Fritz-Pontiac-Cadillac-Buick v. Goforth
| Citation | 440 S.E.2d 367,312 S.C. 315 |
| Decision Date | 17 November 1993 |
| Docket Number | No. 23994,FRITZ-PONTIAC-CADILLAC-BUIC,A,23994 |
| Parties | ppellant, v. Larry A. GOFORTH, Respondent, v. AMERICAN MUTUAL FIRE INSURANCE COMPANY and Universal Underwriters Insurance Company, of which American Mutual Fire Insurance Company, is a Respondent, and Universal Underwriters Insurance Company, is an Appellant. . Heard |
| Court | United States State Supreme Court of South Carolina |
Bradford N. Martin and Susan A. Fretwell both of Leatherwood, Walker, Todd, and Mann, Greenville, and Paul A. Dominick and David B. Summer, Jr. both of Nexsen, Pruett, Jacobs, and Pollard, Columbia, for appellant.
Timothy G. Quinn of Quinn, Boyle, and Greenberg and Thomas F. Dougall of Bowers, Orr, and Robertson, Columbia, for respondents.
This is a declaratory judgment action. Universal Underwriters Insurance Company (Universal) contends that the trial judge erred in ruling that Larry A. Goforth (Goforth) was an insured under a policy Universal issued to Fritz-Pontiac-Cadillac-Buick's (Fritz). We agree and reverse.
On October 30, 1989, Fritz allowed Goforth to take a Cadillac Allante for an overnight test drive. While driving home, Goforth lost control of the Cadillac and ran off the road, causing extensive damage to the car. Pursuant to a collision and liability policy, Universal paid Fritz for the damage to the Cadillac.
Thereafter, Fritz brought this action against Goforth to recover for the damage to the Cadillac. Goforth filed a third party complaint against Universal, claiming that he was an insured under the policy Universal issued to Fritz and, therefore, Universal had a duty to defend and indemnify him against Fritz's claims. A declaratory judgment action was held to resolve the coverage issues raised by Goforth's third party complaint. The trial judge held that Goforth was an insured under Universal's policy because S.C.Code Ann. § 38-77-140 (1989) required insurers to cover permissive drivers. Additionally, the trial judge ruled that because Goforth was an insured, Universal had a duty to defend Goforth and could not be subrogated to Fritz's claim against Goforth. Fritz and Universal (Appellants) appealed.
Appellants contend that the trial judge erred in holding that Goforth was an insured under Fritz's policy. We agree.
The preamble to the Unicover TM insurance policy Universal issued to Fritz provides:
This entire document constitutes a multiple coverage insurance policy. Unless stated otherwise in a Coverage Part, each Coverage Part is made up of its provisions, plus those of the State Amendatory Part (if any), the General Conditions, and that portion of the declarations referring to the Coverage Part, including all endorsements made applicable to that Coverage Part. Each Coverage Part so constituted becomes a separate contract of insurance. [Emphasis added.]
The General Conditions portion of the policy states:
"INSURED" means any person or organization qualifying as an INSURED in the WHO IS AN INSURED provision of the Coverage Part. Except with respect to the limit of liability, the insurance afforded applies separately to each INSURED.
The remainder of Universal's Unicover TM policy is arranged into distinct parts that provide separate coverage for auto physical damage, property damage and loss, loss due to crime, garage operations, basic auto insurance, general liability, and excess liability. Only two of these Coverage Parts are relevant to this appeal.
Coverage Part 900, which provides basic auto insurance, contains the following provisions:
WHO IS AN INSURED--With respect to this Coverage Part:
(2) under Insuring Agreements A and B ...
(b) any other person using an OWNED AUTO ... within the scope of YOUR permission....
INSURING AGREEMENTS--We will pay:
A. INJURY--all sums the INSURED legally must pay as damages (including punitive damages where insurable by law) because of INJURY to which this insurance applies, caused by an OCCURRENCE arising out of the ownership, maintenance, use, loading or unloading of an OWNED AUTO or TEMPORARY SUBSTITUTE AUTO....
C. PHYSICAL DAMAGE--for LOSS to an OWNED AUTO from any cause, except as excluded or as stated otherwise in the declarations....
EXCLUSIONS--This insurance does not apply to ...
(e) under Insuring Agreement A, INJURY to property owned by, rented to, being transported by, or in the care, custody or control of the INSURED. This exclusion does not apply to a residence or private garage ...
NO BENEFIT TO BAILEE--This insurance will not benefit, directly or indirectly, any carrier or bailee.
Coverage Part 300, which provides coverage for auto physical damage, contains the following provisions:
INSURING AGREEMENT--WE will pay for LOSS of or to a COVERED AUTO from any cause, except as excluded or as stated otherwise in the declarations....
EXCLUSIONS--WE will not pay for LOSS ...
(o) to a COVERED AUTO that is or becomes subject to a bailment lease, conditional sale, purchase agreement, mortgage or other encumbrance not described or specifically declared in this Coverage Part....
NO BENEFIT TO BAILEE--This insurance will not benefit, directly or indirectly, any carrier or bailee.
Insurance policies are subject to general rules of contract construction. Sloan Constr. Co. v. Central Nat'l Ins. Co., 269 S.C. 183, 236 S.E.2d 818 (1977). We must enforce, not write, contracts of insurance and we must give policy language its plain, ordinary, and popular meaning. We should not torture the meaning of policy language to extend or defeat coverage that was never intended by the parties. Torrington Co. v. Aetna Casualty and Surety Co., 264 S.C. 636, 216 S.E.2d 547 (1975).
Although Goforth is an insured for purposes of liability coverage under Part 900, exclusion (e) specifically excludes coverage for injury to property in the care, custody, or control of the insured. Further, the relationship between Goforth and Fritz was that of a bailor and bailee. Eberhardt v. Forrester, 241 S.C. 399, ...
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