Case Title: Fritz-Pontiac-Cadillac-Buick v. Goforth

Citation: 440 S.E.2d 367

Docket Number: 

State: south-carolina

Court: South Carolina Supreme Court

Date: 1994-01-17T00:00:00Z

Document:
440 S.E.2d 367 (1994) FRITZ-PONTIAC-CADILLAC-BUICK, Appellant, v. Larry A. GOFORTH, Respondent, v. AMERICAN MUTUAL FIRE INSUANCE COMPANY and Universal Underwriters Insurance Company, of which American Mutual Fire Insurance Company, is a Respondent, and Universal Underwriters Insurance Company, is an Appellant. No. 23994. Supreme Court of South Carolina. Heard November 17, 1993. Decided January 17, 1994. *368 Bradford N. Martin and Susan A. Fretwell both of Leatherwood, Walker, Todd, and Mann, Greenville, and Paul A. Dominick and David B. Summer, Jr. both of Nexsen, Pruett, Jacobs, and Pollard, Columbia, for appellant. Timothy G. Quinn of Quinn, Boyle, and Greenberg and Thomas F. Dougall of Bowers, Orr, and Robertson, Columbia, for respondents. HARWELL, Chief Justice: This is a declaratory judgment action. Universal Underwriters Insurance Company (Universal) contends that the trial judge erred in ruling that Larry A. Goforth (Goforth) was an insured under a policy Universal issued to Fritz-Pontiac-Cadillac-Buick's (Fritz). We agree and reverse. On October 30, 1989, Fritz allowed Goforth to take a Cadillac Allante for an overnight test drive. While driving home, Goforth lost control of the Cadillac and ran off the road, causing extensive damage to the car. Pursuant to a collision and liability policy, Universal paid Fritz for the damage to the Cadillac. Thereafter, Fritz brought this action against Goforth to recover for the damage to the Cadillac. Goforth filed a third party complaint against Universal, claiming that he was an insured under the policy Universal issued to Fritz and, therefore, Universal had a duty to defend and indemnify him against Fritz's claims. A declaratory judgment action was held to resolve the coverage issues raised by Goforth's third party complaint. The trial judge held that Goforth was an insured under Universal's policy because S.C.Code Ann. § 38-77-140 (1989) required insurers to cover permissive drivers. Additionally, the trial judge ruled that because Goforth was an insured, Universal had a duty to defend Goforth and could not be subrogated to Fritz's claim against Goforth. Fritz and Universal (Appellants) appealed. Appellants contend that the trial judge erred in holding that Goforth was an insured under Fritz's policy. We agree. The preamble to the Unicover® insurance policy Universal issued to Fritz provides: The General Conditions portion of the policy states: The remainder of Universal's Unicover® policy is arranged into distinct parts that provide separate coverage for auto physical damage, property damage and loss, loss due to crime, garage operations, basic auto insurance, general liability, and excess liability. Only two of these Coverage Parts are relevant to this appeal. Coverage Part 900, which provides basic auto insurance, contains the following provisions: Coverage Part 300, which provides coverage for auto physical damage, contains the following provisions: Insurance policies are subject to general rules of contract construction. Sloan Constr. Co. v. Central Nat'l Ins. Co., 269 S.C. 183, 236 S.E.2d 818 (1977). We must enforce, not write, contracts of insurance and we must give policy language its plain, ordinary, and popular meaning. We should not torture the meaning of policy language to extend or defeat coverage that was never intended by the parties. Torrington Co. v. Aetna Casualty and Surety Co., 264 S.C. 636, 216 S.E.2d 547 (1975). Although Goforth is an insured for purposes of liability coverage under Part 900, exclusion (e) specifically excludes coverage for injury to property in the care, custody, or control of the insured. Further, the relationship between Goforth and Fritz was that of a bailor and bailee. Eberhardt v. Forrester, 241 S.C. 399, 128 S.E.2d 687 (1962); Wilcox v. Glover Motors, Inc., 269 N.C. 473, 153 S.E.2d 76 (1967) (when the dealer permits a prospective purchaser of an automobile to *370 test drive the car, the relationship between the dealer and the prospective purchaser is that of bailor and bailee). Part 900 specifically states that insurance coverage in that section of the policy provides no benefit to a bailee. Therefore, Goforth is not covered by Part 900 for damages to Fritz's auto. Coverage Part 300 does not include a definition of insured. Looking solely at the language of Coverage Part 300, we find that this coverage applies to covered property rather than to the action of a particular individual who could be characterized as an "insured." See Western Motor Co. v. Koehn, 242 Kan. 402, 407, 748 P.2d 851, 855 (1988). Additionally, Coverage Part 300 also provides that bailees are not intended to benefit from the coverage. Id. Therefore, Goforth is not covered under Coverage Part 300. Because Goforth is not covered under the plain terms of this policy, we find that the trial judge erred in holding that Universal may not be subrogated to Fritz's claim for damages. See Frank B. Hall & Co. v. Vic Bailey Lincoln-Mercury, Inc., 298 S.C. 282, 379 S.E.2d 892 (1989) (when insurer pays its insured for a loss resulting from the tortious conduct of a third party, the insurer is subrogated to the rights of its insured against the third party); 10A GEORGE J. COUCH ET AL., COUCH ON INSURANCE § 42.223 (2d ed. 1982) (person to whom the insured under an automobile collision policy loans the automobile is not an insured with respect to collision insurance and the collision insurer can maintain a subrogation action against such person for collision loss). Appellants also contend that the trial judge erred in ruling that section 38-77-140 requires an insurer to provide coverage for property damage to the named insured's car. We agree. Section 38-77-140 provides: The clause "property of others" inescapably refers to property of individuals other than the insured. American Interinsurance Exchange v. Diamond, 268 S.C. 35, 231 S.E.2d 304 (1977). Because the car Goforth damaged was the property of Fritz, the insured, and the statute does not require coverage for property of the insured, we find that the trial judge erred in ruling that section 38-77-140 mandated such coverage. Our holding renders it unnecessary to address Appellants' remaining exceptions. For the foregoing reasons, the trial judge's ruling is REVERSED. CHANDLER, FINNEY, TOAL and MOORE, JJ., concur.