Burgess v. Nationwide Mut. Ins. Co.
| Citation | 361 S.C. 196,603 S.E.2d 861 |
| Decision Date | 07 September 2004 |
| Docket Number | No. 3863.,3863. |
| Parties | Robert J. BURGESS, Respondent, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Appellant. |
| Court | Court of Appeals of South Carolina |
Robert C. Brown, of Columbia, for Appellant.
Kristi F. Curtis, of Sumter, and Nelson R. Parker, of Manning, for Respondent.
Robert J. Burgess brought a declaratory judgment action against Nationwide Mutual Insurance Company seeking a declaration that he was entitled to underinsured motorist coverage. The trial judge granted declaratory relief and found Burgess was entitled to UIM coverage in the amount of $15,000. Nationwide appeals. We affirm as modified.
Burgess was operating his 1986 Honda motorcycle when a car driven by Angelo T. Heyward struck him. Heyward carried automobile liability insurance on his car with New Hampshire Indemnity Company. Burgess collected $15,000 of liability coverage from New Hampshire Indemnity and agreed to a covenant not to execute with Heyward.
Burgess had a liability policy on his motorcycle with Alpha Property and Casualty Insurance, but the policy did not provide any underinsured motorist ("UIM") coverage. In addition to the motorcycle, Burgess also owned three vehicles that were covered by Nationwide Mutual Insurance Company ("Nationwide"). That policy provided UIM coverage of $25,000 per person. The Uninsured and Underinsured Motorist Endorsement provided that:
If a vehicle owned by you or a relative is involved in an accident where you or a relative sustains bodily injury or property damage, this policy shall: a) be primary if the involved vehicle is your auto described on this policy; or b) be excess if the involved vehicle is not your auto described on this policy. The amount of coverage applicable under this policy shall be the lesser of the coverage limits under this policy or the coverage limits on the vehicle involved in the accident.
Because the motorcycle was not listed under Nationwide's policy, Nationwide refused to pay Burgess, arguing that the motorcycle did not have any UIM coverage.
Burgess moved for declaratory judgment. He argued that he was entitled to $15,000 of UIM coverage from the Nationwide policy that covered his "at-home" vehicles. Nationwide countered it should not be required to pay any UIM benefits because Burgess had more than the basic amount of UIM coverage and the vehicle involved in the accident had none. Nationwide also argued that its UM/UIM endorsement excludes coverage under these circumstances. The trial judge granted declaratory relief to Burgess in the amount of $15,000.
Whether a suit for declaratory judgment is legal or equitable is determined by the nature of the underlying issue. Auto-Owners Ins. Co. v. Horne, 356 S.C. 52, 56, 586 S.E.2d 865, 867 (Ct.App.2003) (citing Felts v. Richland County, 303 S.C. 354, 356, 400 S.E.2d 781, 782 (1991)). "An action to determine coverage under an insurance policy is an action at law." S.C. Farm Bureau Mut. Ins. Co. v. Wilson, 344 S.C. 525, 528, 544 S.E.2d 848, 849 (Ct.App.2001). In an action at law, tried without a jury, the appellate court will not disturb the trial court's findings of fact unless they are found to be without evidence that reasonably supports those findings. Townes Assocs., Ltd. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976). However, when an appeal involves stipulated or undisputed facts, an appellate court is free to review whether the trial court properly applied the law to those facts. In re Estate of Boynton, 355 S.C. 299, 301, 584 S.E.2d 154, 155 (Ct.App.2003). In such a situation, the appellate court does not have to defer to the trial court's findings. Id.
There is a great division of authority as to coverage for damages arising out of accidents involving owned but not insured vehicles. In some jurisdictions, UIM coverage follows the person; in others it follows the vehicle. We believe that South Carolina falls in the category where UIM coverage follows the person, as is the case with uninsured motorist ("UM") coverage.
UIM insurance is a variant of UM insurance. 9 Couch on Ins.3d § 122:3 (2004). In some jurisdictions, UIM is referred to as supplemental uninsured coverage. Id. South Carolina courts have often analogized UM and UIM, especially when discussing the application and interpretation of section 38-77-160 of the South Carolina Code (2002), which deals with UM and UIM coverage.2 Therefore, our appellate courts' treatment of UM is instructive in this case.
The purpose of the UM statute is "to provide benefits and protection against the peril of injury or death by an uninsured motorist to an insured motorist, his family, and the permissive users of his vehicle." Ferguson v. State Farm Mut. Auto. Ins. Co., 261 S.C. 96, 100, 198 S.E.2d 522, 524 (1973). The statute "is remedial in nature, enacted for the benefit of injured persons, and is to be liberally construed so that the purpose intended may be accomplished." Gunnels v. American Liberty Ins. Co., 251 S.C. 242, 247, 161 S.E.2d 822, 824 (1968).
Our supreme court has previously explained, "uninsured motorist coverage is not to provide coverage for the uninsured vehicle but to afford additional protection to the insured." Nationwide Mut. Ins. Co. v. Howard, 288 S.C. 5, 12, 339 S.E.2d 501, 504 (citing Hogan v. Home Ins. Co., 260 S.C. 157, 162, 194 S.E.2d 890, 892 (1973)). The court further clarified in Hogan that Hogan, 260 S.C. at 162,194 S.E.2d at 892.
Similarly, the statutory purpose of UIM coverage is to provide coverage in the event damages are sustained in excess of the liability limits carried by an at-fault insured or underinsured. S.C.Code Ann. § 38-77-160. Thus, our UIM statute is also remedial in nature and enacted for the benefit of injured persons. It should be construed liberally to effect the purpose intended by the legislature. See Sloan v. Greenville County, 356 S.C. 531, 564, 590 S.E.2d 338, 356 (Ct.App.2003)
().
Understanding that UIM coverage is a variation of UM coverage, we believe that Hogan indicates the legislative intent behind our UIM statute and is applicable here. In other words, under insurance, like un insurance, is personal and portable. "In jurisdictions where the coverage follows the person any person who enjoys the status of an insured under a motor vehicle policy of insurance which includes uninsured/underinsured coverage enjoys coverage protection simply by reason of having been injured by an uninsured/underinsured motorist." 9 Couch on Ins.3d § 123:3.3
S.C.Code Ann. § 38-77-160
The proper interpretation of section 38-77-160 is central to the resolution of the issues in this case. That section deals with UM and UIM and states:
Automobile insurance carriers shall offer, at the option of the insured, uninsured motorist coverage up to the limits of the insured's liability coverage in addition to the mandatory coverage prescribed by section 38-77-160. Such carriers shall also offer, at the option of the insured, underinsured motorist coverage up to the limits of the insured liability coverage to provide coverage in the event that damages are sustained in excess of the liability limits carried by an at-fault insured or underinsured motorist or in excess of any damages cap or limitation imposed by statute. If, however, an insured or named insured is protected by uninsured or underinsured motorist coverage in excess of the basic limits, the policy shall provide that the insured or named insured is protected only to the extent of the coverage he has on the vehicle involved in the accident. If none of the insured's or named insured's vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with the excess or underinsured coverage.4
(Emphasis added).
Nationwide argues that the emphasized language excludes basic UIM coverage in situations where the vehicle involved in a collision is owned by the insured but is not specifically covered in a UIM policy. We disagree.
The emphasized language has been interpreted or discussed on numerous occasions by our appellate courts.5 Several of those cases involved facts very analogous to the case sub-judice.6 However, none of them has directly addressed the question we face today, that is whether or not section 38-77-160 and public policy allow the exclusion of basic UIM coverage. Each of the cases addressed the issue of "stacking" UIM or UM coverage. Invariably, each of these cases found the emphasized language to apply to situations involving stacking. See S.C. Farm Bureau Mut. Ins. Co. v. Mooneyham, 304 S.C. 442, 445, 405 S.E.2d 396, 398 (1991)
(). In each case the insurer made an initial payment of at least the basic UIM/UM coverage and only litigated additional UIM/UM payments.
To address the issue of basic coverage, we must consider section 38-77-160 in its entirety, not just the...
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