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Peterson v. West American Insurance Co.6/1/1999
Lela Peterson v. West American Insurance Co.
Appeal From Greenville County
C. Victor Pyle, Jr., Circuit Court Judge
Submitted May 11, 1999
AFFIRMED
This is an insurance case involving the question whether automobile coverage was effectively cancelled by the policyholder in the absence of notice to the South Carolina Department of Highways and Public Transportation (the Highway Department). Lela Peterson's son, Steve Tarver, was killed while riding in a car driven by E. Michael Galloway. The car belonged to Margaret Webb Walker. Peterson sought actual and punitive damages from West American Insurance Company, Walker's insurance carrier. The circuit court granted West American summary judgment, finding Walker had voluntarily cancelled the insurance policy prior to the date of the automobile accident. Peterson appeals, arguing the cancellation was not effective in the absence of notice to the Highway Department. We affirm.
FACTUAL/PROCEDURAL BACKGROUND
Walker obtained an automobile insurance policy on November 23, 1990 from West American through the Abercrombie Insurance Agency. The policy was for the stated six-month term of November 23, 1990 to May 23, 1991.
On or about November 27, 1990, Walker gave her car to Galloway, a neighbor, so that he could repair the car. Galloway took possession of the car and never returned. On December 12, 1990, Walker reported her car stolen to the Simpsonville Police Department. Walker spoke with an Abercrombie agent on February 15, 1991 and sought to cancel her policy. West American issued a cancellation notice and sent Walker a refund check on February 25, 1991. West American designated November 28, 1990 as the policy termination date on the notice. However, the Highway Department never received a Form FR-4, Notice of Cancellation of Policy.
On April 14, 1991, Galloway wrecked Walker's car in a single-car accident in Mississippi. Galloway, who had been drinking, lost control of the car and hit a tree. Steve Tarver, a passenger in the back seat of the car, died as a result of his injuries in the wreck.
Peterson, Tarver's mother, was appointed administratrix of Tarver's estate. Prior to the appointment, Peterson's attorney informed Walker of the wreck and sought information on Walker's insurance company. Walker referred the letter to West American. West American declined coverage, asserting Walker cancelled her policy prior to the accident. Thereafter, on several occasions West American suggested Walker retain personal counsel and advised her they would not provide her with a defense.
Peterson's attorney sought the limits of the policy from West American. West American continued to refuse liability, claiming Galloway stole the car and Walker cancelled the policy prior to the accident.
Peterson brought a wrongful death action against Galloway, alleging he drove the car in excess of 100 m.p.h. while intoxicated before crashing, and a negligent entrustment action against Walker. In 1993, the Mississippi circuit court awarded a default judgment against Walker and Galloway for $544,350. South Carolina circuit court Judge McKellar enrolled the foreign judgment in South Carolina for the principal amount plus post-judgment interest of $105,231.07.
Walker assigned her claims against West American to Peterson on July 5, 1995. Peterson then sued West American for bad faith refusal to pay benefits. Peterson alleged West American failed to perform its duty to defend Walker under the terms of the policy, resulting in the default judgment; failed to properly cancel the policy under the law; and failed to pay benefits du
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