S.C. Farm Bureau Mut. Ins. Co. v. Kennedy

• Court: United States State Supreme Court of South Carolina
• Citation: 398 S.C. 604,730 S.E.2d 862
• Decision Date: 25 July 2012
• Docket Number: No. 27147.,27147.
• Parties: SOUTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, Respondent, v. Henry KENNEDY, Petitioner.

398 S.C. 604
730 S.E.2d 862

SOUTH CAROLINA FARM BUREAU MUTUAL INSURANCE COMPANY, Respondent,
v.
Henry KENNEDY, Petitioner.

No. 27147.

Supreme Court of South Carolina.

Heard April 3, 2012.
Decided July 25, 2012.

Blake Alexander Hewitt and John S. Nichols, of Bluestein Nichols Thompson & Delgado, of Columbia; and Eric Holcombe Philpot, of Greenville, for Petitioner.

Karl Stephen Brehmer and L. Darby Plexico, III, of Brown & Brehmer, of Columbia, for Respondent.

[730 S.E.2d 863]

Justice BEATTY.

[398 S.C. 606]South Carolina Farm Bureau Mutual Insurance Co. (Farm Bureau) brought this declaratory judgment action to determine whether Henry Kennedy (Kennedy) was entitled to underinsured motorist (UIM) coverage for an accident. The trial court found Kennedy was entitled to UIM coverage under the terms of the policy because Kennedy was “upon” and thus “occupying” the insured vehicle at the time of the accident. The Court of Appeals reversed. S.C. Farm Bureau Mut. Ins. Co. v. Kennedy, 390 S.C. 125, 700 S.E.2d 258 (Ct.App.2010). We granted Kennedy's petition for a writ of certiorari to review the decision of the Court of Appeals. We reverse.

[398 S.C. 607]I. FACTS

Kennedy was sent by his employer, Irons Poultry Farms, Inc. (Irons), in his employer's truck, to Wise Barbeque, to tell Johnny Wise that Irons had some feed for him to pick up. Upon arrival, Kennedy left the keys in his employer's truck and went into the restaurant to deliver the message.

After delivering the message, Kennedy saw his brother, Teddie Robinson, and they engaged in a conversation while walking towards the Irons truck. Part of the conversation occurred at the rear of the Irons truck. Kennedy and Robinson finished their conversation and Robinson prepared to leave. At that moment, an accident occurred on a nearby highway between two pickup trucks. The impact of the collision knocked one of the pickup trucks driven by George Counts into the restaurant's parking lot. Counts's truck struck both Robinson and Kennedy as they attempted to escape the careening vehicle.

Kennedy sustained a broken right femur and multiple abrasions, as well as head, neck, and back injuries. His combined medical expenses and lost wages exceeded the liability coverage on Counts's truck. Irons had a Commercial Auto Policy with Farm Bureau that covered its truck. The policy provided UIM coverage of $50,000 per individual and $100,000 per occurrence. Kennedy sought UIM coverage under his employer's insurance policy, but Farm Bureau denied coverage.

Farm Bureau filed this declaratory judgment action seeking a determination whether Kennedy was entitled to UIM benefits under the policy. Farm Bureau (1) disputed whether Kennedy was ever pinned to his employer's vehicle; and (2) asserted Kennedy was standing by his employer's vehicle and not in actual physical contact with it when the accident occurred and, thus, did not meet the policy's definition of “occupying” the vehicle.

Kennedy was initially granted summary judgment. The Court of Appeals reversed, holding there was a genuine factual dispute regarding whether Kennedy was ever pinned against his employer's truck, which precluded summary judgment. S.C. Farm Bureau Mut. Ins. Co. v. Kennedy, Op. No. 2006–UP–423 (S.C. Ct.App. filed Dec. 19, 2006).

[398 S.C. 608]A bench trial was subsequently held by Judge J. Mark Hayes on the declaratory judgment action. Judge Hayes determined Kennedy was entitled to UIM benefits. As part of his findings of fact, Judge Hayes found that Kennedy had left the engine running on his employer's truck, with a dog inside, and that Kennedy had a brief conversation with Teddie Robinson at the back of the employer's truck after performing the errand for his employer. Judge Hayes further found that Kennedy “was in physical contact [with the insured vehicle] prior to the accident but had removed his hand from the insured vehicle in his efforts to avoid being injured when the other vehicle was about to strike him,” and that “the evidence, especially the medical documentation submitted as to the injuries, clearly established the injuries were consistent as being caused by physical contact with the insured vehicle.”

Judge Hayes stated he was reaching this result in light of this Court's mandate that “upon” and “occupying” should be construed in favor of the insured, citing McAbee v. Nationwide Mutual Insurance Co., 249 S.C. 96, 152 S.E.2d 731 (1967). Judge Hayes noted the policy at issue in McAbee, like the policy here, did not contain any restrictions as to how or in what manner the insured was to be upon the vehicle.

In McAbee, this Court considered a Nationwide insurance policy that provided benefits in case of bodily injury or death “while in

[730 S.E.2d 864]

or upon, entering or alighting from” a motor vehicle. Id. at 99, 152 S.E.2d at 732. The insured was driving his employer's truck when he came upon his employer's brother, whose tractor had broken down, and stopped to help him. Id. at 98, 152 S.E.2d at 731–32. The insured, while preparing to leave in the truck, went to the rear of the truck to remove a chain. Id. at 98, 152 S.E.2d at 732. At that time the tractor began rolling toward the rear of the truck where the insured, stooped with his back turned, was engaged in removing the chain Id. “[T]he insured straightened up, turned, and placed his hands on the tractor with his back against the truck as if trying to stop the tractor and keep it from striking him.” Id. at 98–99, 152 S.E.2d at 732. However, he was crushed to death between the rear of the truck and the front of the tractor. Id. at 99, 152 S.E.2d at 732.

[398 S.C. 609]This Court stated it was conceded the insured was not in, entering, or alighting from the truck, so “[t]he sole question is whether the insured, while standing on the ground with his back against the parked truck in an effort to keep the tractor from rolling against him, was Upon the truck within the meaning of the policy.” Id.

The Court observed that this provision had not previously been construed by this Court, and while cases in other jurisdictions are not in complete agreement, “the rule seems to be generally recognized that the words ‘in or upon’ as used in such policy provisions require a broad and liberal construction in favor of the insured and that by the weight of authority actual physical contact with the insured's automobile is sufficient to establish that the insured was Upon the vehicle as contemplated by such policies.” Id.

The Court held that the insured was in actual physical contact when he had his back against the insured vehicle trying to protect himself and thus was “upon” it within the meaning of the policy provision, triggering his entitlement to UIM benefits. Id. at 100, 152 S.E.2d at 733.

In the current matter before us on appeal, Judge Hayes found Kennedy was entitled to UIM coverage because he (1) “was in physical contact with the insured vehicle at the exact moment of the accident, by virtue of being knocked against it or pinned to it,” and (2) “that the evidence established that [Kennedy] was in physical contact [with the insured vehicle] prior to the accident but had removed his hand from the insured vehicle in his efforts to avoid being injured when the other vehicle was about to strike him.”

The Court of Appeals reversed. The Court of Appeals concluded that Kennedy was not occupying his employer's truck at the time of the accident because “[h]e had departed the truck, gone inside the restaurant, and returned to the parking lot to talk with his half-brother near the vehicle when he was hit by the pickup truck. As a result, there was no causal connection between Kennedy's use of the [employer's] truck and his being struck by Counts'[s] pickup truck.” S.C. Farm Bureau Mut. Ins. Co. v. Kennedy, 390 S.C. 125, 139, 700 S.E.2d 258, 266 (Ct.App.2010). This Court granted Kennedy's petition for a writ of certiorari.

[398 S.C. 610]II. STANDARD OF REVIEW

“A suit for declaratory judgment is neither legal nor equitable, but is determined by the nature of the underlying issue.” Felts v. Richland County, 303 S.C. 354, 356, 400 S.E.2d 781, 782 (1991). “When the purpose of the underlying dispute is to determine whether coverage exists under an insurance policy, the action is one at law.” Crossmann Cmtys. of N.C., Inc. v. Harleysville Mut. Ins. Co., 395 S.C. 40, 46, 717 S.E.2d 589, 592 (2011) (citation omitted).

“In an action at law tried without a jury, the appellate court will not disturb the trial court's findings of fact unless there is no evidence to reasonably support them.” Id. at 46–47, 717 S.E.2d at 592 (citation omitted). However, an appellate court may make its own determination on questions of law and need not defer to the trial court's rulings in this regard. Id. at 47, 717 S.E.2d at 592.

III. LAW/ANALYSIS

Initially, it is noted that the Court of Appeals ignored the trial court's findings of fact and substituted its own. Significantly, the Court of Appeals ignored the trial court's findings that Kennedy had physical contact with the insured truck until he attempted to escape the impending danger and that Kennedy

[730 S.E.2d 865]

also had actual physical contact as a result of being pinned between the insured vehicle and Counts's truck. These findings of fact are supported by evidence in the record. Additionally, it appears the Court of Appeals based its decision on a question not raised by the parties, that being whether or not Kennedy was using the insured vehicle at the time he was injured. It is undisputed that Kennedy was performing an errand for his employer and was preparing to return to the work site when he was struck by Counts.

The proper question before the court was whether or not Kennedy had actual physical contact with the insured truck when he was injured. This was a question of fact for the trial court, which it answered in the affirmative. The evidence in the record supports the trial court's finding. Farm Bureau attempts to convert this...