Hunton Insurance Recovery Blog

The Fourth Circuit recently held that a “literal” interpretation of a North Carolina insurance law was “poppycock.” Whitmire v. S. Farm Bureau Life Ins. Co., No. 21-1643 (4th Cir. 2022). The case involved a North Carolina statute that required an insurer to provide notice by mail addressed to the insured’s “last known post-office address in this State.” The person that was to receive notice under the statute had lived in North Carolina but then moved to South Carolina. The insurer provided notice at the person’s South Carolina address. It did not provide notice at the person’s last known address in North Carolina. So the beneficiary of the life insurance argued that notice did not meet the North Carolina statute because it was not provided at “last known post-office address in this State,” i.e. North Carolina.

The Fourth Circuit acknowledged that position applied the statute “literally.” Despite that, the court labeled the person’s “literal” interpretation as “poppycock.” Rather than apply the literal meaning of the statute, the court applied what it said was the purpose of the law. One judge dissented, concluding that the majority erred “by ignoring that language to imagine some broad statutory purpose to justify its own re-write.”

This decision is a reminder that courts will not always apply the “literal” meaning of a statute or contract and instead inject the supposed purpose behind a statute or contract, which can make predicting outcomes even more uncertain. As the dissent noted, potential litigants “should take heed of the Majority’s free-flowing, strong purposivism, for tomorrow’s decision might not be so mundane.”