Articles Posted in South Carolina Supreme Court

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This appeal arose from fourteen lawsuits brought by various plaintiffs against (1) Laura Willis, an insurance agent; (2) Jesse Dantice, the insurance broker who hired Willis and made her the agent in charge of the insurance office; (3) their insurance agency, Southern Risk Insurance Services, LLC (Southern Risk), and (4) six insurance companies for which their office sold policies (the Insurers). The plaintiffs in the lawsuits were Willis's customers (the Insureds) and other insurance agents (the Agents) in competition with Willis and Southern Risk. The Insureds filed twelve of the lawsuits, asserting claims against Willis, Dantice, and Southern Risk for, inter alia, violations of the Unfair Trade Practices Act (UTPA), common law unfair trade practices, fraud, and conversion. They also named the Insurers as defendants on a respondeat superior theory of liability for failing to adequately supervise or audit Willis and Southern Risk. The question before the South Carolina Supreme Court was whether arbitration should have been enforced against nonsignatories to a contract containing an arbitration clause. The circuit court denied the motion to compel arbitration. The court of appeals reversed and remanded, holding equitable estoppel was applicable to enforce arbitration against the nonsignatories. The Supreme Court reversed and remanded, finding the circuit court properly denied the motion to compel arbitration. View "Wilson v. Willis" on Justia Law

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The underlying dispute arose following a deadly motor vehicle accident in Bamberg County, South Carolina in January 2008. At the time of the accident, decedent James Buchanan was driving a tractor trailer traveling northbound on U.S. Highway 321. Heading southbound on U.S. Highway 321 were three vehicles: a logging truck followed by two tractor trailers, one driven by Willie Pelote and the other by his brother Roger Pelote, both of whom were former parties to this action. As the vehicles converged, a set of tandem tires came loose from the logging truck and struck Buchanan's vehicle, breaking the front axle. As a result, Buchanan's truck crossed the center line and struck the second tractor trailer. Buchanan's tractor trailer caught fire, and he died at the scene. Respondents, as co-personal representatives of Buchanan's estate, filed a wrongful death claim against the driver of the logging truck; the owner of the logging truck; Strobel Tire Co., which performed tire maintenance work on the logging truck shortly before the accident; and the Pelotes. On certiorari, the South Carolina Property and Casualty Insurance Guaranty Association (the Guaranty) argued the court of appeals erred in construing the provisions of the South Carolina Property and Casualty Insurance Guaranty Association Act (the Act) and affirming the trial court's finding that the Guaranty's statutory offset of $376,622 should be deducted from the claimant's total amount of stipulated damages of $800,000 rather than the Association's mandatory statutory claim limit of $300,000. The South Carolina Supreme Court concluded the Act was ambiguous, and found the court of appeals correctly construed the Act to require that settlement amounts be offset from the total amount of an injured party's damages rather than from the $300,000 statutory cap. The Court therefore affirmed the court of appeals' decision as modified. View "Buchanan v. SC Property and Casualty Insurance" on Justia Law

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The South Carolina Supreme Court accepted two certified questions from the United States District Court for the District of South Carolina arising from a dispute over uninsured motorist (UM) coverage: (1) whether a police officer who conducts an investigation of an accident qualifies as a "witness" under Section 38-77-170 of the South Carolina Code; and (2) whether injuries suffered during a drive-by shooting "arise out of" the operation of the vehicle for insurance purposes. Because the Supreme Court answered the first question, "No," it declined to reach the second question. View "Silva v. Allstate" on Justia Law

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The United States District Court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. Jack Poole and his wife, Jennifer, were riding in a vehicle owned by Doris Knight, Jennifer's mother, when a drunk driver crossed the center line and struck them. The Pooles were both seriously injured in the collision; although Jack survived, Jennifer's catastrophic injuries resulted in her death several days later. In contrast with the substantial bodily injuries, the Pooles sustained minimal property damage because they did not own the vehicle. The at-fault driver's liability carrier tendered its policy limits. Farm Bureau, the insurer on Knight's vehicle, then tendered its underinsured motorist (UIM) policy limits for bodily injury to Jack individually and to Jack as the representative of Jennifer's estate. The Pooles then sought recovery from their own insurer, Government Employees Insurance Company (GEICO), which provided them a split limits UIM policy with bodily injury coverage of up to $100,000 per person and $50,000 for property damage. GEICO tendered the UIM bodily injury limits of $100,000 each for Jack and Jennifer's estate. The Pooles requested another $50,000 from the UIM policy's property damage coverage in anticipation of a large punitive damages award, but GEICO refused. GEICO then initiated a declaratory judgment action with the federal district court to establish that it was not liable to pay any amounts for punitive damages under the property damage provision of the UIM policy because the source of the Pooles' UIM damages was traceable only to bodily injury. The federal court asked the South Carolina Supreme Court whether, under South Carolina law, when an insured seeks coverage under an automobile insurance policy, must punitive damages be apportioned pro rata between those sustained for bodily injury and those sustained for property damage where the insurance policy is a split limits policy? The Supreme Court answered the question, "No." View "Government Employees Insurance Company v. Poole" on Justia Law

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Sentry Select Insurance Company brought a legal malpractice lawsuit in federal district court against the lawyer it hired to defend its insured in an automobile accident case. The federal court certified two questions of South Carolina law to the South Carolina Supreme Court pertaining to: (1) whether an insurer may maintain a direct malpractice action against counsel hired to represent its insured where the insurance company has a duty to defend; and (2) whether a legal malpractice claim may be assigned to a third-party who was responsible for payment of legal fees and any judgment incurred as a result of the litigation in which the alleged malpractice arose. The South Carolina Court answered the first question "yes:" "However, we will not place an attorney in a conflict between his client's interests and the interests of the insurer. Thus, the insurer may recover only for the attorney's breach of his duty to his client, when the insurer proves the breach is the proximate cause of damages to the insurer. If the interests of the client are the slightest bit inconsistent with the insurer's interests, there can be no liability of the attorney to the insurer, for we will not permit the attorney's duty to the client to be affected by the interests of the insurance company. Whether there is any inconsistency between the client's and the insurer's interests in the circumstances of an individual case is a question of law to be answered by the trial court." As to question two, the Supreme Court declined to answer the question: "We are satisfied that our answer to question one renders the second question not 'determinative of the cause then pending in the certifying court,' and thus it is not necessary for us to answer question two." View "Sentry Select Insurance v. Maybank Law Firm" on Justia Law

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The Riverwalk at Arrowhead Country Club and Magnolia North Horizontal Property Regime developments were constructed between 1997 and 2000. After construction was complete and the units were sold, the purchasers became aware of significant construction problems, including building code violations, structural deficiencies, and significant water-intrusion problems. In 2003, the purchasers filed suit to recover damages for necessary repairs to their homes. Lawsuits were filed by the respective property owners' associations (POAs), which sought actual and punitive damages for the extensive construction defects under theories of negligent construction, breach of fiduciary duty, and breach of warranty. As to the Riverwalk development, individual homeowners also filed a class action to recover damages for the loss of use of their property during the repair period. The defendants in the underlying suits were the related corporate entities that developed and constructed the condominium complexes: Heritage Communities, Inc. (the parent development company), Heritage Magnolia North, Inc. and Heritage Riverwalk, Inc. (the project-specific subsidiary companies for each separate development), and Buildstar Corporation (the general contracting subsidiary that oversaw construction of all Heritage development projects), referred to collectively as "Heritage." The issues presented to the Supreme Court by these cases came from cross-appeals of declaratory judgment actions to determine coverage under Commercial General Liability (CGL) insurance policies issued by Harleysville Group Insurance. The cases arose from separate actions, but were addressed in a single opinion because they involved virtually identical issues regarding insurance coverage for damages. The Special Referee found coverage under the policies was triggered and calculated Harleysville's pro rata portion of the progressive damages based on its time on the risk. After review of the arguments on appeal, the Supreme Court affirmed the findings of the Special Referee in the Magnolia North matter, and affirmed as modified in the Riverwalk matter. View "Harleysville Group Ins. v. Heritage Communities, Inc." on Justia Law

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Petitioner was injured in a car accident while riding as a passenger in a vehicle driven by a co-employee. The liability limits of the at-fault driver were tendered, and there was no underinsured motorist (UIM) coverage on the vehicle in which he was riding. Therefore, Petitioner submitted a claim for UIM benefits under a Progressive insurance policy, issued to Sarah Severn. At the time of the accident, Petitioner resided with Severn and their child. He described Severn as "his on again off again fiancé." Both Petitioner's and Severn's names appear on the Declarations Page of the Policy under the heading "Drivers and household residents." Under the heading "Additional information," Severn is listed as the "Named insured." Progressive denied UIM coverage to Petitioner under Part III of the Policy. According to the affidavit filed by Progressive's Claims Injury Operations Manager, "[t]he claim was denied because [Petitioner] did not fall within the terms, provisions and conditions of [the Policy] to qualify for benefits under the [UIM] provisions," as Petitioner "was only listed as a 'driver' on the policy and not a named insured, nor was he a resident relative of the named insured." The Supreme Court granted Bell's petition for review of the court of appeals' decision affirming the circuit court's grant of summary judgment in favor of Progressive Direct Insurance Company. Finding no reversible error, the Supreme Court affirmed. View "Bell v. Progressive Direct Insurance" on Justia Law

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Appellant Dorris Green, representing his child who was injured while a passenger in his mother's automobile, contended that as a matter of public policy the courts of South Carolina should refuse to recognize the validity of a family member exclusion in a Florida car insurance policy. Further, he contended that the circuit court erred in finding there was no uninsured motorist coverage for his minor child under his Florida policy. The Supreme Court agreed with the circuit court that enforcement of this exclusion, valid under Florida law, did not offend South Carolina public policy, and that there was no underinsured coverage for father's minor child under the father's policy. The Court therefore affirmed the grant of summary judgment to the insurance company. View "Green v. USAA" on Justia Law

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White Oak Manor, Inc. owns and operates a nursing home in York. After sustaining injuries from the improper replacement of a feeding tube, a White Oak resident filed a lawsuit against the nursing home. White Oak ultimately settled the lawsuit without the involvement of its insurer, Lexington Insurance Company. White Oak subsequently filed a declaratory judgment action against Lexington to determine coverage for the malpractice claim. The issue this case presented to the Supreme Court concerned the validity of a service-of-suit clause in an insurance policy in light of Section 15-9-270 of the South Carolina Code (2005) which provides for service of process on an insurer through the Director of the Department of Insurance. The circuit court upheld the service-of-suit clause and refused to relieve the insurer from default judgment. The court of appeals reversed, holding section 15-9-270 provided the exclusive method for serving an insurance company. In its review, the Supreme Court disagreed that section 15-9-270 provided the exclusive means of service on an insurer and held that insurance policy provisions creating alternative methods of service are valid and binding on insurers. Accordingly, the court of appeals' decision was reversed. View "White Oak Manor v. Lexington Insurance Company" on Justia Law

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The issue in this case centered on a workers' compensation lump-sum award to a claimant who passed away while an appeal of her award was pending. At issue before the Supreme Court was a Court of Appeals opinion that refused to reach Respondents-Petitioners' argument that the award abated upon the beneficiary's death; granted the entire lump-sum award to beneficiary's dependent grandsons; reversed the grant of interest on the award; and affirmed the reinstatement of a ten-percent penalty. Upon review, the Supreme Court affirmed the Court of Appeals' decision with respect to the abatement issue and that court's holding that the ten-percent penalty should have been imposed in this case. The Supreme Court reversed the Court of Appeals decision requiring the entire lump-sum award be paid to the Grandsons, and reinstated the Estate's and Grandsons' settlement. The Court also reversed the Court of Appeals decision to remove the assessment of interest. The case was remanded for further proceedings on what sums were due pursuant to the Court's holding here. View "Hudson v. Lancaster Convalescent Center" on Justia Law