Laird v. Nationwide Ins. Co.

• Decision Date: 02 January 1964
• Docket Number: No. 18149,18149
• Citation: Laird v. Nationwide Ins. Co., 243 S.C. 388, 134 S.E.2d 206 (S.C. 1964)
• Court: South Carolina Supreme Court
• Parties: Marie LAIRD, by her Guardian ad Litem, Jimmy Laird, Respondent, v. NATIONWIDE INSURANCE COMPANY, Appellant.

Page 206

134 S.E.2d 206

243 S.C. 388

Marie LAIRD, by her Guardian ad Litem, Jimmy Laird, Respondent, v. NATIONWIDE INSURANCE COMPANY, Appellant.

No. 18149.

Supreme Court of South Carolina.

Jan. 2, 1964.

Henderson, Salley & Cushman, Aiken, for appellant.

Blatt & Fales, Barnwell, for respondent.

MOSS, Justice.

The record here reveals that on July 25, 1962, Marie Laird was riding as a passenger in an automobile owned and driven by one Franklin Laird, her brother, when said automobile was involved in a collision with a truck driven by one Tom Barrett and in which said collision the said Marie Laird received bodily injury. Thereafter, the said Marie Laird instituted a suit against the said Franklin Laird and Tom Barrett to recover damages for the bodily injury sustained by her. She alleged that her bodily injury was caused and occasioned by the negligent, reckless and willful conduct of the said Franklin Laird and Tom Barrett. The trial of this action resulted in a judgment in favor of the said Marie Laird in the sum of Ten Thousand Dollars actual damages, equally apportioned against Franklin Laird and Tom Barrett, and also a verdict of Two Thousand Five Hundred Dollars punitive damages against the said Franklin Laird. A judgment was duly entered in the office of the Clerk of the Court for Barnwell County against the said Franklin Laird for Five Thousand Dollars actual damages and Two Thousand Five Hundred Dollars punitive damages, plus court costs in the amount of Twenty-four Dollars. It is agreed that the said Franklin Laird was an uninsured motorist and that his automobile was uninsured.

The present action was commenced by Marie Laird, through her guardian ad litem, the respondent herein, against Nationwide Insurance Company, the appellant herein, to enforce payment of the judgment obtained by her against Franklin Laird under two certain policies of insurance issued in favor of Lillian Laird and Jimmy Laird, whereby in each policy the insurer agreed to pay all sums which the aforesaid Lillian Laird and Jimmy Laird, and the relatives of either while residents of the same household, shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury sustained by the insureds and any relative of either while a resident of the same household, up to an amount not exceeding Ten Thousand Dollars, for any one of such persons. It is agreed that Marie Laird is an insured under these policies as a member of the household of the policy holders. These policies provide in part, as follows:

'INSURING AGREEMENT

'1. Damages for Bodily Injury and Property Damage Caused by Uninsured Automobiles. To pay all sums which the Insured or his legal representative 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;'

The appellant, by answer, admits liability to the respondent for the amount of her judgment against Franklin Laird for actual damages and court costs and tendered payment thereof, but denied that it was liable for the portion of the aforesaid judgment for punitive damages.

The only issue in this case is whether or not the appellant is required to pay the portion of the judgment which is for punitive damages, under the terms and provisions of the aforesaid policies and under the applicable law of this State. This question was heard by the Honorable Bruce Littlejohn, Presiding Judge, without a jury. Thereafter, by order dated May 17, 1963, the Trial Judge held that the appellant was liable to the respondent for the portion of the judgment relating to punitive damages. The appellant gave due notice of intention to appeal to this Court from said order.

The appellant, by its exception, raises two questions: (1) Does the Safety Responsibility Act and the policy in question provide for the payment of punitive damages? (2) Is it against the public policy of this State for a liability insurance policy to cover punitive damages awarded against an uninsured motorist?

Uninsured motorist insurance is of recent origin. It is a new type of automobile insurance which came into being by legislative enactment, as a result of public concern over the increasingly important problem arising from injuries inflicted by motorists who are uninsured and financially irresponsible. Its purpose was to provide financial recompense to innocent persons who receive bodily injuries, property damage and to the dependents of those who are killed through the wrongful conduct of uninsured motorists.

Our Uninsured Motorist Law, modeled after the Virginia Act, was enacted in 1959, 51 Stat. 567, amended in minor respects in 1960, 51 Stat. 1902, and was further amended in 1963, 53 Stat. 526. The Uninsured Motorist Act of 1959, as amended in 1960, and prior to the 1963 amendment, is contained in Section 46-750.11 and Sections 46-750.14 through 46-750.18 of the 1962 Code.

Section 46-750.11(2) of the Code defines the term 'insured' to mean the named insured and, while a resident of the same household the spouse of any such named insured and relatives of either. It is admitted that the respondent was a daughter of the named insureds and a resident of their household. Hence, she was an insured under the aforesaid section of the Code.

Under Section 46-750.11(3) of the Code, the term 'uninsured motor vehicle' means a motor vehicle as to which there is no bodily injury liability insurance and property damage liability insurance in the amount specified in Section 46-750.13 of the Code.

Section 46-750.13 of the Code provides that '[n]o policy or contract of bodily injury liability insurance' shall be issued or delivered unless it contains the provisions of this section and provides that the policy insure 'against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of such motor vehicles.'

It is provided in Section 46-750.14 of the Code that no policy or contract of insurance shall be issued or delivered as described in Section 46-750.13 of the Code, 'unless it contains an endorsement or provisions undertaking to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle.'

It is required by Section 46-750.13 of the Code that a liability insurance policy must insure 'against loss from the liability imposed by law', while under the uninsured motorist coverage, which appears on said policy by endorsement, is for the benefit of the insured, and those qualifying as such, and does not insure 'against liability imposed by law', but does obligate the insurer to pay the insured 'all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle.' Clearly, the legislature, by using this differing language, recognized the distinction between liability coverage and the uninsured motorist endorsement.

It is not the purpose of the uninsured motorist law to provide coverage for the uninsured vehicle but its object is to afford the insured additional protection in the event of an accident. Horne v. Superior Life Ins. Co., 203 Va. 282, 123 S.E.2d 401. Two requirements must be met before a person can claim under or receive the benefits of uninsured motorist coverage. Such person must qualify as an 'insured' under the endorsement of the policy upon which claim is being made and must be involved in an accident with the owner or operator of an uninsured motor vehicle. The intent of the General Assembly, in enacting the Uninsured Motorist Act, was to provide benefits and protection against the peril of injury by an uninsured motorist to an insured motorist, his family, and the permissive users of his vehicle. Nationwide Mut. Ins. Co. v. Harleysville Mut. Cas. Co., 203 Va. 600, 125 S.E.2d 840.

It is admitted that the respondent qualifies as an 'insured' under the endorsement of the policy upon which her claim is being made and that she sustained bodily injury as a result of being involved in an accident with the owner and operator of an uninsured motor vehicle.

Recovery under the uninsured endorsement is subject to the condition that the insured establish legal liability on the part of the uninsured motorist....