State Auto Property and Cas. Ins. Co. v. Gibbs

• Decision Date: 09 December 1993
• Docket Number: No. 24077,24077
• Court: South Carolina Supreme Court
• Parties: STATE AUTO PROPERTY AND CASUALTY INSURANCE COMPANY and Unisun Insurance Company, Plaintiffs, v. John E. GIBBS, Paula O. Gibbs, Ralph Sanders, Jr., May Sanders, Kathleen C. Sligh, David E. Sligh, Edith Wicker, Gene Workman and Allstate Insurance Company, Defendants, of whom State Auto Property and Casualty Insurance Company is Appellant, and Unisun Insurance Company, John E. Gibbs, Paula O. Gibbs, Ralph Sanders, Jr., May Sanders, Kathleen C. Sligh, David E. Sligh, Edith Wicker, Gene Workman and Allstate Insurance Company are Respondents. . Heard

Page 504

444 S.E.2d 504

314 S.C. 345

STATE AUTO PROPERTY AND CASUALTY INSURANCE COMPANY and Unisun Insurance Company, Plaintiffs, v. John E. GIBBS, Paula O. Gibbs, Ralph Sanders, Jr., May

Sanders, Kathleen C. Sligh, David E. Sligh, Edith

Wicker, Gene Workman and Allstate

Insurance Company, Defendants,

of whom State Auto Property and Casualty Insurance Company

is Appellant,

and

Unisun Insurance Company, John E. Gibbs, Paula O. Gibbs,

Ralph Sanders, Jr., May Sanders, Kathleen C.

Sligh, David E. Sligh, Edith Wicker,

Gene Workman and Allstate

Insurance Company

are Respondents.

No. 24077.

Supreme Court of South Carolina.

Heard Dec. 9, 1993.

Decided May 23, 1994.

R. Davis Howser, Charles E. Carpenter, Jr., and Deborah L. Harrison, all of Richardson, Plowden, Grier & Howser, P.A., Columbia, for appellant.

Edward W. Laney, IV, of Turner, Padget, Graham & Laney, P.A., Columbia, for respondent Unisun Ins. Co.

Tara H. Snyder, of Leatherwood, Walker, Todd & Mann, P.C., Greenville, for respondent Allstate Ins. Co.

Mark D. Chappel, of Harris & Graves, Columbia, for respondents May and Ralph Sanders.

Robert C. Brown, of Brown & Woods, Columbia, for respondents John and Paula Gibbs.

Melton Kligman, of Kligman & Fleming, Columbia, for respondent Edith Wicker.

William F. Patridge, Jr., Newberry, for respondents Kathleen and David Sligh.

Gene Workman, pro se.

TOAL, Justice:

In this declaratory judgment action, State Auto Property and Casualty Insurance Company ("State Auto") sued to determine its responsibility for an automobile accident where Unisun Insurance Company ("Unisun") insured the driver under a non-owner policy and State Auto insured the owner of the vehicle. The circuit court found State Auto liable on its owner's policy. We affirm.

FACTS

John and Paula Gibbs had been married 18 years and had three children at the time of the accident in October 1990. John Gibbs was driving Paula Gibbs' 1982 van while intoxicated and without a driver's license when the accident occurred. State Auto insured Paula Gibbs' automobile under an owner's policy and Unisun insured John Gibbs under a non-owner's policy.

When Paula Gibbs applied for liability insurance from State Auto, she completed and signed an application of insurance. On the application, Paula Gibbs gave her address as 814 James Street, Newberry, South Carolina. She listed her marital status as "single."

John Gibbs applied for a non-owner policy from Unisun Insurance Company. On his application for insurance, he gave his address as 204 Boundary Street, Newberry, South Carolina. The Boundary Street address is the address of John Gibbs' mother, Daisey Gibbs. That address is located approximately 4 blocks from the James Street address.

Paula Gibbs testified that she gets off of work every day and goes to her mother-in-law's home where the family eats dinner. The day before the accident, Paula Gibbs' van was not running properly when she arrived at her mother-in-law's home. John Gibbs agreed to take the van the next day and either fix it or have it fixed.

John Gibbs wrecked the van the next day while driving under the influence of alcohol and driving under suspension. The accident caused over $33,000.00 in injuries to others.

The trial judge found that John Gibbs was an "insured" under the State Auto policy as the spouse, living in the same household with Paula Gibbs, and that John Gibbs was a permissive user of the van. He further found that the exception in the Unisun policy relieved Unisun from any liability. The Unisun policy excepted liability for damage while driving a vehicle owned by the insured or a member of the insured's household. State Auto appeals.

LAW/ANALYSIS

An action to declare excess or secondary liability coverage is an action at law. S.C. Farm Bureau Ins. Co. v. Windham, 303 S.C. 330, 400 S.E.2d 497 (Ct.App.1990). Thus, facts found by the trial judge sitting without a jury should "not be disturbed upon appeal unless found to be without evidence which reasonably support the judge's findings." Townes Associates, Ltd. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976).

State Auto claims the trial judge erred in finding that John Gibbs was the spouse of Paula Gibbs and living in the same household such that he is an insured under the State Auto policy and S.C.Code Ann. § 38-77-30(6) (Rev.1989). Paula Gibbs testified that John Gibbs spent the night at his mother's home often during the 18-year marriage. She also testified that there was no divorce action filed nor was a divorce ever planned. While there was conflicting testimony as to the Gibbs' living arrangements, there was sufficient evidence for the trial judge to find that John Gibbs was Paula Gibbs' spouse and a member of the household such that he was an insured under the policy and under S.C.Code Ann. § 38-77-30(6) (Rev.1989).

Next, State Auto contends that the evidence does not support the trial judge's finding that John Gibbs drove the van with the reasonable belief that he had permission to do so. There was testimony that an extra set of keys was left at the mother-in-laws' house for John Gibbs' use. Paula Gibbs testified that she knew John Gibbs would probably drive the van in order to get it fixed. Although there was also evidence that John Gibbs was told not to drive the van while intoxicated, our standard of review is whether there is evidence which reasonably supports the trial judge's findings of fact. We find that while there was some evidence tending to show that John Gibbs did not have permission to drive the van, there was "evidence which reasonably supports the judge's [finding]," Townes, supra, that John Gibbs drove the van with a reasonable belief that he had his wife's permission to do so.

Finally, the trial judge ruled that the exclusion in Unisun's policy, which excluded coverage while the insured was driving an automobile owned by the insured or a member of the household, relieved Unisun from any liability in connection with the accident. We reach the same result as the trial judge for reasons set out herein.

South Carolina law is clear that liability to third parties under an owner's automobile liability policy is absolute when injury occurs. See S.C.Code Ann. § 56-9-20(7)(b)(1) (Rev.1991); see also S.C.Code Ann. § 56-9-20(7)(b)(3); Ferguson v. Employers Mut. Cas. Co., 254 S.C. 235, 174 S.E.2d 768 (1970). The validity of exclusions in a non-owner's policy purporting to exclude liability to third parties when the insured is driving an automobile owned by the insured or a member of the household has not been addressed by this Court under the revised Insurance Code ¹ and revised Motor Vehicle Financial Responsibility Act. ²

Originally, the S.C.Insurance Code defined Automobile Insurance as "automobile bodily injury and property damage liability insurance ... written or offered by automobile insurance insurers." S.C.Code § 37-591 (Supp.1975). The definitional section was recodified as S.C.Code § 38-77-30 and the "Automobile Insurance" definition was amended to include a motor vehicle liability policy as defined in item (7) of § 56-9-20. Under S.C.Code Ann. § 56-9-20(7), a "motor vehicle liability policy" is defined as "[a]n owner's or operator's policy of liability insurance that fulfills all requirements of §§ 37-77-140 through 38-77-230." [Emphasis added]. Thus, the legislature clearly intended "non-owner's" policies and automobile owner's policies to follow the same rules.

Further, S.C.Code Ann. § 56-9-20(7)(b)(1) (Rev.1991) provides "[t]he liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute whenever injury or damage covered by the motor vehicle liability policy occurs." The result is that the exclusion in Unisun's policy exclusion is probably invalid as to third parties. ³ See Jackson v. State Farm Mutual Automobile Insurance Co., 288 S.C. 335, 342 S.E.2d 603 (1986) (insurer may not avoid coverage required by statute); see also Globe Mut. Casualty Co. v. Teague, 14 Ohio App.2d 186, 43 O.O.2d 394, 237 N.E.2d 614 (1967) (where policy issued for purpose of meeting financial responsibility act to allow suspended driver to regain license, policy reformed to meet act by...