S.C. Prop. & Cas. Ins. Guaranty Ass'n v. Brock

• Citation: 764 S.E.2d 920,410 S.C. 361
• Decision Date: 29 October 2014
• Docket Number: No. 27458.,27458.
• Court: United States State Supreme Court of South Carolina
• Parties: SOUTH CAROLINA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION, Appellant/Respondent, v. Roger BROCK, Ryan Stevens, Malachi Sanders and Health Advantage/BCBS of Arkansas, Defendants, of whom Roger Brock is the Respondent/Appellant. Appellate Case No. 2013–000402.

410 S.C. 361

764 S.E.2d 920

SOUTH CAROLINA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION, Appellant/Respondent

v.Roger BROCK, Ryan Stevens, Malachi Sanders and Health Advantage/BCBS of Arkansas, Defendants

of whom Roger Brock is the Respondent/Appellant.

Appellate Case No. 2013–000402.

No. 27458.

Supreme Court of South Carolina.

Heard April 2, 2014.

Decided Oct. 29, 2014.

Howard A. VanDine, III, A. Mattison Bogan, Erik T. Norton and Tara C. Sullivan, all of Nelson Mullins Riley & Scarborough, LLP, of Columbia, for Appellant/Respondent.

Andrew D. Gowdown and Timothy J.W. Muller, of Rosen, Rosen & Hagood, LLC, of Charleston, for Respondent/Appellant.

Opinion

Justice PLEICONES.

This appeal concerns the construction and application of the South Carolina Property and Casualty Insurance Guaranty Association Act (the Act), S.C.Code Ann. §§ 38–31–10 to –170 (2002 and Supp.2013), and specifically the exhaustion/non-duplication provision in section 38–31–100(1). Roger Brock (Brock) was a passenger in a car involved in a wreck and sustained severe injuries. Brock settled his claim, but before payment was made, the insurance carrier responsible for the claim was declared insolvent and the claim was assumed by the South Carolina Property and Casualty Insurance Guaranty Association (Guaranty). Guaranty and Brock moved for summary judgment on the issue whether Guaranty may offset payments from solvent insurance carriers against Brock's settlement under section 38–31–100. The circuit court found section 38–31–100 was ambiguous and granted partial summary judgment to both parties, holding that Guaranty may offset some but not all of the benefits received by Brock from solvent insurance carriers. We disagree that section 38–31–100 is ambiguous and hold that the unambiguous language of section 38–31–100 provides that Guaranty may offset all payments from all solvent insurers made to Brock as a result of this wreck.

FACTS

Brock was passenger in a vehicle driven by Brian Mason (Mason), which was involved in an accident with a logging truck, driven by Ryan Stevens (Stevens).¹ At the time of the accident, Stevens was insured through the owner of the logging truck, Malachi Sanders's (Sanders), policy issued by Aequicap Insurance Company (Aequicap).

Brock sustained severe injuries as a result of the wreck and filed suit. Soon after the litigation began, Brock settled his claim against Stevens and Sanders with Aequicap for $185,000 for the release of all claims.

Shortly after the settlement was reached but before Brock received any payment, Aequicap was declared insolvent. Because Aequicap was an insurer licensed to do business in the State of South Carolina and the insured was a resident of South Carolina, the claim was referred to Guaranty. As a result, Brock made demand on Guaranty for payment of the full settlement amount of $185,000.²

As a result of the wreck, Brock received the following amounts directly from or paid on his behalf by solvent insurers:

a.Liability Coverage from Nationwide Ins. Co.  (Mason's Policy)$22,500.00  b.Payments for the provision of medical care by Health Advantage/BCBS of Arkansas  (Brock's private pay medical insurance carrier)$40,590.45  c.Uninsured Motorist coverage from Progressive Ins. Co.  (resident relative coverage through Brock's parents' carrier)$25,000.003 d.Personal Injury Protection from Progressive Ins. Co.  (resident relative coverage through Brock's parents' carrier)$5,000.00   Total:$93,090.45

In the trial court, Guaranty asserted entitlement to offset all payments from the solvent insurers pursuant to section 38–31–100(1). As a result, Guaranty paid Brock $91,909.55, the difference between the settlement amount ($185,000) and the offset amount ($93,090.45). Brock alleged that he was entitled to the remaining $93,090.45, arguing that this would not lead to duplicative recovery. The circuit court found that section 38–31–100(1) was ambiguous, and held that Guaranty could not offset the benefits received under Mason's policy or the amount paid by Brock's medical insurance. The court did allow offset of the uninsured motorist (UM), and personal injury protection (PIP) benefits. As a result, the court ordered Guaranty to pay Brock an additional $63,090.45.

STANDARD OF REVIEW

The parties agree that the issue is solely one of statutory interpretation. “Questions of statutory interpretation are questions of law, which we are free to decide without any deference to the court below.” CFRE, LLC v. Greenville Cnty. Assessor, 395 S.C. 67, 74, 716 S.E.2d 877, 881 (2011).

DISCUSSION

This case is one of first impression and concerns the construction and application of the Act's exhaustion provision, section 38–31–100(1).

Guaranty is an unincorporated, non-profit legal entity. Because Guaranty is a creature of statute, its duties, liabilities, and obligations are controlled by the terms and conditions set forth in the Act. § 38–31–60. Pursuant to the Act, Guaranty must pay certain “covered claims,” as the term is defined in section 38–31–20(8).⁴ As a condition precedent to recovery from Guaranty, a claimant is required to first exhaust all available coverage from solvent insurers, and Guaranty is allowed to offset the full limits of such other coverage against its obligations under the Act. § 38–31–100.

Both parties agree that the $185,000 settlement entered into by Aequicap qualifies as a “covered claim” for which Guaranty is responsible under section 38–31–20(8). The parties disagree on what types of insurance coverage Guaranty may offset against its obligation to pay the $185,000. The exhaustion provision provides in relevant part:

A person, having a claim under an insurance policy, whether or not it is a policy issued by a member insurer, and the claim under such other policy arises from the same facts, injury, or loss that gave rise to the covered claim against the association, is required to first exhaust all coverage and limits provided by any such policy. Any amount payable on a covered claim under this chapter must be reduced by the full limits of such other coverage as set forth on the declarations page and the association shall receive a full credit for such limits, or, where there are no applicable limits, the claim must be reduced by the total recovery. Notwithstanding the foregoing, no person may be required to exhaust all coverage and limits under the policy of an insolvent insurer.

§ 38–31–100(1) (emphasis supplied).

Brock contends the circuit court erred in permitting Guaranty to offset any of the insurance benefits. Conversely, Guaranty contends the circuit court erred by holding that Guaranty was not able to offset the proceeds of Mason's policy and the amount of medical insurance benefits provided to Brock. We agree with Guaranty that the Act unambiguously provides that Guaranty may offset all the proceeds received by Brock in this case.

“All rules of statutory construction are subservient to the one that legislative intent must prevail if it can be reasonably discovered in the language used, and that language must be construed in light of the intended purpose of the statute.” McClanahan v. Richland Cnty. Council, 350 S.C. 433, 438, 567 S.E.2d 240, 242 (2002). “What a legislature says in the text of a statute is considered the best evidence of the legislative intent or will. Therefore, the courts are bound to give effect to the expressed intent of the legislature.” Id. Thus, we must follow the plain and unambiguous language in a statute and have “no right to impose another meaning.” Id.

Applying section 38–31–100(1), Brock received payments under the medical, UM, and PIP insurance coverages, as well as from Mason's policy. These claims were paid “under an insurance policy,” and the claims arise from “the same facts, injury or loss” that gave rise to the $185,000 settlement. Thus, this $185,000 covered claim should,...