Court Opinion

ID: 9851539
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:14:40.177761+00
Date Added: 2024-06-11T09:21:20.774845
License: Public Domain

Justice WALLER:
I respectfully dissent. In my opinion, the Court of Appeals correctly held that respondent Total Home “met all of the statutory requirements to transfer liability.” Barton v. Higgs, 372 S.C. 109, 117, 641 S.E.2d 39, 43 (Ct.App.2007). Accordingly, I would affirm in result.
S.C.Code Ann. § 42-1-415 provides that when a subcontractor “has represented himself” to a general contractor as having workers’ compensation insurance at the time the subcontractor “was engaged to perform work,” the general contractor “must be relieved of any and all liability.” The statute further states that the general contractor “must collect documentation of insurance ... on a standard form acceptable to the commission.” S.C.Code Ann. § 42-1-415 (Supp.2008).
A review of some additional facts is in order. The president for Total Home testified that he would not have given lyanel Enterprises a contract without obtaining a certificate of workers’ compensation insurance. Likewise, the testimony of William Higgs confirmed that before lyanel could work as a subcontractor on jobs for Total Home, Total Home required him to get a certificate of insurance. According to Higgs, he went to the Jackie Perry Insurance Agency, paid his money for the policy, and obtained the certificate. Despite the issuance of the certificate by the Perry Agency, the coverage was never bound, resulting in lyanel not being insured on the date of Claimant’s accident.
The record reflects that the Perry Agency had employed someone who issued certificates of insurance without the coverage being bound. Therefore, the only fraud that seems to have occurred in this case is by an employee of the insurance agency, not by the subcontractor. Although the majority concedes that section 42-1-415 is designed to protect a general contractor from fraud, the end result of the majority’s reasoning is that Total Home becomes a victim of fraud simply because it was not committed by the subcontractor.
*373More importantly, however, the majority seems to gloss over the fact that the express requirements of the statute clearly were met in the instant case. Instead, the majority opinion focuses its attention on the regulation’s requirements.1 This runs contrary to settled precedent.
Although regulations authorized by the Legislature generally have the force of law, a regulation may not alter or add to a statute. Goodman v. City of Columbia, 318 S.C. 488, 490, 458 S.E.2d 531, 532 (1995); Banks v. Batesburg Hauling Co., 202 S.C. 273, 24 S.E.2d 496, 499 (1943); see also Society of Prof'l Journalists v. Sexton, 283 S.C. 563, 567, 324 S.E.2d 313, 315 (1984) (“Although a regulation has the force of law, it must fall when it alters or adds to a statute.”).
The Goodman case is instructive. Goodman involved S.C.Code § 42-17-50, the workers’ compensation statute which allows “an application for review” of the single commissioner’s order by the Full Commission. The Commission promulgated Regulation 67-701 which requires that a specific form be filed (Form 30). The petitioner in Goodman did not file a Form 30, but instead wrote the Commission a letter “expressing his desire to appeal.” Goodman, 318 S.C. at 490, 458 S.E.2d at 532. On direct appeal, the Court of Appeals found the petitioner’s letter did not substantially comply with section 42-17-50.
On certiorari, this Court reversed. The Goodman court stated that Regulation 67-701 “adds the requirement of applying for review with a particular form, thereby adding to the statute. Insofar as Reg. 67-701 increases the threshold requirements of section 42-17-50, the specifications set *374forth in the statute must prevail.” Id. at 490-491, 458 S.E.2d at 532 (emphasis added). The Court in Goodman therefore held that that petitioner’s letter constituted substantial compliance with section 42-17-50. Id. at 491, 458 S.E.2d at 532.
The instant case is analogous to Goodman in that there was substantial compliance with the applicable statute. Total Home requested and received documentation of Iyanel’s insurance on a form authorized by the Commission. All the substantive parts of the form were filled in- — it listed Higgs as being insured with a workers’ compensation policy (including a policy number and coverage dates), and also listed Total Home as the certificate holder.
The only thing missing was a signature. In my opinion, requiring such strict compliance with the regulation would only serve to frustrate legislative intent.2 The obvious purpose of section 42-1-415 is to encourage a higher tier contractor to require proof that its subcontractors carry workers’ compensation insurance. Therefore, if the higher tier contractor substantially complies with the document collection requirement, it should not be ultimately liable when the subcontractor turns out to not actually be insured. See § 42-1-415; Goodman, supra.
In addition, nowhere in the statute is there a requirement that the higher tier contractor verify the authenticity of the documentation of insurance. Nevertheless, the majority suggests that Total Home “could have easily investigated the absence of the signature and determined that Iyanel did not have a valid policy.” First, I disagree that section 42-1-415 imposes this burden on the general contractor. Moreover, I also disagree that under the facts of this case, any such investigation would have uncovered the fraud apparently committed by a rogue employee of the insurance agency.3
*375Put simply, the majority’s focus on the absence of a signature literally “elevat[es] form over substance.” South Carolina Second Injury Fund v. American Yard Prods., 330 S.C. 20, 24, 496 S.E.2d 862, 864 (1998). At the very least, the majority has elevated regulation over statute, and in my opinion, this runs contrary to well-settled law. See, e.g., Goodman, supra; Society of Prof'l Journalists v. Sexton, supra.
In sum, because I believe the majority opinion overlooks precedent which stands for the principle that a regulation should not trump the language and intent of the statute, I respectfully dissent.

. The Fund's sole argument, with which the majority agrees, is that because the form was unsigned, it did not meet the requirements of the applicable regulation. Regulation 67-415 provides the following information about the term "documentation of insurance” used in the statute:
For purposes of Section 42-1-415, the ACORD Form 25-S, Certificate of Insurance, as published by the ACORD Corporation and as issued by the insurance carrier for the insured, shall serve as documentation of insurance. The Certificate of Insurance must be dated, signed, and issued by an authorized representative of the insurance carrier for the insured.
S.C.Code Reg. 67-415(A) (Supp.2008). The ACORD Form 25-S is a standard insurance industry form.

. See, e.g., South Carolina Second Injury Fund v. American Yard Prods., 330 S.C. 20, 22, 496 S.E.2d 862, 863 (1998) (this Court’s primary function when interpreting a statute is to ascertain and give effect to the intent of the legislature).

. For example, if Total Home had called the Perry Agency to verify the unsigned documentation, it is quite possible that the employee who was *375not binding the coverage could have simply lied to cover up his/her own fraudulent activity.