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Insurance Coverage

City of Hartsville v. South Carolina Mun. Ins. & Risk Financing Fund, 382 S.C. 535, 677 S.E.2d 574 (2009).
Opinion No. 26625, decided May 18, 2009.

A landowner sued a city and county for damages arising out of his difficulties and delays in commercially developing a parcel of property. The landowner’s complaint specifically pled causes of action for gross negligence and inverse condemnation. The city, represented by its insurer, moved for summary judgment, which the court granted as to the negligence cause of action but denied as to the inverse condemnation action. The insurer then withdrew its defense of the city on the grounds that the only remaining cause of action, inverse condemnation, was not covered by the city’s liability policy. The city retained its own counsel and was eventually dismissed from the case pursuant to the Tort Claims Act. The city then filed this declaratory judgment action to recover the costs expended to defend against the landowner’s suit after the insurer withdrew its defense. The trial court ruled in favor of the city, finding that the insurer had a continuing duty to defend, and the South Carolina Supreme Court affirmed. The court held that even though the landowner did not specifically plead civil conspiracy, a cause of action covered by the city’s policy, the insurer knew that civil conspiracy was part of the landowner’s theory of recovery. The court also rejected the insurer’s arguments that the civil conspiracy and inverse condemnation claims were inseparable and that it did not have a duty to defend the civil conspiracy claim because such a claim was barred by the Tort Claims Act. The court found that the latter argument confused the insurer’s duty to indemnify with its broader duty to defend.

CACI Int’l, Inc. v. St. Paul Fire & Marine Ins. Co., 566 F.3d 150 (4th Cir. 2009).
Docket No. 08-1885, decided May 14, 2009.

A federal defense contractor was sued for abuse and torture allegedly perpetrated by its employees at Abu Ghraib prison in Iraq. The contractor notified its general liability insurer of the claims, but the insurer declined to provide a defense. The contractor subsequently brought this declaratory judgment action, seeking a judicial determination that the insurer was obligated to defend under the contractor’s general liability policy. The district court granted summary judgment to the insurer, and the United States Court of Appeals for the Fourth Circuit affirmed. The court acknowledged the breadth of the duty to defend under Virginia law, but found that there was no possibility that the plaintiffs’ claims were covered by the policy because the allegedly tortious activities took place in Iraq, outside the coverage territory of the United States and Canada. The court further held that the “short time” exclusion to the coverage territory limitation did not apply because the plaintiffs alleged a pattern and course of conduct that spanned several years.

Rowzie v. Allstate Ins. Co., 556 F.3d 165 (4th Cir. 2009).
Docket No. 07-2159, decided February 12, 2009.

The plaintiffs were involved in separate automobile accidents with underinsured drivers. They received benefit payments from the medical payments coverages of their respective policies, but when they sought to recover underinsured motorist (UIM) benefits, their insurer claimed that the policies entitled it to reduce the amount payable as UIM benefits by the amounts previously paid as medical payment benefits. The plaintiffs filed suit in federal court, claiming that the policy provision at issue violated S.C. Code Ann. §§ 38-77-144 and 38-77-160. The district court granted summary judgment to the insurer and the United States Court of Appeals for the Fourth Circuit affirmed. The court found that section 38-77-144 applies only to the tortfeasor, that the insurer was not the legal equivalent of the tortfeasor, and therefore that the statute did not apply to the insurer. As to section 38-77-160, the court found that the policies did not create a subrogation or assignment of the plaintiffs’ UIM benefits, as would be required to invoke the statute.

S.C. Farm Bureau Mut. Ins. Co. v. Durham, 380 S.C. 506, 671 S.E.2d 610 (2009).
Opinion No. 26579, decided January 12, 2009.

Two homeowners drained their in-ground pool for cleaning, and subsequently the pool “floated,” meaning that it rose from its foundation and caused damage to both the pool and the surrounding deck. The homeowners filed a claim under their homeowner’s insurance policy, but their insurer denied coverage and filed this suit seeking a declaratory judgment that the policy provided no coverage for the claim. The insurer relied on a policy exclusion which excluded coverage for loss caused directly or indirectly by water damage, including water below the surface of the ground which exerts pressure on a swimming pool. The insurer argued that because expert testimony established that pressure from underground water caused the pool to “float,” the policy did not cover the claim. The circuit court found that the claim was covered by the policy, finding that the “cause” of the damage was the homeowners’ drainage of the pool, but the South Carolina Supreme Court reversed. The court found that it was error for the circuit court to apply legal causation principles because the exclusion specifically stated that it applied “regardless of any other cause or event contributing concurrently or in any sequence to the loss.” Thus, because pressure from underground water was indisputably one of the causes of the damage, the exclusion applied.

Stringer v. State Farm Mut. Auto. Ins. Co., 2008 WL 5381502 (S.C. Ct. App. 2008).
Opinion No. 4474, decided December 23, 2008.

The plaintiff had an automobile insurance policy which was effective from February 15, 2002 until August 15, 2002. However, during the policy period, two policy adjustments caused the plaintiff to owe a small additional premium. The insurer sent the plaintiff a notice that he would have no coverage after July 29, 2002 unless the plaintiff paid the additional premium before that date. The plaintiff did not pay the additional premium prior to the designated date and was involved in an automobile accident on July 31, 2002. He notified his insurance agency of the accident, and an employee informed him that he would have uninterrupted coverage if he immediately paid the additional premium. The plaintiff paid the additional premium the following day, but the insurer subsequently denied his claim, asserting that his coverage had been interrupted and was not in force on the date of the accident. The trial court disagreed and found that the plaintiff had uninterrupted coverage for the full policy period. On appeal, the South Carolina Court of Appeals affirmed, holding that the plaintiff had the right to rely on the representations made by an employee of his insurance company regarding coverage.

Enos v. Doe, 669 S.E.2d 619 (S.C. Ct. App. 2008).
Opinion No. 4444, decided October 14, 2008.

The insured became intoxicated and subsequently went to her vehicle to sleep. The next thing she remembered was waking up in the hospital as the result of a single-vehicle accident. An unidentified driver had apparently driven and wrecked the vehicle with the insured still asleep in the passenger seat. The insured filed this John Doe action seeking uninsured motorist (UM) benefits under her automobile insurance policy. Her insurer sought and was granted a directed verdict on the grounds that the insured had not submitted an affidavit from a witness to the accident other than the owner or operator of the vehicle as required by S.C. Code Ann. § 38-77-170(2). On appeal, the South Carolina Court of Appeals affirmed, holding that production of the required affidavit is the sine qua non of a John Doe action to recover UM benefits where there is no contact with another vehicle.

Collins Holding Corp. v. Wausau Underwriters Ins. Co., 379 S.C. 573, 666 S.E.2d 897 (2008).
Opinion No. 26544, decided September 8, 2008.

An insured was sued by plaintiffs who alleged harm caused by gambling machines. The insurer denied coverage for the claim and refused to defend the insured, who subsequently hired private counsel and settled the lawsuit. Subsequently, the insured brought this declaratory judgment action seeking an order determining that the insurer breached its duty to defend. The circuit court granted summary judgment in favor of the insured, but the South Carolina Supreme Court reversed. The court found that because the complaint alleged systematic, intentional, and fraudulent violations of South Carolina gambling laws, the allegations constituted intentional, deliberate acts which could not be construed as accidental in nature and which therefore were not “occurrences” under the insurance policy. The court further held that even though the underlying plaintiffs had also alleged negligent misrepresentation, courts must look beyond the mere label of negligence to determine whether the facts of the complaint support a cause of action for negligent conduct. Because the facts clearly alleged intentional conduct, the insurer had no duty to defend despite the label of negligence in the plaintiffs’ complaint.

Auto Owners Ins. Co. v. Rollison, 378 S.C. 600, 663 S.E.2d 484 (2008).
Opinion No. 26512, decided June 30, 2008.

A passenger was injured when the vehicle in which he was riding was involved in an accident. The driver of the vehicle was the passenger’s friend, who drove the car off a sales lot owned by his grandfather. The vehicle’s insurer filed this declaratory judgment action, seeking an order finding that the uninsured motorist (UM) policy on the vehicle provided no coverage for the passenger’s damages because the passenger was not a permissive user of the vehicle or a resident of the owner’s home. The circuit court held that the passenger was not entitled to coverage because he did not have the owner’s permission to ride in the vehicle, and therefore he could not be a “guest” within the meaning of S.C. Code Ann. § 38-77-30(7). However, the South Carolina Supreme Court, extending its holding in Unisun Ins. Co. v. Schmidt, 339 S.C. 362, 529 S.E.2d 280 (2000), reversed. The court held that a person need not have the express or implied consent of the named insured in order to qualify as a “guest” under section 38-77-30(7). The person need only have the invitation of the driver unless he or she has knowledge of the named insured’s lack of consent. Thus, because the passenger in this case was invited to ride in the vehicle by the driver and there was no evidence that he had reason to know that the driver was not a permissive user of the vehicle, the passenger was a “guest” and therefore an “insured” for the purposes of UM coverage.

American Credit of Sumter, Inc. v. Nationwide Mut. Ins. Co., 378 S.C. 623, 663 S.E.2d 492 (2008).
Opinion No. 26509, decided June 30, 2008.

A vehicle was involved in an accident and its owner received payment from the at-fault driver’s insurance company in an amount sufficient to repair the damages to the vehicle. However, the owner failed to repair the vehicle and later defaulted on her loan. The lender repossessed the vehicle and filed a claim with the owner’s insurer for the amount of the damages to the vehicle, less the deductible. The magistrate granted a directed verdict to the insurer, finding that the owner had effectively “converted” the damaged portion of the vehicle by retaining the funds paid to her by the at-fault driver’s insurance company rather than using them to repair the vehicle. Therefore, the magistrate found that the Loss Payable Clause of the owner’s insurance policy was inapplicable pursuant to its conversion exclusion. The circuit court affirmed the magistrate’s order, but the South Carolina Supreme Court reversed. Applying the general rule of insurance contract construction that policies should be construed in favor of coverage, the court held that the owner’s failure to utilize the insurance proceeds to repair the vehicle was not a conversion. Therefore, the conversion exclusion of the Loss Payable Clause did not apply.

Cain v. Nationwide Property and Cas. Ins. Co., 378 S.C. 25, 661 S.E.2d 349 (2008).
Opinion No. 26491, decided May 12, 2008.

The plaintiff was injured when the work vehicle in which he was traveling was struck by a Richland County dump truck. The plaintiff sued Richland County and received a $300,000 settlement, which is the maximum allowed by the South Carolina Tort Claims Act. He also received $40,000 from the underinsured motorist (UIM) coverage on the work vehicle. He filed this declaratory judgment action seeking an order declaring that his personal automobile insurer must pay him $30,000 in uninsured motorist (UM) benefits under the policy on his personal automobiles. The trial court found in favor of the insurer and the South Carolina Supreme Court affirmed. The court found that the Tort Claims Act only permits recovery of UM and UIM benefits from a plaintiff’s personal insurance policy if the policy definitions of uninsured and underinsured vehicle are met. Here, the dump truck had insurance protection, though the limits were lower than the plaintiff’s damages. Therefore, the dump truck was an underinsured vehicle, not an uninsured vehicle, so the plaintiff could not recover UM benefits. Furthermore, the plaintiff could not recover UIM benefits because he had specifically declined UIM coverage on his personal automobiles.

Salvaggio v. Time Ins. Co., 553 F.Supp.2d 577 (D.S.C. 2008).
Decided May 8, 2008.

The plaintiff’s health insurer denied coverage for his cancer treatment on the grounds that his cancer was a pre-existing condition for which coverage was excluded by the policy. The plaintiff filed a declaratory judgment action in state court, seeking an order declaring that the policy provided coverage for his cancer treatment. The insurer removed to federal court and filed a motion for summary judgment based on the pre-existing condition exclusion. Though the plaintiff argued that the pre-existing condition exclusion was ambiguous and should be construed in favor of coverage, the United States District Court for the District of South Carolina found that the exclusion was unambiguous, and that therefore the only question was whether there was a genuine issue of material fact as to whether the plaintiff’s cancer was a pre-existing condition as defined by the policy. The court held that despite the fact that the cancer was not diagnosed until after the policy’s effective date, the fact that the plaintiff’s doctors treated and gave advice regarding the undiagnosed condition prior to the policy’s effective date brought the cancer under the policy’s definition of pre-existing condition. Therefore, the court granted the insurer’s motion for summary judgment.

Zurich American Ins. Co. v. Tolbert, 378 S.C. 493, 662 S.E.2d 606 (Ct. App. 2008).
Opinion No. 4382, decided May 2, 2008.

The defendant leased a BMW from his employer. The employer insured the BMW with Zurich. The defendant was involved in an accident while driving his own vehicle, not the leased BMW. The other driver in the accident carried only minimum liability insurance, and the defendant received that amount in a settlement. Thereafter, Zurich filed this declaratory judgment action seeking a court order that it was not obligated to provide underinsured motorist (UIM) coverage to the defendant under its policy on the BMW. The South Carolina Court of Appeals held that the defendant was not a Class I insured and, relying on Burgess v. Nationwide Mutual Ins. Co., 373 S.C. 37, 644 S.E.2d 40 (2007), that because the defendant made the decision not to obtain UIM coverage when he insured his personal vehicle, the Zurich policy’s limitation on UIM coverage portability did not conflict with South Carolina law or policy. However, the court found that there was a genuine issue of material fact as to the applicability of an endorsement to the policy which extended UIM coverage to persons occupying the BMW or any “temporary substitute” for the BMW.

USAA Property and Cas. Ins. Co. v. Clegg, 377 S.C. 643, 661 S.E.2d 791 (2008).
Opinion No. 26476, decided April 28, 2008.

A passenger was killed in a single-vehicle accident. The driver was the owner of the vehicle and was driving with a suspended license. The mother of the deceased passenger filed a wrongful death and survival action against the driver and his father. The father’s insurer filed this declaratory judgment action seeking a determination that it did not have a duty to defend the plaintiff’s claims because the driver was not named as an insured on the father’s insurance policy, he was not a resident of his father’s home, and his vehicle was not listed as a covered vehicle on the insurance policy. The circuit court granted the father partial summary judgment, holding that the insurer had a duty to defend the plaintiff’s claims. On appeal, the South Carolina Supreme Court reversed, finding that the insurer had no duty to defend because the policy specifically excluded coverage for the ownership of a vehicle other than the father’s covered automobiles, which did not include the driver’s vehicle. Furthermore, neither the driver nor his father met the definition of “covered person” under the policy. The driver was not a “family member” of his father because he did not resident in his father’s household, and the father did not “own,” “maintain,” or “use” the driver’s vehicle. Finally, even if the father could be deemed a “covered person,” he was not potentially liable for a claim of negligent entrustment arising from the negligent use of a non-covered automobile by someone other than the insured.

Smith v. Auto-Owners Ins. Co., 377 S.C. 512, 660 S.E.2d 271 (Ct. App. 2008).
Opinion No. 4363, decided March 31, 2008.

The estate of a deceased automobile accident victim intervened in an action between the drivers of the two vehicles involved in the accident, joining the deceased’s parents’ automobile insurer as a party. The estate and the insurer submitted to the trial court the question of whether the deceased qualified as an insured under his parents’ underinsured motorist (UIM) coverage. The parents maintained two residences, one of which the deceased lived in prior to his death, and the estate argued that because the father often traveled to and stayed in the deceased’s residence, the deceased qualified as an insured as a relative of his parents. However, S.C. Code Ann. § 38-77-30(7) requires that a relative be a “resident of the same household” as the named insured in order be considered an insured. The trial court found that the deceased’s residence was not the father’s primary residence, and that therefore the deceased was not an insured under his parents’ UIM coverage because he was not a resident of his parents’ household. On appeal, the South Carolina Court of Appeals affirmed the trial court, finding that the father was only a temporary, transient visitor of the deceased’s residence and that his other home was his primary residence.

Grinnell Corp. v. Wood, 378 S.C. 458, 663 S.E.2d 61 (Ct. App. 2008).
Opinion No. 4355, decided March 11, 2008.

An employee was injured in an automobile accident while driving a vehicle owned by his employer. He sought uninsured motorist (UM) and underinsured motorist (UIM) coverage, and his employer sought a declaratory judgment that it had successfully rejected its insurer’s offer of additional UM and UIM coverage and therefore its policy should not be reformed to provide UM and UIM coverage up to the policy’s liability limits. The South Carolina Court of Appeals found that the offer form used by the employer’s insurer did not comply with S.C. Code Ann. § 38-77-350, which provides a conclusive presumption that a “meaningful offer” of UM and UIM coverage was made if the insurer uses an offer form which complies with the statute. Despite the form’s non-compliance, the employer and insurer still had the opportunity to show that the offer was meaningful under the four-pronged Wannamaker test, but the court found that they failed to do so. Therefore, the court affirmed reformation of the policy to include UM and UIM coverage up to the policy’s liability limits.

Auto Owners Ins. Co. v. Newman, 2008 WL 648546 (S.C. 2008).
Opinion No. 26450, decided March 10, 2008.

A homeowner filed suit against her homebuilder alleging defective construction primarily related to the installation of stucco siding. An arbitrator awarded damages to the homeowner, and the homebuilder’s commercial general liability (CGL) insurer sought a declaratory judgment that the damages awarded by the arbitrator were not covered by the homebuilder’s CGL policy. The South Carolina Supreme Court held that the CGL policy did provide coverage because the damages resulted from an “occurrence” under the policy, which the policy defined as “an accident, including continuous or repeated exposure to substantially the same harmful conditions.” The court distinguished its seminal case of L-J v. Bituminous Fire & Marine Ins. Co., 366 S.C. 117, 621 S.E.2d 33 (2005), in which the court found that a claim alleging negligent construction causing damage only to the work product itself was merely one for faulty workmanship and was not covered by a CGL policy. In this case, although negligent application of the stucco was not on its own sufficient to constitute an “occurrence” under L-J, the court found that the continuous water intrusion into the home resulting from the negligent application qualified as an “accident,” thus invoking coverage under the policy.

Atkins v. Horace Mann Ins. Co., 376 S.C. 625, 658 S.E.2d 106 (Ct. App. 2008).
Opinion No. 4345, decided February 21, 2008.

The plaintiff alleged that his automobile insurer failed to make him a commercially reasonable offer of underinsured motorist (UIM) coverage and sought a declaratory judgment reforming his policy to provide him with UIM coverage equal to the limits of his liability insurance coverage. He alleged that the insurer’s offer of UIM coverage failed the four-pronged Wannamaker test because his agent mailed him a selection form rather than speaking with him directly and because the insurer allegedly failed to intelligibly advise him of the nature of underinsured motorist coverage. The South Carolina Court of Appeals rejected both arguments, holding that the use of mail is a reasonable method of communicating with an insured about an important business transaction and that the plaintiff understood the nature of UIM coverage because he signed under a paragraph acknowledging that he had read the selection form, which clearly explained the nature of UIM coverage, in its entirety.

Horace Mann Ins. Co. v. General Star Nat. Ins. Co., 514 F.3d 327 (4th Cir. 2008).
Docket No. 06-2156, decided January 23, 2008.

A high school student filed a lawsuit against several defendants, including his school principal and local school board. The first $1 million of the parties’ settlement was funded by a state insurance policy as mandated by state law. The remainder of the settlement was funded by the state’s excess insurer, which subsequently sought reimbursement from the school principal’s insurer. The school principal’s insurer refused the reimbursement and filed this action seeking a declaratory judgment that it had no obligation to contribute to the settlement. The district court found that the school principal’s insurance policy required that if any other insurance covered the settlement, the limits of the other policy must be exhausted before the school principal’s insurer would be required to contribute. On appeal, the United States Court of Appeals for the Fourth Circuit found that the state’s excess coverage was a “true excess” policy, whereas the school principal’s coverage was written as primary insurance. Therefore, under the general rule that the limits of a primary insurance policy must always be exhausted before coverage under a true excess policy is triggered, the court held that the school principal’s insurer must reimburse the state’s excess insurer.

Cook v. State Farm Automobile Ins. Co., 376 S.C. 426, 656 S.E.2d 784 (Ct. App. 2008).
Opinion No. 4337, decided January 17, 2008.

A teenage girl was injured in an automobile accident. Her mother and grandfather made a claim on her behalf for UIM benefits under the policies on the grandfather’s three automobiles. The insurer rejected the claim, and the mother and grandfather filed this declaratory judgment action to determine the girl’s ability to recover under the policies. The South Carolina Court of Appeals found that there was ample evidence to support the master-in-equity’s determination that the girl did not reside primarily with her grandfather, a requirement to be considered a “relative” under the policies and qualify for UIM benefits. Therefore, the court upheld the finding that the girl was not entitled to UIM benefits under her grandfather’s policies.

Coakley v. Horace Mann Insurance Co., 376 S.C. 2, 656 S.E.2d 17 (2007).
Opinion No. 26407, decided December 17, 2007.

The plaintiff’s son was rendered a permanent quadriplegic when a vehicle he was riding in collided with a tree. The vehicle was owned by the driver’s brother, and their mother was the named insured on the vehicle’s liability policy. The mother maintained liability policies with the same company on three other vehicles, and the primary issue in the case was whether the policies on these three vehicles provided excess coverage to the plaintiff. The three policies each extended liability coverage to the use of “non-owned” vehicles with the permission of the owner, but the definition of “non-owned” vehicle excluded vehicles owned by a relative of the insured. As defined by the policies, “relative” included dependent children who were away at school. The South Carolina Supreme Court held that there was ample evidence that the owner of the wrecked vehicle was a “dependent” of his mother, and therefore the vehicle was not a “non-owned” vehicle under the policies on her three other vehicles. Thus, those policies did not provide excess coverage to the plaintiff.

Nationwide Mut. Ins. Co. v. Smith, 376 S.C. 60, 654 S.E.2d 837 (Ct. App. 2007).
Opinion No. 4295, decided September 26, 2007.

The defendants were injured in an automobile accident with an uninsured driver. While they owned the car in which they were riding, the insurance policy on the vehicle was in the name of one of their parents. The insurance company sought a declaratory judgment that there was no coverage because the policy was void for lack of an insurable interest. The trial court granted summary judgment to the defendants because it found the insurable interest issue to be irrelevant because the defendants had sought coverage under the uninsured motorist (UM) provision of the policy rather than the liability insurance provisions. The South Carolina Court of Appeals reversed and remanded for a determination of whether an insurable interest existed. The court held that the issue was not irrelevant because without an insurable interest the policy, including the UM provision, was void at its inception.

Bradley v. Doe, 374 S.C. 622, 649 S.E.2d 153 (Ct. App. 2007).
Opinion No. 4274, decided July 6, 2007.

The plaintiff was driving late at night when he swerved to avoid an unknown object in the road and struck a tree, suffering injuries. He brought a “John Doe” action to collect damages under the uninsured motorist provision of his automobile insurance. Though he presented multiple witnesses and affidavits tending to show that there was a white garbage bag in the road at the time of the accident, the South Carolina Court of Appeals held that he did not satisfy the requirements of S.C. Code Ann. § 38-77-170, which provides that if the accident was not caused by contact with an unknown vehicle, the plaintiff must present an affidavit from a third party witness to the accident. Because there were no third party witnesses, the plaintiff could not produce the required affidavit, and therefore the court upheld summary judgment against the plaintiff.

Nationwide Mut. Ins. Co. v. Erwood, 373 S.C. 88, 644 S.E.2d 62 (2007).
Opinion No. 26305, decided April 9, 2007.

In this declaratory judgment action, the defendant was injured in a motorcycle accident, but the motorcycle, which was owned and driven by her husband at the time of the accident, was uninsured. The defendant sought uninsured motorist coverage (UM) from the policy on another vehicle she owned, but the insurer denied the claim based on a policy provision limiting UM portability. The South Carolina Supreme Court held that because UM, unlike UIM, is mandatory, insurers may not limit the portability of UM coverage.

Burgess v. Nationwide Mut. Ins. Co., 373 S.C. 37, 644 S.E.2d 40 (2007).
Opinion No. 26304, decided April 9, 2007.

In this declaratory judgment action, the plaintiff was injured in a motorcycle accident, but the motorcycle was not covered by underinsured motorist insurance (UIM). The plaintiff sought UIM coverage from the policies on three other vehicles he owned, all of which were covered by UIM but were insured by a separate insurance carrier. The insurer denied the claim based on a policy provision limiting UIM portability. The South Carolina Supreme Court held that because vehicle owners have the ability to decide whether to purchase voluntary UIM coverage, insurers may limit the portability of UIM coverage when the insured has a vehicle involved in the accident.

Progressive Specialty Ins. Co. v. Murray, 472 F.Supp.2d 732 (D.S.C. 2007).
Decided January 26, 2007.

An employee of the owner of a truck used the truck without the owner’s permission. The employee loaned the truck to a third party, who ended up wrecking the car while the defendant was riding along as a passenger. The defendant sought coverage for his injuries under the owner’s insurance policy and the carrier sought a declaratory judgment that the defendant was not covered. The United States District Court for the District of South Carolina held that the defendant was neither an express nor an implied permissive user of the vehicle. Furthermore, the defendant was not an “insured” entitled to uninsured motorist coverage. Thus, the court granted summary judgment to the carrier.

St. Paul Reinsurance Co. Ltd. v. Ollie’s Seafood Grille and Bar, LLC, 242 F.R.D. 348 (D.S.C. 2007). Decided January 5, 2007.

Two restaurant patrons allegedly assaulted another patron with a knife, resulting in serious injury to the victim. The victim sued the two alleged assailants as well as the restaurant, which filed a claim with its insurance carrier requesting coverage for the lawsuit. The carrier defended the lawsuit under a reservation of rights and sought a declaratory judgment that it had no duty to defend or indemnify the restaurant. The United States District Court for the District of South Carolina granted summary judgment to the carrier based on policy language excluding coverage for claims “arising out of” assault and battery.



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