819 S.E.2d 124
S.C.2018Background
- Fatal 2008 tractor-trailer collision; wrongful-death suit against multiple tortfeasors settled with stipulated damages of $800,000.
- Insolvent primary insurer (Aequicap) triggered coverage from the South Carolina Property & Casualty Insurance Guaranty Association (the Guaranty), whose statutory obligation is limited to $300,000 per claim.
- Claimants (Respondents) recovered $376,622 from other sources (insurance payments, tortfeasor carrier, workers' compensation); parties stipulated that amount as the setoff.
- Dispute: whether the Guaranty’s required setoff applies to the claimant’s total damages ($800,000) or to the Guaranty’s $300,000 statutory cap—i.e., whether the Guaranty owes any remaining amount.
- Trial court and court of appeals held the setoff reduces the total claim (leaving $423,378 in damages, of which the Guaranty must pay its $300,000 cap); Supreme Court affirms, finding the Act ambiguous but adopting that construction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether amounts recovered from other insurers/tortfeasors are offset against the claimant's total damages or against the Guaranty's $300,000 statutory cap | Buchanan: setoff applies to total damages ($800,000), leaving unpaid damages of $423,378; Guaranty therefore owes the $300,000 cap | Guaranty: apply the $300,000 cap first, then offset recoveries against that cap, eliminating any Guaranty liability | Court: statute ambiguous but properly construed to offset recoveries from the claimant's total damages (not from the Guaranty's $300,000 cap); Guaranty must pay $300,000 |
Key Cases Cited
- S.C. Prop. & Cas. Ins. Guar. Ass'n v. Carolinas Roofing & Sheet Metal Contractors Self-Ins. Fund, 315 S.C. 555, 446 S.E.2d 422 (1994) (describing Guaranty’s purpose to protect insureds of insolvent insurers)
- Hudson ex rel. Hudson v. Lancaster Convalescent Ctr., 407 S.C. 112, 754 S.E.2d 486 (2014) (Guaranty’s liability is derivative of insolvent insurer’s liability)
- S.C. Prop. & Cas. Ins. Guar. Ass'n v. Brock, 410 S.C. 361, 764 S.E.2d 920 (2014) (Guaranty is creature of statute; duties controlled by Act)
- Crescent Mfg. Co. v. Tax Comm'n, 129 S.C. 480, 124 S.E. 761 (1924) (statutory provisions must be read to give effect to all parts without destroying the statute’s intent)
- CFRE, LLC v. Greenville Cty. Assessor, 395 S.C. 67, 716 S.E.2d 877 (2011) (statutory language should not be rendered surplusage)
- Arizona Prop. & Cas. Ins. Guar. Fund v. Herder, 156 Ariz. 203, 751 P.2d 519 (1988) (similar-setoff provision construed to reduce claimant's total damages by recoveries)
- Connecticut Ins. Guar. Ass'n v. Union Carbide Corp., 217 Conn. 371, 585 A.2d 1216 (1991) (reduction prevents double recovery; setoff applies to total damages)
- Blackwell v. Pennsylvania Ins. Guar. Ass'n, 390 Pa.Super. 31, 567 A.2d 1103 (1989) (contrasting rule: construed setoff against statutory cap)
- Antley v. New York Life Ins. Co., 139 S.C. 23, 137 S.E. 199 (1927) (discussing when courts may choose among conflicting precedents)
- Donze v. General Motors, LLC, 420 S.C. 8, 800 S.E.2d 479 (2017) (framework for deciding novel legal questions when not governed by statute or precedent)