Court Opinion

ID: 4695951
Source: CourtListenerOpinion
Date Created: 2021-06-16 14:12:53.434851+00
Date Added: 2024-06-11T08:05:37.799485
License: Public Domain

THE STATE OF SOUTH CAROLINA
                        In The Supreme Court

           Ashley Reeves, as Personal Representative for the Estate
           of Albert Carl "Bert" Reeves, Petitioner,

           v.

           South Carolina Municipal Insurance and Risk Financing
           Fund, Respondent.

           Appellate Case No. 2019-001756

       ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

                         Appeal from Colleton County
                   Perry M. Buckner III, Circuit Court Judge

                            Opinion No. 28034
                Heard November 18, 2020 – Filed June 16, 2021

                REVERSED IN PART, VACATED IN PART

           William Mullins McLeod Jr. and Colin Ram, McLeod
           Law Group, LLC, of Charleston for Petitioner.

           C. Mitchell Brown and Brian Patrick Crotty, Nelson
           Mullins Riley & Scarborough, LLP, of Columbia for
           Respondent.

JUSTICE FEW: A Town of Cottageville police officer shot and killed the former
town Mayor Bert Reeves. A federal jury awarded Reeves' estate $97,500,000 in
damages. The South Carolina Municipal Insurance and Risk Financing Fund, which
insured the town, paid $10,000,000 to settle the federal lawsuit and two other
lawsuits. The Settlement Agreement provided for two questions to be submitted to
the state courts. The first question is whether the amount of indemnity coverage
available under the policy is more than $1,000,000. The second question is whether
the South Carolina Tort Claims Act applies to a bad faith action against the Fund.
We answer the first question "yes"; we decline to answer the second question.

      I.     Facts and Procedural History

Randall Price—a police officer for the Town of Cottageville in Colleton County—
shot and killed former Cottageville Mayor Albert Carl "Bert" Reeves on May 16,
2011. Ashley Reeves—the personal representative of Bert Reeves' estate—filed a
wrongful death and survival lawsuit in state court against Price, the Cottageville
police department, and the Town of Cottageville for negligence, assault, battery, and
civil rights violations under 42 U.S.C.A. § 1983 (2012). Ashley alleged that while
Price was on duty, he drove onto a dirt road to confront Reeves, blocked him in,
started a fight with him, and shot and killed him. She claimed the police department
and the town were liable for Price's actions because he was their employee. Ashley
also alleged the police department and the town were negligent in hiring, retaining,
and supervising Price, and those actions violated Reeves' civil rights under section
1983. The defendants removed the lawsuit to federal court. The parties refer to this
as the Cottageville lawsuit.

Ashley filed a separate federal lawsuit against Cottageville Police Chief John
Craddock. She alleged Craddock—a licensed paramedic—was present when Price
shot Reeves. She claimed Craddock was liable for civil rights violations under
section 1983 for failing to supervise Price, failing to intervene to stop Price, and
failing to give medical care after Price shot Reeves.

The South Carolina Municipal Insurance and Risk Financing Fund provided liability
insurance to Cottageville, and administered claims against it, pursuant to an
insurance policy labeled the Coverage Contract. This "Fund," as we will call it, is a
self-insurance liability fund established pursuant to subsection 15-78-140(A) of the
South Carolina Code (Supp. 2020).1 Ashley filed a declaratory judgment action in

1
 Subsection 15-78-140(A) provides that "political subdivisions of this State . . . shall
procure insurance to cover [tort and other liability] risks for which immunity has
been waived" under the Tort Claims Act by one of several methods, including "(4)
establishing pooled self-insurance liability funds, by intergovernmental agreement."
state circuit court against the Fund requesting the court declare the extent of
indemnity coverage provided in the Coverage Contract. The Fund argued then and
argues now that coverage provided by the Coverage Contract is limited to
$1,000,000.

The Cottageville lawsuit was the only case to go to trial. The federal jury found
Price was negligent, his negligence proximately caused Reeves' death, and Price
violated Reeves' constitutional rights by using excessive force and unlawfully
seizing Reeves. The jury found Cottageville negligently hired, retained, and
supervised Price, and violated Reeves' constitutional rights. The jury awarded
Reeves' estate $7,500,000 in actual damages and $90,000,000 in punitive damages—
$30,000,000 against Price and $60,000,000 against Cottageville.

Ashley and the Fund agreed to settle all three lawsuits for $10,000,000. The
Settlement Agreement provided Ashley may seek declaratory judgment asking the
courts to resolve the two questions.2 The Fund agreed to pay Reeves' estate an
additional $1,000,000 for each question resolved in Ashley's favor. The federal
court approved the Settlement Agreement.

The Fund filed a petition with this Court asking us to decide the questions in our
original jurisdiction. We declined. Ashley then filed this declaratory judgment
claim by amending her pending complaint in circuit court. On the first question, the
circuit court ruled in favor of Ashley, finding there was more than $1,000,000 in
coverage available under the policy. On the second question, the circuit court ruled
in favor of the Fund, finding the Fund is a political subdivision, and therefore, a bad
faith claim against it would be subject to the Tort Claims Act.

The court of appeals reversed the circuit court's ruling regarding the amount of
coverage available but affirmed the ruling the Fund is a political subdivision. Reeves
v. S.C. Mun. Ins. & Risk Fin. Fund, 427 S.C. 613, 635, 640, 832 S.E.2d 312, 324,
326 (Ct. App. 2019). We granted a writ of certiorari to review the court of appeals'
decision.

2
 The two questions as fully stated by the parties in the Settlement Agreement are set
forth in the court of appeals' opinion. Reeves v. S.C. Mun. Ins. & Risk Fin. Fund,
427 S.C. 613, 620-21, 832 S.E.2d 312, 316 (Ct. App. 2019).
      II.    Indemnity Coverage Available

The Coverage Contract provided indemnity coverage for the town in areas such as
general liability, business auto liability, and law enforcement liability. The coverage
at issue in this case is law enforcement liability under Section IV of the Coverage
Contract. The general provisions in Section I apply.

             A.     Insuring Language

We begin with the law enforcement liability insuring language in Section IV. We
highlighted the operative language in bold for clarity,

             [The Fund] agrees, subject to the limitations, terms, and
             conditions hereunder mentioned to pay on behalf of the
             Member or Covered Person(s) for sums which the
             Member or Covered Person(s) shall be obligated to pay
             exclusively as Money Damages because of a Wrongful
             Act by a Member, a Law Enforcement Employee, or
             other Covered Person(s) while acting in conjunction with
             Law Enforcement Employees, which is committed while
             acting in both the course and the scope of his or her
             official duties, as provided under the "South Carolina Tort
             Claims Act" where a South Carolina state law is involved,
             or while acting in both the course and scope of a mutual
             aid agreement between governmental entities for the
             temporary sharing of Law Enforcement Employees or
             other Covered Person(s) under the terms and
             circumstances specified therein, and which results in:

             a. Property Damage or Bodily Injury which is first
                caused and first becomes manifest during the Coverage
                Period, provided the Wrongful Act amounts to an
                Occurrence; or

             b. Personal Injury or Advertising Injury which is first
                caused and first becomes manifest during the Coverage
                Period.
Under this insuring language, the Fund agreed to pay when a Member (Cottageville)
or a Law Enforcement Employee (Price or Craddock) committed a Wrongful Act in
the course and scope of his official duties, and the Wrongful Act resulted in Bodily
Injury or Personal Injury. The parties agree Price and Craddock were acting within
the scope of their official duties when Price killed Reeves. The federal jury
determined Cottageville and Price committed numerous Wrongful Acts.

The next question is whether the Wrongful Acts resulted in Bodily Injury. Bodily
Injury is defined in the Coverage Contract. We highlighted the operative language
in bold for clarity,

             "Bodily Injury" means physical injury to any person
             (including death) and any mental anguish or mental
             suffering associated with or arising from such physical
             injury. However, for purposes of this Section IV, Bodily
             Injury does not include such injuries if they result directly
             and immediately from the infliction of Personal Injury,
             including without limitation assault and battery; any such
             resulting injuries shall be deemed to be part of the Personal
             Injury.

Reeves is dead; that is a Bodily Injury. Therefore, as the parties agree, the insuring
language provides coverage in this case.

We turn then to the policy limits for law enforcement liability indemnity coverage.
The Contract Declaration page for Section IV of the Coverage Contract provides the
"Liability Limit" is "$1,000,000" "Per Occurrence."

The term "Occurrence" is one we commonly use. In that common usage, the death
of Bert Reeves was one tragic occurrence. However, we are not permitted to use our
intuitive definition of a term defined in an insurance policy. The Fund wrote the
definition of "Occurrence" applicable here, which is found in Section I, the General
Provisions section of the Coverage Contract. Again, we put the operative language
in bold for clarity,

             "Occurrence" means an accident which results in
             Bodily Injury or Property Damage, the original cause of
             which and the initial damage from which happened
             during the Contract Period set forth in the Declarations.
             Without limitation, all references to any type of injury
             arising out of or from an Occurrence or being caused by
             an Occurrence employ the foregoing meaning. Subject to
             the foregoing, "Occurrence" includes continuing exposure
             to the same harmful conditions. All such continuing
             exposure, damage, or injury shall be treated as one
             Occurrence.

             Only when used to describe coverage limits on a per
             "Occurrence" basis or when otherwise describing
             whether an event or series of events constitutes one loss
             for coverage purposes or more than one loss, the word
             "Occurrence" means a covered event of the sort
             expressly described in the Insuring Agreement of the
             relevant Coverage Section pertaining to the loss or claim,
             whether an Occurrence (as defined in the opening
             paragraph of this General Definition or as defined in the
             separate definition, if any, appearing in the Definitions
             part of the relevant Coverage Section), a Wrongful Act, a
             Loss, or an Offense causing Personal Injury or Advertising
             Injury, as those terms are defined in the relevant Coverage
             Section.

This is not a simple and straightforward definition. In effect, it is three definitions,
one for each context in which the Fund used the term Occurrence in the Coverage
Contract. The first sentence of the definition provides its central meaning—an
"'Occurrence' is an accident which results in Bodily Injury." The definition
continues by explaining the three specific contexts in which the Fund used the term
in the policy. The first context is set forth in the second sentence of the definition,
which further explains the central meaning by reiterating the definition applies when
an injury "arises out of" or is "caused by" an Occurrence. The first context applies
when the Occurrence is an act or failure to act that causes injury. Under the terms
of the Coverage Contract, therefore, an Occurrence is some act or failure to act that
causes an injury.

The second context is addressed in the next two sentences of the definition, which
are the last two sentences of the first paragraph. These two sentences explain that
when "continuing exposure to the same harmful conditions" results in damage or
injury, there is only one Occurrence. This case is not a "continuing exposure"
situation, and thus, this second context for the definition of Occurrence is not
applicable here.
The third context overlaps with the first context and is applicable here. It is found
in the second paragraph, which applies when Occurrence is "used to describe limits
on a per 'Occurrence' basis or when otherwise describing whether an event or series
of events constitutes one loss . . . ." In that context—this context—"the word
'Occurrence' means a covered event of the sort expressly described in the Insuring
Agreement of the relevant Coverage Section."

This takes us back to the insuring language quoted above. The "covered
event . . . expressly described" in the insuring language is a Wrongful Act. This
portion of the definition of Occurrence specifically equates Occurrence with
Wrongful Act.3 The term Wrongful Act is defined as "any actual or alleged error in
the performance or failure to perform an official duty . . . or any omission or neglect
in performing an official duty; or any breach of an official duty . . . ."

The meaning of the term Occurrence is central to understanding the Liability Limit
for law enforcement liability coverage in Section IV. The Coverage Contract does
not define Occurrence the way we commonly use it, in which some act or failure to
act results in a tragic occurrence.4 Rather, under the Fund's definition, the tragic
death of Bert Reeves was the result of an Occurrence. The Coverage Contract
defines Occurrence as a Wrongful Act that results in Bodily Injury. Ashley argues
Reeves' death was the result of at least four Wrongful Acts. She argues
Cottageville's negligent hiring, retention, and supervision of Price, and Price's use of
deadly force, are four different Wrongful Acts. The federal jury found in Ashley's
favor for each Wrongful Act, which demonstrates she is correct that four Wrongful
Acts occurred. The four Wrongful Acts are four Occurrences under the terms of the
Coverage Contract.

3
 The definition provides, "'Occurrence' means a covered event of the sort expressly
described in the Insuring Agreement . . . , whether an Occurrence . . . , a Wrongful
Act, a Loss, or an Offense."
4
  Our analysis is narrow and relates only to the term "Occurrence" as it is defined in
this Coverage Contract. Our analysis is irrelevant, for example, to the term
"Occurrence" as it is used in the South Carolina Tort Claims Act. See S.C. Code
Ann. § 15-78-30(g) (2005) (providing, "'Occurrence' means an unfolding sequence
of events which proximately flow from a single act of negligence").
Our conclusion there was more than one Occurrence is supported by considering just
two of the several Wrongful Acts Ashley contends "occurred." Even under the
Fund's interpretation of the Coverage Contract, these two acts are separate
Occurrences. First, Price shot Reeves. Though the gunshot left Reeves in danger
for his life, and caused him eventually to die, he was still alive immediately
afterwards. Second, Craddock allegedly refused to render medical care to Reeves,
despite Craddock's training as a paramedic. The Craddock case was never tried, but
considering the allegations against him, it is not possible to view (1) Price shooting
Reeves and his eventually resulting death, and (2) Craddock standing by refusing to
render medical care while Reeves suffered through the last few minutes of life, as
the same Occurrence. So, even if we were to find all of the Wrongful Acts by Price,
Craddock, the police department, and the town were not separate Occurrences, we
cannot escape the reality that the two acts used in this illustration are two separate
Occurrences resulting in separate claims for separate damages.

Returning to the applicable insuring language, however, we do find Cottageville and
Price committed at least four Wrongful Acts while acting in the course and scope of
their official duties: Cottageville's negligent hiring, retaining, and supervising Price,
and Price's use of deadly force in shooting Reeves. If the jury in the Craddock case
agreed Chief Craddock violated Reeves' civil rights by failing to render medical care,
that would be another Wrongful Act and a fifth Occurrence. Section IV provides
coverage for each of the four Occurrences the jury found occurred. The Liability
Limit is the number of Occurrences/Wrongful Acts times $1,000,000. Unless some
other limitation in the Coverage Contract applies, the four Occurrences require the
Fund to pay more than $1,000,000 in indemnity coverage.5

5
  The circuit court ruled in favor of Ashley on the first question for the additional
reason that there were multiple categories of damages caused by the defendants'
Wrongful Acts, including damages for wrongful death and damages that survived
Reeves' death. The circuit court found the multiple categories of damages rendered
the policy limit to be in excess of $1,000,000. See Reeves, 427 S.C. at 631, 832
S.E.2d at 321-22 (explaining the circuit court's alternative basis for its ruling).
Because our decision is based on the number of Occurrences, we need not address
this alternative point. See Whiteside v. Cherokee Cty. Sch. Dist. No. One, 311 S.C.
335, 340, 428 S.E.2d 886, 889 (1993) ("In view of our disposition of this issue, we
need not address appellants' remaining exceptions." (citations omitted)).
             B.     Limitations

The Fund argues there are three applicable limitations in the Coverage Contract: (1)
the No Duplication clause in Section I; and two clauses in the "Limit of Liability"
portion of Section IV—(2) the "Limit of Liability" clause; and (3) "[the Fund]'s
Limit of Liability" clause. We find none of the limitations apply.

The No Duplication clause contains two prohibitions. First, it limits recovery for
any claim that invokes liability coverage from more than one section of the Coverage
Contract. Ashley's claims involve only law enforcement liability, and thus, invoke
liability coverage only under Section IV. Next, the No Duplication clause provides,
"A single Coverage Limit applies to all claims or suits involving substantially the
same injury or damage, or a progressive injury or damage." "Coverage Limit" is not
defined in the Coverage Contract. The Fund would have us assume "Coverage
Limit" means "$1,000,000," but there is no support for this position in the language
of the policy. As the term "Coverage Limit" is not defined, we will not read it as
limiting coverage more than the defined term "Liability Limit." See Walde v. Ass'n
Ins. Co., 401 S.C. 431, 439, 737 S.E.2d 631, 635 (Ct. App. 2012) ("Policies are
construed in favor of coverage, and exclusions in an insurance policy are construed
against the insurer." (quoting M & M Corp. of S.C. v. Auto–Owners Ins. Co., 390
S.C. 255, 259, 701 S.E.2d 33, 35 (2010))). We find the undefined term Coverage
Limit is synonymous with "Liability Limit," which is defined as "$1,000,000" "Per
Occurrence."

The second limitation the Fund claims applies is in the "Limit of Liability" portion
of Section IV of the Coverage Contract. The limitation provides, "Only a single
limit or Annual Aggregate . . . will apply, regardless of the number of persons or
organizations injured or making claims, or the number of Covered Persons who
allegedly caused them, or whether the damage or injuries at issue were continuing
or repeated over the course of more than one Coverage Period." This language does
not limit Ashley's claims because Section IV does not contain an "Annual
Aggregate," and to the extent there is a "single limit"—another undefined term—the
Coverage Contract provides it is the Liability Limit: "$1,000,000" "Per Occurrence."

The third limitation the Fund claims applies is also in the "Limit of Liability" portion
of Section IV. The limitation provides the Fund's "liability for any one
occurrence/wrongful act will be limited to $1,000,000 per Member regardless of the
number of Covered Persons, number of claimants or claims made . . . ." The Fund
focuses on "limited to $1,000,000 per Member" to argue it does not have to provide
coverage from different wrongful acts committed by Cottageville and its officers.
However, the Fund overlooks the key language in the limitation—that liability is
limited to $1,000,000 per Member "for any one occurrence/wrongful act." There
were multiple occurrences/wrongful acts. Therefore, this provision does not limit
Ashley's claims.

To summarize, the insuring language of the Coverage Contract provides $1,000,000
in coverage for each Occurrence, which is a Wrongful Act resulting in Bodily Injury.
Cottageville's negligent acts of hiring, retaining, and supervising Price, and Price's
use of deadly force, are separate Occurrences under the terms of the Coverage
Contract. No limitation applies. Therefore, there is more than $1,000,000 in
indemnity coverage available.

             C.     Court of Appeals' Analysis

The structure of the court of appeals' opinion differs considerably from ours, which
this Court should explain. We acknowledge the Coverage Contract is a complicated
insurance policy which must be analyzed in a complicated factual scenario with at
least four defendants and numerous Wrongful Acts. Respectfully, however, we find
the court of appeals erred primarily because it did not complete its analysis of the
insuring language of the Coverage Contract before considering whether the limiting
language affected the insuring language. Under the proper structure for analyzing
any insurance policy, the analysis begins with the insuring language. The court
should complete that analysis, and then determine whether there is any other
provision in the policy that limits or excludes what is insured.

The court of appeals followed that structure through what it called its first and second
steps of analysis. Reeves, 427 S.C. at 627-29, 832 S.E.2d at 319-20. In its third step,
however, the court of appeals considered whether the law enforcement liability
coverage for Bodily Injury was limited by the definition of Personal Injury. 427
S.C. at 629-30, 832 S.E.2d at 320-21. The court of appeals relied on the following
sentence in the Coverage Contract, as set forth in the definition we quoted above,
"Bodily Injury does not include such injuries if they result directly and immediately
from the infliction of Personal Injury."

The court of appeals erred in relying on this sentence for several reasons. First, this
sentence from the Coverage Contract is confusing, if not indecipherable. The court
of appeals read the phrase "such injuries" to refer all the way back in the definition
of Bodily Injury to "physical injury to any person (including death)." Under the
court of appeals' reading, the sentence provides "Bodily Injury" does not include
"physical injury" or "death." However, the policy definition of the term states,
"'Bodily Injury' means physical injury . . . (including death)." Bodily Injury cannot
be defined to "mean" physical injury including death and then suddenly not mean
physical injury or death. The more logical way is to read the phrase "such injuries"
as referring back in the definition of Bodily Injury only to "any mental anguish or
mental suffering associated with or arising from such physical injury." Under this
reading—which still is confusing—when an insured commits an Offense that results
in Personal Injury, the Coverage Contract does not provide coverage for "mental
anguish or mental suffering," but for only the physical injury itself. As our courts
have repeatedly stated, confusing and ambiguous language in insurance policy
limitations must be construed against the insurer that drafted the policy. See, e.g.,
Walde, 401 S.C. at 439, 737 S.E.2d at 635.6

Second, the court of appeals' reading limits coverage only when the sentence is
considered in conjunction with the definition of Offense. The court stated "to
recover under Personal Injury, the Wrongful Act that caused the Personal Injury
must amount to a covered Offense." 427 S.C. at 629, 832 S.E.2d at 320. Thus, the
Personal Injury limitation applied by the court of appeals operates by incorporating
the language "Offense is subject to a single Coverage Limit of $1,000,000" into the
analysis. See 427 S.C. at 633, 832 S.E.2d at 323 (stating "the Offense is subject to
a single Coverage Limit of $1,000,000"). As we explained, however, the term
"Coverage Limit" is undefined, and we will not read it to limit coverage under the
policy to $1,000,000.

Third, the term Personal Injury does not include all of the Wrongful Acts the jury
found to have occurred in this case. The Coverage Contract defines Personal Injury
to "mean[] only the following Offenses," and then lists "assault and battery,"
"violation of civil rights," and others not applicable here. The definition does not

6
  The circuit court found the term Occurrence to be ambiguous, 427 S.C. at 633-34,
832 S.E.2d at 323, but the court of appeals apparently found the entire Coverage
Contract to be clear and unambiguous, 427 S.C. at 634-35, 832 S.E.2d at 323-24.
As we explained, we find the insuring language applicable to this case, including the
Liability Limit on the Contract Declarations page, to be unambiguous. We also find
there is no clear limitation in the policy that would reduce the available coverage to
$1,000,000. To the extent it may be argued that such a limitation exists, the
argument ignores numerous ambiguities in the limiting language. When those
ambiguous provisions are construed against the insurer, the insuring language is
limited only by the Limit of Liability provision, "$1,000,000" "Per Occurrence."
list negligence, such as the jury found Price committed, or negligent hiring,
retention, or supervision, such as the jury found the town committed. Each of these
were Wrongful Acts that resulted in the death of Reeves, but they are not Personal
Injury as that term is defined in the policy. Thus, even to the extent Reeves' death
did result directly from Offenses as included in the definition of Personal Injury,
Reeves' death also resulted directly from Wrongful Acts that meet only the definition
of Bodily Injury.

Finally, the court of appeals was not correct to conclude "the coverage issue [must
be analyzed] exclusively under the Coverage Contract's provisions for Personal
Injury." 427 S.C. at 622, 832 S.E.2d at 317; see also 427 S.C. at 630, 832 S.E.2d at
321 (stating "the Bodily Injury is deemed part of the Personal Injury
for coverage purposes"); 427 S.C. at 634, 832 S.E.2d at 323 (holding "coverage
for Offense is at issue, not coverage for Occurrence"). A straightforward analysis of
the insuring language of the Coverage Contract reveals clear and unambiguous
indemnity coverage for liability incurred when a Member (Cottageville) or Law
Enforcement Employee (Price or Craddock) commits Wrongful Acts that result in
Bodily Injury "(including death)."

      III.   Bad Faith Tort Claim

The second question the Settlement Agreement calls on us to answer is whether a
bad faith claim against the Fund is subject to the South Carolina Tort Claims Act.
For two reasons, we decline to answer the question. We vacate the answer given by
the court of appeals. See Reeves, 427 S.C. at 635-40, 832 S.E.2d at 324-26.

The first reason we decline to answer the question is we cannot be sure the claim is
assignable. The claim did not initially belong to Ashley, but instead, to the parties
insured by the Fund: Cottageville, Price, and Craddock. According to the full text
of the second question, "[The Fund] was informed that any bad faith claims that exist
in favor of Cottageville would be assigned to [Ashley]." 427 S.C. at 620-21, 832
S.E.2d at 316. The declaratory judgment claim Ashley filed pursuant to the
Settlement Agreement also states, "Cottageville informed [the Fund] it intended to
assign any bad faith claims in its favor that may exist against [the Fund] to
[Ashley]."7 This Court has never recognized the validity of any assignment of a bad
faith claim; certainly we have not done so in the circumstances of this case.8

In other factual situations, South Carolina's federal courts have held a bad faith claim
is assignable. In Schneider v. Allstate Insurance Co., 487 F. Supp. 239 (D.S.C.
1980), for example, the injured plaintiff sued the at-fault driver insured by Allstate
with liability limits of $10,000. 487 F. Supp. at 240. Before trial, the plaintiff
offered to settle within policy limits. The jury awarded a total of $68,000. Allstate
paid its liability limits but no more, leaving its insured with an excess judgment of
$58,000. The at-fault driver then assigned his bad faith claim against Allstate to the
plaintiff, presumably in exchange for a covenant not to execute on the judgment. Id.
In the plaintiff's suit against Allstate on the assigned claim, the district court held the
bad faith claim was assignable. 487 F. Supp. at 245.

The assignment in Schneider, however, appears considerably different from the
assignment in this case. The party making the assignment was an individual, not a
town. 487 F. Supp. at 240. To reach its conclusion the bad faith claim was

7
    The record before us does not contain the actual assignment.
8
 While we have no concern regarding any improper conduct in this case, the practice
of assigning bad faith claims to leverage insurance companies to pay more than
policy limits has apparently become fashionable in recent years. In Fowler v. State
Farm Mutual Automobile Insurance Co., 300 F. Supp. 3d 751 (D.S.C. 2017), for
example, the plaintiff's attorney sent a demand letter to State Farm insisting the
insurer pay its policy limits within a week, "at noon." 300 F. Supp. 3d at 753.
Despite State Farm's apparent acceptance of the demand, the plaintiff's attorney
deemed the response a counteroffer and rejection, filed suit against the insured,
negotiated with the insured—now its adverse party in a lawsuit—for a "confession
of judgment of $7 million" without State Farm's involvement, took a purported
assignment of the insured's bad faith claim, and sued State Farm for bad faith. Id.
After State Farm removed the case, the district court granted summary judgment, in
part because, "Defendant's response to the offer could not constitute bad faith as a
matter of law." 300 F. Supp. 3d at 753-54. The Fourth Circuit affirmed. 759 F.
App'x 160 (4th Cir. 2019). While the Fowler case suggests "bad faith" of another
form that we stress is not present here, it illustrates reasons it may not be appropriate
to permit assignment of bad faith claims under all circumstances. But see Constance
A. Anastopoulo, A New Twist on Remedies: Judicial Assignment of Bad Faith
Claims, 50 Ind. L. Rev. 727 (2017) (arguing bad faith claims should be assignable).
assignable, the district court in Schneider relied exclusively on the applicability of
the South Carolina survival statute. 487 F. Supp. at 241 (citing S.C. Code Ann. § 15-
5-90 (1976) (survival statute); Doremus v. Atl. Coast Line R.R. Co., 242 S.C. 123,
142, 130 S.E.2d 370, 379 (1963) (holding a personal injury claim is assignable
because it survives the death of the real party in interest)). In this case, the party
making the assignment is a town, to which the survival statute does not apply. See
S.C. Code Ann. § 15-5-90 (2005) (providing this statute—the survival statute—
applies to "a deceased person and . . . an insolvent person or a defunct or insolvent
corporation"). In Schneider, the plaintiff made an offer to settle within policy limits.
487 F. Supp. at 240. In this case, the parties never were able to agree on the policy
limits. In Schneider, the judgment against the insured appears to have become final.
In this case, the verdict against the insured remained subject to the district court's
ruling on post-trial motions and an appeal to the Fourth Circuit.

The most significant difference between Schneider and this case, however, is that in
Schneider the insurance company did not satisfy the judgment, but left the insured
exposed beyond the policy limits. Here, the Fund satisfied the judgment. The
insured paid nothing.

The question of whether a bad faith claim is assignable under the circumstances
present in this case, to our knowledge, has never been presented to this Court. While
it seems to us that allowing assignment under the circumstances present in Schneider
would be appropriate, we also recognize there are other considerations that may
warrant refusing to allow assignment of bad faith claims in all situations. See
generally Fowler v. Hunter, 388 S.C. 355, 362, 697 S.E.2d 531, 535 (2010)
(permitting the assignment of a professional negligence claim against the insurer as
a part of a settlement with an at-fault driver, "provided the risk of collusion is
minimized").9 Until we decide whether such a claim may be assigned in the first
place, we are hesitant to answer the question posed by the parties in this case.

The second reason we decline to answer the question relates to the validity of any
bad faith claim Cottageville may have had against the Fund. On this point, we do
not address whether the Fund acted in bad faith. There is simply no evidence in the

9
  The assigned claim in Fowler was a professional negligence claim against the
insurer; it was not a bad faith claim. 388 S.C. at 360, 697 S.E.2d at 533. However,
our analysis in Fowler of the danger of collusion as a predicate to permitting the
assignment of claims pursuant to a settlement is relevant to whether assignment of
bad faith claims should be permitted in all situations.
record either way, so we have no way of knowing. Rather, we address the nature of
the Fund's duty to its insureds.

This Court has recognized in numerous opinions that an insurer must act reasonably
and in good faith in defending its insured. See, e.g., Miles v. State Farm Mut. Auto.
Ins. Co., 238 S.C. 374, 380, 120 S.E.2d 217, 220 (1961) ("In the defense of an action
against its insured, an insurer is bound not only to act in good faith but also to
exercise reasonable care." (citing Tiger River[10] Pine Co. v. Maryland Cas. Co., 163
S.C. 229, 234-35, 161 S.E. 491, 493-94 (1931))). This duty includes the insurer's
obligation to settle a lawsuit against its insured within policy limits if it is
unreasonable to refuse to do so. See Nichols v. State Farm Mut. Auto. Ins. Co., 279
S.C. 336, 339, 306 S.E.2d 616, 618 (1983) (stating "an insurer's unreasonable refusal
to settle within policy limits subjects the insurer to tort liability" (citing Tyger River
Pine Co. v. Maryland Cas. Co., 170 S.C. 286, 290-91, 170 S.E. 346, 348 (1933))).
We also recognized an insurer may be liable for consequential damages in addition
to the amount of the excess judgment if the insurer acts in bad faith to the insured in
some respect other than protecting the insured from an excess judgment. See
Tadlock Painting Co. v. Maryland Cas. Co., 322 S.C. 498, 501, 473 S.E.2d 52, 53
(1996) ("[I]mplicit in the holding [of Nichols] is the extension of a duty of good faith
and fair dealing in the performance of all obligations undertaken by the insurer for
the insured." (quoting Carolina Bank & Tr. Co. v. St. Paul Fire & Marine Co., 279
S.C. 576, 580, 310 S.E.2d 163, 165 (Ct. App. 1983))); 322 S.C. at 504, 473 S.E.2d
at 55 (permitting the recovery of consequential damages).

As we stated, we do not have before us any facts regarding what conduct by the Fund
may form the basis of a bad faith claim. Nevertheless, none of the cases we
previously decided in which we recognized a right of action for bad faith against an
insurer appear to bear any relationship to this case. Here, the Fund argued the extent
of its limit for liability was $1,000,000. Although we disagree, we find the Fund's
position reasonable. The Coverage Contract gave the Fund the exclusive right—
"subject to the Limits of Liability"—to "conduct negotiations and enter into such
settlement of any claim or suit as [the Fund] deems expedient." The liability issues
at the trial of the Cottageville lawsuit were hotly contested, and there is no indication
of any certainty the plaintiff would prevail before the jury. We are aware of no
conduct by the Fund which might subject it to liability other than asserting its
insureds right to a trial by jury. See In re Mt. Hawley Ins. Co., 427 S.C. 159, 170,

10
   The River and the former eponymous "Pine Company" are correctly spelled
"Tyger." See Sentry Select Ins. Co. v. Maybank L. Firm, LLC, 426 S.C. 154, 158
n.3, 826 S.E.2d 270, 272 n.3 (2019).
829 S.E.2d 707, 714 (2019) ("Of course, . . . '[i]f there is a reasonable ground for
contesting a claim, there is no bad faith.'" (alteration in original) (quoting Crossley
v. State Farm Mut. Auto. Ins. Co., 307 S.C. 354, 360, 415 S.E.2d 393, 397 (1992))).
When the verdict far exceeded any view of policy limits, the Fund settled the case,
leaving its insureds insulated from any excess judgment. While it is conceivable an
insurer may subject itself to liability for consequential damages for bad faith conduct
in some other respect, we do not condone the idea an insurer may incur bad faith
liability for simply taking a case to the jury, when the insurer satisfied the judgment
after trial without exposing the insured to excess liability.

For these two reasons, we decline to answer the second question.

      IV.    Conclusion

We reverse the court of appeals' determination regarding the amount of indemnity
coverage available. We vacate the court of appeals' determination that a bad faith
claim against the Fund is barred by the South Carolina Tort Claims Act.

BEATTY, C.J., HEARN and JAMES, JJ., concur. KITTREDGE, J.,
concurring in result in a separate opinion.
JUSTICE KITTREDGE: I concur in result. I write separately because I
respectfully disagree with the majority's approach in determining the number of
occurrences. I would hold the two lawsuits filed by the Estate of Albert "Bert"
Reeves involved two occurrences.

The South Carolina Municipal Insurance and Risk Financing Fund (the Fund)
provided liability coverage to the Town of Cottageville and its police officers. The
question presented by the parties is:

      (1) Do the claims made and the verdict rendered against the Town of
          Cottageville and Randall Price, relating to the hiring, retention,
          supervision, and shooting death of Bert Reeves result in there
          being more than $1,000,000.00 in indemnity coverage available
          under the terms of the [Fund's] Coverage Contract with the Town
          of Cottageville with respect to all such claims including the claims
          made against John Craddock in the separately styled action
          referenced above? Reeves asserts there is more than one
          occurrence based on the facts and claims and the jury's verdict
          relating to the hiring, retention, supervision, and shooting death of
          Bert Reeves, and, thus, there is more than $1,000,000.00 in
          indemnity coverage available under the Coverage Contract. [The
          Fund] asserts the Coverage Contract is limited to a total of
          $1,000,000.00 in indemnity coverage.

Reeves v. S.C. Mun. Ins. & Risk Fin. Fund, 427 S.C. 613, 620, 832 S.E.2d 312, 316
(Ct. App. 2019) (internal alteration marks omitted).

The facts are fully set forth in the majority opinion as well as the court of appeals'
opinion. Cottageville Police Officer Randall Price shot former Cottageville Mayor
Bert Reeves. Cottageville Police Chief John Craddock was present when Price
shot Reeves. Craddock, a trained paramedic, refused to provide medical assistance
to Reeves as he lay dying from the gunshot wound. In the action against Officer
Price and the Town of Cottageville, a jury awarded Reeves's estate $97.5 million,
consisting mainly of punitive damages. Reeves's estate and the Fund settled both
cases, which included the claim against Craddock.
The parties agreed that Reeves's estate would receive—in addition to a guaranteed
$10,000,000 settlement—an additional $1,000,000 payment for each of two
possible questions answered in favor of Reeves's estate.11

Reeves's estate argued there were four "occurrences" under the terms of the Fund's
insurance policy with Cottageville; the Fund argued there was only one
occurrence. Once we determine there was more than one occurrence, we have
resolved the appeal—under the terms of the question presented by the parties, it
matters only whether there was more than one occurrence (as asserted by Reeves's
estate), not precisely how many occurrences there were. The majority, however,
holds there were exactly four occurrences. I do not agree. If we must decide the
number of occurrences, in my judgment, the policy provides there were only two
occurrences.

As I construe the majority opinion, it seems the majority equates each "wrongful
act" with a covered "occurrence" under the policy, irrespective of the presence or
absence of a resulting injury. In construing the insuring language portion of the
policy, the majority opinion states, "[t]his portion of the definition of Occurrence
specifically equates Occurrence with Wrongful Act." I agree with the majority
insofar as a single wrongful act or multiple wrongful acts resulting in an injury is
an occurrence. I respectfully disagree that a wrongful act, by itself with no
resulting injury, "equates [to an] Occurrence."

The policy defines "wrongful act" as

      any actual or alleged error in the performance or failure to perform an
      official duty; or any misstatement, misleading statement, or
      misleading act made or done in the course of official duty and upon
      which a claimant or plaintiff has relied to his, her, or its detriment; or
      any omission or neglect in performing an official duty; or any breach
      of an official duty, including misfeasance, malfeasance and
      nonfeasance; but only, with respect to any or all of the foregoing,
      when committed by a Member or by a Covered Person(s) while acting
      within both the course and the scope of his or her official duties, as
      provided under the "South Carolina Tort Claims Act."

The policy defines "occurrence" as the term is commonly understood—"an
accident which results in Bodily Injury." "Bodily Injury" is further defined as

11
  The majority and I answer only the first of the two questions presented by the
parties.
"physical injury to any person (including death)." The policy language requires the
Fund to only pay covered claims for "a Wrongful Act . . . which results in . . .
bodily injury . . . provided the Wrongful Act amounts to an Occurrence."
(Emphasis added.) Thus, as I read the policy's language, the Fund is not required
to cover a wrongful act that does not result in bodily injury.

I do agree with the majority that the policy language does allow for coverage for
more than a single occurrence. That, however, does not negate what I view as a
clear requirement that a wrongful act result in an injury. What links a wrongful act
to an occurrence is the resulting injury. Absent a resulting injury, there is no
occurrence, regardless of the number of wrongful acts.

I acknowledge a host of wrongful acts committed by Officer Price and the Town of
Cottageville.12 But under the terms of the policy, a wrongful act by itself is not an
occurrence and does not trigger coverage. My review of the policy persuades me
that coverage is activated only when the wrongful act or wrongful acts result in the
injury—that is the occurrence. I would hold the parties to the unambiguous
definition of occurrence, which expressly requires a resulting injury. Here, there
were two occurrences, one which resulted from the wrongful acts of Officer Price
and the Town of Cottageville, and the second stemming from Chief Craddock's
willful failure to render aid to Reeves. Concerning the second occurrence—the
claim against Chief Craddock—the record stipulates that Reeves was still alive
after being shot by Officer Price, yet Chief Craddock (a trained paramedic) decided
to watch Reeves die rather than attempt to save his life or promptly summon
medical assistance.

Therefore, as far as determining there was more than one occurrence, I concur in
result. I do fully concur in the balance of the majority opinion.

12
   The majority agrees with Reeves's estate that "Cottageville's negligent hiring,
retention, and supervision of Price, and Price's use of deadly force, are four
different Wrongful Acts." I take no issue with the majority in this regard. I part
company with the majority in equating a wrongful act with a covered occurrence.