Opinion
Opinion No. 4474.
Heard November 19, 2008.
Filed December 23, 2008.
Appeal From Anderson County Alexander S. Macaulay, Circuit Court Judge.
AFFIRMEDCharles R. Norris, of Columbia, and John P. Riordan, of Greenville, for Appellant.
Donald Leverette Allen, of Anderson, for Respondent.
In this action arising from an automobile accident, the circuit court held Andrew F. Stringer, III (Stringer) had uninterrupted automobile coverage with State Farm Mutual Automobile Insurance Company (State Farm) and dismissed Stringer's claims for breach of contract accompanied by a fraudulent act, breach of the duty of good faith and fair dealing, emotional damages, and attorneys fees. State Farm appeals. We affirm.
FACTUAL/PROCEDURAL BACKGROUND
On July 31, 2002, Stringer was involved in an automobile accident in which he was driving a 1984 Chevrolet truck. The accident was caused by an uninsured driver named Troy Robinson. Stringer suffered various injuries, some of which are permanent. Stringer made a payment of $424.76 to State Farm for a six month policy on the truck running from February 15, 2002 until August 15, 2002. After Stringer paid State Farm, there were two policy adjustments that caused an additional $47.25 premium to be due.
State Farm mailed Stringer a bill that he failed to pay. The $424.76 premium paid was sufficient to carry the policy to July 29, 2002. On July 11, State Farm mailed Stringer a notice of cancellation that stated payment of $47.25 by the cancellation date of July 29, 2002 would provide uninterrupted coverage. The notice informed that in the event of payment after that date, there would be no coverage between the date and time of cancellation and the date and time of reinstatement based upon a post-cancellation payment.
On August 1, Stringer notified Sherry Jennings (Jennings), an employee of the Quincy Waters State Farm agency, about his accident on the previous day. Stringer testified that Jennings told him there would be uninterrupted coverage if he paid the $47.25 due. Stringer sent his son to the agency where he paid the additional $47.25 premium on August 2, 2002, after the accident. Jennings accepted the payment, issued a receipt, and promptly mailed form FR-10 to the Department of Motor Vehicles. The form FR-10 verified that Stringer had valid coverage with State Farm at the time of the accident.
The circuit court held Stringer paid his entire premium pursuant to the insurance policy prior to the expiration of the six month policy period, which fulfilled his obligations under the insurance policy. State Farm appeals this ruling. The circuit court dismissed Stringer's claims for breach of contract accompanied by a fraudulent act, breach of the duty of good faith and fair dealing, emotional damages, and attorneys fees. These issues are not appealed.
ISSUE
Did the trial court err in ruling Stringer had uninterrupted automobile insurance coverage for the full policy period?
STANDARD OF REVIEW
The determination of coverage under an insurance policy is an action at law. Auto-Owners Ins. Co. v. Hamin, 368 S.C. 536, 540, 629 S.E.2d 683, 685 (Ct.App. 2006), cert. granted, May 24, 2007; Nationwide Mut. Ins. Co. v. Prioleau, 359 S.C. 238, 241, 597 S.E.2d 165, 167 (Ct.App. 2004). "In an action at law, on appeal of a case tried without a jury, the findings of fact of the judge will not be disturbed upon appeal unless found to be without evidence which reasonably supports the judge's findings. . . . The judge's findings are equivalent to a jury's findings in a law action." Townes Assocs., Ltd. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976); accord Patricia Grand Hotel, LLC v. MacGuire Enterprises, Inc., 372 S.C. 634, 638, 643 S.E.2d 692, 694 (Ct.App. 2007); Cohens v. Atkins, 333 S.C. 345, 347, 509 S.E.2d 286, 288 (Ct.App. 1998); Small v. Pioneer Mach., Inc., 329 S.C. 448, 461, 494 S.E.2d 835, 841 (Ct.App. 1997). "[Q]uestions regarding the credibility and the weight of evidence are exclusively for the trial judge." Golini v. Bolton, 326 S.C. 333, 342, 482 S.E.2d 784, 789 (Ct.App. 1997).
"This court is bound by the trial court's factual findings unless they are clearly erroneous." State v. Preslar, 364 S.C. 466, 472, 613 S.E.2d 381, 384 (Ct.App. 2005); accord State v. Baccus, 367 S.C. 41, 48, 625 S.E.2d 216, 220 (2006) (citing State v. Quattlebaum, 338 S.C. 441, 442, 527 S.E.2d 105, 111 (2000)). The appellate court does not re-evaluate the facts based on its own view of the evidence but simply determines whether the trial judge's ruling is supported by any evidence. State v. Wilson, 345 S.C. 1, 6, 545 S.E.2d 827, 829 (2001);Preslar, 364 S.C. at 472, 613 S.E.2d at 384; State v. Mattison, 352 S.C. 577, 583, 575 S.E.2d 852, 855 (Ct.App. 2003).
On appeal, we are limited to determining whether the trial judge abused his discretion. State v. Reed, 332 S.C. 35, 503 S.E.2d 747 (1998); State v. Edwards, 374 S.C. 543, 649 S.E.2d 112 (Ct.App. 2007), cert. granted, July 10, 2008; State v. Douglas, 367 S.C. 498, 626 S.E.2d 59 (Ct.App. 2006), cert. granted, June 7, 2007; State v. Walker, 366 S.C. 643, 623 S.E.2d 122 (Ct.App. 2005). An abuse of discretion occurs when the ruling is based on an error of law or a factual conclusion that is without evidentiary support. Fields v. Reg'l Med. Ctr. Orangeburg, 363 S.C. 19, 609 S.E.2d 506 (2005); Renney v. Dobbs House, Inc., 275 S.C. 562, 274 S.E.2d 290 (1981); see also Simon v. Flowers, 231 S.C. 545, 550, 99 S.E.2d 391, 393-94 (1957) ("`[E]rror at law' exists: (1) when the circuit judge, in issuing [the order], was controlled by some error of law . . . or (2) where the order, based upon factual, as distinguished from legal, considerations, is without adequate evidentiary support."); McSween v. Windham, 77 S.C. 223, 226, 57 S.E. 847, 848 (1907) ("[T]he determination of the court will not be interfered with, unless there is an abuse of discretion, or unless the exercise of discretion was controlled by some error of law.").
LAW/ANALYSIS
The circuit court made the following conclusions of law:
1. It is well established that the terms of an insurance policy must be construed most liberally in favor of the insured and, where they are ambiguous or where they are capable of two reasonable interpretations, that construction will be adopted which is most favorable to the insured. Garrett vs. Pilot Life Insurance Company, 241 S.C. 299, 128 S.E.2d 171 (1962).
2. An insured has a right to rely on the representation made by an employee of his insurance company regarding coverage. Giles vs. Lanford and Gibson, Inc., 285 S.C. 285, 328 S.E.2d 916 (Ct.App. 1985).
3. If the insurer or insurer's agents assumes the duty to advise the insured, liability arises for failure to exercise reasonable skill and care in counseling the insured. Giles vs. Lanford and Gibson, Inc., 285 S.C. 285, 328 S.E.2d 916 (Ct. App. 1985). See also Riddle-Duckworth, Inc. vs. Sullivan, 253 S.C. 411, 171 S.E.2d 486 (1969).
4. When the employee of State Farm advised the insured, she had a duty to exercise due care in giving advice. Carolina Production Mantenance, Inc. vs. U.S. Fidelity and Guaranty Co., 310 S.C. 32, 38, 425 S.E.2d 39, 43 (Ct.App. 1993) (quoting Trotter vs. State Farm, supra).
In light of the cardinal rules governing construction of insurance contracts, the Plaintiff complied with the language of State Farm's coverage provision. The Plaintiff paid all premiums due within the six-month and before the end of the, then, current policy period ending August 15, 2002. Moreover, and in addition, the post-collision remittance of $47.25 by the insured and the insurer's receipt and retention of the consideration bound the insurer to the coverage.
State Farm argues the case of Jones v. State Farm Mutual Auto Ins. Co., 364 S.C. 222, 612 S.E.2d 719 (Ct.App. 2005), is controlling. We disagree. In Jones, State Farm provided insurance for three of Jones's vehicles as late as November 1999, including a 1986 Mazda pickup truck. On November 5, 1999, State Farm sent a cancellation notice informing Jones that effective November 24, 1999, coverage of the 1986 Mazda would be cancelled due to nonpayment of premiums. On December 19, 1999, Jones was seriously injured in a motor vehicle collision while driving the 1986 Mazda. Sometime after the accident, Jones's State Farm agent signed a Form FR-10 which stated: "I hereby affirm that to the best of my knowledge the vehicle described above was insured by State Farm insurance company on the date and time of the accident."
After settling with the at-fault driver's liability carrier, Jones sought a declaration that (1) the 1986 Mazda was covered by State Farm at the time of the collision, (2) he was entitled to $50,000 of underinsured motorist coverage on the Mazda, and (3) he was entitled to stack $50,000 of underinsured motorist coverage from each of the two additional vehicles covered by State Farm. State Farm moved for summary judgment, claiming the policy had been cancelled. The trial judge ruled that State Farm was entitled to summary judgment because State Farm's cancellation notice complied with the applicable statute and the Form FR-10 did not affect the cancellation.
This Court held the trial judge properly granted summary judgment. In a light most favorable to Jones, the FR-10 did not raise an issue as to the validity of State Farm's cancellation notice. We elucidated:
The form simply states "to the best of my knowledge the vehicle described above was insured by State Farm insurance company on the date and time of the accident." (Emphasis added). State Farm presented evidence that Jones, in fact, was not insured by State Farm at the time of the accident because his policy had been cancelled weeks earlier. Jones cites no legal authority establishing that a policy, once effectively canceled, can somehow become renascent by virtue of a qualified representation of coverage by an agent after a loss.
In the case at bar, Jennings not only completed Form FR-10 acknowledging coverage, but she also accepted and retained consideration from Stringer. The insured has a right to rely on the representations made by an employee of his insurance company regarding coverage. Giles v. Lanford Gibson, Inc., 285 S.C. 285, 328 S.E.2d 916 (Ct.App. 1985). If the insurer or insurer's agents assume the duty to advise the insured, liability arises for failure to exercise reasonable skill and care in counseling the insured. Id. See also Riddle-Duckworth, Inc. v. Sullivan, 253 S.C. 411, 171 S.E.2d 486 (1969). When the employee of State Farm advised the insured, she had a duty to exercise due care in giving advice. Carolina Prod. Maint., Inc. v. U.S. Fid. Guar. Co., 310 S.C. 32, 38, 425 S.E.2d 30, 40 (Ct.App. 1993).
The contemporaneous representations made by Jennings are inconsistent with State Farm's subsequent legal contention that the coverage was interrupted. State Farm's intentions were clear when it made its representations to Stringer and its assertions to the Department of Motor Vehicles, all of which were done after receiving and retaining the $47.25 premium on August 2, 2002.
The circuit court did not make an express finding of fact in its order that the policy is ambiguous, but the court did reference ambiguity in its first conclusion of law. This implies that the court found the policy to be ambiguous and relied on that ambiguity in reaching its conclusions of law. "It is a well settled rule that the terms of an insurance policy must be construed most liberally in favor of the insured and where the words of a policy are ambiguous or where they are capable of two reasonable interpretations that construction will be adopted which is most favorable to the insured." Garrett v. Pilot Life Ins. Co., 241 S.C. 299, 304, 128 S.E.2d 171, 174 (1962).
The circuit court quoted a section of the policy titled "When Coverage Applies" in its findings of fact. That provision states:
The policy period is shown under "Policy Period" on the declarations page and is for successive periods of six months each for which you pay the renewal premium. Payments must be made on or before the end of the current policy period. The policy period begins and ends at 12:01 A.M. Standard Time at the address shown on the declarations page.
[Emphasis in original.] Because Stringer paid the additional $47.25 before the end of the stated policy period, August 15, 2002, he was entitled to continuous, uninterrupted coverage. The circuit court correctly adopted an interpretation most favorable to the insured based on the ambiguity and an application of Garrett.
CONCLUSION
In light of the cardinal rules governing construction of insurance contracts, Stringer complied with the provisions of State Farm's insurance policy. Stringer paid all premiums due within the six-month coverage period and before the end of the policy period on August 15, 2002. The post-collision remittance of $47.25 by the insured and the insurer's receipt and retention of the consideration bound the insurer to the coverage.
Accordingly, the order of the circuit court is
AFFIRMED.
HUFF, J., concurs. THOMAS, J., dissents in a separate opinion.
I respectfully dissent from the majority.
The majority correctly points out that when construing the language of an insurance policy, the cardinal rule of construction is in favor of finding coverage for the insured. Garrett v. Pilot Life Ins., Co., 241 S.C. 299, 128 S.E.2d 171 (1962). This rule of construction, however, applies only if the policy is ambiguous. See id. at 304, 128 S.E.2d at 174 ("[I]n cases where there is no ambiguity, contracts of insurance, like other contracts, must be construed according to the terms which the parties have used, to be taken and understood in their plain, ordinary and popular sense.").
As the majority acknowledges, the trial court made no express finding that the policy in question was ambiguous. While the majority states that such a finding is implied by the language of the order, this Court does not sit to speculate as to the holdings of the trial court.See S.C. Coastal Conservation League v. S.C. Dep't of Health and Envt'l Control, Op. No. 4450 (S.C.Ct.App. filed October 23, 2008) (Shearouse Adv. Sh. No. 40 at 65, 90 ("Issue preservation rules are designed to give the trial court a fair opportunity to rule on the issues, and thus provide [the Court] with a platform for meaningful appellate review.") (quoting Queen's Grant II Horizontal Prop. Regime v. Greenwood Dev. Corp., 368 S.C. 342, 373, 628 S.E.2d 902, 919 (Ct.App. 2006) (internal quotations omitted)). An issue must be both raised to the trial court and ruled on by the trial court to be preserved for review by this Court. Pye v. Est. of Fox, 369 S.C. 555, 564, 633 S.E.2d 505, 510 (2006); Singleton v. Sherer, 377 S.C. 185, 208, 659 S.E.2d 196, 208 (Ct. App. 2008) (emphasis added). Accordingly, as the trial court made no ruling as to any ambiguity in the policy, construction of the language of the policy is not an issue before this Court. Rather, the issue is simply whether the laws of this state provide for coverage under these particular facts; and absent an ambiguity, they do not.
Had there been a finding that the policy was ambiguous and had the policy in fact been ambiguous, I would concur in the result reached by the majority as it would be the policy of this state to construe the contract in favor of coverage.
The terms of the insurance policy at issue in this case clearly state: "[The insured] agrees that . . . [the insurer] may increase the premium during the policy period based upon . . . changed information." Further, the insured agrees "that if the premium is decreased or increased during the policy period . . . [the insured] will pay for any increase in premium."
Based on adjustments to the policy made by Stringer, an additional $47.25 in premium came due in order to keep the policy in place until the stated termination date of August 15, 2002. It is undisputed that Stringer received two notifications informing him that failure to pay this amount would result in cancellation of the policy at 12:01 am on July 29, 2002. Such cancellation is specifically provided for in the plain language of the policy: "[State Farm] will not cancel your policy before the end of the current policy period unless . . . you fail to pay the premium when due." In the case at hand, it is not contested that the payment of the $47.25 overdue premium was not paid until after July 29, 2002. Thus, the only issue before this Court is whether Jennings' statement can retroactively provide coverage. It cannot.
According to the trial court's order, the increase in premium was due to the addition of a driver to the policy at the request of the insured.
Our courts have held that an insured is entitled to rely on representations made by the employee of the insured. Giles v. Lanford Gibson, Inc., 285 S.C. 285, 328 S.E.2d 916 (Ct.App. 1985); however, "whether or not reliance upon a representation in a particular case is justifiable or excusable, what constitutes reasonable prudence and diligence with respect to such reliance, and what conduct constitutes a reckless or conscious failure to exercise such prudence, will depend upon the various circumstances involved, such as the form and materialty [sic] of the representations, the respective intelligence, experience, age, and mental and physical condition of the parties, and the relation and respective knowledge and means of knowledge of the parties." Id. In the present case, Stringer's reliance was simply unreasonable. The record reflects that Stringer was fully aware that the policy would terminate on July 29, 2002, and as such was fully aware that after such date he was uninsured. While the trial court found that Stringer's payment of $47.25 was in reliance on an unsubstantiated representation that coverage would be continuous, such reliance could not have been to Stringer's detriment as it arose after the accident had occurred. Moreover, it is significant that Stringer did not plead estoppel as basis for asserting coverage, and the majority cites no authority that a lapsed insurance policy can be resurrected in the absence of estoppel being plead or preserved.
The majority cites authority that an insured may rely on representations made by an employee of an insurance company as to coverage. However, these authorities are not analogous to the case at hand because the representations were made before any loss or accident had occurred. See Giles v. Gibson, Inc., 285 S.C. 285, 328 S.E.2d 916 (Ct.App. 1985) (finding that when an insured specifically requested particular fire coverage and an employee, in writing the policy, represented the policy provided such coverage, the insurer could not deny coverage when the loss subsequently occurred); Riddle-Duckworth, Inc. v. Sullivan, 253 S.C. 411, 171 S.E.2d 486 (1969) (holding that an insured was entitled to rely on representations that he was "fully covered," and accordingly when an accident later occurred the insurer could not deny coverage).
The majority's decision not only rewards Stringer's misconduct and languidness but also extends the law on this issue beyond that supported by our jurisprudence.
State Farm relies heavily on this Court's decision in Jones v. State Farm Mutual Auto Insurance Co., 364 S.C. 222, 612 S.E.2d 719 (Ct.App. 2005), for the proposition that post cancellation representations may not be relied on. While I do not believe Jones to go so far as State Farm suggests, the majority languishes to distinguish it from the case at hand. I agree with the majority that Jones has no binding effect on this issue; however, this is because the language relied on by State Farm and distinguished by the majority, is not the law of the case. InJones, this Court specifically held that the issue of the legal effect of the agent's representation on the FR-10 form was not preserved for appeal. Id. at 234, 612 S.E.2d at 725.
Additionally, much of the discussion in Jones, concerned Jones' claim that the insurer was estopped from denying overage. In the case at hand Stinger did not plead estoppel as a basis for asserting coverage. Moreover, even had estoppel been plead, Stinger would not be able to demonstrate any detrimental reliance as the representation was made to him after the accident had already occurred.
Moreover, in discussing the merits of the issue in Jones, this Court noted the insured "cites no legal authority establishing that a policy, once effectively canceled, can somehow become renascent by virtue of a qualified representation of coverage by an agent after a loss." Id. at 236, 612 S.E.2d at 726. Similarly, no such authority exists that would support Stringer's claim that he had insurance coverage at the time of his accident.
The majority's holding would allow a situation in which an insured could wait until after a policy has lapsed, and then, with the certainty of hindsight, determine if he wants to pay the premiums. Effectively, the decision circumvents the purpose of insurance and creates a system which would allow an insured to retroactively insure himself after an accident or loss has occurred.
Accordingly, while I am sensitive to the position of the majority to prefer a finding of coverage, neither the policy at issue nor the laws of this State support such a finding. Accordingly, I would reverse the judgment of the trial court.