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Group's Suit Failed to Meet Heightened Pleading Requirements


June 20, 2016

Workers' compensation industry news outlet, WorkCompCentral, reported on a recent ruling by the SC court of Appeals.  The court found that a group of disgruntled members of the state's largest self-insured workers’ compensation fund, the South Carolina Home Builders Self Insurers Fund, failed to state a viable cause of action against the fund's trustees.

The action stemmed from the fund's decision to reroute $5 million in assets to start up an insurance company. The fund has close to 800 members, and 96.5% of them had voted in favor of forming a mutual insurance company.

Attorney Billy Wilkins, who was joined by Burl Williams as part of the defense team, explained that the fund "is a vehicle used to provide workers' compensation insurance to its members," and incorporating a mutual insurance company would allow the fund to "increase the insurance opportunities to its members" by offering coverage for other liabilities.

 An excerpt from the report:

In addition, Wilkins, the attorney for the fund and its trustees, on Friday reflected that it was "unfortunate" that the founding documents for the fund had used the word "trust." 

All of the litigation up until this point "would never have occurred if it hadn't been used," he opined.

Wilkins said he thought the court appropriately "peeled the onion skin back a little bit and looked at how things were really operating," instead of just looking at the title of the document, to determine what kind of entity the trust really was.


For further insight into the case or the court's decision, read more (subscription required)

William W. “Billy” Wilkins, former Chief Judge of the United States Court of Appeals for the Fourth Circuit and former Chair of the United States Sentencing Commission, leads Nexsen Pruet’s White-Collar Criminal Defense, Appellate Advocacy, and Corporate Compliance/Crisis Management practices and serves clients through his work in the firm’s Business Litigation Group.