Bell v. Progressive Direct Ins. Co.

• Decision Date: 07 May 2014
• Docket Number: No. 27381.,27381.
• Court: South Carolina Supreme Court
• Parties: Joshua BELL, Petitioner, v. PROGRESSIVE DIRECT INSURANCE COMPANY, Respondent. Appellate Case No. 2011–195286.

407 S.C. 565

757 S.E.2d 399

Joshua BELL, Petitioner,

v. PROGRESSIVE DIRECT INSURANCE COMPANY, Respondent.Appellate Case No. 2011–195286.

No. 27381.

Supreme Court of South Carolina.

Heard Feb. 20, 2013.

Decided April 9, 2014.

Rehearing Denied May 7, 2014.

Gene McCain Connell, Jr., of Kelaher Connell & Connor, PC, of Surfside Beach, for Petitioner.

John Robert Murphy and Ashley Berry Stratton, both of Murphy & Grantland, PA, of Columbia, for Respondent.

C. Mitchell Brown, of Nelson Mullins Riley & Scarborough, LLP, of Columbia, for Amicus Curiae Property & Casualty Insurers Association of America.

William F. Merlin, Jr., of Merlin Law Group, PA, of Tampa, Florida, and J. Jackson Thomas, of Thomas & Brittain, PA, of Myrtle Beach, both for Amicus Curiae United Policy Holders.

Susan F. Campbell, of McGowan, Hood & Felder, LLC, of Columbia, for Amicus Curiae South Carolina Association for Justice.

A. Johnston Cox, Jennifer E. Johnsen, Jennifer D. Eubanks, all of Gallivan, White & Boyd, PA, of Greenville, for Amicus Curiae Allstate Property and Casualty Insurance Company.

Chief Justice TOAL.

The Court granted Joshua Bell's (Petitioner) petition for a writ of certiorari to review the court of appeals' decision affirming the circuit court's grant of summary judgment in favor of Progressive Direct Insurance Company (Progressive). We affirm.

Facts/Procedural Background

Petitioner was injured in a car accident on March 31, 2006, 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 K. Severn, effective from November 4, 2005, until May 4, 2006 (the Policy). 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.” (Emphasis removed). Under the heading “Additional information,” Severn is listed as the “Named insured.”

The Policy generally defines “You” and “Your” to mean:

a. a person or persons shown as a named insured on the Declarations Page; and

b. the spouse of a named insured if residing in the same household.(Emphasis removed). A “Relative” is defined as “a person residing in the same household as you, and related to you by blood, marriage, or adoption....” (Emphasis removed).

Under Part I, entitled “Liability to Others,” the Policy sets forth the following Insuring Agreement:

Subject to the Limit of Liability, if you pay the premium for liability coverage, we will pay damages for bodily injury and property damage for which an insured person becomes legally responsible because of an accident arising out of the:

1. ownership, maintenance, or use of a vehicle....

(Emphasis removed). Part I defines an “insured person” or “insured persons” as, inter alia, “you or a relative with respect to an accident arising out of the ownership, maintenance, or use of a covered vehicle” and “any person with respect to an accident arising out of that person's use of a covered vehicle with the express or implied permission of you or a relative.” (Emphasis removed).

Part III of the Policy, which outlines the availability of UIM coverage, states the following:

Subject to the Limits of Liability, if you pay the premium for [UIM] Coverage, we will pay for damages which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle because of bodily injury sustained by an insured person or due to property damage:

1. caused by an accident; and

2. arising out of the ownership, maintenance, or use of an underinsured motor vehicle.

(Emphasis removed). Part III of the Policy further states that “Insured person” and “insured persons” mean, inter alia, “you or a relative.” (Emphasis removed).

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.”

On September 24, 2007, Petitioner sought a declaratory judgment that he was entitled to UIM coverage under the Policy and filed complaint averring causes of action for bad faith and failure to pay benefits. Progressive answered and subsequently filed a motion for summary judgment.

The circuit court held a hearing on the summary judgment motion on October 13, 2008. Petitioner argued that he was listed as a driver and household resident on the Declarations Page of the Policy, and Progressive was aware that he and Severn resided together when he signed up for coverage. Petitioner presented the following questions to the circuit court: (1) whether a “household resident” is also a “named insured” under the Policy language; (2) whether the Policy was ambiguous; and (3) whether Petitioner was a “relative” of Severn for purposes of coverage. Finally, Petitioner also argued he was entitled to coverage under the Policy by virtue of the doctrine of reasonable expectations. Progressive argued that because Petitioner was neither the named insured nor related to the named insured by blood or marriage, he could not recover UIM benefits under the Policy. Moreover, Progressive argued that Petitioner was not Severn's common-law husband.

During the hearing, Progressive submitted a deposition transcript to support its motion for summary judgment. In the transcript, Petitioner stated he and Severn were engaged but “hadn't set a date yet.” He explained he proposed to Severn when she was pregnant with their son. To the question of whether they had taken any steps to be married, Petitioner responded, “Verbal agreement and a ring.... She's a procrastinator and she didn't—I mean, I didn't think—I mean, the girl supposed [sic] to marry me, she's supposed to be on that, I thought, and so she didn't want to do it so it just progressively got longer.” Petitioner stated that they discussed marriage often but Severn never went through with it. In April 2008, well after the accident, Petitioner stated he and Severn ended their engagement, and Petitioner stated he had no intention of entering a relationship with Severn again.¹

Petitioner stated he paid all of the bills for water, sewer, rent, electricity, clothing, food, and the Internet. At some point while they resided together, Petitioner relinquished his car insurance through Nationwide and became an additional driver on the Policy:

Well, we was [sic] saving money and stuff so I took—that was insured through Nationwide and I took the insurance off of it so we wouldn't have two insurance bills, so [Severn] made me an additional driver on [the Policy] and I drove her car and we just shared that car. She'd drive me to work and I'd drive her to work and ... I'd use [the car] on the weekend and I drove it all over.

Petitioner stated further that he “called [Progressive] on the phone” because he “had all [Severn's] personal information, my soon-to-be wife,” and he “wasn't driving around Myrtle Beach with [his] name not being on her insurance” because he feared he would be arrested for driving without insurance. Petitioner stated,

I called, gave [Progressive's employee] all my information. They put me down as an additional driver and they told me the premium, how much difference the bill was going to be each month, and then I had to pay more money at the first.

Petitioner paid all the premiums once he became an additional driver on the Policy. To the question, “Did you have any understanding of what that meant, to be an additional driver on the policy?,” Petitioner responded, “No. I need a cigarette. I'm getting irritated.” The deposition concluded at that point.

On January 14, 2009, the circuit court entered an order granting Progressive's motion for summary judgment, finding Petitioner was not entitled to UIM coverage under the Policy. First, the court found that Petitioner and Severn were not engaged in a common-law marriage based on Petitioner's deposition testimony that he and Severn were engaged at various times, ended their engagement each time, never decided on a date to be married, were no longer engaged, and Severn resided in Maryland, a state that does not recognize common-law marriage. Second, the circuit court rejected Petitioner's argument that he was a “named insured” under the Policy based on the doctrine of reasonable expectations. Finally, relying on Ex Parte United Services Automobile Association, 365 S.C. 50, 614 S.E.2d 652 (Ct.App.2005) [hereinafter Ex Parte USAA], the circuit court found that because Petitioner was listed as a “driver” on the declarations page of the Policy but not as a “named insured,” and the Policy was clear regarding coverage, Petitioner was not entitled to UIM coverage under the Policy based on any ambiguity in the policy language.

The court of appeals affirmed in an unpublished opinion. See Bell v. Progressive Direct Ins. Co., Op. No. 2011–UP–242 (S.C.Ct.App. filed June 23, 2011). The court of appeals held that Petitioner was not an “insured” under the Policy because the Policy explicitly provides for UIM for an “insured person,” which it defines as “you or a relative,” and Petitioner did not fall within either definition. Id. With respect to Petitioner's argument that the Policy was ambiguous, the court of appeals held that the mere fact that the Policy did not define “household resident” did not in itself render the Policy ambiguous. Id. (citing Ex parte USAA, 365 S.C. at 55, 614 S.E.2d at 654). The court of...