South Carolina Law Does Not Require Punitive Damages to be Apportioned Pro Rata Between Bodily Injury and Property Damage in Split Limits UIM Policy

Most issues arising in a South Carolina automobile accident case can be handled in state court. Sometimes, however, a case is filed in federal court. When this happens, a state court may be asked to weigh in on a particular issue of South Carolina law.

This is especially likely in cases involving issues which have not previously been addressed specifically by the state courts.

Facts of the Case

In a recently considered declaratory judgment case, the defendant was a man who, along with his late wife, had been involved in an automobile accident caused by a drunk driver. At the time of the accident, the couple was traveling in a car owned by the late wife’s mother. After the wife passed away from injuries suffered in the accident, the drunk driver’s automobile liability insurance company tendered policy limits to the man as compensation for his personal injuries and his late wife’s injuries and wrongful death. The mother’s uninsured/underinsured motorist carrier also paid policy limits to the man. The man’s own UM/UIM carrier tendered UIM bodily injury limits, but it refused the man’s request for additional funds (to be paid from property damage coverage of the “split limits” policy) for potential punitive damages against the drunk driver.

Instead, the man’s UIM insurance carrier filed a declaratory judgment action in the federal district court for the District of South Carolina, seeking to establish that it was not liable for any additional monies under the property damage provision of the plaintiff’s UIM policy, regardless of whether the man was ultimately awarded punitive damages from the drunk driver. After the parties filed cross motions for summary judgment, the federal district court certified a question of law to the South Carolina Supreme Court.

Decision of the Court

At issue was whether, under South Carolina law, punitive damages were to be apportioned pro rata between bodily injury and property damage coverage when an insured sought coverage under a split limits policy. Although the insurance company argued that state law required such an apportionment, the South Carolina Supreme Court answered the question in the negative.

The court first noted that the South Carolina statutory scheme for UM/UIM coverage was silent on the issue of allocation. According to the court, if the South Carolina General Assembly had intended to require allocation of punitive damages, it could have done so with clear, express language. The court went on to hold that the due process limits of the Constitution did not require a pro rata apportionment of punitive damages in the instant case. With regard to the insurance company’s arguments regarding the contractual language of the UIM policy at issue, the court was of the opinion that this matter was more properly reserved for the federal district court were the insurance company’s lawsuit was pending, rather than the state supreme court. The court also rejected the insurance company’s argument that public policy required a pro rata apportionment, opining that this concern was best addressed by the South Carolina General Assembly.

Speak with an Attorney in Spartanburg or Greenville

If you have questions about a car accident case in South Carolina, call the Patrick E. Knie Law Offices at 864-582-5118 and ask for an appointment. We will be glad to schedule a free consultation for you so that you can learn more about your legal rights.

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