Potomac Ins. Co. v. Allstate Ins. Co., 19041

• Decision Date: 13 April 1970
• Docket Number: No. 19041,19041
• Parties: The POTOMAC INSURANCE COMPANY, Appellant, v. ALLSTATE INSURANCE COMPANY, Respondent.
• Court: South Carolina Supreme Court

Page 653

173 S.E.2d 653

254 S.C. 107

The POTOMAC INSURANCE COMPANY, Appellant, v. ALLSTATE INSURANCE COMPANY, Respondent.

No. 19041.

Supreme Court of South Carolina.

April 13, 1970.

Bridges & Whisenhunt, Florence, for appellant.

Haynsworth, Perry, Bryant, Marion & Johnstone, Greenville, for respondent.

BUSSEY, Justice.

This is a controversy between two liability insurance carriers as to who shall bear the ultimate financial burden of the settlement of certain claims, which settlement was arranged and contributed to equally by both insurers, under an agreement whereby each reserved the right to litigate the issue of where the ultimate financial burden lay. The appellant, The Potomac Insurance Company, instituted this action to recover its contribution in the sum of $4,800.00 from the respondent, Allstate Insurance Company, and Allstate counterclaimed for a like sum contributed by it. Judgment below was awarded Allstate on its counterclaim and Potomac appealed.

The facts are not in dispute and the case was tried without a jury. Potomac issued a garage liability policy insuring Williams Chevrolet Company of Florence, South Carolina. This policy covered vehicles owned, used or maintained by Williams subject, however, to what Potomac designates a 'limited coverage endorsement'. In the course of its business, Williams undertook to repair an automobile belonging to one S. M. White. While White's vehicle was being repaired, Williams turned over to him a Corvair, owned by Williams and insured by Potomac, for White's unrestricted use. White had in effect an automobile liability policy with Allstate which provided that its coverage with respect to a non-owned automobile would be excess coverage in the event there was other valid and collectible insurance on the non-owned car.

While using Williams' vehicle covered by Potomac's policy, White was involved in a serious accident following which both insurers effected a settlement of the resulting claims as above set forth.

It is conceded by Potomac that its policy covered White while using the Williams' vehicle with the consent of Williams, but for the exclusionary endorsement which limits the omnibus coverage, and purportedly affords coverage to White only under and in accordance with the following paragraph of the endorsement:

'(b) any other person, but only if no other valid and collectible automobile liability insurance either primary or excess, with limits of liability at least equal to the minimum limits specified by the financial responsibility law of the state in which the automobile is principally garaged, is available to such person; provided that with respect to Coverage C, such person shall be deemed to be a person for whom insurance is afforded, whether or not there is any other valid and collectible automobile liability insurance.'

The lower court held that the quoted provision was in direct violation of the statutory law of this state and that the attempted exclusion, or limitation, of coverage was, therefore, void. If we conclude that such holding was correct, it will become unnecessary to consider any other question.

The exclusionary endorsement of Potomac cannot be sustained as valid, we think, in view of the provisions of the South Carolina Financial Responsibility Act. For the purpose of the Act, Sec. 46--750.31(2) defines an insured, the pertinent portion of said section reading as follows:

'The term 'insured' means the named insured * * * and any person who uses, with the consent, express or implied, of the named insured, the motor vehicle to which the policy applies * * *.'

Section 46--750.32 of the Code is as follows:

'Bodily injury and property damage limits required.--No policy or contract of bodily injury liability insurance or of property damage liability insurance, covering liability...