Grinnell Corp. v. Wood

• Decision Date: 11 March 2008
• Docket Number: No. 4355.,4355.
• Citation: 663 S.E.2d 61,378 S.C. 458
• Parties: GRINNELL CORPORATION d/b/a Grinnell Fire Protection, Appellant/Respondent, v. John WOOD, Respondent, and American Home Assurance Company, Respondent/Appellant, and Government Employees Insurance Company, Respondent.
• Court: South Carolina Court of Appeals

663 S.E.2d 61

378 S.C. 458

GRINNELL CORPORATION d/b/a Grinnell Fire Protection, Appellant/Respondent, v. John WOOD, Respondent, and American Home Assurance Company, Respondent/Appellant, and Government Employees Insurance Company, Respondent.

No. 4355.

Court of Appeals of South Carolina.

Heard February 5, 2008.

Decided March 11, 2008.

Rehearing Denied July 16, 2008.

Amy M. Snyder and Sean A. Scoopmire, both of Greenville, for Appellant/Respondent Grinnell Corporation d/b/a Grinnell Fire Protection.

David Whittington, of Summerville, for Respondent John Wood.

Peter H. Dworjanyn, of Columbia, for Respondent/Appellant American Home Assurance Company.

Stephen F. DeAntonio, of Charleston, for Respondent Government Employees Insurance Company.

ANDERSON, J.

Grinnell Corporation d/b/a Grinnell Fire Protection (Grinnell) and American Home Assurance Company (American Home) appeal from an order of the circuit court reforming an automobile insurance policy to include uninsured motorist coverage (UM) and underinsured motorist coverage (UIM) in the amount of $5,000,000. We affirm.

FACTUAL/PROCEDURAL BACKGROUND

The parties agree to the following Stipulation of Facts and Exhibits:

1. On or about May 1, 2000, John Wood was injured in a motor vehicle accident while in the course and scope of his employment with Grinnell Corporation DBA Grinnell Fire Protection.

2. The vehicle driven by John Wood at the time of the accident was owned by Grinnell Corporation DBA Grinnell Fire Protection.

3. American Home Insurance Company (aka American Home Assurance Company and/or AIG) issued a policy of insurance to Grinnell Corporation DBA Grinnell Fire Protection, policy number RMCA5347215 providing automobile insurance coverage for vehicles owned by Grinnell Corporation DBA Grinnell Fire Protection including but not limited to the automobile involved in this accident.

4. The insurance policy in question provides for coverage limits of Five Million Dollars.

5. The documents identified as Exhibits 1, 2, and 3 attached to the stipulation of fact are agreed to by the parties to be true and accurate copies of the original documents in question and authenticated for admissibility into evidence at the hearing on this matter, said exhibits identified as follows:

Exhibit 1 — American Home Assurance Company insurance policy issued to Grinnell Corporation;

Exhibit 2 — Premium Agreement between American Home Assurance Company and Grinnell Corporation; and

Exhibit 3 — American Home Assurance Company offer/rejection form for optional UM/UIM coverage.

All issues of UIM + UM are deemed properly pleaded and raised.

On July 1, 1999, Tyco International (US) Inc. (Tyco), obtained a policy of insurance with American Home. At the time Tyco obtained the policy, Grinnell was a wholly owned subsidiary of Tyco. The policy provided commercial auto coverage with liability limits in the amount of $5,000,000 and applied to vehicles owned and operated by Grinnell. Along with the policy, Tyco and American Home executed a "payment agreement" which required Tyco to reimburse American Home up to $500,000 for each claim American Home paid. Using a standard form, American Home made an "Offer of Additional Uninsured and Underinsured Automobile Insurance Coverages" (the Offer Form) for Tyco's South Carolina policy.

Gerald M. Goetz executed the Offer Form for Tyco's South Carolina policy. At the time, Goetz was serving as Vice President of Risk Management for Tyco. He had worked in the insurance industry as a risk manager since 1978 and earned several degrees relating to risk management. Goetz signed only the acknowledgement section of the Offer Form. He testified the Offer Form was not completed by Tyco; it was filled out by either American Home or the insurance broker.

Goetz asserted he was fully aware of Tyco's options and the nature of UM and UIM coverage when he executed the form. According to Goetz, Tyco was "effectively self-insured" due to the $500,000 deductible, and explained that Tyco would not have bought additional UM and UIM coverage under any circumstances because doing so would increase its own exposure to liability. Additionally, Goetz professed Tyco desired to purchase minimum UM and UIM coverage because it carried workers' compensation coverage for employees who might be injured while driving company vehicles.

On May 1, 2000, John Wood sustained injuries from an accident while driving a vehicle owned by Grinnell, his employer at the time. The vehicle was insured under the policy American Home issued to Grinnell.

Wood brought a claim for workers' compensation benefits against Grinnell which was paid. Wood also sought recovery under UM and UIM coverage in the case of John Wood v. Lisa Ackerman and John Doe, 2003-CP-08-615. In that action, which is currently pending, Wood served both American Home and Government Employees Insurance Company (GEICO), the insurance provider for his personal vehicle.

Grinnell filed this separate action against Wood, GEICO, and American Home seeking a declaratory judgment that it had successfully rejected UIM and additional UM coverage under its policy with American Home. GEICO answered, filing a counterclaim against Grinnell and a cross-claim against American Home, asking for a reformation of Grinnell's policy to include additional UM and UIM coverage. GEICO requested a declaration that American Home is the primary insurance provider for UM and UIM coverage. Wood answered and filed a cross-claim against American Home, beseeching a reformation of the policy and damages for bad faith.

Following discovery, Grinnell, GEICO, and Wood filed motions for summary judgment on the issues of the offer of UM and UIM and reformation of the policy. American Home joined in Grinnell's motion at the hearing. The motions were heard on the stipulated facts above. The circuit court granted summary judgment to Wood and GEICO.

STANDARD OF REVIEW

I. Summary Judgment/Sufficiency of Offer

In reviewing the grant of a motion for summary judgment, the appellate court applies the same standard of review as the trial court under Rule 56, SCRCP. Pye v. Estate of Fox, 369 S.C. 555, 563, 633 S.E.2d 505, 509 (2006). Summary 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. Rule 56(c), SCRCP ("The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."); Young v. South Carolina Dept. of Disabilities and Special Needs, 374 S.C. 360, 365, 649 S.E.2d 488, 490 (2007); Madison ex rel. Bryant v. Babcock Center, Inc., 371 S.C. 123, 134, 638 S.E.2d 650, 655 (2006); Houck v. State Farm Fire & Cas. Ins. Co., 366 S.C. 7, 11, 620 S.E.2d 326, 329 (2005); Bennett v. Investors Title Ins. Co., 370 S.C. 578, 587, 635 S.E.2d 649, 654 (Ct.App.2006); B & B Liquors, Inc. v. O'Neil, 361 S.C. 267, 270, 603 S.E.2d 629, 631 (Ct.App.2004). In determining whether any triable issues of fact exist, the evidence and all reasonable inferences therefrom must be viewed in the light most favorable to the non-moving party; Law v. S.C. Dep't of Corrections, 368 S.C. 424, 434, 629 S.E.2d 642, 648 (2006); Medical Univ. of South Carolina v. Arnaud, 360 S.C. 615, 619, 602 S.E.2d 747, 749 (2004); Moore v. Weinberg, 373 S.C. 209, 216, 644 S.E.2d 740, 743 (Ct.App.2007); Rife v. Hitachi Constr. Mach. Co., Ltd., 363 S.C. 209, 213, 609 S.E.2d 565, 567 (Ct.App.2005).

"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." WDW Props. v. City of Sumter, 342 S.C. 6, 10, 535 S.E.2d 631, 632 (2000); Cowden Enterprises, Inc. v. East Coast Millwork Distributors, 363 S.C. 540, 543, 611 S.E.2d 259, 260 (Ct.App.2005); Goldston v. State Farm Mut. Auto. Ins. Co., 358 S.C. 157, 166, 594 S.E.2d 511, 516 (Ct.App.2004). In such cases, we are not required to defer to the circuit court's legal conclusions. Dreher v. Dreher, 370 S.C. 75, 79, 634 S.E.2d 646, 648 (2006); J.K. Constr., Inc. v. W. Carolina Reg'l Sewer Auth., 336 S.C. 162, 166, 519 S.E.2d 561, 563 (1999); McGirt v. Nelson, 360 S.C. 307, 310, 599 S.E.2d 620, 622 (Ct. App.2004); In re Estate of Boynton, 355 S.C. 299, 301-302, 584 S.E.2d 154, 155 (Ct.App. 2003).

The sufficiency of an offer of UIM or UM coverage is a question of law for the court. See Hanover Ins. Co. v. Horace Mann Ins. Co., 301 S.C. 55, 389 S.E.2d 657 (1990); Antley v. Nobel Ins. Co., 350 S.C. 621, 567 S.E.2d 872 (Ct.App.2002); Bower v. Nat'l Gen. Ins. Co., 342 S.C. 315, 536 S.E.2d 693 (Ct.App.2000), aff'd, 351 S.C. 112, 569 S.E.2d 313 (2002).

II. Statutory Construction

The issue of interpretation of a statute is a question of law for the court. Univ. of S. California v. Moran, 365 S.C. 270, 275, 617 S.E.2d 135, 137 (Ct.App.2005); see also Catawba Indian Tribe of South Carolina v. State of South Carolina, 372 S.C. 519, 524, 642 S.E.2d 751, 753 (2007), cert. denied, Oct. 1, 2007; Charleston County Parks & Recreation Comm'n v. Somers, 319 S.C. 65, 67, 459 S.E.2d 841, 843 (1995).

The cardinal rule of statutory interpretation is to determine the intent of the legislature. Bass v. Isochem, 365 S.C. 454, 459, 617 S.E.2d 369, 377 (Ct.App.2005), cert. dismissed as improvidently granted, 374 S.C. 346, 649 S.E.2d 485 (2007); Georgia-Carolina Bail Bonds, Inc. v. County of Aiken, 354 S.C. 18, 22, 579 S.E.2d 334, 336 (Ct.App.2003); Smith v. S.C. Ins. Co., 350 S.C. 82, 87, 564 S.E.2d 358, 361 (Ct.App. 2002); see also Gordon v. Phillips Utils., Inc., 362 S.C. 403, 406, 608 S.E.2d 425, 427 (2005) ("The primary purpose in construing a statute is to ascertain legislative intent."). All rules of statutory construction are subservient to the one that legislative...