In Washington v. National Service Fire Insurance Co., the Supreme Court of South Carolina considered whether an insurer was bound by the defense asserted in its letter denying coverage under an automobile insurance policy. 168 S.E.2d 90 (S.C. 1969). The insured in Washington had promptly given notice of the accident in question to the insurer, but the insurer denied coverage, arguing the substitution of the "owned automobile" under the policy relieved it of liability with respect to the collision.
July 19, 1972.Frank Sawyer, Esq., of Spartanburg, for Plaintiff-Appellant, cites: As to denial of coverage to uninsured motoristcarrier: 137 S.E.2d 264; As to waiver by insurer ofRight to Require Notice and Forwarding of Suit Papers: 7 Am. Jur.2d Automobile insurance sec. 188; annotation, 18 A.L.R.2d 491, sec. 31; 196 Va. 790, 86 S.E.2d 180; 182 S.E.2d 727. As to insurer failing toshow substantial prejudice after insured failed to give noticeand forward suit papers: 182 S.E.2d 727. As to theCounty Court's erring in not sustaining order of the CivilCourt Holding the Respondent waived notice of claim andforwarding suit papers: 168 S.E.2d 90; 182 S.E.2d 727. L. Paul Barnes, Esq., of Ward, Howell, Barnes Long, of Spartanburg, for Defendant-Respondent, cites: As to theRespondent's not waiving the requirements of its policyprovisions regarding notice of claim and forwarding of suitpapers: 196 Va. 790, 86 S.E.2d 173; 247 S.C. 353, 147 S.E.2d 412. As to the Appellant improperly presentingquestions for decision that were not raised byher exceptions: 102 S.C. 57, 86 S.E. 194; 254 S.C. 42, 138 S.E.2d 643; 182 S.E.2d 727; 247 S.C. 58, 145 S.E.2d 673; 193 S.C. 176, 7 S.E.2d 833. As to the reversal of the Lower Court and directed judgmentin favor of Respondent upon the additional ground thatthe case of Washington v. National Service Fire Ins. Co., 252 S.C. 635, 168 S.E.2d 90 not being applicable to thefacts in the present case: 7 Am. Jur.2d, Automobile Insurance, Sec. 188; Annotation, 18 A.L.R.2d 491, Sec. 31; 196 Va. 790, 86 S.E.2d 173, 180.
As to a lack of sufficient evidence that Insuredfailed to comply with the Conditions of the uninsured motoristsendorsement of the insurance policy: 247 S.C. 58, 145 S.E.2d 673; 243 S.C. 338, 134 S.E.2d 206; 7 Am.Jur.2d, Automobile Insurance, Sec. 135, p. 461. As tothe Court's erring in ruling that assertion of a waiver on thepart of Insurer had no application in this case: 252 S.C. 635, 168 S.E.2d 90. George E. LaFaye, III, Esq., of Lumpkin LaFaye, Columbia, for the Respondents, cites: As to the service of aSummons only on an uninsured motorist insurance carriernot being sufficient compliance with the law: Section 46-750.
Upon receipt of timely notice, Atain would have had the opportunity to investigate the circumstances of the alleged "property damage" and determine what processes could be employed to minimize CPB's risk. See CAMICO Mut. Ins. Co. v. Jackson CPA Firm, No. 2:15-CV-1823-PMD, 2016 WL 7403959, at *12 (D.S.C. Dec. 22, 2016) (finding failure to give notice of potential claim resulted in substantial prejudice to insurer by precluding it from early investigation of facts and ability to mitigate insured's exposure); Factory Mut. Liab. Ins. Co. of Am. v. Kennedy, 182 S.E.2d 727, 729 (1971) (holding, in an action affecting rights of innocent third parties under automobile liability insurance policy, noncompliance by insured with policy provisions as to notice and forwarding suit papers will not bar recovery, unless insurer shows that failure to give such notice has resulted in substantial prejudice to its rights); Washington v. National Service Fire Ins. Co., 168 S.E.2d 90, 93 (S.C. 1969) ("The purpose of these policy [notice] requirements is to enable the insurer to inform itself promptly concerning the accident, to investigate the circumstances, and prepare a timely defense, if necessary on behalf of the insured." (quotation marks and citation omitted)).
The purpose of a notification requirement in an insurance policy is to allow the insurer to investigate facts and to assist the insurer in preparing a defense. Vermont Mut. Ins. Co. v. Singleton By & Through Singleton, 446 S.E.2d 417, 421 (S.C. 1994) (citing Washington v. National Service Fire Ins. Co., 168 S.E.2d 90 (S.C. 1969)). "Where the rights of innocent parties are jeopardized by a failure of the insured to comply with the notice requirements of an insurance policy, the insurer must show substantial prejudice to the insurer's rights."
"The purpose of a notification requirement is to allow for investigation of the facts and to assist the insurer in preparing a defense." Vt. Mut. Ins. Co., 446 S.E.2d at 421 (citing Washington v. Nat'l Serv. Fire Ins. Co., 168 S.E.2d 90 (1969)). Although the failure of an insured to comply with a notice requirement may bar recovery by the insured, Squires, 145 S.E.2d at 677, "[w]here the rights of innocent parties are jeopardized by a failure of the insured to comply with the notice requirements of an insurance policy, the insurer must show substantial prejudice to the insurer's rights" before recovery is barred.
The purpose of a notification requirement is to allow for investigation of the facts and to assist the insurer in preparing a defense. Washington v. National Service Fire Ins. Co., 168 S.E.2d 90 (S.C. 1969). Where the rights of innocent parties are jeopardized by a failure of the insured to comply with the notice requirements of an insurance policy, the insurer must show substantial prejudice to the insurer's rights.
The purpose of a notification requirement is to allow for investigation of the facts and to assist the insurer in preparing a defense. Washington v. National ServiceFire Ins. Co., 252 S.C. 635, 168 S.E.2d 90 (1969). Where the rights of innocent parties are jeopardized by a failure of the insured to comply with the notice requirements of an insurance policy, the insurer must show substantial prejudice to the insurer's rights.
The underlying issue in this case is whether Criterion was justified in denying coverage of Davis' claim for damages. Many other courts have held that, where an insurer wrongfully denies coverage, an insured's subsequent failure to forward the suit papers is not fatal to a valid claim. See Mutual Benefit Health and Accident Ass'n v. Moyer, 94 F.2d 906 (9th Cir. 1938) (also reported at 9 Alaska 235); Dixie Auto Ins. Co. v. Goudy, 238 Ark. 432, 382 S.W.2d 380 (1964); Washington v. National Serv. Fire Insurance Co., 252 S.C. 635, 168 S.E.2d 90 (1969). We agree.
As to itsbeing error to allow Midwest to recover one-half of thetotal settlement from Fireman's Fund for its payment underthe uninsured motorist coverage: Section 46-750.17, South Carolina Code of Laws, 1962; 178 S.E.2d 660; 7 Am.Jur.2d, Automobile Insurance, Sec. 188; 18 A.L.R.2d 491, Sec. 31; 252 S.C. 635, 168 S.E.2d 90; 235 S.C. 452, 112 S.E.2d 241. Messrs. Turner, Padget, Graham Laney, of Columbia, for Respondent, cite: As to the "other insurance" provisionin the Uninsured Motorist Endorsement in the Fireman'sFund policy being applicable although its insuredwas occupying a motorcycle rather than an automobile: 246 S.C. 97, 142 S.E.2d 741; 258 F.2d 934; 7 Am. Jur.2d Automobile Insurance, Sec. 202, 8 Appleman, Insurance Law and Practice, Sec. 4914; 247 S.C. 148, 146 S.E.2d 156; 246 S.C. 46, 142 S.E.2d 704; 245 S.C. 200, 139 S.E.2d 908; 244 S.C. 95, 135 S.E.2d 620; 203 Kan. 783, 457 P.2d 34; 144 F. Supp. 5, aff'd.