STATE FARM AUTO INS. v. RICHARDSON
8/23/1993
This is a declaratory judgment action. State Farm Mutual Automobile Insurance Company (State Farm) contends that the trial judge erred in ruling that a clause in an automobile insurance policy which prevents a claimant from stacking
I. FACTS
David and Patricia Richardson (Richardsons) incurred medical expenses in excess of $20,000 after their minor child was injured in a bicycle-automobile collision. The Richardsons filed a claim for PIP benefits under two State Farm automobile insurance policies that each carried a $10,000 maximum medical payment provision. State Farm paid $10,000 under one policy but denied payment on the other based on the following language in its policy:
If two or more policies issued by us to you,
your spouse, or your relatives provide vehicle
Medical Payments Coverage and apply to these
same bodily injuries sustained;
(a) while occupying a non-owned car, a
temporary substitute car, or
(b) as a pedestrian,
the total limits of liability under all such
policies shall not exceed that of the policy
with the highest limit of liability.
(Emphasis added).
The Richardsons brought this declaratory judgment action, claiming that State Farm's refusal to pay PIP benefits under more than one policy amounted to set-off of one policy against another and, therefore, violated section 38-77-145. The trial judge agreed and ordered State Farm to pay the Richardsons $10,000 under the second policy.
II. DISCUSSION
State Farm contends that the disputed language in its policy comprises an anti-stacking clause rather than a set-off within the meaning of 38-77-145. We agree.
Section 38-77-145 provides:
There is no personal injury protection (PIP)
coverage mandated under the automobile
insurance laws of this State. Any reference
to personal injury protection in Titles 38 or
56 or elsewhere is deleted. If an insurer
sells no-fault insurance coverage which
provides personal injury protection, medical
payment coverage, or economic loss coverage,
the coverage must not be assigned or subrogated
and is not subject to a set-off. (Emphasis
added).
Prior to the passage of Act No. 148, 1989 S.C. Acts 427, the Legislature allowed a tortfeasor to reduce his liability to a claimant by the amount of PIP benefits received by the claimant. See S.C. Code Ann. ยง 38-77-290(f) (1989). We termed this tortfeasor liability reduction a "set-off" in Moultrie v. North River Ins. Co., Inc., 272 S.C. 53, 249 S.E.2d 158 (1978).
In 1989, the Legislature made sweeping reforms in automobile insurance law. See Act No. 148, 1989 S.C. Acts 427. In section 57 of that Act, the Legislature repealed the tortfeasor's statutory "set-off" authorized by section 38-77-290(f). See 1989 S.C. Acts at 513. Concurrently, in section 34 of Act 148, the Legislature expressly provided that PIP coverage was not subject to a "set-off." See 1989 S.C. Acts at 470. In our view, the Legislature intended for the "set-off" prohibition in section 34 of Act 148 to refer to the statute allowing reduction of a tortfeasor's liability which was repealed in section 57 of Act 148. Accordingly, we find that the "set-off" prohibited by section 34 of Act 148, now codified in section 38-77-145, is the tortfeasor's reduction in liability formerly allowed by section 38-77-290(f). This finding is consistent with the Legislature's decision to make
An elementary and cardinal rule of statutory construction is that the Court must ascertain and effectuate the legislature's intent. Burns v. State Farm Mut
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