922 S.E.2d 231
S.C. Ct. App.2025Background
- WestPoint Home succeeded to assets of WestPoint Stevens, a self-insured employer that entered bankruptcy in 2005; WestPoint deposited $1.8 million as security via an irrevocable letter of credit held by the South Carolina Workers’ Compensation Commission (the Commission).
- In August 2005 the Commission drew the full $1.8 million from the letter of credit and transferred the funds to the State Treasurer’s account; at the time and at trial the Commission had not paid claims equaling the full amount and had not needed the full amount.
- WestPoint sought accounting and return of funds; the circuit court upheld the Commission’s drawdown and its continued retention of funds because of possible latent asbestos claims; the court also found the Commission could retain funds despite the statute of repose issue.
- The Commission relied on its MOU and regulations permitting draws when proceeds are needed for payment or if a letter of credit is not replaced; its witnesses emphasized asbestos latency and the potential for future claims.
- The Court of Appeals reversed: it held the Commission improperly drew the full letter of credit because proceeds were not needed to pay pending claims, and it held the statutory two‑year exposure rule (§42‑11‑70) is a statute of repose that bars new pulmonary occupational‑disease claims after two years from last exposure, entitling WestPoint to return of unused funds plus earned interest; prejudgment interest was remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument (WestPoint) | Defendant's Argument (Commission) | Held |
|---|---|---|---|
| 1. Was Commission justified in drawing entire $1.8M though pending claims < deposit? | Draw was improper because funds were not needed to pay existing claims and the irrevocable letter could not be cancelled without Commission consent. | MOU/regulations authorized drawdowns at Commission discretion, and WestPoint disclaimed liability so Commission needed to secure funds. | Reversed — drawdown improper; Commission may draw only when proceeds are needed or letter is not replaced. |
| 2. May Commission retain unused portion indefinitely after repose period? | The statute of repose (§42‑11‑70) bars new pulmonary occupational‑disease claims two years after last exposure; unused funds must be returned. | No statute of repose shields against latent claims; potential asbestos claims justify retaining funds. | Reversed — §42‑11‑70 is a statute of repose; new claims are barred and WestPoint entitled to unused funds plus interest. |
| 3. Is WestPoint entitled to prejudgment interest on returned funds? | Seeks prejudgment interest; amount should account for any interest already returned to avoid double recovery. | Commission invokes sovereign immunity as a bar to prejudgment interest. | Remanded — circuit court to consider prejudgment interest and offset any interest already paid. |
Key Cases Cited
- Barnacle Broad., Inc. v. Baker Broad., Inc., 343 S.C. 140, 538 S.E.2d 672 (Ct. App. 2000) (procedural standard for declaratory judgment review)
- Peake v. S.C. Dep't of Motor Vehicles, 375 S.C. 589, 654 S.E.2d 284 (Ct. App. 2007) (plain‑language rule for statutory interpretation)
- Hodges v. Rainey, 341 S.C. 79, 533 S.E.2d 578 (Ct. App. 2000) (interpret statutes by their plain and unambiguous language)
- Vernon v. Harleysville Mut. Cas. Co., 244 S.C. 152, 135 S.E.2d 841 (1964) (express exceptions exclude other exceptions)
- Capco of Summerville, Inc. v. J.H. Gayle Const. Co., 368 S.C. 137, 628 S.E.2d 38 (2006) (distinguishing statute of limitations from statute of repose)
- School Bd. of the City of Norfolk v. U.S. Gypsum, 360 S.E.2d 325 (Va. 1987) (explaining statutes of repose run from an event separate from accrual of cause of action)