Bovain v. Canal Ins.

• Decision Date: 08 June 2009
• Docket Number: No. 26664.,26664.
• Citation: 678 S.E.2d 422,383 S.C. 100
• Court: South Carolina Supreme Court
• Parties: Raymond BOVAIN, Jr., as Personal Representative of the Estate of Willor Dean Bovain, Appellant, v. CANAL INSURANCE, Roy R. Greene d/b/a Rusty Greene Tree Service, and John R. Frazier, Inc., Defendants, Of Whom Canal Insurance is the Respondent.

678 S.E.2d 422

383 S.C. 100

Raymond BOVAIN, Jr., as Personal Representative of the Estate of Willor Dean Bovain, Appellant, v. CANAL INSURANCE, Roy R. Greene d/b/a Rusty Greene Tree Service, and John R. Frazier, Inc., Defendants Of Whom Canal Insurance is the Respondent.

No. 26664.

Supreme Court of South Carolina.

Heard March 5, 2009.

Decided June 8, 2009.

Rehearing Denied July 9, 2009.

Carl B. Grant, of Orangeburg; and Richard A. Harpootlian and Graham L. Newman, both of Columbia, for Appellant.

Brian Dumas, of Peake Fowler & Associates, of Columbia, and Robert D. Moseley, Jr., of Smith, Moore, Leatherwood, of Greenville, for Respondent.

Justice BEATTY:

Raymond Bovain, Jr. brought this declaratory judgment action as the Personal Representative of the Estate of Willor Dean Bovain, his late wife, after she died in a collision with a logging truck that was insured by Canal Insurance. Bovain asserted the truck driver was a "motor carrier" and sought reformation of the insurance policy to increase its limit of coverage to $750,000 pursuant to 23A S.C.Code Ann. Regs. 38-414 (Supp.2008) (requiring heightened insurance coverage for "motor carriers"). Canal Insurance opposed the request and sought a declaration that the $40,000 of combined limits coverage carried on the truck was sufficient under South Carolina law. Both parties moved for summary judgment.¹ The circuit court granted summary judgment to Canal Insurance, finding the truck driver was not a "motor carrier" under state law and was not subject to the insurance requirement of Regulation 38-414. Bovain appeals. We reverse and remand for entry of summary judgment in favor of Bovain.

FACTS

On September 9, 2004, Bovain's wife died after she collided with a logging truck driven by Roy R. Greene. Greene was pulling onto Interstate 26 from the side of the road when Bovain's wife struck him from behind. Her car burst into flames and she died at the scene.

Greene, who does business as Rusty Greene Tree Service, is in the business of hauling cut trees to various pulpwood and paper companies. At the time of the accident, Greene was picking up logs from a worksite beside Interstate 26 and planned to take them to a paper mill in Eastover, South Carolina. Greene had insurance coverage on the logging truck with Canal Insurance in a combined single liability limit of $40,000. The truck was a ten-wheeler weighing approximately 26,000 pounds that Greene had purchased used. It had an attachment on the front for moving logs.

On November 4, 2005, Bovain filed this declaratory judgment action against Canal Insurance asserting Greene was a "motor carrier" and seeking to reform the insurance policy to increase the coverage to $750,000 pursuant to 23A S.C.Code Ann. Regs. 38-414. Under Regulation 38-414, which is applicable to "motor carriers," trucks weighing 10,000 or more pounds (GVWR)² that carry non-hazardous material must be insured under a policy carrying at least $750,000 of coverage. Bovain argued Greene was a motor carrier and thus was subject to the increased level of coverage required by Regulation 38-414.

Canal Insurance asserted Greene transported his own property and thus was not a motor carrier. Canal Insurance further argued that, even if Greene was a motor carrier, he was exempt from Regulation 38-414 because he was using his truck to haul cut trees. See S.C.Code Ann. Regs. 38-407(4) (Supp.2008) (providing an exemption for "[l]umber haulers engaged in transporting lumber and logs from the forest to the shipping points in this State").

The circuit court granted summary judgment to Canal Insurance. Bovain appeals, alleging the circuit court erred (1) in ruling the insurance policy at issue cannot be reformed to increase the limit of coverage to $750,000 pursuant to 23A S.C.Code Ann. Regs. 38-414, (2) in finding Greene was not a "motor carrier" within the purview of Regulation 38-414, and (3) in finding that, even if Greene qualified as a "motor carrier," he fell within the "lumber hauler" exception contained in 23A S.C.Code Ann. Regs. 38-407(4) and thus was exempt from Regulation 38-414's coverage requirement.

LAW/ANALYSIS

Rule 56(c) of the South Carolina Rules of Civil Procedure provides that a trial court may grant a motion for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Rule 56(c), SCRCP.

"In determining whether any triable issues of fact exist, the court must view the evidence and all reasonable inferences that may be drawn from the evidence in the light most favorable to the non-moving party." Brockbank v. Best Capital Corp., 341 S.C. 372, 378-79, 378, 534 S.E.2d 688, 692 (2000). An appellate court reviews the granting of summary judgment under the same standard applied by the trial court under Rule 56(c), SCRCP. Id. at 379, 534 S.E.2d at 692.

(A) Insurance for Motor Carriers Under Regulation 38-414

Bovain first asserts the circuit court erred in finding Greene was not a "motor carrier" subject to the increased minimum insurance requirements of Regulation 38-414. We agree.

South Carolina law contains both statutes and regulations governing "motor carriers." At issue in this case is Regulation 38-414, which provides for heightened insurance requirements for certain "motor carriers" for hire as part of a group of Economic Regulations.

Specifically, Regulation 38-414 provides that "[i]nsurance policies and surety bonds for bodily injury and property damage will have limits of liability not less than" $750,000 per incident for trucks weighing 10,0000 or more pounds GVWR that carry non-hazardous freight. 23A S.C.Code Ann. Regs. 38-414 (Supp.2008). This regulation applies "to any person ... or corporation which is ... engaged as a motor carrier for hire within the State of South Carolina" unless they are otherwise exempted. 23A S.C.Code Ann. Regs. 38-401 (Supp.2008).

A "carrier," in the legal sense, refers to one who undertakes to transport persons or property from place to place. Huckabee Transp. Corp. v. W. Assurance Co., 238 S.C. 565, 121 S.E.2d 105 (1961); Windham v. Pace, 192 S.C. 271, 6 S.E.2d 270 (1939). The term "motor carrier" includes "both a common carrier by motor vehicle and a contract carrier by motor vehicle." 23A S.C.Code Ann. Regs. 38-402(8) (Supp.2008).

Statutory law also controls motor carriers. Section 58-23-20 provides: "No corporation or person ... may operate a motor vehicle for the transportation of persons or property for compensation on an improved public highway in this State" without complying with the applicable statutory provisions and the regulations and authority of the Public Service Commission. S.C.Code Ann. § 58-23-20 (Supp.2008) (emphasis added).

"The term `motor vehicle carrier' [as used in the portion of the Code concerning the regulation of motor vehicles for compensation] means every corporation or person ... owning, controlling, operating or managing any motor propelled vehicle ... used in the business of transporting persons or property for compensation over any improved public highway in this State[.]" S.C.Code Ann. § 58-23-10(4) (1977) (emphasis added).

The phrase "for compensation" as used in section 58-23-20 "means a return in money or property for transportation of persons or property by motor vehicle over public highways, whether paid, received or realized, and shall specifically include any profit realized on the delivered price of cargo where title or ownership is temporarily vested during transit in the carrier as a subterfuge for the purpose of avoiding regulation under this chapter." S.C.Code Ann. § 58-23-30 (1977).

In the case before us, the circuit court found Greene was a private carrier, not a motor carrier, so he was not subject to the insurance requirements in Regulation 38-414. The circuit court found "Greene is not a motor carrier for hire because he does not transport the property of others for compensation." The circuit court stated: "Greene cuts trees, picks up trees that have been cut and abandoned to him by other tree services, and hauls and sells those trees to pulpwood and paper companies. When he sells the trees, he receives their market value, not a fee for handling them as cargo. Greene is transporting and selling his own property and is not subject to regulation as a motor carrier for hire."

The circuit court stated because Greene is a private carrier, "he is not required to carry a certificate of authority issued by the Public Service Commission (PSC). ... Instead, as a private carrier, Greene is governed by the general South Carolina Financial Responsibility Act, which, at the time of the collision, only required him to maintain minimum liability limits of $15,000/$30,000/$10,000 or, in this case, combined single limits of $40,000," citing S.C.Code Ann. § 38-77-140. The circuit court concluded that reformation of the policy issued by Canal Insurance to provide the minimum coverage for a motor carrier of $750,000 was not appropriate as "Greene complied with the law as it applies to private carriers."

On appeal, Bovain contends the circuit court erred in finding that Greene is not a motor carrier subject to the increased limits of coverage in Regulation 38-414. Bovain asserts the temporary transfer of ownership of the logs to Greene may not be used to avoid application of the limits of coverage in Regulation 38-414.

Canal Insurance, in contrast, maintains Greene is not compensated for transporting the wood; rather, Greene owns the trees and takes them to the mills of his choice. Canal Insurance asserts "[t]he fact that Greene is paid by a timber broker [John Frazier] for providing logs to various mills and pulpwood producers does not contradict the fact that he is selling the wood as his own property. ..."

During his deposition testimony,...