Justia South Carolina Supreme Court Opinion Summaries

The federal district court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. In 2019, USAA issued a personal automobile policy to Megan Jenkins. The policy defined "your covered auto" as any vehicle shown on the policy's declaration, any newly acquired vehicle, and any trailer owned by the insured. While riding her bicycle, Jenkins was struck and killed by an underinsured motorist. Defendant Vincent Rafferty—Jenkins' personal representative—made a claim under Jenkins' policy for UIM property damage arising from damage to the bicycle. USAA Casualty Insurance Company (USAA) denied the claim and commenced this action in federal court, asserting Jenkins' bicycle did not fall within the definition of "your covered auto." Whether USAA prevailed depended upon whether automobile insurers were required to offer UIM property damage coverage at all. If insurers were not required to offer UIM property damage coverage, they were free to restrict such coverage to an insured's "covered auto." The federal court asked the Supreme Court whether, under South Carolina Law, an auto insurer could validly limit underinsured motorist property damage coverage to property damage to vehicles defined in the policy as a “covered auto.” In their briefs and during oral argument, the parties did not directly address the question as framed by the district court. Instead, the parties briefed and argued the broader question of whether an automobile insurer's offer of underinsured motorist (UIM) coverage had to include property damage coverage. Because the answer to the broader question yielded the answer to the certified question, the Supreme Court addressed the parties’ question. USAA rightly conceded that if the Supreme Court held an insurer was required to offer UIM property damage coverage, the Court had to answer the certified question "no." The Court indeed held insurers were required to offer UIM property damage coverage, and therefore answered the certified question "no." View "USAA Casualty v. Rafferty" on Justia Law

This case involved promises made and broken to homeowners by a developer and its affiliated entities. A jury returned verdicts on several causes of action in favor of the homeowners, and the developer appealed. The court of appeals initially upheld the jury's verdict for $1.75 million on the homeowners' breach of fiduciary claim and a verdict for $10,000 on a breach of contract claim by an individual homeowner. Thereafter, upon petitions for rehearing, the court of appeals completely reversed course, dismissing all of the homeowners' claims as a matter of law and reversing and remanding the breach of contract claim by the individual homeowner. The South Carolina Supreme Court granted certiorari and affirmed in part and reversed in part, thus reinstating the jury's verdicts. The Court: (1) reversed the court of appeals' ruling on the statute of limitations because the issue as to when Homeowners had adequate notice to begin the limitations clock was properly presented to the jury and resolved by it; (2) found any procedural issues related to the derivative claims either (a) moot as the HOA was realigned as a plaintiff and the trial court explicitly found it adopted its own claims against the Developers, or (b) demand was saved by futility due to the Developer's continuing veto power; (3) held that Developers breached the fiduciary duties owed to Homeowners; (4) reversed the court of appeals' decision that Developers could not be amalgamated, as there was more than enough evidence of bad faith, abuse, fraud, wrongdoing, or injustice resulting from the blurring of the entities' legal distinctions; and (5) affirmed the court of appeals that the recreational easement was invalid. View "Walbeck, et al. v. The I'On Company" on Justia Law

The South Carolina workers' compensation commission dismissed an appeal to its appellate panel because the attorney filing the appeal missed a deadline for his brief. The commission refused to reinstate the appeal even after the attorney explained he made an innocent calendaring mistake, and then the commission refused to reconsider its decision. In all three instances, the commission gave no explanation of its decision; it simply issued a form order with blanks checked indicating the commission's action. The South Carolina Supreme Court found that because the commission offered no explanation for its decision, it did not act within its discretion in refusing to reinstate the appeal. "The failure to accurately calendar a filing deadline will not constitute good cause for reinstating an appeal in every instance. We have reviewed the record in this case, however, and we find Proffitt demonstrated good cause." The commission's decision refusing to reinstate the appeal was reversed and the case remanded to the appellate panel for consideration of the appeal on the merits. View "Morris v. BB&T Corporation" on Justia Law

Respondent Stephany Connelly was a passenger in a vehicle driven by co-worker Freya Trezona during the course and scope of their employment when Trezona negligently caused the accident, injuring Connelly. Because workers’ compensation benefits did not fully redress Connelly’s injuries, she made a claim for bodily injury and uninsured motorist (UM) benefits with her own insurance carrier and with Trezona’s carrier. Both companies denied the claim, contending Connelly’s sole remedy lay with the South Carolina Workers’ Compensation Act. Connelly filed suit seeking a declaration that both policies provided coverage. The parties agreed the dispute turned on the interpretation of the phrase “legally entitled to recover” found in the UM statute. The trial court ruled in favor of Connelly, and the court of appeals concurred the phrase was legally ambiguous. The South Carolina Supreme Court found the phrase unambiguous: the amount a plaintiff is “legally entitled to recover” under a UM provision of an insurance policy is the amount for which the plaintiff has secured a judgment against the at-fault defendant. Because the Act prevents Connelly from ever becoming “legally entitled to recover” from Trezona under the facts of this case, the Court reversed the trial court. View "Connelly v. Main Street America Group" on Justia Law

Jimmy and Laura Bailey mortgaged their home in October 2009 to Quicken Loans (first mortgage). A week later, the Baileys entered into an equity line of credit a month later with ArrowPointe Federal Credit Union (the LOC) to the maximum principal amount. The ArrowPointe LOC was secured by a mortgage; ArrowPointe had record notice of the first mortgage. Shortly after taking out the second mortgage, the Baileys refinanced the first mortgage with Quicken in a greater amount than the previous first mortgage. The Baileys executed a “Title Company Client Acknowledgement” at the closing of the refinanced mortgage, which stated the only outstanding lien on the subject property was the first mortgage. There was no clear explanation in the record as to whether Quicken obtained a title examination to ascertain whether there were any outstanding additional liens; Quicken did not ask ArrowPointe to sign a subordination agreement, and ArrowPointe was unaware of the refinance. The Baileys used money from the refinance to pay the first mortgage. Quicken released the first mortgage and recorded the refinance. The Baileys ultimately defaulted on the LOC, and ArrowPointe filed an action to declare its lien had priority over the refinance. US Bank, assignee to the Quicken refinance, argued it was entitled to priority under the replacement mortgage doctrine. ArrowPointe argued it was entitled to priority because Quicken had record notice of its LOC at the time of refinancing. A referee concluded South Carolina did not recognize the replacement mortgage doctrine, and because there was no subordination agreement, ArrowPointe had priority under the race-notice statute. The referee ordered foreclosure and sale of the subject property. Finding no reversible error in the referee’s order, the South Carolina Supreme Court affirmed. View "ArrowPointe Federal Credit Union v. Bailey" on Justia Law

Respondent Myra Windham was seriously injured while driving a rental car that was considered a temporary substitute vehicle under her State Farm policy. In this declaratory judgment action instituted by Petitioner State Farm, the issue this case presented for the South Carolina Supreme Court's determination was whether Windham could stack her underinsured motorist ("UIM") coverage pursuant to section 38-77-160 of the South Carolina Code. The circuit court agreed with State Farm that stacking was prohibited, and the court of appeals reversed. Because both parties offered reasonable interpretations of the policy language, the Supreme Court found an ambiguity existed, which it construed against the drafter. Accordingly, the Court agreed with the court of appeals that Windham could stack, and affirmed as modified. View "State Farm v. Windham" on Justia Law

Jimi Redman shot and killed Lynn Harrison with a rifle while both were in their vehicles at a stoplight. Immediately before the shooting, Redman, who was driving a Ford Escape, approached Harrison's GMC in the lane to her right. A witness, who was directly behind Harrison in the left lane, saw Redman make hand gestures and blow kisses toward Harrison. There is no evidence that Harrison attempted to evade Redman or that she even saw his gestures. Instead, as the two vehicles stopped at the red light, Redman pulled out a rifle and fired one shot which traveled through Harrison's passenger side window, killing her. Redman subsequently sped away, while Harrison's vehicle, which was still in drive, crept forward until coming to rest in the median. Redman was arrested a few blocks away. The issue this case presented for the South Carolina Supreme Court's review was whether uninsured or underinsured benefits could be recovered when an individual was shot and killed by another motorist as both cars were stopped at a traffic light. In deciding this question, the Court revisited and attempted to clarify conflicting jurisprudence as to whether such injuries arise out of the "ownership, maintenance, or use" of an automobile. To this, the Court held that gunshot injuries do not arise out of the use of an automobile. Therefore, it reversed the court of appeals and reinstated the judgment of the circuit court. View "Progressive Direct v. Groves" on Justia Law

This case arose from a construction defect suit brought by a number of homeowners (Petitioners) against their homebuilder and general contractor, Lennar Carolinas, LLC (Lennar). Lennar moved to compel arbitration, citing the arbitration provisions in a series of contracts signed by Petitioners at the time they purchased their homes. Petitioners pointed to purportedly unconscionable provisions in the contracts generally and in the arbitration provision specifically. Citing a number of terms in the contracts, and without delineating between the contracts generally and the arbitration provision specifically, the circuit court denied Lennar's motion to compel, finding the contracts were grossly one-sided and unconscionable and, thus, the arbitration provisions contained within those contracts were unenforceable. The court of appeals reversed, explaining that the United States Supreme Court's holding in Prima Paint Corp. v. Flood & Conklin Manufacturing Co. forbade consideration of unconscionable terms outside of an arbitration provision (the Prima Paint doctrine). The court of appeals found the circuit court's analysis ran afoul of the Prima Paint doctrine as it relied on the oppressive nature of terms outside of the arbitration provisions. While the South Carolina Supreme Court agreed that the circuit court violated the Prima Paint doctrine, it nonetheless agreed with Petitioners and found the arbitration provisions, standing alone, contained a number of oppressive and one-sided terms, thereby rendering the provisions unconscionable and unenforceable under South Carolina law. The Court further declined to sever the unconscionable terms from the remainder of the arbitration provisions, as "it would encourage sophisticated parties to intentionally insert unconscionable terms—that often go unchallenged—throughout their contracts, believing the courts would step in and rescue the party from its gross overreach. ... Rather, we merely recognize that where a contract would remain one-sided and be fragmented after severance, the better policy is to decline the invitation for judicial severance." View "Damico v. Lennar Carolinas, LLC et al." on Justia Law

South Carolina Attorney General Alan Wilson retained Respondents Willoughby & Hoefer, P.A., and Davidson, Wren & DeMasters, P.A., (collectively, the Law Firms) to represent the State in litigation against the United States Department of Energy (DOE). Wilson and the Law Firms executed a litigation retention agreement, which provided that the Law Firms were hired on a contingent fee basis. When the State settled its claims with the DOE for $600 million, Wilson transferred $75 million in attorneys' fees to the Law Firms. Appellants challenged the transfer, claiming it was unconstitutional and unreasonable. The circuit court dismissed Appellants' claims for lack of standing, and the South Carolina Supreme Court certified the case for review of the standing issue. The Supreme Court reversed the circuit court's finding that Appellants lacked public importance standing and remanded the case for the circuit court to consider the merits of Appellants' claims. View "South Carolina Public Interest Foundation, et al. v. Wilson" on Justia Law

The United States Court of Appeals for the Fourth Circuit certified a question of law to the South Carolina Supreme Court. In June 2005, Poly-Med, Inc. (Poly-Med) entered into a Sale of Materials and License Agreement with the predecessor in interest to Defendants Novus Scientific Pte. Ltd., Novus Scientific, Inc., and Novus Scientific AB (collectively, Novus). The Agreement required Poly-Med to develop a surgical mesh for Novus's exclusive use in hernia-repair products. The dispute between Poly-Med and Novus arose from two ongoing obligations in the parties' Agreement. As characterized by the Fourth Circuit, the alleged breach of the Agreement centered on the contractual provisions that contained these two obligations: the "hernia-only" provision and the "patent-application" provisions. The federal court asked whether, under a contract with continuing rights and obligations, did South Carolina law recognize the continuing breach theory in applying the statute of limitations to breach-of-contract claims, such that claims for separate breaches that occurred (or were only first discovered) within the statutory period are not time-barred, notwithstanding the prior occurrence and/or discovery of breaches as to which the statute of limitations has expired? The Supreme Court found South Carolina did not recognize the continuing breach theory. "Moreover, it may matter greatly 'if the breaches are of the same character or type as the previous breaches now barred.'" Nevertheless, in a contract action, the Court held it was the intent of the parties that controlled: "Whether separate breaches of the same character or type as time-barred breaches trigger a new, separate statute of limitations depends on the parties' contractual relationship—specifically, what the parties intended." View "Poly-Med, Inc. v. Novus Scientific Pte. Ltd., et al." on Justia Law