Usaa Property and Cas. Ins. Co. v. Clegg

• Decision Date: 28 April 2008
• Docket Number: No. 26476.,26476.
• Citation: Usaa Property and Cas. Ins. Co. v. Clegg, 661 S.E.2d 791, 377 S.C. 643 (S.C. 2008)
• Parties: USAA PROPERTY AND CASUALTY INSURANCE COMPANY, Appellant/Respondent, v. Deborah J. CLEGG, as Personal Representative of the Estate of Allison T. Clegg; Elliot M. Lambrecht; and Douglas A. Lambrecht, Defendants of whom Douglas A. Lambrecht is Respondent/Appellant.
• Court: South Carolina Supreme Court

661 S.E.2d 791

377 S.C. 643

USAA PROPERTY AND CASUALTY INSURANCE COMPANY, Appellant/Respondent, v.Deborah J. CLEGG, as Personal Representative of the Estate of Allison T. Clegg; Elliot M. Lambrecht; and Douglas A. Lambrecht, Defendants of whom Douglas A. Lambrecht isRespondent/Appellant.

No. 26476.

Supreme Court of South Carolina.

Heard March 6, 2008.

Decided April 28, 2008.

Rehearing Denied June 11, 2008.

William O. Sweeny, III and William R. Calhoun, Jr., both of Sweeny, Wingate & Barrow, of Columbia, for Appellant-Respondent.

John E. North, Jr. and Pamela K. Black, both of North & Black, of Beaufort, for Respondent-Appellant.

Justice BEATTY.

In this declaratory judgment action, USAA Property and Casualty Insurance Company("USAA"), appeals the circuit court's order granting partial summary judgment in favor of Douglas A. Lambrecht on his claim that USAA had a duty to defend him against a wrongful death and survival action arising out of an accident caused by his non-resident, emancipated son while driving a "non-owned" automobile.Lambrecht, in a cross-appeal, contends this Court is without jurisdiction to review the appeal.We certified the appeal from the Court of Appeals.We reverse.

FACTUAL/PROCEDURAL HISTORY

On January 9, 2002, Lambrecht's nineteen-year-old son, Elliott M. Lambrecht("Elliott"), while driving with a suspended license, was involved in a single-vehicle accident that resulted in the death of his passenger, Allison T. Clegg.At the time of the accident, Elliott was not a resident of Lambrecht's home and was driving a 1994 Mazda, which was owned by Elliott and not listed as a covered automobile on Lambrecht's insurance policy with USAA.

Subsequently, Deborah J. Clegg, Clegg's mother and personal representative of her estate, filed a wrongful death and survival action which named Elliott and Lambrecht as defendants.Based on her belief that Lambrecht owned the 1994 Mazda, Clegg asserted causes of action for negligent entrustment and negligence on the grounds that Lambrecht knew his son: (1) was driving without a valid South Carolina driver's license; and (2) had a history of numerous traffic violations involving excessive speed.Shortly after the initial filing, Clegg amended her Complaints.In the Amended Complaints, Clegg named three other defendants¹ and characterized Lambrecht as the "de facto" owner of the 1994 Mazda.

In response, USAA denied Lambrecht's request to defend him in the underlying lawsuits.USAA then filed a declaratory judgment action seeking a determination by the circuit court that there was no coverage under Lambrecht's policy and, thus, it owed no duty to defend.Specifically, USAA claimed the insurance policy in effect at the time of the accident did not name Elliott as an insured and did not list the 1994 Mazda as a covered vehicle.²USAA also relied on the fact that Elliott owned the 1994 Mazda and was not a resident relative at the time of the accident.Based on these allegations, USAA believed it did not have a duty to defend Lambrecht or Elliott given there were no provisions of the policy which would render coverage for the accident.

Lambrecht filed an Answer and Counterclaim in which he alleged that USAA was required to defend him in the underlying action as well as reimburse him for the attorney's fees and costs of defending the lawsuits and USAA's declaratory judgment action.Lambrecht alleged he was a "covered person" under the terms of the policy and that USAA owed him a duty to defend based on the following policy language: "We will pay damages for BI or PD for which any covered person becomes legally liable because of an auto accident."³As a result, Lambrecht filed a motion for partial summary judgment.

After a hearing on Lambrecht's motion, the circuit court issued an order on April 8, 2005, granting partial summary judgment in favor of Lambrecht.The court prefaced its order by noting the parties agreed the facts were undisputed and the motion presented a question of law "with regard to the construction of the policy of insurance issued by USAA to Lambrecht."In the recitation of the facts, the court specifically noted that at the time of the accident: (1) Elliott was nineteen years old and no longer a member of Lambrecht's household; (2) the 1994 Mazda was owned by Elliott; and (3) the 1994 Mazda was not identified as a covered automobile in the Declarations page of the policy.

The court framed the issue before it as follows: "whether [the allegations] even if ultimately proven to be legally and factually baseless, trigger USAA's obligation to defend Lambrecht in the Underlying Actions."Relying on the language of the policy and decisions from other jurisdictions, the court answered this question in the affirmative.With respect to the policy, the court found "[t]he unambiguous language of the Policy provides coverage for Lambrecht if the claims against him arise from any auto accident, not just one in which he was a driver, and was the result of the `ownership, maintenance, or use' of `any auto,' not just those automobiles insured under the Policy."

On May 26, 2005, USAA filed a motion for reconsideration of the April 8, 2005 order.USAA explained the filing of its motion was belated because it did not receive notice of entry of the order until May 16, 2005.Lambrecht objected to the motion as untimely.In support of his objection, Lambrecht filed an affidavit from his attorney and an accompanying facsimile transmittal sheet which indicated that Lambrecht's attorney had faxed a letter to USAA's counsel on April 19, 2005, which stated that he had received a copy of the circuit court's order.

After a hearing on the motion,⁴the circuit court issued an order on August 22, 2005, in which it found USAA's motion for reconsideration was timely filed.As to the substantive issues, the Court affirmed its previous order but modified the basis for its decision.⁵

Both parties appealed the circuit court's order to the Court of Appeals.We certified the appeal from the Court of Appeals.

Although the parties in their cross-appeals raise multiple issues, we believe there are essentially two questions before the Court: (1) whether this Court has jurisdiction to review the appeal?; and (2) whether the circuit court erred in finding USAA had a duty to defend Lambrecht in the underlying wrongful death and survival actions?⁶

I.JURISDICTION

In his cross-appeal, Lambrecht contends the circuit court erred in finding USAA's motion for reconsideration was timely given it was filed more than ten days after entry of the April 8, 2005 order.If the motion is found to have been untimely, Lambrecht asserts the circuit court was without jurisdiction to hear the motion.As a result Lambrecht claims this Court, in turn, is without jurisdiction to review the appeal on the ground the time was not tolled for USAA to file its Notice of Appeal.

"Rule 203(b), SCACR, requires a party to serve his notice of appeal within thirty days after receiving written notice of the entry of a final order or judgment, and failure to do so divests this court of subject matter jurisdiction and results in dismissal of the appeal."Canal Ins. Co. v. Caldwell,338 S.C. 1, 4, 524 S.E.2d 416, 418(Ct.App.1999)."The requirement of service of the notice of appeal is jurisdictional, i.e., if a party misses the deadline, the appellate court lacks jurisdiction to consider the appeal and has no authority or discretion to `rescue' the delinquent party by extending or ignoring the deadline for service of the notice."Elam v. S.C. Dep't of Transp.,361 S.C. 9, 14-15, 602 S.E.2d 772, 775(2004).

"A timely post-trial motion, including a motion to alter or amend the judgment pursuant to Rule 59(e), SCRCP, stays the time for an appeal for all parties until receipt of written notice of entry of the order granting or denying such motion."Id. at 15, 602 S.E.2d at 775(citingRule 203(b)(1), SCACR, Rules 50(e),52(c), and59(f), SCRCP)."A motion under Rule 59(e) is timely if it is `served not later than 10 days after receipt of written notice of the entry of the order.'If a timely motion is made pursuant to Rule 59, the time for appeal runs from the receipt of written notice of entry of the order disposing of the motion."Coward Hund Constr. Co. v. Ball Corp.,336 S.C. 1, 3, 518 S.E.2d 56, 57(Ct.App.1999).

Strictly applying the above-outlined rules of civil and appellate procedure, there is evidence to support Lambrecht's assertion.However, for this Court to dismiss the appeal for lack of jurisdiction, it would have to essentially reject the circuit court's implicit credibility determination of USAA's counsel and find that counsel made a false representation to the circuit court regarding notice of entry of the order.

In response to Lambrecht's assertion that USAA's motion to reconsider was untimely, USAA's counsel submitted a letter to the circuit court in which she claimed she did not receive notice of entry of the final order until May 16, 2005, when Lambrecht's counsel contacted her.After receiving this notice, USAA's counsel claimed she filed the motion for reconsideration on May 26, 2005, within the requisite ten-day time period.Presumably, USAA's counsel was being truthful when she made this representation to the circuit court.SeeRule 407(1), SCACR("A lawyer, being a member of the legal profession, is a representative of clients, an officer of the legal system and a public citizen having special responsibility for the quality of justice.");Rule 3.3(a)(1)("A lawyer shall not knowingly make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer.");Rule 4.1(a)("In the course of representing a client a lawyer shall not knowingly make a false statement of material fact or law to a third person.");Rule 8.4(d)("It is professional misconduct for a lawyer to engage in conduct involving...