Denson v. Nat'l Cas. Co., 28146

CourtUnited States State Supreme Court of South Carolina
Writing for the CourtKITTREDGE, JUSTICE
PartiesAnthony Denson, as personal representative of the estate of Garland Denson, Plaintiff, v. National Casualty Company, Defendant.
Docket Number28146,Appellate Case 2021-001389
Decision Date29 March 2023

Heard September 13, 2022


Johnny F. Driggers, of Goose Creek; and Andrew S. Radeker and Sarah M. Larabee, both of Harrison, Radeker & Smith, P.A., of Columbia, all for Plaintiff.

Robert Mills Kennedy Jr., of Phelps Dunbar LLP, of North Carolina for Defendant.


This Court accepted the following certified question from the United States District Court for the District of South Carolina:

May a person entitled to bring a dram-shop action against a business maintain a negligence action against the business's insurer where the insurer failed to notify the South Carolina Department of Revenue of the business's lapse in or termination of liquor liability coverage in violation of S.C. Code Ann. § 61-2-145(C) [(2022),] and the business did not have liquor liability coverage at the time of the underlying accident?

We answer the certified question "no" and conclude section 61-2-145(C) does not create a private right of action in favor of an injured party against the business's insurer.


We discern the following facts from the limited record before us and offer them merely in an effort to provide context.[1]

Garland Denson (the decedent) was killed in an automobile accident allegedly caused by a drunk driver. The complaint alleged the at-fault driver was overserved at Royal Lanes, a bar insured by Defendant National Casualty Company (National Casualty) under a general liability policy with no liquor liability endorsement. During probate of the decedent's estate, his personal representative, Plaintiff Anthony Denson (Denson) discovered Royal Lanes did not have the required liquor liability insurance. Specifically, Denson learned National Casualty previously provided liquor liability coverage to Royal Lanes, but at the time of the accident, the business had failed to renew the liquor liability coverage, leaving only a general liability policy.[2] Liquor liability coverage is statutorily mandated for certain establishments that sell alcoholic beverages, and the failure to maintain this coverage constitutes a violation of South Carolina law. See S.C. Code Ann. § 61-2-145(A) (requiring certain businesses to maintain liquor liability insurance coverage of at least $1,000,000).

As a result of this discovery, Denson filed a direct negligence action against National Casualty, rather than Royal Lanes. Denson claimed National Casualty was directly liable to the decedent's estate for failing to notify the South Carolina Department of Revenue (the department) about Royal Lanes' lapse or termination of liquor liability coverage as required by statute. In support, Denson cited section 61-2-145(C), which provides:

Each insurer writing liquor liability insurance policies or general liability insurance policies with a liquor liability endorsement to a person licensed or permitted to sell alcoholic beverages for onpremises consumption, in which the person so licensed or permitted remains open to sell alcoholic beverages for on-premises consumption after five o'clock p.m., must notify the department in a manner prescribed by department regulation of the lapse or termination of the liquor liability insurance policy or the general liability insurance policy with a liquor liability endorsement.

(Emphasis added.)[3]

National Casualty filed a motion to dismiss, arguing section 61-2-145 did not grant the decedent's estate (or any similarly injured party) the right to bring a cause of action against the insurer. In opposing the motion, Denson relied on the concept of negligence per se. Denson specifically argued that National Casualty's violation of its statutory duty constituted negligence per se, which in turn gave rise to a private right of action against the insurance company. The district court certified the above question to resolve National Casualty's motion to dismiss. We accepted the question pursuant to Rule 244, SCACR.


This certified question requires that we interpret section 61-2-145. We are guided by our precedents, and we apply standard rules of statutory construction to determine legislative intent. See generally Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000) ("The cardinal rule of statutory construction is to ascertain and effectuate the intent of the legislature. Under the plain meaning rule, it is not the court's place to change the meaning of a clear and unambiguous statute. Where the statute's language is plain and unambiguous, and conveys a clear and definite meaning, the rules of statutory interpretation are not needed and the court has no right to impose another meaning. What a legislature says in the text of a statute is considered the best evidence of the legislative intent or will. Therefore, the courts are bound to give effect to the expressed intent of the legislature." (cleaned up)).


Denson's argument leads with general principles of negligence per se. Armed with the insurer's statutory reporting duty under section 61-2-145(C), Denson concludes he is entitled to forgo an action against the alleged tortfeasor and sue the insurer directly. We reject this argument. To establish a claim for negligence per se based on a violation of the statute's reporting duty, Denson must first demonstrate either that National Casualty owed him a common-law duty of care, or that the legislature created a private right of action in section 61-2-145. As we will explain, no such common-law duty exists, and section 61-2-145 does not create a private right of action against the insurer. In essence, Denson's emphasis of the import of negligence per se puts the cart before the horse. The fact that a statute imposes a duty is not dispositive of a tortfeasor's liability under a negligence claim, for all statutes impose commands to do or refrain from doing something.

Our jurisprudence has at times merged the analysis for a private right of action and negligence per se because both address the question of whether the legislature intended the statute be used to impose civil liability. See 1 Dan B. Dobbs et al., The Law of Torts § 146 &n.13 (2d ed. 2011) (identifying this Court as seemingly treating the negligence per se doctrine as identical to a private cause of action (citing Doe v. Marion, 373 S.C. 390, 645 S.E.2d 245 (2007))); see also, e.g., Whitlaw v. Kroger Co., 306 S.C. 51, 52, 410 S.E.2d 251, 252 (1991) (per curiam) (analyzing whether a private cause of action for damages may be instituted under two statutes, and concluding these statutes give rise to liability only where used to establish negligence per se); Rayfield v. S.C. Dep't of Corr., 297 S.C. 95, 103-04, 374 S.E.2d 910, 914-15 (Ct. App. 1988) (using a negligence per se analysis to determine whether a statute "afford[s] a right of action for injury from the violation of a statute" (citation omitted)).

A distinction must be made, however, between (1) cases in which liability is based upon the violation of a statutory duty when there is also an underlying commonlaw cause of action; and (2) cases in which liability is based upon the violation of a statutory duty when there is no underlying common-law cause of action. See Dobbs, supra, § 158 (noting the confusion between private right of action and negligence per se, but stating the distinctions "are fundamental to a coherent understanding of statutes in tort law"). As Judge Posner explained:

Ordinarily the scope of the tort duty of care . . . is given by the common law. And although the legislature can and sometimes does create a duty of care to a new class of injured persons, the mere fact that a statute defines due care does not in and of itself create a duty enforceable by tort law. The distinction is well explained in Marquay v. Eno, [662 A.2d 272, 277 (N.H. 1995)]: "whether or not the common law recognizes a cause of action, the plaintiff may maintain an action under an applicable statute where the legislature intended violation of that statute to give rise to civil liability. The doctrine of negligence per se, on the other hand, provides that where a cause of action does exist at common law, the standard of conduct to which a defendant will be held may be defined as that required by statute, rather than as the usual reasonable person standard." Otherwise every statute that specified a standard of care would be automatically enforceable by tort suits for damages-every statute in effect would create an implied private right of action-which clearly is not the law.

Cuyler v. United States, 362 F.3d 949, 952 (7th Cir. 2004) (cleaned up) (emphasis added).

In any negligence cause of action, it is of course essential the plaintiff establish that a legal duty of care was owed to the plaintiff by the defendant. See Bass v. Gopal Inc., 395 S.C. 129, 134, 716 S.E.2d 910, 913 (2011) ("In any negligence action, the threshold issue is whether the defendant owed a duty to the plaintiff."); Bishop v. S.C. Dep't of Mental Health, 331 S.C. 79, 86, 502 S.E.2d 78, 81 (1998) ("An essential element in a cause of action for negligence is the existence of a legal duty of care owed by the defendant to the plaintiff. Without a duty, there is no actionable negligence." (citing Rogers v. S.C. Dep't of Parole &Cmty. Corr., 320 S.C. 253, 464 S.E.2d 330 (1995))). That duty may arise from the common law or a statute. Steinke v. S.C. Dep't of Lab., Licensing & Regul., 336 S.C. 373, 388, 520 S.E.2d 142, 149 (1999) (quoting Jensen v. Anderson Cnty. Dep't...

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