Torts, Insurance and Products Blog
Editor: Cheryl Shoun
Uninsured Motorist Coverage Requires Eyewitness - Circumstantial Evidence Is Not Enough
While there are myriad cases interpreting uninsured motorist (UM) coverage in South Carolina, some aspects of the coverage are well determined. No policy of insurance may be issued without providing for the coverage, in an amount not less than $25,000, for injury to or destruction of the property of an insured. It is equally well established that the coverage is remedial in nature and therefore liberally construed to favor the injured. It has even been determined that the coverage is available for stacking. Yet, despite the efforts made over the years by our courts, the nature of the coverage and its inherent complexity continues to give rise to questions, including one recently addressed by our Supreme Court. Silva for Estate of Silva v. Allstate Property and Casualty Insurance Company, 2018 WL 4101084 (August 29, 2018).
National Flood Insurance Program - Not Your Average Claims
Short Claims Deadline Relevant Following Hurricane Florence
The National Flood Insurance Program (“NFIP”) requires strict compliance with its rules and regulations and the United States District Courts for the District of South Carolina uphold this requirement. In a recent decision, the district court resolved a dispute between a Write-Your-Own (“WYO”) carrier participating in the NFIP and commercial insureds involving claims under a Standard Flood Insurance Policy. The district granted summary judgment to the WYO carrier because the insureds failed to strictly comply with all the requirements of the policy.
The South Carolina Property and Casualty Insurance Guaranty Association Act and Further Guidance on Statutory Interpretation
The South Carolina Property and Casualty Insurance Guaranty Association (the Guaranty) is an unincorporated nonprofit entity created pursuant to the South Carolina Property and Casualty Insurance Guaranty Association Act (the Act). The purpose of the Guaranty is to provide a degree of protection to insureds whose carriers become insolvent. Upon an insurer’s insolvency, the Guaranty assumes the position of the insurer to the extent of the insurer’s obligation relative to covered claim; its liability is derived from that of the insolvent carrier’s liability to the insured. The Guaranty’s origin is purely statutory; therefore, its liabilities and duties are controlled by the Act. The Act provides, among other things, the Guaranty’s obligation to pay is limited to $300,000 per claim. The South Carolina Supreme Court recently reviewed the Act and the resulting obligation of the Guaranty, on Writ of Certiorari, providing guidance on the basic tenants of statutory construction. Buchanan, et al v. The South Carolina Property and Casualty Insurance Guaranty Association. 2018 WL 4212101 (September 5, 2018).
South Carolina Supreme Court Clarifies Successor Liability
How to successfully pierce the corporate veil has been shrouded in a degree of mystery in South Carolina, to both those in pursuit of and those defending against the action. However, our Supreme Court has recently made strides in clarifying the requirements for practitioners. Following closely on the heels of its recent decision formally adopting the single business enterprise theory, the court provided another well-reasoned opinion clarifying successor liability. Nationwide Mutual Insurance Company and Gilliam Construction Company, Inc. v. Eagle Window & Door, Inc., 2018 WL 3999905 (August 22, 2018).
Declaratory Judgement by Insurer: The court provides a limitation on attorney's fees and a definition of "prevailing party" under Federal Rule 54
Federal Rule of Civil Procedure 54(d) provides, in pertinent part, that “[u]nless a federal statute, these rules, or a court order provides otherwise, costs – other than attorney’s fees –should be allowed to the prevailing party.” The rule further provides, in contrast, a prevailing party must file a motion requesting attorney’s fees. Consequently, the definition of “prevailing party” is critical.
Typed or Written; Ambiguity or Conflict - It's All About the Insurance Contract
There is no shortage of opinions offering guidance in the construction and analysis of insurance policies. For those of us who regularly read and interpret these policies the courts have provided myriad scenarios with various approaches to guide us. Throughout, however, one thing remains consistent; a policy of insurance is a contract and will be interpreted accordingly. The United States District Court for South Carolina recently provided another opportunity to address the basic principles of contract interpretation in Greenwood Communities and Resorts, Inc. v. Selective Insurance Company of America, 2018 WL 3744967 (August 7, 2018).
A Look at Coverage Under a Personal Liability Umbrella Policy
Because many recognize the prudence in securing additional coverage and because, generally speaking, personal liability umbrella policies (PLUP) are not prohibitively expensive for most, it is not unusual to encounter such a policy. Where a PLUP exists, to whom and under what circumstances is coverage provided? The United States District Court recently took a look, reminding of some basic principles. State Farm Fire & Casualty v. Sproull, et al 2018 WL 3439629 (July 17, 2018).
Bad Faith Actions in South Carolina: Will Attorney-Client Privilege Survive?
South Carolina’s attorney-client privilege protects against the disclosure of communications pursuant to which legal advice of any kind is sought by a client from a professional legal adviser, acting in that capacity. At the client’s discretion, such confidential communications are protected from disclosure by the client or the legal adviser except if such protection is waived. The only recognized exception to this time-honored privilege recognized by the South Carolina Supreme Court includes communications in furtherance of tortious or fraudulent conduct. South Carolina has long revered the sanctity of attorney-client communications. How, then, are we now faced with the potential destruction of that privilege if an insurer denies bad faith liability?
Assault and/or Battery Exclusions - Is the Chain of Events "Immediate and Direct?"
Any regular reader has seen a number of articles here regarding assault and/or battery exclusions of insurance policies. These exclusions are commonly part of commercial general liability (“CGL”) and liquor liability coverages. The United States District Court again analyzed such an exclusion with a particular focus on the relationship between the assault and battery and the ultimate injury. Scottsdale Insurance Company v. GS Thadius LLC d/b/a The Bar, et al 2018 WL 3222998 (July 2, 2018).
Additional Insured Coverage and Primary/Excess Priority Disputes, Oh My
Additional insured coverage in construction projects is one of the most vexing issues facing insurance coverage lawyers. Add to the complexity a priority dispute between primary and excess insurers and you have a recipe for complex coverage litigation. Recently, the Fourth Circuit tackled these issues in the North Carolina case, Continental Casualty Company v. Amerisure Insurance Company, 886 F.3d 366 (4th Cir. 2018). The end result was not a good one for Amerisure. Amerisure, with its primary policy, got it wrong on the duty to defend additional insureds and with its excess policy, also got it wrong on the duty to indemnify. Continental obtained a judgment for over $2.3 million.
Piercing the Corporate Veil: South Carolina Formally Recognizes Single Enterprise Theory
South Carolina has loosely addressed the amalgamation of interests theory for more than three decades, generally finding that separate corporate entities may be viewed as one if there has been an amalgamation of the corporate interests and activities to the point the lines between the corporations and their ongoing activities are no longer distinguishable. Until recently, however, there has not been a decision of the South Carolina Supreme Court providing a detailed examination of the amalgamation theory. Now, the Supreme Court has formally recognized the single business enterprise theory. Pertuis v. Front Roe Restaurants, Inc., et al, 2018 WL 3297910 (July 5, 2018). Here, a brief look into the court’s decision, and how it got there.
Insurers Take Heed: South Carolina Law Does Not Require Apportionment of Punitive Damages
In a significant but not entirely novel ruling, the South Carolina Supreme Court recently held that South Carolina law does not require the pro rata apportionment of punitive damages between damages sustained for bodily injury and those sustained for property damage, under an auto policy. GEICO v. Poole, Opinion No. 27821 (July 5, 2018).
In Case You Were Wondering About Amount in Controversy...
Probably every practitioner has faced the situation. The goal is to remove the case to the United States District Court. There is complete diversity, but the amount in controversy is ambiguous; plaintiff seeks actual and punitive damages and maybe attorney’s fees, but does not specify an amount being sought. What is the next step?
Fourth Circuit Offers a Quick Look at Defamation in South Carolina
In a slander action before the United States District Court on diversity jurisdiction, the jury returned a verdict awarding Plaintiff compensatory and punitive damages. The Defendant’s motion for judgment as a matter of law following the verdict was denied. This appeal to the Fourth Circuit followed, affording the court the opportunity to briefly review the substantive law of South Carolina on defamation. Myers v. Dollar General Corporation, 2018 WL 3060118 (June 20, 2018). The court briefly reviewed the substantive law of South Carolina on defamation.
Continued Support for Forum Selection Clauses
Little more than a month ago, we looked at the United States District Court’s application of a recent Fourth Circuit opinion that relied, in turn, on a United States Supreme Court opinion addressing venue challenges in light of forum selection clauses (click here to view original article). The District Court once again analyzed the now recognized approach to a motion to transfer venue in light of a mandatory forum selection clause in ARCpoint Financial Group, LLC v. Blue Eyed Bull Investment Corporation, et al 2018 WL 2971205 (June 13, 2018).
A Pleading Primer
The United States District Court recently provided a pleading primer on a number of causes of action. Hall v. Storm Team Construction, Inc, et al. 2018 WL 2461991 (June 1, 2018). Plaintiff was hired as a project manager by Storm Team, signing a contract that stated he was an independent contractor. Upon his termination, Plaintiff filed this action wherein he alleged vestiges of an employer-employee relationship and several causes of action against Storm Team as well as its owner/president and its national sales manager. The matter came before the court on Defendants’ motion to dismiss for failure to state a claim, pursuant to Fed. R. Civ. P. 12(b)(6), or motion for more definite statement pursuant to Fed. R. Civ. P. 12(e). In addressing Defendants’ motions, the court provides some pleading reminders.
South Carolina Supreme Court: Insurer May Sue Defense Counsel in Malpractice
Last week, the South Carolina Supreme Court handed down a monumental opinion; one which, in the words of appellant’s counsel, changes 200 years of common law. In a 3-2 decision, the court, all the while indicating its desire not to do so, potentially changed the way practitioners and insurers alike have traditionally defined the attorney-client relationship. Sentry Select Insurance Company v. Maybank Law Firm, LLC 2018 WL 2423694.
The United States District Court Takes Another Look at South Carolina's Statute of Repose: Revisiting Hampton Hall v. Chapman Coyle Chapman & Associates
Several months ago, we addressed the United States District Court’s helpful analysis of selected portions of South Carolina’s statute of repose. That case is back before the court, and there is additional clarification as to the statute. Hampton Hall, LLC v. Chapman Coyle Chapman & Associates Architects AIA, Inc., et al, 2018 WL 2305658 (May 21, 2018).
This time, a few background facts. Chapman Coyle Chapman & Associates Architects, AIA, Inc. (“Chapman”) designed and oversaw the construction of Hampton Hall Development amenity facilities, including a golf clubhouse, a community clubhouse and other amenities. Co-Defendant Choate Construction Company (“Choate”) was the general contractor. Southern Roof and Wood Care Corporation (“Southern”), was one of Choate’s subcontractors.
Reconsideration of Interlocutory Orders: The breadth and limitation of Federal Rule of Civil Procedure 54(b)
A district court may revise “any order or other decision…that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties…at any time before the entry of a judgment adjudicating all the claims and all the parties’ rights and liabilities” Fed. R. Civ. P. 54(b). Thus, Rule 54(b) governs reconsideration of interlocutory orders, such as one denying summary judgment. The United States District Court recently addressed both the discretion afforded and limitations imposed by Rule 54(b) in the context of a breach of contract and bad faith action. Ethel Powell v. State Farm Fire and Casualty Company, 2018 WL 2268007 (May 16, 2018).
Can a Third Party Seek a Declaration of an Insurer's Duties Under Its Policy?
“Be careful what you ask for in your declaratory judgment action” could have been an appropriate subtitle. Either title would fit the United States District Court’s look at whether a party that is not an insured may seek a declaration regarding an insurer’s duties under its policy. American Southern Insurance Company v. Affordable Home Improvements, et al. 2018 WL 2087229 (May 4, 2018).
Is Your Forum Selection Clause Mandatory or Permissive: How to know the difference and why you should.
Drafting an agreement that includes a forum selection clause? Preparing to litigate an agreement that includes a forum selection clause and wondering how to argue? The United States District Court, relying on a recent Fourth Circuit opinion offered some help to your analysis in Allstate Crane Rental, Inc. v. Paramount Equipment, LLC 2018 WL 2048361 (May 2, 2018).
Does South Carolina Recognize an Evidentiary Privilege for Trade Secrets?
The Fourth Circuit recently certified this question to the South Carolina Supreme Court in Theodore G. Hartsock, Jr., as Personal Representative of the Estate of Sarah Mills Hartsock v. Goodyear Dunlop Tires North America, Ltd., et al 2018 WL 1938540 (April 25, 2018).
South Carolina's Support of Arbitration Continues to Grow
Previously, in order to have an enforceable arbitration agreement in South Carolina, the arbitration language had to appear on the pages of the contract in bold, UPPER CASE and underlined print. Now, arbitration agreements are presumed valid and a party resisting the remedy has the burden of proof otherwise.
Mediation, Confidentiality and Set-Off: Take Two
In the recent Huck opinion, the court reiterated that the language of a court rule is construed pursuant to the same basic rule governing interpretation of a statute; its words must be given their plain, ordinary meaning without any forced interpretation to expand or contract the statute’s operation.
Trade Creditor Lacks Standing to Sue Judgment Debtor’s Insurer for Deceptive Trade Practices
On February 20, 2018, the North Carolina Court of Appeals upheld a ruling of the North Carolina Business Court that provided further clarification on whether a judgment creditor may sue the debtor’s insurer for deceptive trade practices. USA Trouser, S.A. de C.V. v. Williams.
Federal Declaratory Judgment Act: What is Required for Standing?
To establish federal jurisdiction in a declaratory judgment action, two conditions must be satisfied. First, is the constitutional inquiry - the case must be a ‘case or controversy’ pursuant to Article III of the US Constitution. Second is the prudential inquiry – declaratory relief must be appropriate. Relief pursuant to the Declaratory Judgment Act also requires the establishment of standing under the statute.
When Does the Time to Appeal Begin? Check your email.
Rule 203(b)(1), South Carolina Appellate Court Rules (SCACR), requires notice of appeal be served within thirty days after receiving written notice of entry of an order or judgment. While the notice of appeal must be served upon parties, there is no such requirement as to the written notice of entry of a judgment.
Unlicensed Lawyers and Undue Influence – Setting Aside Deed Rejected
In a recent unpublished opinion, 2018 WL 679484, the South Carolina Court of Appeals addressed the circumstances under which a deed prepared by an unlicensed attorney would be voided in a challenge that also involved claims of undue influence in the execution of the deed. Briefly, the decedent (“Mother”) executed a deed to her home in favor of her daughter (“Daughter”), granting Daughter a remainder interest in the home, while reserving a life estate for Mother. However, Daughter died first, and Daughter’s interest in the home devolved to her heirs (“Heirs”).
Will the “Real” Representative Please Stand - Litigation in Estate Proceedings
Last month, the Supreme Court of South Carolina, in Fisher v. Huckabee, 2018 WL 1076808 (Feb. 28, 2018), addressed the question of who may bring a suit on behalf of a deceased individual if the personal representative has a conflict. Briefly, the decedent asked the defendants to care for her in her last years. In exchange for such care, the decedent promised to make each of the caregivers residuary beneficiaries under her will.
The Evolution of Ripeness Affords Additional Opportunities for Declaratory Judgment Actions
In Colony Insurance Company v. Hucks Pool Company, Inc., et al. (February 15, 2018), based only upon a demand letter to Hucks from a claimant, Colony filed a declaratory judgment action that sought a determination whether it had the duty to defend and indemnify under a policy issued to Hucks. Hucks moved to dismiss the action, alleging the matter was not ripe because no complaint had been filed.
Late Notice Under Claims-Made Policy Torpedos Claim
A recent ruling by a North Carolina federal district court highlights the different treatment the courts give to the late notice defense under a claims-made liability insurance policy versus an occurrence-based policy. The insurer has a clearer opportunity under claims-made policies to defeat coverage when the insured’s notice of a claim is late. The United States District Court for the Eastern District of North Carolina in the case of John Hiester Chrysler Jeep LLC v. Greenwich Ins. Co., 2017 WL 6210897 (E.D.N.C. December 8, 2017), rejected the policyholder’s argument that prejudice must be shown by the insurer under a claims-made policy before coverage can be avoided due to late notice.
Read full article here.
IRAs and 401(k)s Are Safe From Judgments – For Now
In a recent decision, the South Carolina Court of Appeals considered whether post-judgment contributions to an IRA, 401(k) plan, and a College 529 Plan are exempt from execution.Briefly, the judgment debtor confessed judgments in favor of the bank totaling approximately $113,000. When the judgments remained unpaid, the bank initiated supplemental proceedings under South Carolina Code Section 15-39-310 et seq.
Not Every Refusal to Provide Coverage Equals Bad Faith
A complicated and interesting factual history, along with a number of actions, including an earlier one for declaratory judgment, resulted in a thoughtful and reasoned opinion of the United States District Court for South Carolina. Agape Senior Primary Care, Inc. v. Evanston Insurance Company 2018 WL 490386 (January 19, 2018).
Statutory Construction is Powerful - The Court Interprets “Due Date” Under a Premium Service Agreement
The tools of statutory construction are powerful. In interpreting statutory language, words are generally given their common and ordinary meaning. The cardinal rule is to ascertain and effectuate the intention of the legislature while considering the language of the statute as a whole.
John Doe Removals to Federal Court – Not so Fast!
In a recent decision of Brown v. Doe, 2018 WL 316714, the U.S. District Court for the District of South Carolina remanded a John Doe action to the state court. Briefly, Plaintiff, who was driving her employer’s vehicle, was rear-ended while stopped in traffic. The accident occurred in North Carolina, and the unknown driver fled the scene. No one could identify the driver or even the license plate of the at-fault vehicle. Plaintiff, a South Carolina resident, brought this “John Doe” action in South Carolina state court.
South Carolina's Statute of Repose - A look by the United States District Court
S.C Code §15-3-640, provides, in pertinent part:
No actions to recover damages based upon or arising out of the defective or unsafe condition of an improvement to real property may be brought more than eight years after substantial completion of the improvement…. This statute, commonly referred to as South Carolina’s statute of repose, also provides that a certificate of occupancy is proof of substantial completion of a project, unless the parties otherwise agree, in writing.
Legal Malpractice – a Cautionary Carol
Sometime prior to 2009, a lawyer closed his law practice in South Carolina and moved to another state. Unfortunately, his ghost remains in South Carolina, providing cautionary tales this Christmas season for all lawyers. Based on the trial court’s order affirmed in Herring v. Bagnell, 2017 WL 6032651, Lawyer’s “egregious” treatment of his Client has affected his client, Lawyer’s remaining law partner, and the administration of justice in general. His conduct reminds us all, during this holiday season, of several basic lessons in practicing law.
Who Is Insured, What Is Insured and Why Makes a Difference
What do the Moody Blues and an insurance policy have in common? It boils down to this: Say what you mean and mean what you say. The District Court of South Carolina recently reminded us of the importance of the terms of an insurance policy; it means what it says. Trustgard Insurance Company v. Michael Brown, individually and d/b/a Triple S Transport, et al.
Alleged Statutory Violations Precluded Coverage Under Business Liability Policy
In a November 2017 decision out of the United States District Court for the Western District of North Carolina, the Court held that an insurer has no duty to defend or indemnify its insured when the policy’s statutory violation exclusions precluded coverage for the underlying actions. Hartford Casualty Insurance Co. v. Ted A. Greve & Associates, P.A., et al.
An Insurance Contract is Still a Contract - And How That Impacts Voluntary PIP Coverage
In two recent opinions, the SC Court of Appeals reminded readers that parties are free to contract as they see fit, as long as the contract provisions at issue are not contrary to public policy or a statutory prohibition. It is sometimes easy to forget those basic rules apply to policies of insurance as well as other contracts, and include an insurer’s right to limit liability and impose restrictions on their responsibilities.
Application of the Twenty-Year Statute of Limitations S.C.Code Ann. §15-3-520(a) - SC Mortgage Not Required
Most breach of contract claims in S.C. are governed by a three-year statute of limitations. S.C. Code Ann. § 15-3-530(1). A specific exception, however, is found in S.C. Code Ann §15-3-520(a) that provides for a twenty-year statute of limitations in actions on written contracts secured by a mortgage.
Opioid Litigation Over Insurance Coverage – Coming to a Jurisdiction Near You
A very recent appellate ruling in California provides a roadmap for opioid litigation over insurance coverage that is about to ramp up all over country. In Travelers Prop. Cas. Co. of Am. v. Actavis, Inc. et al, 2017 WL 5119167 (Cal. App. 4th Dist. Nov. 6, 2017), the California court held that Travelers has no duty to defend the pharmaceutical manufacturer and distributor Actavis, Inc. and its affiliates (collectively “Actavis”) in lawsuits filed against them by the City of Chicago and two counties in California.
Aiding & Abetting Fiduciary Breach - What is “Knowing Participation” by South Carolina Professionals?
The South Carolina Supreme Court recently clarified liability for aiding and abetting a breach of fiduciary duty. In Bennett v. Carter, 2017 WL 5163467, the Supreme Court reversed summary judgment on a claim against lawyers and accountants for aiding and abetting breach of fiduciary duty involving two trusts. Briefly, Mother was the sole lifetime beneficiary of two trusts created by her deceased husband. The residual beneficiaries of the two trusts were her sons and her daughters. The sons were also co-trustees of the two trusts from 1999 to 2006.
Bad Faith – Another Angle
In August 2011, Jeffrey Vanderhall was riding his bicycle when he was hit by a car and seriously injured. It is now six years, three courts and two bad faith attempts later... To describe the procedural history of this case as anything but torturous would be generous.
UIM Coverage - A Brief Look at Meaningful Offers and a Discovery Lesson
An automobile insurance carrier in South Carolina must offer underinsured motorist coverage (UIM), at the option of the insured, up to the limits of the insured liability coverage. If the insurer fails to make a meaningful offer of this coverage, the policy will be reformed, as a matter of law, to provide it. An insurer may establish a meaningful offer in two ways: the statutory presumption pursuant to S.C. Code §38-77-350(B) and the Wannamaker test.
Rule 68 Offers of Judgment: Proceed With Caution
If there is any occasion in civil litigation that calls for caution by counsel, it is the drafting of a Rule 68 offer of judgment, so warns the Fourth Circuit. Consistent with the general rule of contract construction, responsibility for clarity and precision in a Rule 68 offer is that of the offeror. That concept, along with a few twists and turns unique to a SCUTPA claim, was recently visited by our District Court in Bradley Johnson, as a general guardian, for and on behalf of S.J., a minor and individually on behalf of S.J. v. Hyatt Hotels Corporation, et al.
South Carolina Unfair Trade Practices Act - Attorney’s Fees Do Not Constitute Actual Damages
To prevail in a claim for violation of the South Carolina Unfair Trade Practices Act (SCUTPA), a claimant must establish 1) the opposing party engaged in an unlawful trade practice, 2) the claimant suffered actual, ascertainable damages as a result of the opposing party’s use of the unlawful trade practice and 3) the unlawful trade practice had an adverse impact on the public interest.
Interesting and Useful Cases in Torts and Insurance - July 2017 in the Fourth Circuit Court of Appeals
Each month, Nexsen Pruet attorney Marc Manos, a member of the SC Bar Torts and Insurance Practice Section Council, sheds light on a few recent cases from the Fourth Circuit Court of Appeals, focused in the area of Torts & Insurance.Below are noted cases from July 2017.
Read full article here.
Insurer Violated Lien Statute and Committed Deceptive Trade Practice When Settling With Pro Se Claimant
The North Carolina Court of Appeals recently held that when an insurer settles with a pro seclaimant and issues a settlement check, the insurer must pay all valid medical provider liens before making any payments to the claimant (pursuant to N.C. Gen. Stat. §§ 44-49 and 44-50). Nash Hosps., Inc. v. State Farm Mut. Automobile Ins. Co.
Products Liability? Prove It
Under South Carolina law, a products liability case may be founded in several theories, including warranty. Regardless of the chosen theory, however, a plaintiff must establish (1) he was injured by the product; (2) at the time of the accident the product was in essentially the same condition as when it left the hands of defendant; and, (3) the injury occurred because the product was in a defective condition unreasonably dangerous to the user.
Interesting and Useful Cases in Torts and Insurance - June 2017 in the Fourth Circuit Court of Appeals
Nexsen Pruet attorney Marc Manos, a member of the SC Bar Torts and Insurance Practice Section Council, sheds light on a few recent cases from the Fourth Circuit Court of Appeals, focused in the area of Torts & Insurance.Below are the selected cases for June 2017.
All that Glimmers is Not [Insurance Agency] Gold
Diversity jurisdiction requires complete diversity among plaintiffs and defendants. While it is difficult for a defendant to remove a case with a nondiverse defendant, removal can be accomplished through the doctrine of fraudulent joinder. Fraudulent joinder may be established if the removing party demonstrates the plaintiff engaged in outright fraud in pleading jurisdictional facts.
Can Insurers Take Their Time? Fourth Circuit Finds No Bad Faith for Delay in Investigating Construction Defect Claim
Construction defect claims often include coverage disputes spiced with allegations of bad faith designed to turn up the heat on the insurer. The Fourth Circuit, in its review of one such recent North Carolina case, held while the insured prevailed on its contract claim, there was no bad faith. Delay, without other, aggravating factors is not enough to establish the malice or reckless indifference to consequences necessary to reach the level of bad faith.
Every Dog Bite has its Day (in Federal Court)
In Lighthouse Property Insurance Corp. v. Rogers, 2017 WL 3634593, the United States District Court for the District of South Carolina considered a motion to dismiss for lack of subject matter jurisdiction in an action founded on diversity jurisdiction. Briefly, an injured minor sued the insured defendant in state court for claims arising out of a dog bite to the minor’s face.
Ripeness: A Question of Subject Matter Jurisdiction
Allied World Surplus Lines Insurance Company v. Blue Cross and Blue Shield of South Carolina. Addressing a contractual requirement to exhaust Alternative Dispute Resolution (ADR) prior to commencing litigation, the United States District Court for the District of South Carolina chose to forge its own path, rejecting reasoning adopted by other courts in this Circuit relative to a Rule 12(b)(1)motion.
UIM Claims – Still No Bad Faith for Refusal to Settle, But….
South Carolina has never recognized a bad faith cause of action based upon the failure of an underinsured (UIM) carrier to settle a UIM claim. Maintaining the established precedent, the United States District Court recently refused to recognize bad faith based on a UIM carrier’s refusal of its insured’s settlement offer.
Another Assault – Another Exclusion
2017 is steadily becoming the year of the assault in South Carolina. Founders Insurance Company v. John Hamilton a/k/a Jim Hamilton, individually and d/b/a Aces High Club, Aces High Club and Kenneth Weatherford, 2017 WL 3415074, (August 9, 2017) offers us yet another look at a policy exclusion for an assault and/or battery.
Harleysville Revisited - What We Know Now
In January, the SC Supreme Court issued its original opinion in Harleysville Group Insurance, a Pennsylvania Corporation v. Heritage Communities, Inc, a South Carolina Corporation; Heritage Magnolia North, Inc., et al. and Harleysville Group Insurance, a Pennsylvania Corporation v. Heritage Communities, Inc., a South Carolina Corporation; Heritage Riverwalk, a South Carolina Corporation, et al., 2017 WL 105021 (Jan. 11, 2017). Hailed by some as one of the most important coverage opinions issued, Harleysville left many reeling.
Torts & Insurance Cases from the 4th Circuit Court of Appeals - May 2017
Each month, Nexsen Pruet attorney Marc Manos, a member of the SC Bar Torts and Insurance Practice Section Council, sheds light on a few recent cases from the Fourth Circuit Court of Appeals, focused in the area of Torts & Insurance.Below are noted cases from May 2017.
MEDIATION: Where the Confidentiality Ends
There is little room for argument; the information and documents exchanged during mediation are confidential. Rule 8 of the South Carolina Alternative Dispute Resolution Rules provides, in part:
Communications during a mediation settlement conference
shall be confidential…To that end, the parties and any other
person present shall not rely on, or introduce as evidence …
any oral or written communications having occurred in a
Bad Faith: District Court Remands Case Involving In-house Adjuster
Recently, the United States District Court in South Carolina closed the door on removal of insurance bad faith actions where the in-house, non-diverse, claims adjuster is a co-defendant. In Aung v. GEICO, C.A. No.: 9:17-CV-856-PMD, 2017 WL 2416475 (S.C.D. June 5, 2017), the district court ruled on a motion to remand filed by the plaintiff.
Not too hot, not too cold: US District Court for SC Adopts Moderate Approach for Counterclaims in Response to Amended Complaints
Addressing a procedural matter of first impression, the United States District Court for South Carolina adopted the moderate approach in response to the question of whether a party requires leave of court to amend counterclaims in response to an amended complaint. Poly-Med, Inc. v. Novus Scientific PTE LTD., 2017 WL 2874715 (D.S.C. July 6, 2017).
Torts & Insurance Cases from the 4th Circuit Court of Appeals - April 2017
Nexsen Pruet attorney Marc Manos, a member of the SC Bar Torts and Insurance Practice Section Council, sheds light on a few recent cases from the Fourth Circuit Court of Appeals, focused in the area of Torts & Insurance.
Equitable Estoppel Halts Insurer’s Success In Bad Faith Claim
Demonstrating that equitable estoppel can create genuine obstacles for insurers, the court in the Middle District of North Carolina denied a carrier relief to which it would have otherwise been entitled based upon the carrier’s prior conduct.
Is Recent Legislation a Prediction of Statutory Dram Shop Liability?
There is no question; drunk drivers are a danger to everyone on the road – including themselves. Recognizing that, many states have enacted dram shop laws; laws that hold restaurants or bars that overserve patrons and then allow them to drive strictly liable for injuries to third parties. A majority of states require establishments serving alcohol to have insurance that provides coverage to third parties injured by an intoxicated patron.
When an Assault Really Is an Assault...
Jesse Bass was a guest at Henry’s Sports Bar in December 2012, when the bouncer struck him in the head with such force that he was knocked unconscious and suffered serious brain injury. Bass brought an action against Henry’s, the bouncer and the independent security firm, which employed the bouncer. The security firm resolved the claim and the bouncer failed to respond leaving the remaining claim against Henry’s.
Comparative Negligence and Crashworthiness Collide at the South Carolina Supreme Court
The South Carolina Supreme Court recently held that the comparative negligence of a plaintiff, in causing a vehicular collision, is not a defense to product liability crashworthiness claims brought under the theories of strict liability and implied warranty. Donze v. General Motors, LLC.
Waiver of Attorney-Client Privilege in Bad Faith Litigation
The United States District Court has confirmed in a recent decision that in most circumstances, the attorney-client privilege will be waived in bad faith litigation in South Carolina. In Contravest, Inc. v. Mt. Hawley Ins. Co., the district court was asked to determine whether the insurance company in a bad faith action had waived the attorney-client privilege relative to certain documents and materials sought in discovery. The district court found that it did waive the privilege.
Defamation – When the Facts Really Are the Facts
Historically, South Carolina has followed the general rule that truth is a complete defense to a claim of defamation. An insinuation, however, drawn from a truthful statement, may be an exception to that general rule, and consequently serve as the basis for a claim of defamation.
Attention Contractors: The Right to Cure Act may still be alive!
Perhaps you forgot about it, or maybe you just gave up on it; regardless, you will be happy to hear that the Right to Cure Act just may be alive.
In an Order dismissing Plaintiffs’ claims, entered in the Charleston County Court of Common Pleas, former South Carolina Supreme Court Chief Justice Jean Hoefer Toal, breathed new life into the Act.
UM, Wait a second! – Rekindled Exposure for Bad Faith Uninsured Motorist Claims in South Carolina
Recently, the United States District Court held a plaintiff can maintain a claim for bad faith handling of Uninsured Motorists Coverage (“UM”) in the District of South Carolina. In Tucker v. Peerless Insurance Company, the plaintiff insured sued his personal UM Carrier for bad faith refusal to pay UM benefits. The district court denied the Carrier’s motion to dismiss and allowed the bad faith UM claim proceed.
Fourth Circuit Upholds 1-year Statute of Limitations on Flood Insurance Claims
In Woodson v. Allstate Insurance Co., the United States Court of Appeals for the Fourth Circuit recently upheld a one-year statute of limitations in flood insurance claims. Briefly, Hurricane Irene flooded the home of plaintiffs Gary and Rebecca Woodson in 2011. Allstate had issued the Woodsons a flood insurance policy under the National Flood Insurance Program.
When an Assault is not an Assault
Covered Up: SC District Court Denies Exclusion for Alleged Nightclub Assault and Battery
In a recent United States District Court decision, the court denied the insurer’s motion for summary judgment as to its duty to defend and indemnify for an alleged assault and battery. The facts of Certain Underwriters at Lloyd’s London v. Butler are typical and straightforward.
Is your Motor Vehicle Loan Safe? Insurance policies may not protect the credit union's lien
Today’s insurance world is a complicated scene. Insureds have more choice than ever for insurance coverage. If a federal credit union has a lien on a motor vehicle in South Carolina, you may be unprotected against the borrower’s malfeasance.
In South Carolina, the innocent insured/lienholder is not necessarily protected from intentional loss caused by another insured.
Torts & Insurance Cases from the 4th Circuit Court of Appeals - March 2017
Nexsen Pruet attorney Marc Manos, a member of the SC Bar Torts and Insurance Practice Section Council, sheds light on a few recent cases from the Fourth Circuit Court of Appeals, focused in the area of Torts & Insurance. Linked below are noted cases from March 2017.
City Slickers & Airplane Litigation: Fight or Flight
Sometimes venue challenges are successful. Sometimes the convenience of the lawyers is not the standard for judging the proper venue for a lawsuit. In Theobald v. Piper Aircraft, Florida’s Third District Court of Appeal affirmed a trial court’s order transferring the venue of an aviation death case from Miami to the defendants’ county of residence.
BEWARE: Certain Acts of Community Management Companies Constitute the Unauthorized Practice of Law in South Carolina
In an opinion expected to affect community management companies and owners’ associations throughout the State, the South Carolina Supreme Court has provided clarification as to what it deems to constitute the unauthorized practice of law, particularly as it relates to the management of various owners’ associations.
Consideration of Force Majeure in Construction Contracts
Before entering into a construction contract, consider how force majeure events are evolving in today’s world. Have you looked at the risk of climate change causing more frequent unusual or severe weather? What about the risk of an act of terrorism?