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Gaskins v. Southern Farm Bureau Casualty Insurance Co.12/18/2000
and the causes of action for fraud, negligence, misrepresentation, unfair trade practices, and the intentional infliction of emotional distress.
II.
As to the Gaskins' causes of action for breach of the covenants of good faith and fair dealing and for wrongful adjustment pursuant to South Carolina Code Annotated Section 38-59-20 (1989), we affirm the trial court.
In Tadlock Painting Co. v. Maryland Cas. Co., our Supreme Court held an insured could assert a cause of action for the breach of the implied covenants of good faith and fair dealing against his insurance company. Tadlock Painting, 322 S.C. 398, 473 S.E.2d 52 (1996)(citing Nichols v. State Farm Mut. Auto. Ins. Co., 279 S.C. 336, 306 S.E.2d 616 (1983)(wherein the Court recognized the existence of a cause of action against an insurance company for bad faith refusal to pay first party benefits due under an insurance contract)). The elements of an action for breach of the covenants of good faith and fair dealing in an insurance contract are as follows:
1) the existence of a mutually binding contract of insurance between plaintiff and defendant;
2) a refusal by an insurer to pay benefits due under the contract;
3) resulting from the insurer's bad faith or unreasonable action in breach of an implied covenant of good faith and fair dealing in the contract;
4) that causes damage to the insured. See Cock-N-Bull Steak House, Inc. v. Generali Ins. Co., 321 S.C. 1, 6, 466 S.E.2d 727, 730 (1996) (emphasis added)(enumerating the elements of a claim for bad faith refusal to pay benefits under an insurance contract).
The Gaskins' complaint did not allege the existence of a contract between the Gaskins and Farm Bureau. Furthermore, South Carolina does not recognize a third party action for the bad faith refusal to pay insurance benefits. Kleckley v. Northwestern Nat'l Cas. Co., 338 S.C. 131, 526 S.E.2d 218 (2000). But see Ateyeh v. Volkswagen of Florence, Inc., 288 S.C. 101, 341 S.E.2d 378 (1986)(applying a narrow exception to this rule for a 'third-party' spouse under the necessaries doctrine). Accordingly, we affirm the trial court's dismissal of this cause of action. See I'On, L.L.C. v. Town of Mt. Pleasant, 338 S.C. 406, 526 S.E.2d 716 ( 2000); Rule 220(c), SCACR (an appellate court may affirm the trial court's order for any reason appearing in the record on appeal).
We also affirm the trial court's dismissal of the Gaskins' cause of action alleging wrongful adjustment pursuant to South Carolina Code Annotated Section 38-59-20 (1989)(The South Carolina Claims Practices Act). The Act provides relief for a third party victim of an improper claims practice. S.C. Code Ann. §§ 38-59-10 to -50 (1989 & Supp. 1999); Kleckley at 137, 526 S.E.2d at 221. Section 38-59-20 declares that a third party may pursue administrative action before the Chief Insurance Commissioner if an insurer inter alia " nowingly misrepresent to insureds or third-party claimants pertinent facts or policy provisions relating to coverages at issue or providing deceptive or misleading information with respect to coverages." S.C. Code Ann. § 38-59-20(1) (1989).
The Act does not create a private cause of action. See Swinton v. Chubb & Son, Inc., 283 S.C. 11, 320 S.E.2d 495 (Ct. App. 1984)(holding section 38-37-1110, the predecessor statute, recodified by 1987 Act No. 155, § 1 to section 38-59-20, did not allow a private cause of action). A cause of action for wrongful adjustment under section 38-59-20 only entitles the Gaskins to an administrative remedy. Therefore, we affirm the trial court's dismissal of the cause of action for wrongful adjustment. See I'On, 338 S.C.
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