THE STATE OF SOUTH CAROLINA 

In The Supreme Court 

Government Employees Insurance Company, Plaintiff, 

v. 

Jack A. Poole, individually and as Personal 

Representative of the Estate of Jennifer Knight Poole, 

Defendant. 

Appellate Case No. 2017-001540 

CERTIFIED QUESTION 

ON CERTIFICATION FROM THE UNITED STATES DISTRICT 

COURT FOR THE DISTRICT OF SOUTH CAROLINA 

Joseph F. Anderson, Jr., United States District Judge 

Opinion No. 27821 

Heard February 15, 2018 – Filed July 5, 2018 

CERTIFIED QUESTION ANSWERED 

J.R. Murphy and Wesley B. Sawyer, both of Murphy & 

Grantland, P.A., of Columbia, for Plaintiff. 

Angela Christy Tyner and Ronald A. Maxwell, Sr., both 

of Maxwell Law Firm, P.C., of Aiken, for Defendant. 

Bert Glenn Utsey, III, of Peters, Murdaugh, Parker, 

Eltzroth & Detrick, P.A., Samuel R. Clawson, Jr., and
 

Christy Fargnoli, both of Clawson Fargnoli, L.L.C., of 

Charleston; and Frank L. Eppes, of Eppes & Plumblee, 

P.A., of Greenville; and Kathleen Chewning Barnes, of 

Barnes Law Firm, L.L.C., of Hampton, all for Amicus 

Curiae, South Carolina Association for Justice. 

Carmelo Barnes Sammataro, of Turner Padget Graham & 

Laney, P.A., of Charleston, for Amicus Curiae, Property 

Casualty Insurers Association of America and the South 

Carolina Insurance Association. 

JUSTICE HEARN: We accepted a certified question from the United States 

District Court for the District of South Carolina, asking whether South Carolina law 

requires that punitive damages be apportioned pro rata between those sustained for 

bodily injury and property damage, respectively, under an automobile insurance 

policy. We answer the question, "No." 

FACTUAL BACKGROUND 

Jack Poole and his wife, Jennifer, were riding in a vehicle owned by Doris 

Knight, Jennifer's mother, when a drunk driver crossed the center line and struck

them. The Pooles were both seriously injured in the collision; although Jack 

survived, Jennifer's catastrophic injuries resulted in her death several days later. In 

contrast with the substantial bodily injuries, the Pooles sustained minimal property 

damage because they did not own the vehicle. The total value of the Pooles' property 

damaged in the collision was approximately $1,250. 

The at-fault driver's liability carrier tendered its policy limits. Farm Bureau, 

the insurer on Knight's vehicle, then tendered its underinsured motorist (UIM) policy 

limits for bodily injury––$25,000 to Jack individually and $25,000 to Jack as the 

representative of Jennifer's estate. The Pooles then sought recovery from their own 

insurer, Government Employees Insurance Company (GEICO), which provided 

them a split limits UIM policy with bodily injury coverage of up to $100,000 per 

person and $50,000 for property damage. GEICO tendered the UIM bodily injury

limits of $100,000 each for Jack and Jennifer's estate. The Pooles requested another 

$50,000 from the UIM policy's property damage coverage in anticipation of a large 

punitive damages award, but GEICO refused. GEICO then initiated a declaratory 

judgment action in the District of South Carolina to establish that it was not liable to 

pay any amounts for punitive damages under the property damage provision of the 
 

 

 

 

UIM policy because the source of the Pooles' UIM damages was traceable only to 

bodily injury.1

After the parties filed cross-motions for summary judgment, the district court 

determined the parties presented a novel issue of law2 and certified the following 

question to this Court. 

CERTIFIED QUESTION PRESENTED 

Under South Carolina law, when an insured seeks coverage under an

automobile insurance policy, must punitive damages be apportioned pro rata

between those sustained for bodily injury and those sustained for property damage 

where the insurance policy is a split limits policy? 

DISCUSSION 

GEICO raises four grounds to support its claim that South Carolina law 

requires the pro rata apportionment of punitive damages in this case. We address 

each in turn and answer the certified question in the negative.

I. STATUTORY SCHEME 

 GEICO argues allocation is required by the plain language of the statutory 

scheme because the insurance code allows for split limits policies. According to 

GEICO, failure to allocate punitive damages would result in transforming the Pooles' 

1 For the purposes of the declaratory judgment action the parties stipulated that an 

award of punitive damages in this case would exceed all available property damage 

coverage. 

2 Though not binding precedent, we note a 1971 case from the District of South 

Carolina addressed a similar situation involving the allocation of punitive damages 

in automobile insurance policies. State Farm Mut. Auto. Ins. Co. v. Hamilton, 326 

F.Supp. 931 (D.S.C. 1971). The insurer for the at-fault motorist argued any punitive 

damages awarded to the victim should be allocated pro rata according to his actual 

property damages. Id. at 935. Finding the statutory definition of "damages" 

included both actual and punitive damages, and given the insurer's failure to cite any 

authority for prorating punitive damages, the court concluded punitive damages 

were not allocable, and the victim could recover his award of punitive damages from 

the at-fault motorist's property damage liability coverage. Id. at 935–36.
 

 

 

 

 

split limits policy into a combined single limit policy. While GEICO acknowledges 

the statutory definition of "damages" includes punitive damages, it contends this 

requirement must be applied in the split limits context. Therefore, one can collect

actual and punitive damages traceable to bodily injury, and likewise for property 

damage. Under GEICO's theory, if an insurer must pay for punitive damages, those 

punitive damages are "because of" bodily injury or property damages, respectively. 

Mindful of the purpose and enforceability of split limits policies,3

 we

nevertheless reject GEICO's statutory argument. South Carolina law requires that

carriers offer UIM coverage "up to the limits of the insured liability coverage to 

provide coverage in the event that damages are sustained in excess of the liability 

limits carried by an at-fault insured or underinsured motorist . . . ." S.C. Code Ann.

§ 38-77-160 (2015) (emphasis added). "Damages" are defined by statute to include 

both actual and punitive damages. S.C. Code Ann. § 38-77-30(4). Beyond that, the 

statutes are silent with regard to the apportionment of punitive damages. Thus, by 

the plain language of the statute, the trigger for UIM coverage is an event that causes

damages––actual and punitive––which exceed the liability limits of the at-fault 

motorist. Even when viewed in the split limits context, the UIM statute makes no

mention of allocation nor does it indicate that bodily injury and property damage 

must be analyzed separately before determining whether UIM coverage is triggered. 

Moreover, the rationale behind punitive damages is not to compensate an

aggrieved party for his or her underlying injuries to body and property; rather, 

"punitive damages, in addition to punishing the defendant and deterring similar

conduct by the defendant and others, serve to vindicate the private rights of the 

plaintiff and they provide some measure of compensation to plaintiffs for the 

intentional violation of those rights that is separate and distinct from the usual 

measure of compensatory damages[] . . . ." O'Neill v. Smith, 388 S.C. 246, 252, 695 

S.E.2d 531, 534 (2010) (emphasis added). Thus, while actual damages may be 

traceable directly to bodily injury and property damage, punitive damages are not so

easily divisible. Reading the statutes to require allocation of punitive damages 

would result in adding language to the statutes, rather than merely interpreting them. 

3 We note that punitive damage awards are rare in the context of automobile 

collisions and our holding today does not eliminate the viability of split limits 

policies. In most cases, plaintiffs are entitled only to recovering their actual 

damages, and state law has limited the instances in which punitive damages may be 

awarded. See S.C. Code Ann. § 15-32-520(D) (Supp. 2017) ("Punitive damages 

may be awarded only if the plaintiff proves by clear and convincing evidence that 

his harm was the result of the defendant's wilful, wanton, or reckless conduct."). 
 

 

 

 

 

 

 

See Sloan v. Hardee, 371 S.C. 495, 499, 640 S.E.2d 457, 459 (2007) ("Words must 

be given their plain and ordinary meaning without resort to subtle or forced 

construction to limit or expand the statute's operation."). If the General Assembly 

intended to require the allocation of punitive damages, it could have done so with 

clear, express language. Accordingly, because we find the statutory scheme is silent 

on the issue of allocation, we decline to reach the result urged by GEICO. 

II. DUE PROCESS

GEICO argues a failure to allocate punitive damages would result in a

violation of constitutional due process. Citing BMW of North America, Inc. v. Gore, 

517 U.S. 559 (1996), GEICO contends a constitutional ratio of punitive damages to 

actual damages requires allocation. 

We believe GEICO's reliance on Gore is misplaced, in part, because the issue

in this case is not whether punitive damages should be awarded and in what amount;

rather, the issue is GEICO's contractual responsibility to pay those punitive damages 

to which its insureds are entitled. More importantly, unlike the tortfeasor in Gore, 

GEICO's exposure to punitive damages is limited by the terms of the policy. In no 

event would GEICO be liable for punitive damages beyond the policy limits. From

the time GEICO entered into the contract to provide UIM coverage, it was on notice 

that it may have to pay actual and punitive damages up to the policy limits upon an 

event triggering coverage. See Gore, 517 U.S. at 574 ("Elementary notions of 

fairness enshrined in our constitutional jurisprudence dictate that a person receive 

fair notice not only of the conduct that will subject him to punishment, but also of 

the severity of the penalty that a State may impose."). Having accepted payments 

from the Pooles for UIM coverage up to the agreed upon policy limits, GEICO 

cannot persuade us that fulfilling its contractual duty to pay those policy limits would 

somehow result in a violation of due process. See O'Neill, 388 S.C. at 255, 695 

S.E.2d at 535–36 ("Plaintiffs accepted [UIM coverage] and paid the corresponding 

premiums for coverage and are entitled to this contractual benefit. State Farm set its 

premiums with the knowledge that they are liable for compensatory and punitive 

damages under the insurance contract, and it cannot now be heard to complain that

the delivery of benefits under the contract would thwart public policy."). 

Additionally, the Gore court was largely concerned with the rationale behind 

punitive damages and the connection to the tortfeasor's conduct. 517 U.S. at 575–

80. That issue is not present in this case because the insurance code and the policy 

itself make clear that the coverage includes punitive damages. The allocation

question does not concern the propriety of awarding punitive damages or the 
 

 

 

 

 

 

foreseeability of those damages because GEICO has already contracted to pay those 

sums. Moreover, GEICO's proposed application of Gore is based on the premise 

that the ratio of punitive damages to actual damages must be bifurcated and analyzed 

separately for bodily injury and property damage. However, the conduct giving rise 

to the punitive damages––here, the at-fault motorist's recklessness––is a single, 

indivisible act. Therefore, the potential award for punitive damages in this case 

would not be divided based on two separate occurrences or acts.

GEICO's liability for punitive damages is contingent upon the contract, and it 

arises from the at-fault motorist's conduct. The at-fault motorist committed a single 

negligent act giving rise to the Poole's damages. GEICO has not produced any 

authority to suggest that punitive damages must be bifurcated according to each type 

of damages. To the contrary, the constitutionality of a punitive damages award is

simply measured against (1) the degree of the defendant's reprehensibility or 

culpability; (2) the relationship between the penalty and the harm to the victim 

caused by the defendant's actions; and (3) the sanctions imposed in other cases for

comparable misconduct. Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 

532 U.S. 424, 434–35 (2001). Therefore, we conclude due process limitations do

not require the pro rata apportionment of punitive damages in this case. 

III. CONTRACTUAL LANGUAGE 

GEICO next argues faithful adherence to the contract requires pro rata 

apportionment of punitive damages. However, given our limited capacity in

answering a certified question, we abstain from ruling on the construction and 

interpretation of the contractual terms at this juncture. We believe such a 

determination is properly reserved for the district court, where the presiding judge

has the ability to review the contract in its entirety and is privy to any testimony or 

other documents which may be admissible in interpreting the contract. Therefore,

we do not address GEICO's argument that the insurance agreement must be

construed to require apportionment of punitive damages. 

IV. PUBLIC POLICY 

Lastly, GEICO argues public policy is served by finding South Carolina law

requires the apportionment of punitive damages in the UIM context. We, however, 

find this concern is best addressed by the General Assembly, which is in the proper 

position to make such policy determinations given its ability to conduct studies,

collect information about insurance rates, and weigh the various courses of action. 
 

 

Accordingly, we decline to find that public policy, as a matter of law, requires the

pro rata apportionment of punitive damages. 

CONCLUSION 

Based on the foregoing, we answer the certified question in the negative and 

hold that South Carolina law does not require punitive damages be apportioned pro 

rata between bodily injury and property damage in a split limits automobile 

insurance policy. 

CERTIFIED QUESTION ANSWERED.

BEATTY, C.J., KITTREDGE, FEW and JAMES, JJ., concur.