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

Citation364 S.C. 222,612 S.E.2d 719
Decision Date21 March 2005
Docket NumberNo. 3964.,3964.
CourtSouth Carolina Supreme Court
PartiesTerry K. JONES, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., Respondent.

Gary W. Poliakoff, of Spartanburg, for Appellant.

Michael T. Cole and Charles R. Norris, both of Charleston, for Respondent.


Terry K. Jones (Jones) initiated this action against State Farm Automobile Insurance Company (State Farm) seeking a declaration that his 1986 Mazda pickup truck was covered under a State Farm policy at the time he was involved in an automobile collision. The trial judge entered summary judgment in favor of State Farm, finding that State Farm had cancelled coverage on the 1986 Mazda prior to the accident. We affirm.1


As late as November of 1999, State Farm provided insurance for three of Jones's vehicles, including the 1986 Mazda pickup truck. However, on November 5, 1999, State Farm sent a cancellation notice informing Jones that effective November 24, 1999, coverage of the 1986 Mazda would be cancelled due to nonpayment of premiums.

On December 19, 1999, Jones was seriously injured in a motor vehicle collision with Arthur W. Campbell. Jones had been driving the 1986 Mazda. Sometime after the accident, Jones's State Farm agent signed a Form FR-10 which stated: "I hereby affirm that to the best of my knowledge the vehicle described above was insured by State Farm insurance company on the date and time of the accident."

Jones's medical bills exceeded $200,000. After settling with Campbell's liability carrier, Jones sought a declaration that (1) the 1986 Mazda was covered by State Farm at the time of the collision, (2) he was entitled to $50,000 of underinsured motorist coverage on the Mazda, and (3) he was entitled to stack $50,000 of underinsured motorist coverage from each of the two additional vehicles covered by State Farm. State Farm moved for summary judgment, claiming the policy had been cancelled.

The trial judge ruled that State Farm was entitled to summary judgment because State Farm's cancellation notice complied with S.C.Code Ann. § 38-77-120 (1985), and the Form FR-10 did not affect the cancellation.


When reviewing the grant of a summary judgment motion, the appellate court applies the same standard which governs the trial court under Rule 56(c), SCRCP: 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. White v. J.M. Brown Amusement Co., 360 S.C. 366, 601 S.E.2d 342 (2004); B & B Liquors, Inc. v. O'Neil, 361 S.C. 267, 603 S.E.2d 629 (Ct.App.2004); Redwend Ltd P'ship v. Edwards, 354 S.C. 459, 581 S.E.2d 496 (Ct.App.2003), cert. denied. In determining whether any triable issue of fact exists, the evidence and all inferences which can reasonably be drawn therefrom must be viewed in the light most favorable to the nonmoving party. Medical Univ. of South Carolina v. Arnaud, 360 S.C. 615, 602 S.E.2d 747 (2004); Rife v. Hitachi Const. Mach. Co., Ltd., 363 S.C. 209, 609 S.E.2d 565 (2005). Summary judgment is appropriate where 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 judgment as a matter of law. Rule 56(c), SCRCP; Belton v. Cincinnati Ins. Co., 360 S.C. 575, 602 S.E.2d 389 (2004); McCall v. State Farm Mut. Auto. Ins. Co., 359 S.C. 372, 597 S.E.2d 181 (Ct.App.2004); Trivelas v. South Carolina Dep't of Transp., 348 S.C. 125, 558 S.E.2d 271 (Ct.App.2001).

The party seeking summary judgment has the burden of clearly establishing the absence of a genuine issue of material fact. McCall, 359 S.C. at 376, 597 S.E.2d at 183. Once the party moving for summary judgment meets the initial burden of showing an absence of evidentiary support for the opponents case, the opponent cannot simply rest on mere allegations or denials contained in the pleadings. Regions Bank v. Schmauch, 354 S.C. 648, 582 S.E.2d 432 (Ct.App.2003). Rather, the nonmoving party must come forward with specific facts showing there is a genuine issue for trial. Ellis v. Davidson, 358 S.C. 509, 595 S.E.2d 817 (Ct.App.2004); Peterson v. West American Ins. Co., 336 S.C. 89, 518 S.E.2d 608 (Ct.App.1999). The purpose of summary judgment is to expedite disposition of cases which do not require the services of a fact finder. Dawkins v. Fields, 354 S.C. 58, 580 S.E.2d 433 (2003); Rumpf v. Massachusetts Mut. Life Ins. Co., 357 S.C. 386, 593 S.E.2d 183 (Ct.App.2004). Because it is a drastic remedy, summary judgment should be cautiously invoked to ensure that a litigant is not improperly deprived of a trial on disputed factual issues. Helena Chem. Co. v. Allianz Underwriters Ins. Co., 357 S.C. 631, 594 S.E.2d 455 (2004); Hawkins v. City of Greenville, 358 S.C. 280, 594 S.E.2d 557 (Ct.App.2004); Murray v. Holnam, Inc., 344 S.C. 129, 542 S.E.2d 743 (Ct.App.2001).

The determination of legislative intent is a matter of law. City of Myrtle Beach v. Juel P. Corp., 344 S.C. 43, 543 S.E.2d 538 (2001); Charleston County Parks Recreation Comm'n v. Somers, 319 S.C. 65, 459 S.E.2d 841 (1995); Goldston v. State Farm Mut. Auto. Ins. Co., 358 S.C. 157, 594 S.E.2d 511 (Ct.App.2004); Georgia-Carolina Bail Bonds, Inc. v. County of Aiken, 354 S.C. 18, 579 S.E.2d 334 (Ct.App.2003); see also Johnson v. Pratt, 200 S.C. 315, 20 S.E.2d 865 (1942) (acknowledging that statutory construction is the province of the courts); Thompson v. Ford Motor Co., 200 S.C. 393, 21 S.E.2d 34 (1942) (noting that the interpretation of the meaning of a statutory term is not a finding of fact).

I. Requirements of § 38-77-120

Jones argues the trial judge erred in granting summary judgment to State Farm because the cancellation notice mailed to Jones did not comply with the requirements of South Carolina Code Ann. § 38-77-120 (2002). We disagree.

Section 38-77-120 provides, in pertinent part:

(a) No cancellation ... is effective unless the insurer delivers or mails to the named insured at the address shown in the policy a written notice of the cancellation.... This notice:

(1) must be approved as to form by the director or his designee before use;

(2) must state the date not less than fifteen days after the date of the mailing or delivering on which the cancellation or refusal to renew becomes effective;

(3) must state the specific reason of the insurer for cancellation ... and provide for the notification required by subsection (B) of Section 38-77-390....

(4) must inform the insured of his right to request in writing within fifteen days of the receipt of notice that the director review the action of the insurer....

(5) must inform the insured of the possible availability of other insurance which may be obtained through his agent, through another insurer, or through the Associated Auto Insurers Plan. It must also state that the Department of Insurance has available an automobile insurance buyer's guide regarding automobile insurance shopping and availability, and provide applicable mailing addresses and telephone numbers, including a toll-free number, if available, for contacting the Department of Insurance.

Nothing in this subsection prohibits any insurer or agent from including in the notice of cancellation . . ., any additional disclosure statements required by state or federal laws, or any additional information relating to the availability of other insurance. The insurer must disclose in writing whether the insured is ceded to the facility.

S.C.Code Ann. (2002) (emphasis added). The language at the center of this logomachy is the last sentence of § 38-77-120(a)"The insurer must disclose in writing whether the insured is ceded to the facility." State Farm concedes it did not notify Jones that he was not being ceded to the Reinsurance Facility and contends § 38-77-120 does not require it to do so.

A. Rules of Statutory Interpretation

The cardinal rule of statutory interpretation is to determine the intent of the legislature. Georgia-Carolina Bail Bonds. v. County of Aiken, 354 S.C. 18, 579 S.E.2d 334 (Ct.App.2003); see also Gordon v. Phillips Utils. Inc., 362 S.C. 403, 608 S.E.2d 425 (2005) ("The primary purpose in construing a statute is to ascertain legislative intent."); Olson v. Faculty House of Carolina, Inc., 344 S.C. 194, 205, 544 S.E.2d 38, 44 (Ct.App. 2001) ("The quintessence of statutory construction is legislative intent."). All rules of statutory construction are subservient to the one that legislative intent must prevail if it can be reasonably discovered in the language used, and that language must be construed in the light of the intended purpose of the statute. McClanahan v. Richland County Council, 350 S.C. 433, 567 S.E.2d 240 (2002); Ray Bell Constr. Co. v. Sch. Dist. of Greenville County, 331 S.C. 19, 501 S.E.2d 725 (1998); State v. Morgan, 352 S.C. 359, 574 S.E.2d 203 (Ct.App.2002); State v. Hudson, 336 S.C. 237, 519 S.E.2d 577 (Ct.App.1999).

The legislature's intent should be ascertained primarily from the plain language of the statute. State v. Landis, 362 S.C. 97, 606 S.E.2d 503 (Ct.App.2004); Morgan, 352 S.C. at 366, 574 S.E.2d at 206; Stephen v. Avins Const. Co., 324 S.C. 334, 478 S.E.2d 74 (Ct.App.1996). The language must also be read in a sense which harmonizes with its subject matter and accords with its general purpose. Hitachi Data Sys. v. Leatherman, 309 S.C. 174, 420 S.E.2d 843 (1992); Morgan, 352 S.C. at 366, 574 S.E.2d at 206; Hudson, 336 S.C. at 246, 519 S.E.2d at 582. The court's primary function in interpreting a statute is to ascertain the intent of the General Assembly. Smith v. South Carolina Ins. Co., 350 S.C. 82, 564 S.E.2d 358 (Ct.App.2002). "Once the legislature has made [a] choice, there is no room...

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