Trimper v. Nationwide Ins. Co.

• Decision Date: 02 June 1982
• Docket Number: Civ. A. No. 81-2206-3.
• Citation: 540 F. Supp. 1188
• Court: U.S. District Court — District of South Carolina
• Parties: John S. TRIMPER, Plaintiff, v. NATIONWIDE INSURANCE CO., Defendant.

540 F. Supp. 1188

John S. TRIMPER, Plaintiff, v. NATIONWIDE INSURANCE CO., Defendant.

Civ. A. No. 81-2206-3.

United States District Court, D. South Carolina, Florence Division.

June 2, 1982.

COPYRIGHT MATERIAL OMITTED

J. Frank Looper, Florence, S. C., for plaintiff.

Saunders M. Bridges, Jr., Bridges, Bridges & Orr, Florence, S. C., for defendant.

ORDER

GEORGE ROSS ANDERSON, Jr., District Judge.

This action, for recovery of insurance benefits under a theft provision of a homeowner's policy, was tried before a jury on March 3, 1982. Plaintiff's first cause of action for recovery of the available policy proceeds and his fourth cause of action for punitive damages, based on the alleged bad faith and recklessness of the Defendant in failing to properly and reasonably investigate and settle his claim, were submitted to the jury.

The jury returned a verdict for the Plaintiff in the amount of One Thousand, Nine Hundred Twenty and No/100 ($1,920.00) Dollars actual damages, which represented the maximum policy coverage available, and One Thousand, Five Hundred and No/100 ($1,500.00) Dollars punitive damages. Thereafter, Plaintiff moved for and was granted One Thousand and No/100 ($1,000.00) Dollars representing attorney's fees pursuant to Section 38-9-370, South Carolina Code of Laws, 1976.

This matter is presently before the Court on Defendant's motions for judgment, n. o. v., pursuant to Fed.R.Civ.P. 50(b), as to both causes of action, and for amendment of the judgment to disallow the prior award of attorney's fees.

The essential facts are not in dispute. On May 23, 1981, during the early morning hours, personal property belonging to Mr. and Mrs. Trimper was stolen from their 1978 Datsun automobile while it was parked in the lot of a Jacksonville, Florida motel. Trimper testified he and his wife were in route from Florence, South Carolina to Flagler Beach, Florida and had stopped in Jacksonville at approximately 11:00 P.M. on May 22, 1981 to spend the night. Prior to retiring, Trimper checked to ensure the car doors were locked. The following morning he discovered the driver's and passenger doors ajar, but still locked. Luggage and other items of personal property were missing. He immediately informed the desk clerk of the theft, who in turn contacted the Sheriff's Department. Soon thereafter, an investigating officer arrived at the scene, questioned the Plaintiff and his wife, took an inventory of missing property and dusted the automobile for fingerprints.

Trimper contacted his homeowner's insurance carrier, the Defendant herein, on June 1, 1981, the day he returned to South Carolina. On June 2, 1981, Ms. Eato, Defendant's telephone claims representative in Columbia, South Carolina, contacted the Trimpers by telephone and took their statement. She indicated no action would be taken on the claim until a copy of the Incident Report was received from Jacksonville, Florida. Four weeks later Ms. Eato advised Mr. Trimper that she had not yet received the Report. Annoyed by the unexplained delay, Trimper requested the Incident Report from Jacksonville and forwarded it to the Defendant by mail on August 3, 1981. The following day, the Plaintiff was advised that his claim was being denied because the Incident Report indicated there were no visible signs of forcible entry. Thereafter, despite Plaintiff's requests, the Defendant refused to send a claims representative to inspect the vehicle. Ms. Eato testified it was the established policy of the Defendant to adjust all automobile theft claims by telephone. Plaintiff filed this action on September 3, 1981.

The homeowner's policy provision reads in pertinent part:

PART II(2) THEFT, but excluding loss (d) of property left unattended in or on any motor vehicle, other than a public conveyance ... except as loss results from forcible entry (of which there must be visible evidence) into a fully enclosed body or compartment ... the doors and windows of which have been closed and locked.

At trial, the Plaintiff testified that after his return to South Carolina, he noticed small cuts and scratches on the rubber molding around the driver's window. He subsequently took the automobile to a locksmith to examine the damage. The locksmith, Ronnie Somerset, testified that the marks and cuts he observed were, in his opinion, caused by an attempt to gain forcible entry into the passenger compartment of the automobile by tripping the lock. Somerset exhibited a flat metal object, known as a "slim jim," which he described as a device for gaining access into a locked automobile. He further testified that when employed in a hurried manner such a device often leaves residual marks such as those found on the Trimpers' automobile.

The Florence County Sheriff's Investigator corroborated Mr. Somerset's testimony; stating that based on his experience in law enforcement, such makeshift devices are commonly used in the theft of property from automobiles.

The Defendant does not contend that the applicability of the policy provision is not a question of fact for the jury. However, the Defendant seeks judgment, n. o. v., on the grounds that the cuts and scratches found on the rubber molding were as easily caused by normal wear as by forcible entry. Defendant argues that the connection between the evidence submitted to the jury and a finding of forcible entry is too speculative to support a verdict for the Plaintiff.

The purposes served by requiring a claimant to prove forcible entry with some evidence thereof are abundantly clear. First, by requiring a felonious entry to be "forcible," the policy provides coverage only when the insured has exercised reasonable diligence in securing the contents of the automobile. Second, the requirement of "visible evidence" of such entry provides some protection to the insurer against fraud by the insured. Essentially, the substantive condition of this policy provision imposes a rule of evidence upon the parties.

In Prothro v. Commercial Casualty Ins. Co., 200 S.C. 432, 21 S.E.2d 1 (1942), the South Carolina Supreme Court interpreted an almost identical insurance policy provision dealing with the theft of property from a business safe. Although the Court in Prothro focused on a different aspect of the provision (whether actual force was required to be the sole factor of felonious entry in order to recover) the reasoning clearly suggests such provisions should be strictly interpreted against the insurer.

The standard for granting judgment, n. o. v., is identical to the standard for directing a verdict. Hawkins v. Sims, 137 F.2d 66 (4th Cir. 1943). In determining whether or not the Plaintiff's evidence was sufficient to create an issue of fact for the jury, this Court is not free to weigh that evidence; indeed, the Plaintiff is entitled to every legitimate inference which can be drawn therefrom. Shelton v. Jones, 356 F.2d 426 (4th Cir. 1966). Moreover, the credibility of the witnesses and the probative weight of the evidence merely present questions solely within the province of the jury. Allen v. Zurich Insurance Company, 667 F.2d 1162 (4th Cir. 1982).

In South Carolina, insurance policies are construed most strongly in favor of coverage and against the insurer who drafted them. Gaskins v. Blue Cross-Blue Shield of South Carolina, 271 S.C. 101, 245 S.E.2d 598 (1978). It would be patently unfair to allow an insurer to rely on a substantive condition of its policy to the extent that a claimant is forced to make a heightened prima facie showing in order to overcome a motion for directed verdict. The policy provision requires only that there be visible evidence of forcible entry; whether such evidence is sufficient to support a recovery was properly a question for the jury. See, Thibodeaux v. Southeastern Fire Ins. Co., 399 So.2d 704 (La.App.1981).

Defendant's second ground for judgment, n. o. v., concerns Plaintiff's recovery of punitive damages under his cause of action for willful or reckless failure to settle or investigate his claim. Defendant contends that such a cause of action does not exist in first-party situations in South Carolina, or alternatively, if one does exist, the facts of this case do not justify recovery.

The South Carolina Supreme Court has not been presented the issue of whether or not such a cause of action exists. When state law is uncertain or silent, a federal court in a diversity case must determine what the state court would decide if faced with the identical question. Brendle v. General Tire and Rubber Co., 505 F.2d 243 (4th Cir. 1974).

In Robertsen v. State Farm Mutual Auto Insurance Co., 464 F.Supp. 876 (D.C.S.C. 1979), Judge Blatt, in a most comprehensive order, surveyed relevant South Carolina cases and judicial trends, and concluded the South Carolina Supreme Court would recognize a cause of action for bad faith refusal to settle a first-party insurance claim.

In Wilkie v. Home Security Life Ins. Co., 514 F.Supp. 896 (D.S.C.1981), Judge Chapman concluded that the reasoning of Robertsen, which had been applied in the context of first-party personal injury protection (PIP) benefits provided under an automobile insurance policy, was not applicable to a claim involving disability insurance:

Although it is now optional, at the time of (Robertsen), PIP coverage was still mandatory. The coverage at issue is not mandatory, but is purely voluntary, being based not upon a statutory requirement but purely upon a contract between the parties. (514 F.Supp. at 898).

It has long been the law in South Carolina that a liability insurer owes its insured a duty to defend and settle actions brought against its insured in good faith and with reasonable care for the rights of the insured. Tyger River Pine Co. v. Maryland Casualty Co., 170 S.C. 286, 170 S.E. 346 (1933). Unreasonable refusal on the insurer's part to accept an offer of compromise settlement has been held to render it liable in tort to the insured for the amount of the...