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Unisun Insurance Co. v. Schmidt6/15/1998
Appeal From Charleston County Larry R. Patterson, Circuit Court Judge
Heard April 7, 1998
REVERSED
This insurance coverage case requires us to decide whether a permissive occupant of a vehicle being driven by a non-permissive driver qualifies as an "insured" under the provisions of the owner's insurance policy. The trial court ruled in favor of the permissive occupant. We reverse.
After receiving strict instructions from her father not to let anyone else drive the car, January O'Neale took her mother's 1978 BMW and drove with her friend, Jennifer Hurst, to a party at the home of Christopher Schmidt on the evening of November 27, 1992. While the party was in progress, Schmidt and Hurst got into the car and later Schmidt drove off in it while Hurst was asleep in the backseat. Schmidt lost control and ran into a tree and Hurst was injured.
I.
Unisun brought a declaratory judgment action to establish that it was not liable on the policy it had issued to Schmidt's mother, because it excluded coverage for "any person using a vehicle without a reasonable belief that that person is entitled to do so." At trial, the jury found that at the time of the accident Schmidt "was using the BMW without a reasonable belief that he was entitled to do so," and that he "did not have permission from January O'Neale, express or implied, to use the BMW."
State Farm issued the policy covering the BMW. It denied liability based on the jury finding that Schmidt was a non-permissive user. Hurst then claimed that State Farm's denial of coverage rendered the BMW an "uninsured motor vehicle." As she was a permissive occupant, guest, or user of the BMW at the time of the accident, Hurst argued, she qualified as an insured under the uninsured motor vehicle provisions of State Farm's policy and under South Carolina law.
The trial court agreed. It found that, as a matter of law, Hurst was "a guest and/or a permissive occupant and/or a permissive user" of the BMW at the time of the accident. As such, the court reasoned, she was an insured under the State Farm. policy. Finally, because Schmidt was a non-permissive user, the court concluded that the BMW was an uninsured motor vehicle and Hurst could thus make a claim against State Farm.
On appeal, State Farm argues that Hurst's status as a guest, permissive occupant, or permissive user, does not make her an insured. Similarly, State Farm maintains the fact that it was able to avoid liability coverage--because Schmidt was a non-permissive user--does not mean that the car was an uninsured motor vehicle.
II.
The first issue to be addressed is whether or not Hurst was an insured. State Farm's policy defined an "insured," in the section of the policy relating to underinsured and uninsured motorist coverages, as follows:
1. you [i.e. the named insured], your spouse and relatives;
2. any other person while occupying or using your car, a newly acquired car or a trailer attached to either, if such vehicle is:
a. insured under the liability coverage; and
b. being used with your consent; and
3. any person to the extent he or she may recover damages under a state wrongful death statute because of the death of an insured under 1. or 2. above.
We agree with State Farm that Hurst does not come within the definition of an insured under the policy. Insurance contracts are subject to the same rules of interpretation that govern other types of contracts. See Sphere Drake Ins. Co. v. Litchfield, 313 S.C. 471, 438 S.E.2d 275 (Ct. App. 1993). Rather than straining to read insurance poli
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