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

• Decision Date: 02 August 1973
• Docket Number: No. 19670,19670
• Citation: 198 S.E.2d 522,261 S.C. 96
• Court: South Carolina Supreme Court
• Parties: Gladys P. FERGUSON, Executrix of the Estate of James A. Ferguson, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

Page 522

198 S.E.2d 522

261 S.C. 96

Gladys P. FERGUSON, Executrix of the Estate of James A.

Ferguson, Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant.

No. 19670.

Supreme Court of South Carolina.

Aug. 2, 1973.

Nelson, Mullins, Grier & Scarborough, Columbia, for appellant.

Watkins, Vandiver, Kirven, Long & Gable, Anderson, for respondent.

MOSS, Chief Justice:

James A. Ferguson, on September 27, 1966, while driving his own automobile and in the course of his employment, lost his life in a collision with an automobile driven by an uninsured motorist, George T. Bailey.

Gladys P. Ferguson, executrix of the estate of James A. Ferguson, the respondent herein, brought suit against Robert L. Waldrep, Jr., as administrator of the estate of George T. Bailey, for the wrongful death of the said James A. Ferguson. This action resulted in a verdict and judgment for the respondent in the amount of $100,000 and said judgment was entered of record, on October 29, 1969, in the office of the Clerk of Court for Anderson County, South Carolina.

At the time James A. Ferguson lost his life, he was engaged in the course and scope of his employment so as to be covered under the South Carolina Workmen's Compensation Act. Pursuant thereto, his statutory dependents were paid $11,515.74 by Liberty Mutual Insurance Company, the compensation carrier for his employer. Thereafter, on July 25, 1968, Liberty Mutual waived its right to any of the proceeds to the extent of any recovery made under Coverage U, the uninsured motorist endorsement, contained in the automobile liability insurance policy which was issued by State Farm Mutual Automobile Insurance Company, the appellant herein, to James A. Ferguson, which said policy was issued prior to his death and was in full force and effect at said time.

The appellant, by the terms of Coverage U, and in accordance with the requirements of Sections 46--750.32 and 46--750.33 of the Code, promised:

'To pay all sums which the insured or his legal representatives shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of:

'(a) bodily injury, sickness or disease, including death resulting therefrom hereinafter called 'bodily injury', sustained by the insured. . . . caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile.'

The respondent brought this action against the appellant alleging that by virtue of her judgment against the estate of George T. Bailey that the appellant was liable to her under Coverage U of its liability insurance policy, before mentioned, in the amount of $10,000, with interest thereon from October 29, 1969, the date of the entry of judgment.

The appellant, by answer, admitted its policy was in full force and effect at the time of Ferguson's death, but denied that any amount was due under it to the respondent because of the following exclusions and conditions contained in Insuring Agreement III. The exclusion set forth by the appellant is as follows:

'This coverage does not apply:

'(d) so as to inure directly or indirectly to the benefit of any Workmen's Compensation or disability benefits carrier or any person or organization qualifying as a self-insurer under any Workmen's Compensation or disability benefits law or any similar law;'

and the condition set forth is as follows:

'(d) any amount payable to an insured under the terms of this coverage shall be reduced by . . . (2) the amount paid and the present value of all amounts payable to such an insurer under any Workmen's Compensation law, exclusive of non-occupational disability benefits. . . .'

This case came on for trial by agreement of the parties before The Honorable E. Harry Agnew, Resident Judge, upon the pleadings and agreed stipulation of facts. Thereafter, the trial judge issued his order granting the respondent judgment against the appellant in the amount of $10,000 with interest at the legal rate from October 29, 1969. This appeal followed.

The appellant contends that the trial judge was in error in failing to reduce the payment under the uninsured motorist endorsement by the amount received by the insured under the South Carolina Workmen's Compensation Act. Based upon the foregoing, it is the position of the appellant that the respondent has recovered $11,515.74 under the South Carolina Workmen's Compensation Act, which amount exceeds the $10,000 policy limit contained in the uninsured motorist provision and because thereof the respondent is not entitled to recover any amount from the appellant.

The provision for reduction in payments under the uninsured motorist endorsement of amounts paid under our Workmen's Compensation Law is a question of first impression in this State. The uninsured motorist endorsement is the contract which the insurance company makes with the insured to protect him against the uninsured motorist. It was not the purpose of the uninsured motorist endorsement to provide coverage for the uninsured vehicle, its owner or operator, but was 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. Laird v. Nationwide Ins. Co., 243 S.C. 388, 134 S.E.2d 206.

The public policy declared by our uninsured motorist statute imposes an obligation on insurers to provide protection to their insureds against loss caused by wrongful conduct of an uninsured motorist, and any limiting language in an insurance contract which had the effect of providing less protection than made obligatory by the statutes...