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TIPS: a Torts, Insurance and Products Blog

Weekly insights and updates from Nexsen Pruet's TIPS attorneys

#TuesdayTIPSat10

Editor: Cheryl D. Shoun


In a premises liability action, the duty a landowner owes depends on the status assigned to the person upon the property. Generally, South Carolina acknowledges four categories; trespassers, invitees, licensees and children. While South Carolina’s common law generally imposes no duty upon a landowner to protect a trespasser from hidden dangers, children have long been an exception. Historically, the vulnerabilities of children coupled with their tendencies to fail to perceive risks and fully comprehend dangers led to the recognition of two exceptions to the common law preclusion of liability to trespassers; attractive nuisance and unguarded dangerous condition. Ultimately recognizing the inconsistencies between the two theories, South Carolina’s courts concluded the more prudent approach is a single exception to the trespasser rule in premises liability actions; hazardous conditions that injure children. This conclusion led to the adoption of Restatement (Second) of Torts §339.

Generally, the right to enforce arbitration may be waived. While there is no established rule as to what constitutes waiver, it typically requires a showing of prejudice through undue burden resulting from the delay in demanding arbitration. That given, the South Carolina Court of Appeals recently made what appears to be its initial assessment of whether waiver is inherent upon a party’s default. See Palmetto Construction Group, LLC v. Restoration Specialists, LLC, Reuben Mark Ward and Lynette Pennington Ward, 2019 WL 2608493 (June 26, 2019).

In May 2015, Raymond Wacha and Alphonso Dudley were involved in an automobile accident. At the time, Wacha, an employee of Founders National Golf, LLC, was driving a truck owned by that entity and insured by a commercial policy issued by Selective Insurance Company of America, with limits of $1,000,000. Almost a year following the accident, Dudley filed suit against Wacha. Wacha failed to respond and the circuit court entered a default judgment against Wacha for damages, including punitive damages.[1] Interestingly, the court awarded actual damages in the amount of $169,967.52 and punitive damages in the amount of $830.032.48; the amounts equaling the policy limits.

Nearly one year ago, in this space, we addressed the issue of whether South Carolina’s attorney-client privilege was facing its ultimate demise, in the context of insurance bad faith litigation. At that time, based upon an opinion of the United States District Court for the District of South Carolina, there loomed the prospect that an insurer’s attempt to defend itself in a bad faith action, by simply denying liability, may constitute a waiver of its attorney-client privilege. The attorney-client privilege, long recognized in South Carolina and long a cornerstone of our judicial system, allows one confidence that his or her disclosures to counsel will be protected, thus facilitating effective representation. The attorney-client privilege is significant public policy, yet, it is not absolute; there is a competing interest in the proper administration of justice against which the privilege must be balanced. As a result of that district court opinion almost a year ago, our Supreme Court undertook an analysis of this delicate, yet requisite balance and the survival of the privilege in the context of bad faith litigation in In re: Mt. Hawley Insurance Company, 2019 WL 2441119 (June 12, 2019).

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