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

• Decision Date: 16 February 2005
• Docket Number: 2005-UP-116
• Parties: South Carolina Farm Bureau Mutual Insurance Company, Respondent, v. Arnold Hawkins, Freedonia Hawkins and Lakeya Hawkins, Appellants.
• Court: South Carolina Court of Appeals

South Carolina Farm Bureau Mutual Insurance Company, Respondent, v. Arnold Hawkins, Freedonia Hawkins and Lakeya Hawkins, Appellants.

No. 2005-UP-116

Court of Appeals of South Carolina

February 16, 2005

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.

Submitted January 1, 2005

Appeal From Berkeley County Thomas L. Hughston, Jr., Circuit Court Judge

George J. Kefalos, of Charleston, for Appellants.

Robert J. Thomas and William E. Hopkins, Jr., both of Columbia, for Respondent.

PER CURIAM

In this insurance coverage dispute, Appellants (the Hawkinses) appeal the circuit court's denial of their motion for judgment notwithstanding the verdict (JNOV) or alternatively for a new trial. We affirm.

FACTS

Respondent South Carolina Farm Bureau Mutual Insurance Company (Farm Bureau) issued a homeowner's insurance policy concerning property located at 3826 Highway 17A North, Jamestown, South Carolina. The policy was issued based on the application signed by Arnold Hawkins. In the application, Arnold Hawkins represented he owned the property to be covered by the policy.

In January 2000, the property sustained substantial fire damage. After investigation by both the South Carolina Law Enforcement Division and Farm Bureau, it was determined the fire was intentionally set. The investigation also revealed Arnold Hawkins did not own the property when he signed the insurance application. At the time Arnold Hawkins made the representation of ownership on the application, title to the property was in the name of Arnold's daughter, Lakeya Hawkins.

Farm Bureau initiated a declaratory judgment action seeking a judgment that coverage was not available because the fire was intentionally set by, or at the direction of, Arnold Hawkins or, alternatively, Farm Bureau was relieved of its obligations under the policy due to the material misrepresentations of Arnold Hawkins as to the ownership of the property. Pursuant to special interrogatories, the jury found for Farm Bureau only on the material misrepresentation claim. The Hawkinses filed a motion for JNOV or a new trial pursuant to Rule 50, SCRCP. The circuit court denied the motion, and this appeal followed.

LAW/ANALYSIS

The Hawkinses allege the circuit court erred in denying the motion for JNOV or, in the alternative, a new trial. We disagree.

At the close of the evidence, the Hawkinses moved for a directed verdict on one ground as to the misrepresentation claim. ^[1] The sole argument was based on the failure of Farm Bureau prior to trial to tender the premiums to the named insured Arnold Hawkins. We initially observe that this defense-failure to tender premiums-constitutes an affirmative defense or matter of avoidance” under Rule 8(c), SCRCP. See Oyler v. Oyler, 293 S.C. 4, 7, 358 S.E.2d 170 172 (Ct. App. 1987) ([A]n avoidance is a defense which goes beyond the basic elements of the opposing party's cause and depends upon additional facts to defeat the claim”); see generally Floyd v. St. Paul Fire & Marine Ins. Co., 285 S.C. 148, 150, 328 S.E.2d 132, 132 (Ct. App. 1985); Brown v. Dr. Michael D. Hoffman &amp Assoc., 111 S.W.3d 826, 827 (Texas 2003); McCord v Horace Mann Ins. Co., 390 F.3d 138, 141 (Mass. 2004) (referring to failure of condition precedent as an affirmative defense).

The Hawkinses pled no such defense, and the general rule precludes consideration of claims or defenses not presented in the pleadings. See Fraternal Order of Police v South Carolina Dep't of Revenue, 352 S.C. 420, 435, 574 S.E.2d 717, 725 (2002) (Generally, claims or defenses not presented in the pleadings will not be considered on appeal”); Howard v. South Carolina Dep't of Highways, 343 S.C. 149, 155, 538 S.E.2d 291, 294 (Ct. App. 2000) (Affirmative defenses are waived if not pled”); Oyler v. Oyler, 293 S.C. at 6, 358 S.E.2d at 171-72 (stating that under Rule 8(c), SCRCP, a party must set forth in its pleadings any matter constituting an avoidance or affirmative defense”); R. Brown & Sons, Inc. v. Credit Alliance Corp., 473 A.2d 1168, 1170 (Vt. 1984) ([A] matter raised constituting an avoidance is an affirmative defense and must be affirmatively pled”). While a matter not included in the pleadings may be tried by the express or implied consent of the parties under Rule 15(b), SCRCP, the scant record before us does not allow us to affirmatively find such consent. The burden is on the appellant to present a sufficient record for review. State v. Mitchell, 330 S.C. 189, 194, 498 S.E.2d 642, 645 (1998); State v. Smith, 359 S.C. 481, 490, 597 S.E.2d 888, 893 (Ct. App. 2004). ^[2]

We do not believe the Hawkinses' argument would prevail in any vent. We begin this analysis with the acknowledgement that generally an insurance company suing to cancel a policy for fraud[] must restore or tender the premiums received as a condition of relief.” Arnold v. Life Ins. Co. of Georgia, 226 S.C. 60, 73, 83 S.E.2d 553, 559 (1954). The supreme court revisited this issue in the case of McElmurray v. American Fidelity Fire Insur. Co., 236 S.C. 195, 113 S.E.2d 528 (1960). In McElmurray, the court focused on the policy language and determined that [t]he policy contract expressly negates necessity for return to the insured of the unearned premium in order to effect cancellation of the policy by the insurer.” Id. at 205, 113 S.E.2d at 533. We are persuaded the policy language here compels the same conclusion. Under the terms of the policy, the parties agreed...