Connelly v. The Main St. Am. Grp.
| Decision Date | 11 January 2023 |
| Docket Number | 28130,Appellate Case 2021-000005 |
| Parties | Stephany A. Connelly and James M. Connelly, Plaintiffs, v. The Main Street America Group, Old Dominion Insurance Company, Allstate Fire and Casualty Insurance Company, Debbie Cohn, and Freya Trezona, Defendants, of which Allstate Fire and Casualty Insurance Company, The Main Street America Group, and Old Dominion Insurance Company are the Petitioners, and Stephany A. Connelly and James M. Connelly are the Respondents. |
| Court | South Carolina Supreme Court |
Heard April 6, 2022
Appeal from Richland County Jocelyn Newman, Circuit Court Judge
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
Thomas Frank Dougall and Michal Kalwajtys, both of Dougall & Collins, of Elgin, and Eugene Hamilton Matthews, of Richardson Plowden & Robinson, PA, of Columbia, all for Petitioners Old Dominion Insurance Company and The Main Street America Group; and Alfred Johnston Cox and Kendall Patricia Crawford, both of Gallivan, White & Boyd, PA, of Columbia, for Petitioner Allstate Fire and Casualty Insurance Company.
John D. Kassel and Theile Branham McVey, both of Kassel McVey, of Columbia, for Respondent James M. Connelly; and Bert Glenn Utsey III, of Clawson Fargnoli Utsey, LLC, of Charleston, for Respondents Stephany A. Connelly and James M. Connelly.
John Robert Murphy and Megan Noelle Walker, both of Murphy & Grantland, P.A., of Columbia, for Amicus Curiae Progressive Select Insurance Company.
KITTREDGE JUSTICE
This case involves the intersection of the uninsured motorist (UM) statute[1] with the Workers' Compensation Act (the Act).[2]Respondent Stephany Connelly was a passenger in a vehicle driven by her co-worker Freya Trezona during the course and scope of their employment when Trezona negligently caused an accident, injuring Connelly. Because workers' compensation benefits did not fully redress Connelly's injuries, Connelly made a claim for bodily injury and UM benefits with her own insurance carrier and with Trezona's carrier. Both companies denied the claim maintaining Connelly's sole remedy lay with the Act. After Connelly filed suit seeking a declaratory judgment that both policies provided coverage, the parties agreed the dispute turned on the proper interpretation of the phrase "legally entitled to recover" found in the UM statute. See S.C. Code Ann. § 38-77-150(A) ( all insurance policies must contain a UM 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" (emphasis added)).[3] The trial court ruled in favor of Connelly finding the phrase "legally entitled to recover" ambiguous. The court of appeals concurred in the finding of ambiguity and affirmed the trial court's determination that a plaintiff merely needed to show fault on the part of the uninsured driver and resulting damages, both of which had been satisfied here.
We find the statutory phrase "legally entitled to recover" unambiguous. We conclude the amount a plaintiff is "legally entitled to recover" under a UM provision of an insurance policy is the amount for which the plaintiff has secured a judgment against the at-fault defendant. Because the Act prevents Connelly from ever becoming "legally entitled to recover" from Trezona under these facts, we reverse.
I.
The parties jointly stipulated the underlying facts, which are not in dispute. Connelly was injured in an automobile accident while riding as a passenger in a vehicle owned and operated by Trezona. The vehicle was covered by an automobile liability insurance policy issued by Petitioner Old Dominion Insurance Company (Old Dominion).[4] Additionally, Connelly had purchased UM coverage through her own automobile insurance policy with Petitioner Allstate Fire and Casualty Insurance Company (Allstate). At the time of the accident, Connelly and Trezona were co-workers acting within the course and scope of their employment. Therefore, Connelly made a successful claim for benefits under the Act.
Connelly then sought additional compensation against her co-worker under the bodily injury provision of the Old Dominion policy, as well as under the UM provision of both the Old Dominion and Allstate (collectively, Petitioners') policies,[5] but Petitioners denied Connelly's claims. Petitioners admitted that Connelly is an insured person, as defined in the policies, and that Trezona's negligence caused the accident and Connelly's resulting injuries. However Petitioners claimed, among other things, that (1) because Connelly was injured during the course and scope of her employment, the Act provides her exclusive remedy; (2) because the Act affords tort immunity to the employer and co-workers of an injured employee, Trezona is immune from suit by Connelly, thereby rendering Petitioners likewise immune; and thus (3) Connelly is not legally entitled to recover against Trezona or Petitioners.
Notwithstanding the exclusivity provision of the Act, Connelly filed suit, seeking a declaratory judgment that the UM provisions of both polices provided coverage for her injuries. Initially, Connelly named Petitioners and Trezona as co-defendants, but-perhaps in recognition of the statutory immunity the Act affords Trezona- Connelly later dismissed Trezona from the suit.[6] Petitioners answered, asserting Connelly was not "legally entitled to recover" from Trezona based on the plain meaning of that phrase as used in the UM statute (section 38-77-150). Petitioners and Connelly then filed cross-motions for summary judgment.
The circuit court granted Connelly's motion and denied Petitioners' motions. In relevant part, the circuit court held Trezona's vehicle was an uninsured vehicle because-despite the fact that Connelly was admittedly an insured person under the policies-Petitioners had denied coverage. See S.C. Code Ann. § 38-77-30(14)(b) (Supp. 2021) ().
Likewise, the circuit court found the "legally entitled to recover" language of the UM statute was ambiguous, reasoning that the phrase is not defined in either the South Carolina Code or Petitioners' insurance policies, and there is a jurisdictional split on the correct interpretation of the phrase. The circuit court explained that it was therefore required to interpret the UM statute in a manner consistent with the legislature's intent, that being "to provide benefits to protect against the peril of injury or death by an uninsured motorist to an insured motorist." Thus, the circuit court held that "legally entitled to recover" meant a plaintiff merely needed to show fault on the part of the uninsured driver and damages, and the Act's provision of immunity to Trezona did not impact the availability of UM coverage to Connelly. (Citing Borjas v. State Farm Mut. Auto. Ins. Co., 33 P.3d 1265 (Colo.App. 2001); Barfield v. Barfield ex rel. Barfield, 742 P.2d 1107 (Okla. 1987); Torres ex rel. Torres v. Kan. City Fire & Marine Ins. Co., 849 P.2d 407 (Okla. 1993)).
Expounding on that point, the circuit court explained UM coverage could coexist with the Act's exclusive remedy in these circumstances because (1) the Act's exclusivity provision only bars tort actions, but a UM claim sounds in contract, not tort; (2) Connelly did not sue Trezona or her employer, so her claims did not run afoul of the exclusivity provision; and (3) Connelly's recovery of UM benefits did not frustrate the Act's goals, as Trezona, her employer, and the workers' compensation carrier remained unaffected by allowing Connelly to receive UM benefits.
Petitioners appealed, and the court of appeals affirmed. Connelly v. Main St. Am. Grp., 432 S.C. 122, 850 S.E.2d 627 (Ct. App. 2020). In large part, the court of appeals concurred with the circuit court that the phrase "legally entitled to recover" is ambiguous, citing the jurisdictional split of authority on the issue. In light of the finding of ambiguity, the court of appeals concluded Connelly was merely required to show fault and damages. The court of appeals explained that allowing UM coverage in this situation effectuated the legislature's intent, noting the UM statute must be liberally construed in favor of coverage, and the Act only bars tort claims against employers and co-employees, not contract claims for UM benefits.
We granted Petitioners a writ of certiorari to review the decision of the court of appeals.
II.
A declaratory judgment action to determine coverage under an insurance policy is an action at law. City of Hartsville v. S.C. Mun. Ins. & Risk Fin. Fund, 382 S.C. 535, 543, 677 S.E.2d 574, 578 (2009). In an appeal from an action at law, the Court's jurisdiction is limited to correcting errors of law. Pope v. Gordon, 369 S.C. 469, 474, 633 S.E.2d 148, 151 (2006). "The trial judge's findings of fact will not be disturbed on appeal unless the findings are wholly unsupported by the evidence or controlled by an erroneous conception of the application of the law." Id.
In reviewing the grant of a motion for summary judgment, appellate courts apply the same standard as the trial court under Rule 56(c), SCRCP. Dawkins v. Fields, 354 S.C. 58, 69, 580 S.E.2d 433, 438-39 (2003). "[S]ummary judgment is proper when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Montgomery v. CSX Transp., Inc., 376 S.C. 37, 47, 656 S.E.2d 20, 25 (2008).
III.
Petitioners contend Connelly's recovery of workers' compensation benefits under the Act renders Trezona immune from lawsuits stemming from the accident. As a result, Petiti...
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