Updates on Insurance Coverage, Construction Defect
and Commercial Auto Law Developments
in North Carolina and South Carolina
Greetings from Evans & Co. Counselors and Litigators, with our March  edition of our Case Notes series. 
We write with our regular updates on insurance, construction defect, and commercial auto law in the states of North Carolina and South Carolina, which we last visited about four months ago. We attach 28 pages presenting and analyzing the cases we mention below.
Please recall that our past Case Notes are archived at and we would be pleased to bring current the decisions on which we've reported previously, at your request.
The North Carolina Court of Appeals brings clarity -- at least till further legislative or Supreme Court action – to the statute of limitations application in respect of uninsured/underinsured motorists insurance.  Such insurers need to be joined in the suit against the uninsured.  Both suit and service on the insurer must be accomplished within the limitations period.
The North Carolina Federal District Court correctly applies CGL policy definition of “property damage” to find no coverage for losses that arose from a trespass, including resultant attorneys fees.  “Expected or intended” exclusion is also discussed and applied. 
We digest a second Federal District Court case granting summary judgment on negligent entrustment and negligent hiring claims, against the employer of a truck driver – a useful checklist for testing the quality of proof of these claims in your cases.
In an “eight corners” interpretation which included the counterclaim as well as the complaint in evaluating the duty to defend, the District Court held: where advertising injury, due to trademark violation, began prior to the inception of multiple policies, the ongoing loss exclusion barred coverage and there was no duty to defend.
Following the prevailing rule, a Federal District Court in North Carolina upheld an endorsement to an insurance policy calling for California choice of law in construing the policy, even though the loss and the litigation occurred in North Carolina.

An interesting maritime case provides instruction on how NOT to prosecute a subrogation case:  the subrogated carriers’ insurer assumed that the proof of loss payment to the insured, supported by some expert opinion, was sufficient to collect the loss in that amount from the tortfeasor. The tortfeasor put on competent proof that the loss was paid in an unjustifiable amount, which was not rebutted, and the case was dismissed with no recovery. When insurers bend over backwards to pay their insureds generously on property losses, they cannot take consolation that their payments will be fully recoverable against the culpable party. Better subrogation counsel would also have helped this case.
In South Carolina, we present an insurance case with lively facts, where the insured Evans (no relation) obtained liability insurance for his night club, and paid premiums under a finance agreement. He didn’t pay on the finance agreement and the insurance was canceled through proper process two days before a shooting at the club. 
We digest a second Federal District Court case applying South Carolina law, which upholds and gives effect to a dog loss exclusion. In another case, the holding is, you can’t insure a personal lines vehicle if you don’t own it
In a truck insurance case, the plaintiff argued unsuccessfully, that the MCS-90 endorsement, which provides minimum statutory insurance coverage to commercial vehicles as a sort of backup to other liability insurance, was triggered because the offending vehicle (not insured under the MSC endorsement) was displaying the ICC logo of an owner of another commercial vehicle. But the offending vehicle had the benefit of its own $1 million liability policy. The court holds MCS coverage would not be triggered where there was statutory minimum coverage in effect under other policies. Thus the attempt to “stack” failed.
Click here for our Case Notes for both states (28 pages).
Click here for North Carolina only (19 pages).
Click here for South Carolina only (10 pages).
Click here to go to the Evans & Co. law firm website for firm information and access to prior case digests.

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