South Carolina Court of Appeals Finds that Exclusion for Injuries Suffered During Flight from Police or Commission of Felony Was Enforceable in Auto Accident Case

In a typical South Carolina car accident lawsuit, it is the injured driver or passenger who files suit. However, this is not always the case. Sometimes, an insurance company files what is called a “declaratory judgment action” in order to seek the court’s guidance as to the applicability and/or extent of coverage of a particular claim or set of claims. Such was the situation in a recent appellate case involving a fatal crash that allegedly followed a police chase in Anderson County, South Carolina.

Facts of the Case

In a case filed in the Anderson County Circuit Court and considered by the South Carolina Court of Appeals, the plaintiff was an automobile accident liability insurance company that sought declaratory relief following a fatal, one-vehicle accident that occurred in 2008. According to the plaintiff, its insured and two other individuals were riding as passengers in the vehicle at the time of the crash; one of the passengers was killed, and the insured and the other passenger were catastrophically injured. The driver, who was apparently not a party to the civil lawsuit filed by the plaintiff insurance company against the defendant insured and passengers, was the defendant in a separate criminal case in which he pled guilty to reckless homicide (a felony offense in South Carolina).

According to the plaintiff, the insurance policy in effect at the time of the accident had an exclusion for bodily injury caused by anyone who was operating the covered vehicle while committing a felony or fleeing from a law enforcement officer. The trial court found that the provisions at issue were unenforceable because (1) the insurance company had failed to inform the insured of the exclusions or otherwise place them conspicuously on the insurance policy; (2) the exclusions were ambiguous; and (3) the exclusions violated the state’s public policy of protecting innocent insureds,
namely the three passengers who were deemed not at fault in causing the collision.

Decision of the Court

The court of appeals reversed the lower court’s decision, holding that there was nothing in the exclusions at issue that violated the statutory schemes of Title 38 or Title 56 of the South Carolina Code, nor did any of the exclusions offend public policy. According to the court, so long as the mandatory minimum coverage limits were met, an insurer could provide reasonable limitations on optional coverage. Here, the insurer had tendered the mandatory coverage limits to the defendants but sought a declaration that it was not liable for anything above such amounts because the driver had been fleeing from the police at the time of the accident.

According to the court of appeals, there was no basis for the trial court’s finding that the flight-from-law enforcement and felony exclusions in the plaintiff’s policy were arbitrary and capricious. Rather, the exclusions were based not on the identity of the victims but on the conduct of the driver. To the extent there was a countervailing interest in protecting innocent passengers of a vehicle evading law enforcement, the appellate court found that the appropriate balance was struck by the compulsory insurance mandate. Accordingly, because the exclusions discouraged certain undesirable
behavior while at the same time preserving coverage for innocent victims in the amount deemed appropriate by the General Assembly, the court found that the exclusions were valid and enforceable.

Talk to a South Carolina Car Accident Attorney

If you need to speak to an experienced South Carolina car accident lawyer about a recent automobile accident, call the Patrick E. Knie Law Offices at 864-582-5118 and schedule an appointment in our Spartanburg or Greenville offices. We will be happy to talk to you about your case.

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