Boyd v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 28 March 1973
• Docket Number: No. 19597,19597
• Citation: 195 S.E.2d 706,260 S.C. 316
• Court: South Carolina Supreme Court
• Parties: Reginald BOYD, by his Guardian ad Litem, Benjamin Boyd, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

Page 706

195 S.E.2d 706

260 S.C. 316

Reginald BOYD, by his Guardian ad Litem, Benjamin Boyd, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

No. 19597.

Supreme Court of South Carolina.

March 28, 1973.

Robert A. McKenzie, of Rogers, McDonald, McKenzie & Fuller, Columbia, for appellant.

Thomas H. Curlee, Jr., of Lourie & Draine, Columbia, for respondent.

BRAILSFORD, Justice:

The minor plaintiff, while walking home from school, was hit and injured by a motorist who did not stop and has not been identified. Plaintiff's father, with whom he resided, was the named insured in two automobile liability insurance policies issued by the defendant, State Farm Mutual Automobile Insurance Company. In a John Doe action conforming to the uninsured motorist statute, plaintiff was awarded judgment for $33,000.00, from which no appeal was taken. State Farm paid plaintiff $10,000.00, claiming that this exhausted coverage afforded him as an insured under the two policies. Plaintiff brought this action seeking a declaration that the insurer owes him an additional $10,000.00. The circuit court found that the policies contained 'other insurance' provisions which purported to limit the insurer's liability to $10,000.00, the maximum coverage extended by one policy. The court held, however, that these provisions must yield to the statutoryrequirement that each policy afford applicable coverage up to $10,000.00, and entered judgment accordingly. The insurer has appealed.

It is settled law that statutory provisions relating to an insurance contract are part of the contract, and that a policy provision which contravenes an applicable statute is to that extent invalid. Pacific Ins. Co. of N.Y. v. Fireman's Fund Ins. Co., 247 S.C. 282, 147 S.E.2d 273 (1966); Davidson v. Eastern Fire & Casualty Ins. Co., 245 S.C. 472, 141 S.E.2d 135 (1965). Hence, the dispositive inquiry is whether the 'other insurance' provisions of these endorsements, which, if lawful, effectively limit the liability of the insurer in this case to $5,000.00 on each policy, are in derogation of the statute. They quite clearly are, if, as held by the circuit court, the statute requires that each policy afford a minimum of $10,000.00 coverage for personal injury to one person.

Section 46--750.32, Code of 1962, Cumulative Supplement, prescribes minimum limits for automobile liability insurance policies of $10,000.00 for injury to or death of one person, $20,000.00 for injury to or death of two or more persons and $5,000.00 for injury to or destruction of property. Section 46--750.33, Cumulative Supplement, provides that '(n)o such (automobile liability) policy or contract shall be issued or delivered unless it contains . . . the uninsured motorist provision, undertaking to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle, within limits which shall be no less than the requirements of Section 46--750.32.' We find no ambiguity in the language of the statute. To prohibit the issuance of any such policy without the prescribed minimum coverage is to require that each policy issued shall provide this coverage. The challenged provisions, under the facts of this case, would reduce the statutory minimum by one-half. To this extent, the 'other insurance' provisions are in derogation of the statute and, therefore, invalid.

We have not heretofore been called upon to decide the precise point; however, the result which we reach was foreshadowed by our decisions in Whitmire v. Nationwide Mutual Ins. Co., 254 S.C. 184, 174 S.E.2d 391 (1970), and Midwest Mutual Ins. Co. v. Fireman's Fund Insurance Co., 258 S.C. 533, 189 S.E.2d 823 (1972). In both of these cases we recognized the validity of other insurance clauses of similar import when applied for the purpose of determining the liability of insurance companies between themselves, the minimum coverage provided by one policy being sufficient to pay in full the damages recovered by the insured in the tort action. We said in Whitmire: 'To the extent that such provisions simply spell out, as applied to the facts of this case, which of the two insurers afforded primary coverage and which afforded excess coverage, they do not have the effect of affording less coverage than is required by the uninsured motorist statute.' 254 S.C. at 194--195, 174 S.E.2d at 396. Midwest Mutual was an action by one insurer for contribution from another for a loss paid under the uninsured motorist endorsement. We quote two excerpts from the opinion:

'Such excess clause has no effect whatever, and, indeed, under the statute it could have no effect on the rights of the insured. The excess clause has a bearing only on rights and obligations as between...