ONE South Carolina Supreme Court Opinion published last week voids auto insurance policy provisions that “decrease” the maximum payout in cases where the policyholder was committing a crime or trying to evade a police officer.
Decision 3-2 provides an additional $250,000 in insurance coverage for victims of an accident in 2008 that killed one person and seriously injured the driver and two passengers. The majority overturned an Appellate Court decision that found Nationwide to be responsible only for the legal minimum of $50,000 instead of the policy limit of $300,000.
The two dissidents said most were overreacting. “When deciding, the Court is legislating. Make no mistake about it,” said the dissenting opinion written by Judge John W. Kittredge.
Sharmin Christine Walls was a passenger in her car, a Chevrolet Lumina, as she and several friends drove through Anderson, South Carolina on July 11, 2008. Korey Mayfield was driving.
When a South Carolina state trooper spotted Mayfield speeding across the yellow center line, he turned on the emergency lights and siren. Instead of stopping, Mayfield accelerated. The soldier followed in a pursuit where the speed exceeded 160 km / h.
The officer abandoned the pursuit for public safety reasons, but Mayfield didn’t stop accelerating. The car’s passengers begged him to stop, but Mayfield refused. He lost control of the vehicle and crashed, killing passenger Christopher A. Timms and injuring Walls, Deborah Timms and Randi Harper.
Mayfield was paralyzed by the fall. He pleaded guilty to vehicular manslaughter in 2010. Judge Cordell Maddox sentenced him to two years of unmonitored house arrest and five years of probation, according to a report by the Independent Mail newspaper.
Walls’ policy with Nationwide had a coverage limit of $300,000 per occurrence and $100,000 per person. But after the accident, the insurer sought a declaratory judgment that it could reduce the total benefit to $50,000 because of a provision in the policy that reduced the maximum benefit to the legal minimum if the accident occurred while the insured was committing a crime or running away from it. law enforcement. Both parties agreed that Mayfield was insured because he was a permissive user of Walls’ car.
The Circuit Court judge refused, but Nationwide appealed. The Court of Appeals ruled that the policy language reduced the amount of coverage owed and ruled in favor of the insurer.
United policyholders and the South Carolina Association for Justice filed amicus briefs when the case was appealed to the state Supreme Court.
The Supreme Court majority said its decision was required by Section 38-77-140 of the South Carolina statute. That law states that any policy clause “that purports to or seeks to limit or reduce the coverage provided by the clauses required by this section is null”.
The state Supreme Court has cited this law to restrict the use of reduction clauses once before. In Williams v. Government Employees Ins. Co. (2014) the higher court ruled that benefits were reduced to the legal minimum when a family member of the guilty insured person was the claimant.
A Supreme Court majority said the same reasoning requires it to overturn the dismissal clause in Nationwide’s policy.
Dissidents said the majority of the court was using “judicial sleight of hand” to create policy under the guidance of interpreting a law.
The dissenting opinion says that “all other jurisdictions in the United States that follow a similar legal framework allow criminal conduct exclusions that reduce liability coverage to the legal minimum when the damage is caused by an insured.”
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