Insurance Financial Services, Inc. v. South Carolina Ins. Co., 21261

• Decision Date: 09 July 1980
• Docket Number: No. 21261,21261
• Citation: 268 S.E.2d 113,275 S.C. 155
• Parties: INSURANCE FINANCIAL SERVICES, INC., Appellant, v. The SOUTH CAROLINA INSURANCE COMPANY, Respondent, v. The TRAVELERS INSURANCE COMPANY, Main Insurance Company, Gerald R. Callahan,and Edward J. Harrington, Appellants.
• Court: South Carolina Supreme Court

Page 113

268 S.E.2d 113

275 S.C. 155

INSURANCE FINANCIAL SERVICES, INC., Appellant, v. The SOUTH CAROLINA INSURANCE COMPANY, Respondent, v. The TRAVELERS INSURANCE COMPANY, Main Insurance Company, Gerald R. Callahan,and Edward J. Harrington, Appellants.

No. 21261.

Supreme Court of South Carolina.

July 9, 1980.

David M. Ratchford, Donald E. Jonas, and Charles F. Cooper, II, of Ratchford, Cooper & Jonas, and Clinch Heyward Belser and Charles E. Baker, of Belser, Baker, Barwick & Toal, Columbia, for appellants.

David W. Robinson, II, of Robinson, McFadden, Moore & Pope, Columbia, for respondent.

LEWIS, Chief Justice:

Background decisions to the present litigation are found in G-H Insurance Agency, Inc. v. The Travelers Insurance Companies, 270 S.C. 147, 241 S.E.2d 534 and Van Robinson Insurance Agency v. Harleysville Mutual Insurance Agency, 272 S.C. 127, 249 S.E.2d 744.

As a result of the foregoing decisions, and subsequent rulings of the lower court, plaintiff-appellant Insurance Financial Services, Inc. (IFS), served a second amended complaint in this action against respondent, The South Carolina Insurance Company (South Carolina). Upon the service of the second amended complaint, South Carolina, by petition, sought an order making appellants, The Travelers Insurance Company (Travelers), Main Insurance Company (Main), Gerald R. Callahan, and Edward J. Harrington party defendants to the action in order to permit South Carolina to assert a cross complaint against them. It was claimed that a complete determination of the controversy could not be had without their presence as parties to the litigation within the meaning of Section 15-5-200, South Carolina Code of Laws 1976. The proposed cross-claim was set forth in an amended answer, counterclaim, and cross complaint attached to the petition to join additional parties.

The lower court granted the petition to add the parties named; and IFS (plaintiff) and the third party defendants have appealed.

Code Section 15-5-200, under which the addition of parties was sought by South Carolina and granted by the lower court, provides in pertinent part:

The court may determine any controversy between the parties before it, when it can be done without prejudice to the rights of others, or by saving their rights. But when a complete determination of the controversy cannot be had without the presence of other parties, the court must cause them to be brought in.

In Brown v. Quinn, 220 S.C. 426, 68 S.E.2d 326, the general rule was stated that the statutes must be liberally construed to authorize the courts to bring before them all persons necessary to complete determination of the matters involved in order to avoid circuity of action and multiplicity of suits. It was pointed out however that

. . . it is not the purpose of a cross action or a cross complaint to introduce new matters which are outside the original controversy. This is not permitted. The relief sought must in general relate to or depend upon the contract or transaction on which the action is brought.

This action was originally instituted against South Carolina and Travelers and sought injunctive relief in addition to damages. The complaint was based on the alleged wrongful termination of the agency contracts of IFS with South Carolina and Travelers in violation of provisions of Act 1177 of the 1974 Acts of the General Assembly (now codified as 38-37-10 et seq., 1976 Code of Laws). The request of IFS for a temporary injunction restraining the cancellation of the agency contracts was granted and a demurrer of South Carolina and Travelers was granted for misjoinder of causes of action. IFS was permitted to amend its pleadings to allege separate causes of action in separate complaints against South Carolina and Travelers.

IFS thereafter filed an amended complaint against South Carolina seeking the same relief as previously sought in the action against it and Travelers. The temporary injunctive relief, previously granted, we continued in effect. As the result of the decisions of this Court in G-H Insurance Agency, and Van Robinson Insurance Agency, both supra, the latter holding that injunctive relief was not available in actions brought pursuant to Act 1177, the motion of IFS to amend its amended complaint was granted.

The second amended complaint alleges that it is an independent insurance agency and held an agency contract with South Carolina. It was further alleged that prior to the passage of Act 1177 IFS had a high volume...