Court Opinion

ID: 8292206
Source: CourtListenerOpinion
Date Created: 2022-10-17 10:49:05.051537+00
Date Added: 2024-06-11T16:43:54.029824
License: Public Domain

Ness, Chief Justice
(dissenting):
I dissent and would affirm the opinion of the trial court.
I.

Mutual Exclusivity of Underinsured and Uninsured Motorist Coverage

Neither the Majority Opinion nor the Appellant cites any contractual or statutory provision which specifically provides that underinsured and uninsured motorist coverage are mutually exclusive. On the contrary, this conclusion is reached by the Majority by interpreting the definition of underinsured motorist coverage as found in the statute on the date of this incident.1 The Majority reasons that in the majority of cases, an at fault driver will not satisfy both the uninsured and underinsured definitions. Normally, he will have no insurance and therefore be uninsured, or he will have insufficient liability insurance and will therefore be underinsured. Accepting this premise as sound for the sake of argument, the Majority Opinion fails to focus on the peculiar facts of this case.
There is no disagreement that the at fault driver in this case meets the statutory definition of an uninsured motorist, not because he had no insurance, but because his liability insurance was less than-that required by § 56-9-820, South Carolina Code of Laws, 1976.2 Our Legislature has defined an “uninsured motorist vehicle” as any vehicle which is not insured in at least the minimum liability limits. § 56-9-20(16), South Carolina Code of Laws, 1976. The Majority defines an underinsured motorist endorsement as “cover*550age in the event that damages are sustained in excess of the liability limits carried by an at fault insured or underinsured motorist.” § 56-9-831, South Carolina Code of Laws, 1976 as amended. (Emphasis added.) The distinguishing fact overlooked and avoided by the Majority is that the at fault driver in this case had liability coverage and also meets the legislative definition of an underinsured motorist.
The statute does not require a specific amount of liability coverage to trigger the underinsured motorist endorsement. The statute does not provide that under every conceivable fact situation, an at fault motorist must be either an uninsured or an underinsured motorist. The Appellant’s policy contains no definition of an underinsured motorist and likewise no clause defining the two are mutually exclusive. In fact, as the Majority correctly noted, the declaration page of the Appellant’s policy classifies the coverage as “uninsured (and underinsured)” coverage; not “uninsured (or underinsured)” coverage. (Emphasis added.)
It is not the function of this Court to legislate or rewrite contractual agreements. The Majority may be right in concluding that in most cases an at fault driver cannot simultaneously meet the legislative definitions of both an uninsured and underinsured motorist. Albeit unusual, under the peculiar facts of this case, the at fault driver does clearly meet both definitions. The fact that this is unusual and may never happen again, does not give this Court the prerogative to rewrite the legislation.
I agree with the general rule espoused by the Majority. I cannot agree that there can never be exceptions to the rule. The legislative definition of uninsured and underinsured motorist coverage are almost always, ninety-nine.nine percent of the time, mutually exclusive. The peculiar facts of this case establishes that few rules of law are absolute. I would simply hold that under the facts of this case, applying the law applicable at the time of this occurrence, the at fault driver met the legislative definition of both uninsured and underinsüred motorist coverage. Finding no statutory or contractual language which would prohibit this atypical situation, I would agree with the trial judge that the Respondents are entitled to both coverages.
*551III and IV3

Stacking: Contractual Limitations

My disagreement with Sections III and IV of the Majority Opinion follows my prior reasoning: The Majority has misapplied sound principles to reach an illogical result. These sections involve Ms. Locklear who was a passenger in her own vehicle but who under the terms of the Appellant’s policy was a defined insured for uninsured and underinsured coverages. The majority mistakenly concludes that Ms. Locklear is neither a Class 1 nor a Class 2 insured and not a “statutory” insured thus precluding stacking. Likewise, the Majority has erroneously reasoned that the contractual extension of “insurability” to Ms. Locklear justifies imposition of the policy’s contractual cap on uninsured motorist coverage. Most perplexing is the Majority’s unassisted remand to the trial court to somehow determine a fair allocation of the $35,000.00 single limits uninsured motorist endorsement between Locklear and Mullins. It is this last item which produces in my opinion, a clearly illogical result.
Under the Majority reasoning, Locklear’s uninsured motorist coverage can be reduced below the statutory minimum because she is a “defined” insured rather than a “statutory” insured which we have held to include the named insured, his spouse and relatives residing in his household. American Interinsurance Exchange v. Diamond, 268 S. C. 35, 231 S. E. (2d) 304 (1977). Unquestionably, Mullins is a statutory insured inasmuch as he is the named insured. As a statutory insured, clearly Mullins’ uninsured motorist endorsement cannot be contractually reduced below that required by our statutes. Nationwide Mutual Insurance Company v. Howard, 288 S. C. 5, 339 S. E. (2d) 501 (1985). Yet in Part IV of the Majority Opinion, the trial court is directed to allocate the $35,000.00 single limit uninsured motorist endorsement between Locklear and Mullins based on the extent of damages sustained by each. The Majority specifically contemplates that this could entitle Locklear to “partial or total indemnification.” (Emphasis added.) Not knowing the relative extent of damages, Mr. Mullins’ unin*552sured motorist coverage could conceivably be reduced below $15,000.00 and will quite certainly be reduced below $35,000.00. Either eventuality will effectively reduce the coverage legislatively required to Mr. Mullins as a statutory insured. Hence, the Majority, by attempting to apply a contractual restriction to a contractual insured has in result applied a contractual restriction to a statutory insured which is clearly contrary to public policy.
The fallacy in the Majority’s reasoning begins with the classification of Ms. Locklear. In Nationwide v. Howard, supra, we attempted to clarify any uncertainty in our prior interpretations of § 56-9-831 which legislatively provides stacking limitations. It is therefore back to § 56-9-831 that we should look for classification of Ms. Locklear as will be illustrated.
The Majority indicates that a Class 1 insured as defined in § 56-9-831 must be either a named insured, spouse or resident relative. Again, while this is probably true in almost every conceivable case, this case is the exception.
- We have held that § 56-9-831 creates only 2 classes of insureds. Class 2 insureds are guest passengers. Quite clearly, Ms. Locklear is not a guest passenger since she owned the vehicle as the Majority correctly held. But, the Majority also holds that she is not a Class 1 insured. The Majority then without explanation treats Ms. Locklear as a Class 2 insured (precluding stacking).
The understandable mistake in the Majority Opinion was equating the statutory definition of insured found in § 56-9-810 with the terms found in § 56-9-831. The latter statute provides stacking rules for “an insured or named insured.” This particular phrase is used three times in this statute, but is arguably not specifically defined in the Statute. The Majority, quite logically, referred to the definitions found in Article 7 of the Financial Responsibility Act to discern the definition. They then concluded that the term “insured or named insured” must mean the “named insured, his spouse and relatives residing in his household while in a motor vehicle or otherwise ...” quoting from § 56-9-810. However, § 56-9-810(2) provides in full: <.
“The term ‘insured’ means the named insured and, while resident of the same household, the spouse of any *553such named insured and relatives of either, while in a motor vehicle or otherwise, and any person who uses with the consent, expressed or implied, of the named insured, the motor vehicle to which the policy applies and a guest in such motor vehicle to which the policy applies or the personal representative of any of the above.”
If the majority is correct in applying the definition of “insured” found in § 56-9-810(2) to the term “insured or named insured” found in § 56-9-831, then a Class 1 insured also includes a guest passenger! (“Insured or named insured” as found in § 56-9-31 = definition of “insured found in § 56-9-810(2) which includes named insured, spouse, resident relative and guest passenger; therefore, a Class 1 insured under § 56-9-831 includes a guest passenger.” Obviously, such a result was not intended by the Majority nor more importantly, the Legislature.
The error is looking beyond § 56-9-831 for the definition of a Class 1 or Class 2 insured. In using the phrase “insured or named insured” consistently and repeatedly in the statute, the Legislature could not have been referring to § 56-9-810 for numerous reasons. First, § 56-9-810 is never referenced or mentioned. Second, the term would be redundant if referring to § 56-9-810 because an insured would include the named insured. Finally, the term would also include guest passengers if the definition of § 56-9-810 was incorporated.
The Majority specifically concluded Ms. Locklear was prohibited from stacking because she is not a “statutory insured.” However, this is not the language of § 56-9-831 nor of any of our prior decisions. Looking back at § 56-9-831 as we are required, we have held that only a Class 2 insured (a guest passenger) is precluded from stacking. Garris v. Cincinnati Ins. Co., 280 S. C. 149, 311 S. E. (2d) 723 (1984); Nationwide v. Howard, supra. § 56-9-831 as well as our previous decisions clearly hold that when an “insured or named insured’s” vehicle is involved in the accident, the stacking prohibition does not apply. Quite understandably, the Majority concludes that an insured will almost always be the named insured, spouse or resident relative. However, as this case again demonstrates, “insured” for the purpose of this section can be in an exceptional circumstance a *554broader definition. Here the Appellant in its policy has admittedly defined Ms. Locklear as an insured. She was the owner of the vehicle and as the trial court reasoned, must be construed as a Class 1 insured. Any other conclusion redefines and rewrites not only the statute but our prior holdings.
The Majority next concludes that Ms. Locklear is subject to the contractual limitation on uninsured motorist coverage citing Kraft v. Hartford Insurance Companies, 279 S. C. 257, 305 S. E. (2d) 243 (1983). This conclusion is apparently bottomed on the premise that contractual extension of “insurability” equates to contractual extension of “coverage.” This is a new concept which certainly was not contemplated in Kraft.
We have previously held that that any policy provision purporting to limit stacking of statutorily required “coverage” is invalid. Jackson v. State Farm Mut. Auto. Ins. Co., 288 S. C. 335, 342 S. E. (2d) 603 (1986); Belk v. Nationwide Mutual Ins. Co., 271 S. C. 24, 244 S. E. (2d) 744 (1978). A required coverage has been defined as a coverage required to be provided or to be offered. Jackson v. State Farm, supra; Busby v. State Farm Mut. Auto. Ins. Co., 280 S. C. 330, 312 S. E. (2d) 716 (1984).
Both uninsured and underinsured motorist coverages are required coverages as they are both either mandatory or required to be offered. Yet, the Majority is now illogically allowing a contractual restriction on the stacking of this “required coverage” by a misplaced definition of the insured.
Quite simply, Kraft involves the contractual extension of liability “coverage” beyond that required by the liability statute. Here the Appellant has contractually extended the normal and typical definition of “insured” to include Ms. Locklear. Like Kraft, this was not required by any statute, but this is where the comparison ends.
In Kraft, liability coverage was extended to a non-owned vehicle. We referred back to the liability statute and concluded that liability coverage is not mandated for nonowned vehicles. Therefore, any policy provisions restricting this coverage could not violate statutory provisions or public property.
*555Here, insurability has been extended to Ms. Locklear by the Appellant’s policy provisions. Again, similarly to Kraft, this was not required. However, once Ms. Locklear is determined to be insured under the Appellant’s policy, the focus must return to the statutory scheme just as we did in Kraft. § 56-9-831 provides the uninsured and underinsured stacking rules for an “insured or named insured.” Unlike Kraft, the policy provisions here clearly limit the stacking rights of a defined and admitted insured. These provisions therefore violate public policy and are void. Jackson v. State Farm, supra.
To illustrate the subtle distinction between the extension of coverage versus the extension of insurability, an illustration would be beneficial. Assume in Kraft the policy has provided that liability coverage on the vehicle described in the policy had been extended to operation of the vehicle by a non-permissive user. This is beyond the scope required by the statutes which limits insureds for liability purposes to permissive drivers. This is therefore an extension of insurability. Next assume, that the policy provided that in the case of an non-permissive use only $5,000.00 in liability coverage would be offered. Unlike Kraft, this fact situation would violate § 56-9-820 which provides the minimum liability limits required on motor vehicles operated in this State.
In Kraft, even after the extension of coverage, the terms of the statute were not violated. In the illustration and this case, the extension of insurability with the limitation on coverage would violate the terms of the applicable statute.
Stacking issues and insurability have become dreaded issues to the judiciary and the bar primarily because of hybrid policies which either extend coverages or combine terms or limits. It is common knowledge that consumers are not at arms’ length to bargain with the insurance industry. This is the primary reason for the traditional consumer oriented construction of adhesion contracts. I fear that Majority is today shifting this long standing rule of contractual construction.
No reason has been given for the Appellant’s unilateral decision to extend uninsured and underinsured motorist coverage to Ms. Locklear. Everyone agrees, however, that Mr. *556Mullins should be entitled to the $85,000.00 single limit uninsured endorsement at the very minimum. He, after all, did contract and pay for this coverage and he is the named insured. Yet, as I have illustrated, the convoluted application of the policy cap provision has resulted in the Majority being forced to instruct the trial court to give Ms. Locklear part of Mr. Mullins’ coverage. Mr. Mullins, the named insured and purchaser of the policy, will therefore in the end get less than everyone has agreed he is entitled to under his policy. Should the Majority, after considering my dissent, reconsider and determine that the policy cap only applies to Ms. Locklear, the same irrational result applies. Since Mr. Mullins would have already received the $35,000.00 endorsement, the contractual cap would allow Ms. Locklear to receive nothing. Hence, the Appellant, who created this situation by extending insurability to Ms. Locklear which the Majority has already concluded is supported by the contractual consideration, ends up paying nothing for this coverage. The coverage ends up not existing even though it has been contracted and paid for by Mr. Mullins. The insured still gets less than he paid for.
Unusual facts should logically create unusual results. Unfortunately, unusual facts often create inconsistent reasoning and more importantly, conflicting case law. After laboring with this case for more than 15 months, I am convinced that the trial judge’s result is the only one which is consistent with our prior decisions and the statutory scheme. What is more, the trial judge’s result is the only logical ending to this novel of peculiar facts and unusual policy provisions.
I would affirm.

 It should be noted that this discussion is now rendered moot by the Legislature’s amendment of § 56-9-810 which now includes a definition of an underinsured motorist vehicle.

 Repealed by the 1987 Act No. 155 § 25 effective January 1,1988. Insurance matters have now been recodified in Title 38, Insurance. See § 38-77-140 for new text.

 I agree with Sections II and V of the majority opinion and therefore need not address them here.