Antley v. Nobel Ins. Co.

Decision Date10 June 2002
Docket NumberNo. 3516.,3516.
Citation567 S.E.2d 872,350 S.C. 621
PartiesFrancis Clark ANTLEY, Respondent, v. NOBEL INSURANCE COMPANY, Appellant.
CourtSouth Carolina Court of Appeals

Beverly A. Carroll, of Kennedy, Covington, Lobdell & Hickman, of Rock Hill, for appellant.

Ellen McCloy and E. Alan Kennington, both of George Sink, P.A. Injury Lawyers, of North Charleston, for respondent.

SHULER, Judge:

Francis Clark Antley brought this declaratory judgment action to determine his right to recover uninsured motorist (UM) benefits under a policy issued to his employer by Nobel Insurance Company. The trial court reformed the policy to provide Antley up to $1,000,000 in coverage, offset by any recovery from workers' compensation, and Nobel appeals. We affirm.

FACTS/PROCEDURAL HISTORY

The trial court decided this case on the following stipulated facts. On February 7, 1995, Francis Antley, while operating a truck owned by his employer, Southern Bulk Haulers, Inc., was seriously injured in an accident caused by an unidentified vehicle in Savannah, Georgia. As a result, Antley filed a "John Doe" action in Georgia seeking coverage under the UM provision of his personal automobile insurance policy. Since the accident occurred during the course and scope of his employment, Antley also sought benefits under the UM provision contained in Southern's commercial policy issued by Nobel Insurance Company. On its face, this policy provided only the mandatory limit of $15,000 for bodily injury caused by an uninsured driver.

Antley subsequently filed a complaint for declaratory judgment asking the court to reform the policy's UM coverage limit because Nobel failed to make a meaningful offer of additional UM coverage to Southern.1 In its answer, Nobel claimed Antley's exclusive remedy was workers' compensation, but in the event the trial court found otherwise, UM benefits should be limited to $15,000. On March 13, 2000 the parties specifically agreed: 1) that Nobel insured the vehicle driven by Antley under Policy # TAL 1002822, a renewal of Southern's original policy, which provided liability coverage up to $1,000,000; 2) that Nobel offered optional UM coverage via an internally-generated form,2 which Southern rejected, leaving the UM coverage limit at $15,000; and 3) that Antley eventually received $101,901.55, in workers' compensation benefits, including $13,201.53 for medical expenses.

On June 30, 2000, the trial court issued an order finding Antley was not excluded from pursuing coverage under the UM provision of the policy. The court further held that because Nobel failed to make a meaningful offer of additional UM insurance, Antley was entitled to recover up to the limits of Southern's liability coverage, or $1,000,000. Lastly, the court determined Nobel was entitled to a setoff against such coverage in the amount actually received by Antley from workers' compensation. This appeal followed.

LAW/ANALYSIS
Standard of Review

A suit for declaratory judgment is neither legal nor equitable per se; the nature of the suit, therefore, is determined by the underlying issue. See Felts v. Richland County, 303 S.C. 354, 400 S.E.2d 781 (1991)

; Horry County v. Ins. Reserve Fund, 344 S.C. 493, 544 S.E.2d 637 (Ct.App.2001). As the issue below involved a determination of uninsured motorist coverage, the action is at law. Horry County, 344 S.C. at 497,

544 S.E.2d at 640; State Farm Mut. Auto. Ins. Co. v. Calcutt, 340 S.C. 231, 530 S.E.2d 896 (Ct.App.2000). Furthermore, because stipulated or undisputed facts leave only a question of law for the trial court, on appeal this Court reviews "whether the trial court properly applied the law to those facts." WDW Props, v. City of Sumter, 342 S.C. 6, 10, 535 S.E.2d 631, 632 (2000); see J.K. Constr., Inc. v. W. Carolina Reg'l Sewer Auth., 336 S.C. 162, 519 S.E.2d 561 (1999).

Discussion

Nobel asserts two grounds of error in challenging the trial court's ruling. First, Nobel claims Antley is not entitled to recover any UM benefits under Southern's policy, arguing workers' compensation is his sole remedy under both the relevant statutory provision and policy exclusions. Second, Nobel contends that even if Antley is entitled to benefits under the policy's UM provision, his recovery should be limited to $15,000 because Nobel made, and Southern rejected, a meaningful offer of coverage. We address each ground in turn.

I. Workers' Compensation as Exclusive Remedy

Nobel initially argues Antley's recovery of UM benefits is barred by § 42-1-540 of the South Carolina workers' compensation scheme. In relevant part, this section states that the redress available to an injured employee "shall exclude all other rights and remedies of such employee ... as against his employer, at common law or otherwise...." S.C.Code Ann. § 42-1-540 (1985) (emphasis added). Our supreme court previously has rejected the same argument now advanced by Nobel, finding that workers' compensation gives an employee "`the right to swift and sure compensation,'" while an employer in turn "`receives immunity from tort actions by the employee.'" Wright v. Smallwood, 308 S.C. 471, 475., 419 S.E.2d 219, 221 (1992) (quoting Parker v. Williams & Madjanik, Inc., 275 S.C. 65, 70, 267 S.E.2d 524, 526 (1980)). In Wright, the court went on to reiterate that because UM coverage sounds in contract, not tort, "the exclusivity provision of [§ 42-1-540] does not operate to bar [a] contractual claim for UM benefits." Id. (footnote citation omitted).

Nobel further contends applicable language in Southern's policy limits Antley's recovery to workers' compensation. Specifically, Nobel points to exclusionary language in the "Truckers Coverage Form," which, as the parties stipulated, provides in relevant part:

This insurance does not apply to [any of] the following:

....
3. WORKERS' COMPENSATION
Any obligation for which the "insured" or the "insured's" insurer may be held liable under any workers' compensation, disability benefits or unemployment compensation law or any similar law.

In addition, although not referenced in the stipulation, the ensuing paragraph titled "EMPLOYEE INDEMNIFICTION AND EMPLOYER'S LIABILITY" clearly indicates an intention to exclude:

"Bodily injury" to:

a. An employee of the "insured" arising out of and in the course of employment by the "insured" ....

These exclusions purport to eliminate all coverage when the insured employer is liable to pay workers' compensation to an injured employee. Hence, Nobel argues Antley's prior receipt of workers' compensation benefits bars any attempt to recover under the Southern policy's UM provision. We disagree. It is well settled that uninsured motorist coverage in specified minimum limits is mandatory in South Carolina.3Unisun Ins. Co. v. Schmidt, 331 S.C. 437, 503 S.E.2d 211 (Ct.App. 1998),rev'd on other grounds,339 S.C. 362, 529 S.E.2d 280 (2000); White v. Allstate Ins. Co., 314 S.C. 167, 442 S.E.2d 195 (Ct.App.1994). The governing statute expressly states:

(A) No automobile insurance policy or contract may be issued or delivered unless it contains ... [an] uninsured motorist provision undertaking to pay the insured all sums which he is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle ....

S.C.Code Ann. § 38-77-150 (2002) (emphasis added). Thus, "[t]he obligation of the insurer under the terms of the statute is to pay an insured all sums which he is legally entitled to recover from the [uninsured] tortfeasor up to the limit of insurance provided." Nationwide Mut. Ins. Co. v. Howard, 288 S.C. 5, 12, 339 S.E.2d 501, 504 (1985).

"The uninsured motorist endorsement is the contract which the insurance company makes with the insured to protect him against the uninsured motorist." Ferguson v. State Farm Mut. Auto. Ins. Co., 261 S.C. 96, 100, 198 S.E.2d 522, 524 (1973). Although insurance policies are subject to the normal rules governing contracts, including the parties' right to agree to such terms as they deem appropriate, see B.L.G. Enters., Inc. v. First Fin. Ins. Co., 334 S.C. 529, 514 S.E.2d 327 (1999),

the freedom to contract "is not absolute and coverage required by law may not be omitted." Jordan v. Aetna Cas. & Sur. Co., 264 S.C. 294, 297, 214 S.E.2d 818, 820 (1975). Since statutes mandating UM coverage are part of an insurance contract as a matter of law, to the extent policy language conflicts with an applicable statute, the statute prevails. See Ferguson, 261 S.C. at 101,

198 S.E.2d at 524 ("[T]he pertinent provisions of the [UM] statutes prevail as much as if expressly incorporated in the policy"); Schmidt, 331 S.C. at 440,

503 S.E.2d at 213 ("When the language of the policy conflicts with the mandate of the [UM] statute, the statutory language prevails.").

Applying this settled law, we find that to the extent Nobel's policy exclusions purport to bar Antley from pursuing UM coverage, they are void as against public policy and of no effect. As the supreme court stated in Ferguson:

The public policy declared by our uninsured motorist statute imposes an obligation on insurers to provide protection to their insureds against loss caused by wrongful conduct of an uninsured motorist, and any limiting language in an insurance contract which ha[s] the effect of providing less protection than made obligatory by the statutes is contrary to public policy and is of no force and effect.
... To permit [an insurer] ... to exclude coverage where the insured is entitled to workmen's compensation for his injury or death would be a limitation upon the statutory coverage required by our uninsured motorist statutes.

Ferguson, 261 S.C. at 100-01,198 S.E.2d at 524.

Nobel correctly asserts § 38-77-220 (regulating automobile insurance in general) and § 56-9-20(5) (the Motor Vehicle Financial Responsibility Act) each appear to permit such exclusions. Section 38-77-220 provides in pertinent part:

...

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