Court Opinion

ID: 997737
Source: CourtListenerOpinion
Date Created: 2013-07-04 17:01:07.935477+00
Date Added: 2024-06-11T14:57:13.782641
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

GLORIA JEAN ROBERTS,
Plaintiff-Appellee,

v.

USAA CASUALTY INSURANCE
COMPANY,
Defendant-Appellant,

and
                                                               No. 97-2410
STATE FARM FIRE AND CASUALTY
COMPANY; FIRST OF GEORGIA
INSURANCE COMPANY; STATE FARM
MUTUAL COMPANY; JOHN FRANK
MURRAY; JOHN IVEY, d/b/a Ivey
Construction and Maintenance
Company,
Defendants.

Appeal from the United States District Court
for the District of South Carolina at Aiken.
Charles E. Simons, Jr., Senior District Judge.
(CA-96-311-1-6)

Argued: October 30, 1998

Decided: February 5, 1999

Before LUTTIG, Circuit Judge, BUTZNER, Senior Circuit Judge,
and THORNBURG, United States District Judge for the Western
District of North Carolina, sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.
COUNSEL

ARGUED: Clarke W. McCants, III, NANCE & MCCANTS, Aiken,
South Carolina, for Appellant. Stephen H. Cook, KOON & COOK,
P.A., Columbia, South Carolina, for Appellee. ON BRIEF: Elizabeth
L. Cook, KOON & COOK, P.A., Columbia, South Carolina, for
Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

The USAA Casualty Insurance Company appeals from a summary
judgment granted in a declaratory judgment action in favor of its
insured, Gloria Jean Roberts, who was seeking reformation of her lia-
bility insurance policy with USAA to include underinsured motorist
coverage. South Carolina law governs this diversity case. We affirm.

I

Roberts was injured in an automobile accident in Aiken, South
Carolina. She brought a civil action against defendants Frank Murray,
John Ivey, and Ivey Construction and Maintenance Company, which
is pending in the district court. Because she was concerned that the
defendants' insurance was insufficient to satisfy her damages, she
sought a declaration that her USAA policy included underinsured
motorist coverage. At the time of the accident, Roberts was insured
by a liability policy with USAA which provided liability coverage for
bodily injury in the amount of $100,000 per person, per accident, with
a maximum liability coverage of $300,000 per accident. Additionally,
the policy contained liability coverage for property damage in the
amount of $50,000 (100/300/50). Roberts declined USAA's offer of
underinsured motorist coverage when she applied for the policy.

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South Carolina Code § 38-77-160 provides in part that an insurance
carrier shall "offer, at the option of the insured, underinsured motorist
coverage up to the limits of the insured liability coverage . . . ." The
primary issue in this case is whether USAA's offer to Roberts of
underinsured motorist coverage complied with this statute. Butler v.
Unisun Ins. Co., 323 S.C. 402, 475 S.E.2d 758 (1996), held that an
offer of underinsured motorist coverage that did not include limits
below the minimum liability limits of $15,000 per person, $30,000
per accident, and $5,000 property damage did not comply with § 38-
77-160. The minimum liability limits to which Butler referred are
mandated by § 38-77-140 and may be expressed as 15/30/5.

In Butler the insured, like Roberts, expressly declined all underin-
sured motorist coverage, but the South Carolina court considered this
no bar to the insured's action. USAA, like the insurance company in
Butler, did not offer its insured, Roberts, underinsured motorist cover-
age in amounts below the liability limits of 15/30/5. This omission,
the court concluded, did not comply with the requirements of § 38-77-
160 to offer "underinsured motorist coverage up to the limits of the
insured liability coverage."

After careful analysis, the district court concluded that Butler justi-
fied summary judgment in favor of Roberts, and it denied USAA's
motion for summary judgment.

II

The second issue pertains to the reformation of the policy that
USAA issued to Roberts. USAA contends that reformation should be
based on the mandatory limits of 15/30/5. Roberts claims that the ref-
ormation should be based on the limits of her liability coverage,
100/300/50.

Butler held that the insured was entitled to reformation of the pol-
icy. The answer to the question of what limits the reformed policy
must provide is found in Dewart v. State Farm Mut. Auto. Ins. Co.,
296 S.C. 150, 155, 370 S.E.2d 915, 918 (Ct. App. 1988). In that case
the court of appeals held that when an insurance company does not
comply with the statute requiring an offer of underinsured motorist
coverage, the insured is entitled to have the policy reformed to afford

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such coverage up to the limits of the insured's liability coverage.
Butler did not disturb Dewart's resolution of the limits of the
reformed policy.

The district court properly followed Butler and Dewart by afford-
ing Roberts underinsured motorist coverage up to the limits of her lia-
bility coverage, 100/300/50.

III

USAA relies on Norwood v. Allstate Ins. Co., 327 S.C. 503, 489
S.E.2d 661 (Ct. App. 1997), which was decided after the district court
decided Roberts. In Norwood the court of appeals cited Butler, and it
held that Allstate had made a valid offer of underinsured motorist
coverage. The offer in Norwood is significantly different from the
invalid offer USAA made to Roberts.

AFFIRMED

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