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NO. COA08-898 NORTH CAROLINA COURT OF APPEALS Filed: 7 July 2009 NORTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, Plaintiff, v. KELVIN LEE SIMPSON, RICKY RAY HARRINGTON, and THE NORTH CAROLINA DEPARTMENT OF TRANSPORTATION, Defendants. Wake County No. 06 CVS 16192

Appeal by plaintiff from order filed 16 April 2008 by Judge Carl R. Fox in Wake County Superior Court. Appeals 29 January 2009. Smyth & Cioffi, LLP, by Theodore B. Smyth, for plaintiffappellant. Attorney General Roy Cooper, by Assistant Attorney General Steven Armstrong, for The North Carolina Department of Transportation. Gaskins & Gaskins, P.A., by Herman E. Gaskins, Jr., for defendant-appellee Ricky Ray Harrington. STEELMAN, Judge. An insurance company is not liable under an automobile Heard in the Court of

insurance policy when a person fraudulently procures retroactive liability insurance after an accident occurs. I. Factual and Procedural Background

The facts pertinent to the issues presented in this appeal are not in dispute. Defendant Kelvin Lee Simpson (Simpson) was the

-2owner and operator of a tractor-trailer. In early 2004, Simpson

had liability insurance on the tractor-trailer through plaintiff, North Carolina Farm Bureau Mutual Insurance Company (Farm Bureau). His policy expired on 30 April 2004. Simpson attempted to renew

the policy for a period of six months but paid his premium with a worthless check. Farm Bureau notified Simpson by letter dated 25 Simpson acknowledged receipt

May 2004 that his check had bounced. of the letter.

By letter dated 8 June 2004, Farm Bureau notified

Simpson of the expiration of his policy of insurance, effective 30 April 2004. On 15 October 2004, at 9:20 a.m., Simpson was operating the tractor-trailer when it negligently struck a vehicle owned by the North Carolina Department of Transportation (DOT). At the time of That

the accident, there was no insurance on Simpson's vehicle.

same afternoon, Simpson went to the Farm Bureau office located in Chocowinity, North Carolina and tendered the past due premium of $412.34 to the local agent. Simpson testified in his deposition

that he consciously decided not to tell the insurance agent that he had been in an accident because he knew it would result in an increase in his insurance rates. Two weeks after the accident,

Farm Bureau issued a policy covering Simpson's vehicle, effective 12:01 a.m. on 15 October 2004. Farm Bureau was not notified of the

accident until it received a letter from counsel for Ricky Ray Harrington (Harrington), the operator of the DOT vehicle, dated 5 November 2004. Simpson never notified Farm Bureau about the

accident and failed to respond to their inquiries after Farm Bureau

-3was notified by DOT. On 3 November 2006, Farm Bureau filed this action seeking a declaratory judgment that it had no coverage applicable to the claims arising out of the 15 October 2004 accident. and Harrington moved for summary judgment. Farm Bureau

On 16 April 2008, the

trial court entered an order declaring that Farm Bureau "provided liability coverage in favor of Ricky Ray Harrington in the sum of $750,000.00 involving for the Lee automobile Simpson accident and Ricky of Ray October 15, 2004 near

Kelvin

Harrington

Grimesland, North Carolina." Farm Bureau appeals. II. Standard of Review

Summary judgment cases are reviewed in the appellate courts under a de novo standard of review. In re Will of Jones, 362 N.C. On appeal from summary

569, 573, 669 S.E.2d 572, 576 (2008).

judgment, "[w]e review the record in the light most favorable to the non-moving party." Bradley v. Hidden Valley Transp., Inc., 148 N.C. App. 163, 165, 557 S.E.2d 610, 612 (2001) (citing Caldwell v. Deese, 288 N.C. 375, 378, 218 S.E.2d 379, 381 (1975)), aff'd, 355 N.C. 485, 562 S.E.2d 422 (2002). III. Analysis

In its first argument, Farm Bureau contends that the trial court erred in granting summary judgment in favor of Harrington, ruling that Farm Bureau provided liability insurance to Simpson at the time of the 15 October 2004 accident. We agree.

At the time of the accident, on the morning of 15 October

-42004, there was no policy of insurance providing liability

insurance on Simpson's vehicle.

The question presented is whether

Simpson could retroactively procure such coverage, effective back to the time of the accident, by his own admittedly fraudulent conduct. We hold that he could not.

The purpose of Article 9A of Chapter 20 of the General Statutes (Motor Vehicle and Financial Responsibility Act of 1953) is to require the operators of motor vehicles on the streets and highways of North Carolina to be financially responsible.

Insurance Com. v. Simmons, Inc., 262 N.C. 691, 696, 138 S.E.2d 512, 515 (1964). This goal is achieved by requiring that before a motor

vehicle can be registered in this state, the owner must have financial responsibility. N.C. Gen. Stat.

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