Allied Property and Casualty Insurance Company v. Kirk
8:23-cv-03121
| D.S.C. | Mar 25, 2025Background
- Allied Property and Casualty Insurance Co. filed a declaratory judgment action seeking clarification of coverage under a homeowners insurance policy issued to Christina Kirk (the Kirks), after a motor vehicle accident at their residence left Hunter Lawrence paralyzed.
- At a party at the Kirks' home, guests consumed large amounts of alcohol, including minors; Lawrence was injured as a passenger when another guest crashed a car after the party.
- Lawrence sued the Kirks in state court for negligence and social host liability related to furnishing alcohol to minors and to the driver.
- Allied sought a declaration that it had no duty to defend or indemnify the Kirks under their homeowners policy due to motor vehicle liability and criminal acts exclusions.
- Both Lawrence and Allied filed cross-motions for summary judgment; the magistrate judge recommended judgment for Allied on the motor vehicle exclusion.
- Lawrence objected to the magistrate report; the district court reviewed those objections and granted summary judgment for Allied, finding coverage excluded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the motor vehicle exclusion bar coverage? | Exclusion does not apply; even if it does, certain damages are still covered or exclusion is void as against public policy. | Exclusion applies: accident arose out of use/operation of unregistered vehicle required to be registered. | Exclusion applies; no coverage. |
| Does the location or registration status of the vehicle affect coverage? | Claim: car not registered but within statutory grace period, so exclusion does not apply. | Car lacked both registration and temporary permit; grace period is only for vehicles with temporary permit. | Registration required and was absent; exclusion applies. |
| Does endorsement for personal injury coverage remove the exclusion? | Endorsement removes exclusion and is ambiguous, so should be construed in favor of coverage. | Endorsement only modifies exclusions for listed personal injury offenses—not for motor vehicle liability. | Endorsement does not apply; exclusion stands. |
| Are any damages not arising from bodily injury or property damage covered? | Non-bodily injury/property damage claims survive exclusion. | No: exclusion applies to occurrence, regardless of type of damage. | No such damages covered; exclusion precludes all claims from accident. |
Key Cases Cited
- Auto Owners Ins. Co. v. Rollison, 663 S.E.2d 484 (S.C. 2008) (insurance policies interpreted as contracts; plain language governs)
- Bell v. Progressive Direct Ins. Co., 757 S.E.2d 399 (S.C. 2014) (plain meaning standard for insurance policies)
- Diamond State Ins. Co. v. Homestead Indus., Inc., 456 S.E.2d 912 (S.C. 1995) (courts cannot expand insurance coverage beyond policy terms)
- MGC Mgmt. of Charleston, Inc. v. Kinghorn Ins. Agency, 520 S.E.2d 820 (S.C. Ct. App. 1999) (exclusion applies to occurrence, not type of damages)