Respondent's Brief - Law Offices of Robert Hill

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Robert N. Hill. The Hyman Law Firm, LLP. Law Offices of Robert Hill. Post Office Box 1770. P.O. Box 51. Florence, SC 29503-1770. Newberry, SC 29108.
The State of South Carolina In the Supreme Court _________________________________________ Appeal from Williamsburg County Court of Common Pleas Clifton Newman, Circuit Court Judge _________________________________________ ________________________________________________________ Appellate Case No. 2011-193846 Op. No. 2011-UP-175 (S.C. Ct.App. filed April 18, 2011) ________________________________________________________

Thomas M. Carter, Debra Carter, and Christopher Michael Carter,...................................................................

Respondents

v. The Standard Fire Insurance Company and Frank L. Siau Agency, Inc., .............................................................

Defendants

Of whom the Standard Fire Insurance Company is the..

Petitioner

_______________________

Respondents’ Brief _______________________

William P. Hatfield The Hyman Law Firm, LLP Post Office Box 1770 Florence, SC 29503-1770 (843) 662-5000

Robert N. Hill Law Offices of Robert Hill P.O. Box 51 Newberry, SC 29108 (803) 405-1629

Attorneys for the Respondents

Table of Contents Table of Authorities........................................................................... ii Statement of the Issue...................................................................... 1 Statement of the Case....................................................................... 1 Standard of Review ......................................................................... 4 Argument.......................................................................................... 4 1.

The anti-stacking provision is void because § 38-77-160 entitles Class I insureds to stack UIM coverage.................

5

a. Class I insureds enjoy statutory portability...................

6

b. The statute’s text and purpose grant a right to stack....

8

c. The statute’s decades-long construction grants a right to stack................................................................................ 10 2.

Burgess is distinguishable because § 38-77-160 controls, the Carters are not free riders, and carriers can set rates.. 14 a. The statute governs how much UIM coverage must be offered ................................................................................ 14 b. The Carters are not free riders.........................................

15

c. Stacking is not unfair because automobile carriers can assess the risk and factor stacking into their rates......... 17 3.

Absent later legislation, legislative intent, once determined, is permanently settled...................................... 19

Conclusion........................................................................................

i

20

Table of Authorities Cases Am. Sec. Ins. Co. v. Howard, 315 S.C. 47, 431 S.E.2d 604 (Ct.App. 1993)............................................................................. 6, 7, 18, 19

Burgess v. Nationwide Mut. Ins. Co., 373 S.C. 37, 644 S.E.2d 40 (2007)................................................................... 14, 16, 17

Concrete Serv., Inc. v. United States Fid. and Guar. Co., 331 S.C. 506, 498 S.E.2d 865 (1998).......................................... 7

Edge v. State Farm Mut. Auto. Ins. Co., 366 S.C. 511, 623 S.E.2d 387 (2005)....................................................................... 17

Floyd v. Nationwide Mut. Ins. Co., 367 S.C. 253, 626 S.E.2d 6 (2005).................................................................... 4, 10

Gambrell v. Travelers Ins. Co., 280 S.C. 69, 310 S.E.2d 814 (1983).......................................................................................... 12, 13, 15

Garris v. Cincinnati Ins. Co., 280 S.C. 149, 311 S.E.2d 723 (1984)........................................................................................... 12, 13

Hogan v. Home Ins. Co., 260 S.C. 157, 194 S.E.2d 890 (1973). 6, 13 Kay v. State Farm Mut. Auto. Ins. Co., 349 S.C. 446, 562 S.E.2d 676 (Ct.App. 2002).................................................. 12, 13

Layton v. Flowers, 243 S.C. 421, 134 S.E.2d 247 (1964)........

20

Nakatsu v. Encompass Indem. Co., 390 S.C. 172, 700 S.E.2d 283 (Ct.App. 2010).................................................. 7, 13, 19

ii

Nationwide Mut. Ins. Co. v. Howard, 288 S.C. 5, 339 S.E.2d 501 (1985)................................................................................... 9, 12, 13, 19

Nationwide Mut. Ins. Co. v. Rhoden, 398 S.C. 393, 728 S.E.2d 477 (2012)...............................................................

1, 8, 14, 16

Ruppe v. Auto-Owners Ins. Co., 329 S.C. 402, 496 S.E.2d 631 (1998).......................................................................................... 11, 20, 21

South Carolina Farm Bureau Mut. Ins. Co. v. Mooneyham, 304 S.C. 442, 405 S.E.2d 396 (1991)......................................... 9, 11, 13, 19

State Farm Mut. Auto. Ins. Co. v. Horry, 304 S.C. 165, 403 S.E.2d 318 (1991)................................................................ 12

Therrell v. Jerry’s Inc., 370 S.C. 22, 633 S.E.2d 893 (2006)... 4 Vernon v. Harleyville Mut. Cas. Co., 244 S.C. 152, 135 S.E.2d 841 (1964)...............................................................

10

Wehle v. The South Carolina Retirement System, 363 S.C. 394, 11 S.E.2d 240 (2005)..........................................

19

Statutes S.C. Code Ann. § 38-77-20 (1987)............................................

10

S.C. Code Ann.§ 38-77-30(7) (1987)........................................

1, 4, 5, 6, 8, 18

S.C. Code Ann. § 38-77-160.....................................................

passim

iii

Statement of the Issue Standard Fire Insurance Company’s automobile policies prevent its Class I insureds from stacking all of their underinsurance motorist coverage (UIM).1 Do S.C. Code Ann.§ 38-77-30(7) (1987) and § 38-77160 (1987) render the anti-stacking provision void?

Statement of the Case An automobile wreck left Michael Carter permanently paralyzed. To help pay medical bills, he and his parents want to combine the UIM coverage on his car in the wreck with their UIM coverage from Standard Fire. Michael’s mother Debra bought the Standard Fire policy after a local agent quit selling Allstate policies.2 She wanted to maintain the same protection that the family had with Allstate and, effective February 2000, bought UIM coverage from Standard Fire.3 Standard Fire’s UIM endorsement has an anti-stacking provision that excludes UIM coverage for anyone:

Stacking is “the insured’s recovery of damages under more than one policy until all of his damages are satisfied or the limits of all available policies are met.” Nationwide Mut. Ins. Co. v. Rhoden, 398 S.C. 393, 400 n. 3, 728 S.E.2d 477, 481 n. 3 (2012). 1

2

R.p. 160 ll.8-22, 164 ll.9-21, 188 ll.8-14.

3

R.p. 52 ll.2-6, 170 ll.2-22, 189 ll.2-21, 194 ll.2-24, 302. 1

While “occupying”; or when struck by; any motor vehicle owned by you or any “family member”which is not insured for coverage under this policy.4 The endorsement ends, “If any provision of this endorsement conflicts with [South Carolina] law, it is changed to comply with the law.”5 The Carters annually renewed their UIM coverage with Standard Fire, raised the coverage limits, and paid increasingly expensive premiums.6 In 2006-2007, they had $250,000 UIM coverage on each of three cars, for UIM coverage totaling $750,000.7 During this time, Michael and his parents lived together.8 In 2006, Debra wanted him to get his own policy because he was getting his own car and she wanted to teach him responsibility.9 She switched him to an Allstate policy with $250,000 UIM coverage on a Dodge Charger that he and his parents purchased together.10

4

R.p. 338.

5

R.p. 346.

6

R.p. 213 ll.10-15, 302, 334, 348, 352, 354, 358.

7

R.p. 3-4, 358, 364.

8

R.p. 4, 206 ll.11-21.

9

R.p. 174 ll.3-19, 200 ll.6-12, 201 ll.20-23, 209 ll.3-7.

10

R.p. 207 ll.3-19, 400. 2

The agent handling the switch had never taken a child off of his parents’ policy while the family still lived together, and assured Debra that the family’s coverage would not change.11 Debra would not have switched had she been warned that the family could lose coverage, and explained that she wanted “full coverage” because “I wanted to make sure that I was totally protected real well.”12 “The only thing I would ask is to make sure that my family and whoever is driving the vehicle is totally protected, you know.”13 While in his Dodge, Michael was in a wreck that broke his neck in three places and permanently paralyzed him from the waist down.14 By August 2007, his medical bills totaled $666,573.95.15 Michael sued Bernie Collins, alleging that Collins was driving the Dodge when the wreck occurred, and sought Standard Fire’s UIM coverage.16 The company persuaded the trial court to apply the anti-stacking provision

11

R.p. 182 ll.4-23, 201 ll.2-5, 202 l.13 - 203 l.6.

12

R.p. 196 l.23 - 197 l.3, 212 l.1 - 213 l.3, 214 ll.12-19.

13

R.p. 206 ll.1-4.

14

R.p. 149 l.19 - 150 l.21.

15

R.p. 58 ¶ 10, R.p. 78 ¶ 11.

16

R.p. 37-41, 68-71. 3

but the Court of Appeals reversed, holding that the provision violates § 38-77-160.17 This Court granted certiorari.

Standard of Review This appeal turns on S.C. Code Ann. §§ 38-77-30(7) and 38-77-160. Questions of statutory construction are reviewed de novo. Therrell v.

Jerry’s Inc., 370 S.C. 22, 26 n. 3, 633 S.E.2d 893, 895 n. 3 (2006).

Argument The General Assembly enacted § 38-77-160 to benefit automobileaccident victims by providing them UIM coverage when their damages exceed the at-fault driver’s liability limits. Floyd v. Nationwide Mut.

Ins. Co., 367 S.C. 253, 260, 626 S.E.2d 6, 10 (2005). The Legislature requires that automobile insurers offer this coverage and set the amount of coverage that they “shall provide.” Section 38-77-160 reads: Such carriers shall also offer, at the option of the insured, underinsurance motorist coverage up to the limits of the insured liability coverage to provide coverage in the event that damages are sustained in excess of the liability limits . . . . If, however, an insured or named insured is protected by uninsured or underinsurance motorist coverage in excess of basic limits, the policy shall provide that the insured or named insured is protected only to the extent of the 17

R.p. 4-16; App. 3-4. 4

coverage he has on the vehicle involved in the accident. The General Assembly also defined the term “insured.” Class I insureds are “the named insured, and while resident in the same household, the spouse of any named insured and relatives of either . . ..” § 38-77-30(7). They are insured “while in a motor vehicle or otherwise.”

Id. In contrast, Class II insureds are insured only while in or using “the motor vehicle to which the policy applies.” Id. Standard Fire concedes both that § 38-77-160 prevails over conflicting insurance contracts and that case law on the statute says that Class I insureds are entitled to stack.18 It follows that it may not contract away this statutory right. The Court should reach this logical conclusion and decline the invitation to rewrite the legislation.

1. The anti-stacking provision is void because § 38-77-160 entitles Class I insureds to stack UIM coverage. The governing statutes’ text, purpose, and decades-long construction confirm that UIM stacking is controlled by statute and that carriers may not eliminate a Class I insured’s right to stack.

18

Petitioner’s Brief, pp. 22, 26. 5

a. Class I insureds enjoy statutory portability. Michael is Standard Fire’s Class I insured in that he is its named insureds’ resident relative.19 These insureds carry their insurance with them wherever they go because § 38-77-30(7) provides that they remain insured “while in a motor vehicle or otherwise.” This statutory portability protects Class I insureds while walking or while riding in anyone’s car, including their own. Standard Fire’s policy language improperly eliminates this statutory portability, thus shoving its Class I insureds into Class II. Four decisions strike similar attempts. In Hogan v. Home Ins. Co., 260 S.C. 157, 194 S.E.2d 890 (1973), the automobile policy excluded uninsured motorist coverage (UM) if a resident relative was injured in an automobile other than one insured under the policy. The Court struck the provision, reasoning in part that resident relatives are not Class II insureds who are limited to the policy on the vehicle in the wreck. They are Class I insureds who are, by statute, insured at all times and without regard to the activity in which they are engaged. Id. at 161-162, 194 S.E.2d at 891-892. Judge Bell later applied this rule in a UIM stacking case. In Am.

19

R.p. 4, 206 ll.11-21. 6

Sec. Ins. Co. v. Howard, 315 S.C. 47, 431 S.E.2d 604 (Ct.App. 1993), a man was injured on his motorcycle. He had UIM coverage on the motorcycle with one company and wanted to stack UIM coverage from a policy that another company issued to his wife on other vehicles. The trial court applied policy language that excluded UIM coverage if a family member was injured in a vehicle that he owned but did not insure under the policy. Id. at 52, 431 S.E.2d at 608. The Court of Appeals reversed, reasoning that UIM coverage is not limited to the use of the insured vehicle and cannot be so limited by policy provisions. It concluded that the insured was entitled to stack the UIM coverages from his wife’s policy on the at-home vehicles because he was a resident relative. Id. at 53-55, 431 S.E.2d at 608-610.20 In 2010, the Court of Appeals again struck policy language that likewise prevents stacking UIM coverage from different companies. The Court again reasoned the insured’s Class I status trumps the conflicting insurance provision. Nakatsu v. Encompass Indem. Co., 390 S.C. 172, 181, 700 S.E.2d 283, 288 (Ct.App. 2010). Most recently, this Court last November similarly refused to apply

Howard was overruled to the extent that it also read an ownership requirement into the statute. Concrete Serv., Inc. v. United States Fid. and Guar. Co., 331 S.C. 506, 498 S.E.2d 865 (1998). 20

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policy language that violated this State’s “well-settled” and “consistently reaffirmed” policy that UIM coverage is personal and portable. Rhoden, 398 S.C. at 398-399, 728 S.E.2d at 480. The Court concluded that resident relatives who did not own the vehicle involved in the wreck were entitled to the UIM coverage from the at-home vehicles – even though the vehicle in the wreck lacked such coverage. Standard Fire’s provision likewise violates its Class I insureds’ statutory right to portability. In the stacking context, this portability grants Class I insureds their dual status as an insured under both the policy on the vehicle involved in the wreck and under the separate policy on the at-home vehicles. Their status as insureds under both policies is what allows them to combine coverages from both policies.

b. The statute’s text and purpose grant a right to stack. The § 38-77-30(7) violation is not Standard Fire’s only violation. It also violates § 38-77-160 because it did not offer Michael UIM coverage to the extent of the UIM coverage on his Dodge in the wreck. Again, Michael is Standard Fire’s Class I insured because he is the named insureds’ resident relative.21 He also bought UIM protection in

21

R.p. 4, 206 ll.11-21. 8

excess of basic limits on his Dodge in the wreck.22 Because these conditions are met, the stacking sentence applies and provides: If, however, an insured or named insured is protected by uninsured or underinsurance motorist coverage in excess of basic limits, the policy shall provide that the insured or named insured is protected only to the extent of the coverage he has on the vehicle involved in the accident. S.C. Code Ann. § 38-77-160. This text belies Standard Fire’s various distinctions, including its argument that UM and UIM differ. While true in other ways, the stacking statute treats “uninsured or underinsurance motorist coverage in excess of basic limits” exactly the same. Id. Recognizing this, the Court has repeatedly held that both are governed by the same stacking rules. South Carolina Farm Bureau Mut. Ins. Co. v. Mooneyham, 304 S.C. 442, 445 n. 2, 405 S.E.2d 396, 397 n. 2 (1991); Nationwide Mut.

Ins. Co. v. Howard, 288 S.C. 5, 9, 339 S.E.2d 501, 503 (1985). Another disjunctive “or,” this one in the phrase “the policy shall provide that the insured or named insured is protected[,]” further shows that the statute applies to all insureds and not just named ones. And “shall provide” denotes a requirement – not an option – that the

22

R.p. 5, 400. 9

policy protect its insureds to the extent of the coverage that they have on the vehicle in the wreck. Section 38-77-160 also already restricts stacking to insureds who have a vehicle in the wreck and UIM coverage on that vehicle. The statute does not further require that Class I insureds buy all of their UIM coverage within the same policy or from the same company. Standard Fire may not create additional restrictions. Vernon v.

Harleyville Mut. Cas. Co., 244 S.C. 152, 157, 135 S.E.2d 841, 844 (1964)(“Where there is an express exception in a statute, all other exceptions which are not expressly set forth are excluded.”). Besides these plain terms, § 38-77-160 should be liberally construed to effect the legislative intent to provide UIM coverage to those who are injured so severely that their damages exceed the at-fault driver’s liability limits. Floyd, 367 S.C. at 260, 626 S.E.2d at 10-11; see also S.C. Code Ann. § 38-77-20 (“This chapter is to be liberally construed in order to achieve its purposes.”). The Carters’ statutory construction achieves this purpose. Standard Fire does not.

c. The statute’s decades-long construction grants a right to stack. Statutory text is not Standard Fire’s only obstacle. Unbroken decisions, rendered unanimously over decades, also block its path. 10

Ruppe summarizes this precedent: “Construing specific statutory language [in § 38-77-160], we have held that an insured is entitled to stack underinsured or uninsured coverage in an amount no greater than the amount of coverage on the vehicle involved in the accident [citation omitted]. To this extent, stacking cannot be contractually prohibited [citation omitted].” Ruppe v. Auto-Owners Ins. Co., 329 S.C. 402, 405, 496 S.E.2d 631, 632 (1998). This summary shows that the right to stack is statutory and may not be contracted away. The decisions that Ruppe relied on confirm the point. In one, the Court rejected Farm Bureau’s attempt to prevent UIM stacking if the car in the wreck had excess UIM coverage. The Court held that § 38-77160 is “the statute controlling [the insured’s] right to stack underinsured motorists benefits.” Mooneyham, 304 S.C. at 443-444, 405 S.E.2d at 397. It then read the statute’s “crucial sentence” to mean that “the [Class I] insured is entitled to stack underinsured motorist coverage from other policies in an amount equal to the coverage on the car involved in the accident.” Id. at 445, 405 S.E.2d at 398.

Ruppe also cited a decision that struck a carrier’s attempt to limit stacking policies from different companies. Nationwide tried to limit the amount of uninsured motorists coverage (UM) that its insured could

11

stack with UM coverage that another company had on the vehicle in the wreck. In voiding the limit, the Court noted that insurance contracts may not offer less protection than the statute requires. It then struck the limit on stacking because “[s]uch coverage is nowhere limited to the use of the insured vehicle, and cannot be so limited by the policy provisions.” Nationwide, 288 S.C. at 12, 339 S.E.2d at 504-505. This Court likewise held that Class I insureds can stack, and are entitled to stack, when it struck attempts to limit UIM coverage by the amount of the at-fault driver’s liability coverage. Garris v. Cincinnati

Ins. Co., 280 S.C. 149, 155, 311 S.E.2d 723, 727 (1984)(explaining how “the legislature made clear its intent” that UIM coverage “can be stacked.”); Gambrell v. Travelers Ins. Co., 280 S.C. 69, 73-74, 310 S.E.2d 814, 817 (1983)(construing the statute to “hold that [the insured] is entitled to stack her underinsured motorist coverage. . ..”).23 More recently, the Court of Appeals also struck a policy provision that limited UIM stacking to an amount less than the statute requires.

Kay v. State Farm Mut. Auto. Ins. Co., 349 S.C. 446, 562 S.E.2d 676 (Ct.App. 2002).

The Legislature briefly overruled Garris and Gambrell on other points. See State Farm Mut. Auto. Ins. Co. v. Horry, 304 S.C. 165, 403 S.E.2d 318 (1991)(explaining the history). 23

12

Standard Fire distorts this precedent, arguing that the right to stack is not really statutory. The cases say on their face that § 38-77-160 controls the ability to stack UIM coverage and ground the right to stack in the statute. In Garris, for example, the Court noted that it prohibited stacking before the statute changed the law. Garris, 280 S.C. at 155. n.1, 311 S.E.2d at 727 n.1. Standard Fire wants to resurrect the ability to prohibit stacking – despite the statute changing the law. Standard Fire also argues that the cases say only that the statute allows or permits stacking. The cases say that the statute allows or permits stacking to strike limits on an insured’s ability to stack. So too here. Standard Fire may not prevent what the statute allows. It may not revoke the General Assembly’s permission to stack. Besides, the “shall provide” clause in § 38-77-160 reads like a requirement. Lastly, Standard Fire begs the question by arguing that the Court has never addressed stacking when coverage was validly excluded. This wrongly assumes that its provision is valid. Hogan, Howard, and

Nakatsu hold that such exclusions are not valid, but void. Mooneyham, Nationwide, Garris, Gambrell, and Kay strike similar attempts to limit stacking. If one may not limit, it may not eliminate. Eliminating stacking is the greater statutory violation.

13

2. Burgess is distinguishable because § 38-77-160 controls, the the Carters are not free riders, and carriers can set rates. Beyond its misplaced distinctions, Standard Fire’s major theme is that Burgess v. Nationwide Mut. Ins. Co., 373 S.C. 37, 644 S.E.2d 40 (2007), blesses the policy language that Standard Fire implemented years before Burgess was rendered. It is wrong.

a. The statute governs how much UIM coverage must be offered. Section 38-77-160 did not literally apply in Burgess because the insured was not trying to stack. Id. at 41, 644 S.E.2d at 42. In contrast, the statute literally applies here because the Carters seek to stack UIM coverage.24 The statute, being applicable, controls. See Rhoden, 398 S.C. at 401 n. 4, 728 S.E.2d at 481 n. 4 (“[t]he primary source of the declaration of the public policy of the state is the General Assembly [, and] the courts assume this prerogative only in the absence of legislative declaration [citation omitted].”). The statute also answers Standard Fire’s broader point that UIM coverage must be offered but is not required. As an analogy, an automobile purchase is also voluntary. The law still requires seatbelts.

Standard Fire’s citations in its brief at page 27 are as distinguishable. None of these cases dealt with the statute’s sentence on stacking. 24

14

Offers to sell a car must offer to sell one with seatbelts. The same is true here. Drivers do not have to buy UIM coverage. But offers to sell UIM coverage must offer to sell the amount of coverage that the statute describes. See Gambrell, 280 S.C. at 72, 310 S.E.2d at 816 (“An insurance policy must provide the minimum coverage required by statute [citation omitted]. The portions of [the statute] provide that underinsurance motorist coverage is not required but must be offered to the insured. Once the underinsurance coverage has been offered and accepted, the insurer may not replace one with the other.”). Again, Standard Fire’s policy violates § 38-77-160 because its required offer of UIM coverage does not offer coverage that the statute says it “shall provide.”

b. The Carters are not free riders. riders Arguing that UIM coverage is voluntary is also misplaced because the Carters bought all of the coverage that they seek to stack – including coverage on the Dodge in the wreck.25 This purchase shows that Burgess favors them, not Standard Fire.

Burgess agreed with the Court of Appeals that UIM coverage is

25

R.p. 364, 396, 400. 15

generally portable, meaning that it follows the insured rather than the vehicle. Burgess, 373 S.C. at 41, 644 S.E.2d at 42-43. The Court further noted “the legislative intent, in a stacking situation, to bind the insured to the amount of UIM coverage he chose to purchase in the policy covering the vehicle involved in the accident.” Id. It then reasoned that Burgess had zero UIM coverage from the at-home vehicles precisely because he had zero UIM coverage on the vehicle in the wreck. This reasoning and legislative intent favor Michael. Under it, he enjoys $250,000 in personal and portable UIM coverage from each of the three at-home vehicles precisely because he chose to purchase $250,000 UIM coverage in the policy on his Dodge in the wreck. And Standard Fire’s sale of its UIM benefits created Michael’s status as a Class I insured entitled to stack. This view synthesizes three strands of case law. Michael’s status as Traveler’s Class I insured satisfies the § 38-77-160 cases without overruling or distorting any of them. UIM coverage also remains personal and portable, thus satisfying the Rhoden Court’s concern. And the UIM coverage on the Dodge in the wreck satisfies the Burgess Court’s concern about free riders. The Carters are not free riders – all of their vehicles have UIM coverage.

16

Standard Fire’s contrary rule satisfies none of these three lines of authority: the stacking statute must be altered, and portability destroyed, even though the Carters bought all of the UIM coverages that they seek to stack.

c. Stacking is not unfair because automobile carriers assess the risk and factor stacking into their rates. Standard Fire’s repeated citations to Burgess fail to mention the paragraph questioning an insurer’s ability to assess risks. While Standard Fire waived any contention about this, by not arguing it in its opening brief, the Carters are compelled to explain how carriers may factor stacking into their rates. In 1997, the General Assembly granted carriers flexibility in setting rates. See Edge v. State Farm Mut. Auto. Ins. Co., 366 S.C. 511, 515 n. 3, 623 S.E.2d 387, 390 n. 3 (2005)(describing the older rate system and noting that the Legislature overhauled the system in 1997); S.C. Code § 38-73-910 (D)(1997) (statute as amended by 1997 S.C. Act No. 154 § 4)(granting automobile carriers flexibility in setting rates). This flexibility allowed Standard Fire to factor stacking into its rates years before the Carters bought their first Standard Fire policy. In exercising this flexibility, Standard Fire had to know about this 17

State’s law on resident relatives. Hogan held in 1973 that carriers may not limit a resident relative’s statutory portability. Howard likewise held in 1993 that carriers may not block a resident relative’s ability to stack UIM coverage. Standard Fire could thus expect that its language also violates the law – and included a Conformity to Statute provision to cover the violation.26 Standard Fire likewise had to know that dropping a relative’s name off of a policy does not by itself alter his or her status as a Class I insured entitled to stack. Until they change residence, relatives remain Class I insureds. S.C. Code Ann. § 38-77-30(7). And the stacking statute protects both the “insured or named insured,”again showing that resident relatives are protected whether named or not. S.C. Code Ann. § 38-77-160. Finally, Standard Fire can easily identify the resident relatives who pose these risks. All it has to do is ask its named insureds to list their relatives who live with them and what they drive. It is not unfair to ask an insurance company to assess easily identifiable risks. It is not unfair to apply the same law on stacking that has applied for decades to all companies that sell automobile

26

R.p. 346. 18

policies in South Carolina. It is unfair not to, and would thwart the legislative intent to protect severely-injured wreck victims.

3. Absent later legislation, legislative intent, once determined, is permanently settled. Stare decisis is Standard Fire’s last obstacle in that “[l]egislative intent, once determined, is ‘permanently settled’ absent subsequent action by the General Assembly to effect a change in the statutory law.”

Wehle v. The South Carolina Retirement System, 363 S.C. 394, 403, 11 S.E.2d 240, 244 (2005). The Court explained: “It is manifestly in the public interest that the law remain permanently settled. Especially is this so in the construction of statutes, for if any change in the statutory law is desired, the General Assembly may readily accomplish it [citation omitted].” Id. at 402, 611 S.E.2d at 244. This Court and the Court of Appeals have repeatedly held – in unanimously rendered decisions – that the Legislature intended that Class I insureds stack multiple policies. Mooneyham, 304 S.C. at 445, 405 S.E.2d at 398; Nationwide, 288 S.C. at 9-12, 339 S.E.2d at 502-504;

Howard, 315 S.C. at 55-56, 431 S.E.2d at 609-610; Nakatsu, 390 S.C. at 181, 700 S.E.2d at 288. These decisions are part of a broader body of law that began with Hogan in 1973, include Garris in 1984, and 19

continued long after the General Assembly in 1987 repealed the former statute and adopted it verbatim in § 38-77-160. In particular, this Court in 1998 announced unequivocally that UIM stacking cannot be prohibited contractually. Ruppe, 329 S.C. at 405, 496 S.E.2d at 632. The General Assembly did not sit idly by during these decades. It recodified the statute verbatim, and then twice amended it, without altering this right to stack. See S.C. Code Ann. § 38-77-160, Official History. Stare decisis is thus at its highest. Layton v. Flowers, 243 S.C. 421, 423-424, 134 S.E.2d 247, 247-248 (1964)(holding that “it would exceed the bounds of proper judicial restraint” to overturn a construction of a statute that was reenacted and included in successive codes, all without significant amendment).

Conclusion Michael is permanently paralyzed. He and his parents cannot afford his ongoing medical bills, and for help turned to their UIM coverages rather than the taxpayers. The Legislature protected Michael and others like him who purchase UIM coverage and are injured so severely that their damages exceed the at-fault driver’s liability limits. Unbroken decisions rendered over decades hold that this statutory protection includes a Class I insured’s right to stack. 20

All Michael seeks is coverage that § 38-77-160 says Standard Fire “shall provide” and that Ruppe says “cannot be contractually prohibited.” Ruppe, 329 S.C. at 405, 496 S.E.2d at 632. If Standard Fire wants to change this law, let its lobbyists pursue new legislation. In the meantime, the Court should affirm. Respectfully submitted, ________________________ Robert N. Hill Law Offices of Robert Hill P.O. Box 51 Newberry, SC 29108 (803) 405-1629 William P. Hatfield The Hyman Law Firm, LLP Post Office Box 1770 Florence, SC 29503-1770 (843) 662-5000 Attorneys for the Respondents

21