Court of Appeals of Georgia, First Division

November 1, 2022, Decided

A22A0899.

Reporter

2022 Ga. App. LEXIS 517 *; 2022 WL 16569408

FARID et al. v. GASKELL et al.

Notice: THIS OPINION IS UNCORRECTED AND SUBJECT TO REVISION BY THE COURT.

Disposition: Judgment affirmed.

Core Terms

truck, coverage, settlement agreement, uninsured, carrier, tractor trailer, limits, settlement, claimant, voluntary payment, summary judgment, collision, exhaust, surety, liability policy, motor carrier, trial court, reservation-of-rights, endorsement, scheduled, stipulate, supplied, insurer

Case Summary

Overview

HOLDINGS: [1]-Because the driver failed to exhaust the truck driver’s employer’s insurer’s limits as required by O.C.G.A.  33-24-41.1, the driver was precluded from making any recover from his uninsured/underinsured motorist (UM) carrier; [2]-The UM carrier was properly granted summary judgment because if the truck was uninsured, the driver failed to demonstrate that and if it was not uninsured, the driver’s agreement to settle for less than the employer’s insurer’s policy limits and release the insurer from its liability policy and obligations meant that the driver did not comply with the exhaustion requirements of § 33-24-41.1 before seeking UM payment.

Outcome

Judgment affirmed.

LexisNexis® Headnotes

Civil Procedure > Judgments > Summary Judgment > Burdens of Proof

Civil Procedure > … > Summary Judgment > Appellate Review > Standards of Review

Civil Procedure > Judgments > Summary Judgment > Entitlement as Matter of Law

Civil Procedure > … > Summary Judgment > Burdens of Proof > Movant Persuasion & Proof

Civil Procedure > … > Summary Judgment > Burdens of Proof > Nonmovant Persuasion & Proof

HN1  Summary Judgment, Burdens of Proof

Under Georgia law, summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Where a defendant moving for summary judgment discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue. In its de novo review of the grant of a motion for summary judgment, an appellate court must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.

Insurance Law > Claim, Contract & Practice Issues > Reservation of Rights > Notice to Insured Parties

Insurance Law > Claim, Contract & Practice Issues > Estoppel & Waiver > Reservation of Rights

HN2  Reservation of Rights, Notice to Insured Parties

A reservation-of-rights letter is not conclusive proof of a lack of insurance coverage. A reservation of rights is a term of art designed to allow an insurer to provide a defense while still preserving the option to later litigate and ultimately deny coverage; a reservation of rights is only available to an insurer who undertakes a defense while questions remain about the validity of the coverage.

Business & Corporate Compliance > … > Contracts Law > Types of Contracts > Settlement Agreements

Contracts Law > Contract Interpretation > Intent

Civil Procedure > … > Settlement Agreements > Enforcement > Breach of Contract Actions

Civil Procedure > Appeals > Standards of Review > Questions of Fact & Law

HN3  Types of Contracts, Settlement Agreements

A settlement agreement is a contract subject to the usual rules of contract construction. Construing the language of a contract presents a question of law for the court, unless the language presents an ambiguity that cannot be resolved by the rules of construction. The cardinal rule of construction is to ascertain the contracting parties’ intent, and where the terms of a written contract are clear and unambiguous, the court will look to the contract alone to find the intention of the parties. To determine the intent of the parties, all the contract terms must be considered together in arriving at the construction of any part, and a construction upholding the contract in whole and every part is preferred.

Insurance Law > … > Coverage > Underinsured Motorists > Exhaustion Requirements

Insurance Law > … > Coverage > Uninsured Motorists > Exhaustion Requirements

Insurance Law > … > Coverage > Underinsured Motorists > Mandatory Coverage

Insurance Law > … > Coverage > Underinsured Motorists > Liens & Setoffs

Insurance Law > … > Coverage > Underinsured Motorists > Stacking Provisions

HN4  Underinsured Motorists, Exhaustion Requirements

Pursuant to O.C.G.A. § 33-24-41.1, exhausting available liability coverage is a condition precedent to an uninsured/underinsured motorist (UM) claim. As a result, a carrier must offer and a claimant must accept an amount equal to the limit stated in the policy, not an amount less than the limit stated in the policy. Therefore, a claimant may seek recovery under a UM policy when the claimant’s damages exceed the limits of the tortfeasor’s liability policy, after first recovering those liability limits from the tortfeasor through settlement.

Headnotes/Summary

Headnotes

Georgia Advance Headnotes

GA(1) (1)

Insurance Law.  > Motor Vehicle Insurance.  > Uninsured Motorists Coverage.

The only support for the driver’s position in seeking uninsured/underinsured motorist benefits was a reservation-of-rights letter from a third-party administrator on the truck driver’s employer’s insurer’s behalf. However, such a reservation-of-rights letter was not conclusive proof of a lack of coverage.

GA(2) (2)

Insurance Law.  > Motor Vehicle Insurance.  > Coverage Generally.

Whether the insurer’s payment was made pursuant to an MSC-90 endorsement was not relevant because the Agreement released the insurer under both the policy and the MCS-90 endorsement.

GA(3) (3)

Insurance Law.  > Motor Vehicle Insurance.  > Uninsured Motorists Coverage.

The driver’s failure to exhaust the employer’s insurer’s limits as required by OCGA § 33-24-41.1, precluded any recovery from the driver’s uninsured/underinsured motorist carrier.

GA(4) (4)

Insurance Law.  > Motor Vehicle Insurance.  > Uninsured Motorists Coverage.

 If the truck was in fact uninsured, the driver failed to demonstrate that it was uninsured; therefore, the driver could not avail himself of the provisions of OCGA § 33-7-11. If the truck was insured, the Agreement clearly and unambiguously released the insurer from its motor carrier liability policy and MCS-90 obligations for an amount less than the $1,000,000 policy limit, meaning that the Agreement did not comply with the exhaustion requirements of OCGA § 33-24-41.1 before the driver sought additional payment from the uninsured/underinsured motorist carrier and it was entitled to summary judgment.

Judges:  [*1] HODGES, Judge. Barnes, P. J., and Brown, J., concur.

Opinion by: HODGES

Opinion

Hodges, Judge.

Mohammad Farid sued tractor trailer driver Beau Anthony Gaskell and a variety of other entities, including EMBA Transportation, Inc. (Gaskell’s employer) and Knight Specialty Insurance Company (EMBA’s insurer),¹ after Gaskell’s tractor trailer caused a motor vehicle collision in which Farid and his two minor children were injured. Farid also served a copy of his complaint on Mid-Century Insurance Company (“Mid-Century”), his uninsured/underinsured motorist (“UM”) insurance carrier. Farid eventually settled his claims against Gaskell, EMBA, and Knight for a total of $450,000, and Mid-Century moved for summary judgment, arguing that Farid failed to satisfy the conditions of OCGA § 33-24-41.1 to exhaust Knight’s available $1,000,000 primary insurance coverage before proceeding against a UM carrier. The Superior Court of Rockdale County agreed and granted Mid-Century’s motion, and Farid appeals. Finding no error, we affirm.

HN1 Under Georgia law,

[s]ummary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any [*2]  material fact and that the moving party is entitled to judgment as a matter of law. Where a defendant moving for summary judgment discharges this burden, the nonmoving party cannot rest on its pleadings, but rather must point to specific evidence giving rise to a triable issue. … In our de novo review of the grant … of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.

(Citations and punctuation omitted.) Barko Response Team, Inc. v. Sudduth, 339 Ga. App. 897, 898 (795 SE2d 198) (2016). So viewed,² the record reveals that Farid and his two minor children were traveling southbound on Interstate 75 in Cobb County on September 10, 2018, when a tractor trailer driven by Gaskell suddenly changed lanes and struck a 2015 Kia, which then struck Farid’s vehicle, causing it to overturn. As a result, Farid and his passengers sustained injuries.

According to Farid’s counsel’s allegations,³ Gaskell “quit and had been terminated” by prior to the collision. Farid’s counsel claimed that Gaskell had been instructed to leave his truck “where it stood out on the road[,]” but that Gaskell did not trust the dispatcher not to report the truck abandoned and, instead, was driving the [*3]  truck to his residence in Georgia. In addition, Farid’s counsel alleged that the truck was not scheduled on EMBA’s insurance policy with Knight. A declarations page in the record demonstrates that, on the date of the collision, EMBA maintained a motor carrier liability policy issued by Knight in the amount of $1,000,000 covering 67 vehicles, but neither EMBA’s policy issued by Knight, nor a schedule of covered vehicles, is included in the record.

Farid sued Gaskell, EMBA, and Knight for damages. In an amended complaint that added Knight as a party defendant, Farid alleged that Knight issued a motor carrier liability insurance policy to EMBA covering Gaskell’s truck. Thereafter, Farid settled the case for $450,000 and executed a purported limited release; however, as noted, the policy limit in Knight’s policy amount was $1,000,000. In a document entitled “Settlement Agreement and Release” (the “Agreement”), Farid stated that

[t]his Settlement Agreement and Release results from a compromise payment by [Knight] pursuant to its purported surety obligations under the federal motor carrier Form MCS-90.⁴ ] The Undersigned agree and stipulate that this payment is made on a voluntary payment basis [*4]  only. The Undersigned agree and stipulate that [Knight] has maintained that it owes no insurance coverage over the Limited Releasees⁵ as a result of the incident giving rise to this case. The Undersigned agree and stipulate that [Knight]’s voluntary payment provided as consideration for this Settlement Agreement and Release is offered only as a means to avoid litigation and the costs of pursuing a declaratory judgment action in which [Knight] would set forth the legal basis for its absence of coverage and/or any MCS-90 surety obligation. In exchange for the voluntary payment set forth herein, the Undersigned agree and stipulate that [Knight] shall be fully released under its policy and under the Form MCS-90, and shall have no further obligation to the Undersigned under either Policy Number AFXIN000038-00 or the Form MCS-90. This Settlement Agreement and Release shall have the effect of a General Release as to [Knight] only.

(Emphasis supplied.) The Agreement further stated that:

in consideration for the sum paid above, the Undersigned grant this Settlement Agreement and Release. The force and effect of this Settlement Agreement and Release shall be as intended by … OCGA § 33-24-41.1 with respect to [*5]  [Gaskell] and [EMBA] only. This Settlement Agreement and Release shall operate as a release of [Gaskell] and [EMBA] except that this Settlement Agreement and Release shall not bar any claims the Undersigned have against [Gaskell] and [EMBA] to the extent that other insurance coverage is available which covers the claim or claims of the Undersigned against [Gaskell] and [EMBA].

In addition, the Agreement provided that “the Undersigned agree and stipulate that [Knight] shall be fully released under the Form MCS-90, and shall have no further obligation to the Undersigned under Policy Number AFXIN000038-00 or the Form MCS-90.” Finally, the Agreement stated that

[i]t is further understood and agreed that the payment of the consideration stated above is a compromise settlement of a disputed claim at an amount lower than the amount which might have been awarded by a court and jury. The purpose of said compromise and settlement is to avoid the uncertainties, expense and delay attendant upon a trial. It is stipulated that no sum is paid as punitive damages. It is further stipulated and agreed that the sums paid under this Settlement Agreement and Release do not fully and completely compensate [*6]  the Undersigned for the economic and non-economic losses they have suffered.

Farid also notified his UM carrier, Mid-Century, of the claim, and Mid-Century filed a motion for summary judgment arguing that Farid had failed to exhaust Knight’s available policy limits prior to seeking UM benefits. The trial court agreed and granted Mid-Century’s motion. This appeal follows.

In a single enumeration of error focused on the alleged lack of insurance for Gaskell’s tractor trailer, Farid contends that the trial court erred in granting summary judgment to Mid-Century because: (a) Knight’s payment pursuant to the MCS-90 endorsement was a surety payment rather than a liability insurance payment; (b) the evidence demonstrated that the tractor trailer was wholly uninsured in that: (i) the truck was not scheduled on the company’s liability policy; and (ii) the driver of the truck, Gaskell, had been fired at the time of the collision and was disobeying his former employer’s instructions not to drive the truck; and (c) Knight’s payment was a voluntary payment only since there was no coverage. We are not persuaded.

At the outset, each of Farid’s arguments depends largely on Farid’s counsel’s affidavit [*7]  concerning the purported circumstances underlying the Agreement. Attached to counsel’s affidavit are emails from a third-party administrator and Knight’s counsel suggesting that there was no coverage for the collision because Gaskell’s truck was not a scheduled vehicle on EMBA’s motor carrier policy with Knight and because EMBA was out of business. Farid’s counsel also included a second reservation-of-rights letter issued to EMBA from the third-party administrator stating that Gaskell’s truck was not scheduled on EMBA’s policy; an earlier reservation-of-rights letter is not included in the record.⁶ Furthermore, neither EMBA’s policy with Knight nor any schedule of covered vehicles is included in the record.

In short, then, GA(1) (1) the only support for Farid’s position is a reservation-of-rights letter from a third-party administrator on Knight’s behalf.⁷ HN2 However, such a reservation-of-rights letter is not conclusive proof of a lack of coverage. See generally American Safety Indemn. Co. v. Sto Corp., 342 Ga. App. 263, 267-268 (2) (802 SE2d 448) (2017) (“A reservation of rights is a term of art designed to allow an insurer to provide a defense while still preserving the option to later litigate and ultimately deny coverage[;]” “a reservation of rights is only available to an insurer who [*8]  undertakes a defense while questions remain about the validity of the coverage”) (citation and punctuation omitted; emphasis supplied). Moreover, we have not been asked to evaluate — nor could we, even had we been asked — the effect of the reservation-of-rights letter because this appeal does not arise from a declaratory judgment action or a motion to enforce the Agreement. See generally id. at 268 (2); see also LNV Corp. v. Studle, 322 Ga. App. 19, 21-22 (2) (743 SE2d 578) (2013) (“In considering the enforceability of an alleged settlement agreement, … a trial court is obviously limited to those terms upon which the parties themselves have mutually agreed.”) (citation omitted). Therefore, even when viewed in a light most favorable to Farid, the central tenet of Farid’s arguments on appeal is not supported by the record.

With that in mind, we will address each of Farid’s arguments in turn.

(a) MCS-90. In a somewhat convoluted argument, Farid contends that Knight’s settlement payment was made pursuant to its MCS-90 obligation under federal law, which is a surety obligation rather than a liability insurance obligation. As a result, according to Farid, Knight’s settlement payment did not constitute a payment from any available insurance coverage or even trigger the [*9]  application of Knight’s policy, and Gaskell’s truck therefore remained uninsured as that term is defined in OCGA § 33-7-11. We do not agree.

In response to Mid-Century’s summary judgment motion, Farid argued, based on his counsel’s affidavit concerning the circumstances of the settlement, that Knight’s payment was made “to avoid litigation on the applicability of the MCS-90 endorsement” and that “[t]here was no failure to exhaust the liability limits because there were no liability limits as there was no coverage.” The trial court concluded that “the issue of whether Knight … was liable under the policy itself or Form MCS-90, and the fact that the agreement was entered to avoid litigation over the applicability of its MCS-90 surety endorsement[,] is irrelevant” because the parties’ settlement agreement specifically provided that Knight “shall be fully released under its policy and under Form MCS-90. …”

HN3 “A settlement agreement is a contract subject to the usual rules of contract construction.” (Citation omitted.) Wood v. Wade, 363 Ga. App. 139, 146 (2) (a) (869 SE2d 111) (2022).

Construing the language of a contract presents a question of law for the court, unless the language presents an ambiguity that cannot be resolved by the rules of construction. The [*10]  cardinal rule of construction is to ascertain the contracting parties’ intent, and where the terms of a written contract are clear and unambiguous, the court will look to the contract alone to find the intention of the parties. To determine the intent of the parties, all the contract terms must be considered together in arriving at the construction of any part, and a construction upholding the contract in whole and every part is preferred.

(Citation omitted; emphasis supplied.) Id.

In this case, the language of the Agreement is clear and unambiguous. Despite Farid’s arguments to the contrary, the Agreement provides that Knight “shall be fully released under its policy and under the Form MCS-90, and shall have no further obligation to [Farid] under either Policy Number AFXIN000038-00 or the Form MCS-90.” (Emphasis supplied.) The Agreement further acknowledged that Knight “shall be fully released under the Form MCS-90, and shall have no further obligation to [Farid] under Policy Number AFXIN000038-00 or the Form MCS-90.” (Emphasis supplied.) As a result, and as the trial court concluded, GA(2) (2) whether Knight’s payment was made pursuant to an MSC-90 endorsement is not relevant because the Agreement [*11]  released Knight under both the policy and the MCS-90 endorsement. Therefore, this argument fails.

(b) Lack of Insurance for Tractor Trailer. Next, Farid contends that Gaskell’s tractor trailer was uninsured because the truck was not scheduled on EBMA’s liability policy and because Gaskell had been fired at the time of the collision and was disobeying EBMA’s instructions not to drive the truck. As we have already noted, these arguments are based, in whole, on Farid’s counsel’s affidavit reporting the purported circumstances underlying the Agreement. What is absent is any conclusive evidence in the record that Gaskell’s truck was uninsured as that term is defined in OCGA § 33-7-11, and we are not authorized to make such a determination in this case.

Moreover, notwithstanding Farid’s failure to demonstrate his entitlement to relief pursuant to OCGA § 33-7-11, Farid likewise failed to satisfy the exhaustion requirements of OCGA § 33-24-41.1 and is therefore precluded from asserting a claim against Mid-Century. OCGA § 33-24-41.1 (a) provides that

[i]n any instance where a claim arising out of a motor vehicle accident is covered by two or more insurance carriers, one such carrier may tender, and the claimant may accept, the limits of such policy; and, in [*12]  the event of multiple claimants, the settling carrier may tender, and the claimants may accept, the limits of the policy pursuant to a written agreement between or among the claimants.

HN4 Pursuant to OCGA § 33-24-41.1, then, “[e]xhausting available liability coverage is a condition precedent to a UM claim.” (Citation and punctuation omitted.) Holland v. Cotton States Mut. Ins. Co., 285 Ga. App. 365, 366 (1) (646 SE2d 477) (2007). As a result, “[a] carrier must offer and a claimant must accept an amount equal to the limit stated in the policy, not an amount less than the limit stated in the policy.” Id. Therefore, “[a] claimant may seek recovery under a UM policy when the claimant’s damages exceed the limits of the tortfeasor’s liability policy, after first recovering those liability limits from the tortfeasor through settlement.” Id.

In this case, Farid resolved his claims with Knight for $450,000, well short of Knight’s $1,000,000 policy limit.⁸ In addition, the Agreement makes clear that Farid granted Knight a general release rather than a limited release. See Rodgers v. St. Paul Fire & Marine Ins. Co., 228 Ga. App. 499, 500 (1) (492 SE2d 268) (1997) (holding that when a general release in favor of an uninsured motorist is signed, “the uninsured motorist carrier was also released as a matter of law because of the derivative nature of the insurance company’s liability”) (citation [*13]  and punctuation omitted). As a result, GA(3) (3) Farid failed to exhaust Knight’s limits as required by OCGA § 33-24-41.1, which precludes any recovery from Mid-Century, his UM carrier. See Holland, 285 Ga. App. at 366-367 (1).

(c) Voluntary Payment. Finally, Farid contends that Knight’s remittance constituted a mere voluntary payment “to avoid litigation expenses over the applicability of the [MCS-90] surety obligation” and that, as a result, there remained a lack of insurance coverage. However, Farid failed to support this argument with a single citation of authority, and it is therefore deemed abandoned. See Court of Appeals Rule 25 (c) (2) (“Any enumeration of error that is not supported in the brief by citation of authority or argument may be deemed abandoned.”); BB&T Ins. Svcs. v. Renno, 361 Ga. App. 415, 427 (4) (864 SE2d 608) (2021).

In short, Gaskell’s tractor trailer was either insured or uninsured.GA(4) (4)  If Gaskell’s truck was in fact uninsured, Farid has failed to demonstrate that it was uninsured; therefore, he cannot avail himself of the provisions of OCGA § 33-7-11. If Gaskell’s truck was insured, the Agreement clearly and unambiguously released Knight from its motor carrier liability policy and MCS-90 obligations for an amount less than Knight’s $1,000,000 policy limit, meaning that the Agreement did not comply with the exhaustion requirements of OCGA § 33-24-41.1 before [*14]  Farid sought additional payment from Mid-Century. Under either scenario, Mid-Century is entitled to judgment as a matter of law. Therefore, we affirm the trial court’s order granting Mid-Century’s motion for summary judgment.

Judgment affirmed. Barnes, P. J., and Brown, J., concur.

End of Document

---

¹ See OCGA §§ 40-1-112 (c) (authorizing joinder of motor carrier and insurance carrier to cause of action against motor carrier) and 40-2-140 (d) (4) (same), collectively known as the “direct action statutes.”

² Notably, the record does not contain any evidence — affidavits, deposition transcripts, discovery responses, and the like — concerning the circumstances of the collision.

³ The allegations are contained in an affidavit by Farid’s counsel filed in response to Mid-Century’s motion for summary judgment. As more fully described herein, attachments to the affidavit included emails from a third-party administrator and Knight’s counsel concerning coverage as well as a reservation-of-rights letter issued to EMBA from the third-party administrator.

⁴ We have noted that

[a]n MCS-90 endorsement to an automotive insurance policy obligates an insurer to cover an insured’s negligence involving “vehicles subject to the financial responsibility requirements of … the Motor Carrier Act.” The Motor Carrier Act, in turn, creates minimum levels of financial responsibility “for the transportation of property by motor carrier within the United States.” The purpose of a MCS-90 endorsement is to assure compliance with federal minimum levels of financial responsibility for motor carriers. The MCS-90 endorsement must be attached to any liability policy issued to for-hire motor carriers operating motor vehicles transporting property in interstate commerce. The endorsement creates a suretyship, which obligates an insurer to pay certain judgments against the insured arising from interstate commerce activities, even though the insurance contract would have otherwise excluded coverage.

(Citations and punctuation omitted.) Grange Indem. Ins. Co. v. Burns, 337 Ga. App. 532, 533-534 (788 SE2d 138) (2016).

⁵ Gaskell and EMBA were identified as the “Limited Releasees.”

⁶ The May 7, 2019 reservation-of-rights letter that is included in the record states that it “follows the Reservation of Rights letter that was sent … on December 7, 2018[,]” which is not included in the record.

⁷ But see LNV Corp. v. Studle, 322 Ga. App. 19, 21 (1) (743 SE2d 578) (2013) (finding that, in review of settlement agreement, “parol negotiations preceding the making of a written contract are merged in the written contract, and parol evidence is inadmissible to vary or contradict the terms of a written contract which is valid on its face”).

⁸ We are mindful of Farid’s apparent argument that OCGA § 33-24-41.1 does not apply because there was no coverage available and, therefore, there were no policy limits to exhaust. This argument fails because Farid failed to establish that Gaskell’s truck was uninsured under OCGA § 33-7-11.

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Petitioner,

v.

Myra M. WINDHAM, Respondent.

Appellate Case No. 2020-001693

Opinion No. 28121

Heard April 27, 2022

Filed November 2, 2022

Synopsis

Background: Insurer filed suit for declaratory judgment that insured was not entitled to stack coverage for underinsured motorist (UDIM) benefits arising out of accident that occurred while she was driving rental car that served as temporary substitute vehicle while her personal car was in shop for repairs. The Circuit Court, Lexington County, G. Thomas Cooper, Jr., J., granted insurer’s motion for summary judgment and denied insured’s motion, and insured appealed. The Court of Appeals, 432 S.C. 134, 850 S.E.2d 633, reversed. Petition for writ of certiorari was allowed.

[Holding:] The Supreme Court, Hearn, J., held that rental car was “your car,” i.e., insured’s car at time of accident, and thus, insured was entitled to stack coverage for UDIM benefits under multiple policies.

Affirmed as modified.

James, J., filed dissenting opinion.

West Headnotes (9)

[1]	Appeal and ErrorReview using standard applied below
	An appellate court reviews the granting of summary judgment under the same standard applied by the trial court pursuant to the rule governing a motion for summary judgment. S.C. R. Civ. P. 56.

[2]	Appeal and ErrorStatutory or legislative law
	Determining proper interpretation of statute is question of law, and appellate court reviews questions of law de novo.

[3]	Declaratory JudgmentInsurance Declaratory JudgmentLegal or equitable
	Declaratory judgment actions are generally neither legal nor equitable, but assessing coverage under insurance policy in declaratory judgment action is action at law.

[4]	InsuranceOther Insurance
	“Stacking” enables the insured to recover under more than one policy.

[5]	InsurancePersons Covered InsuranceExtent of loss or liability in general
	In South Carolina, an individual must be a “class I insured” in order to stack recovery on a claim under more than one policy, i.e., an insured or named insured who has a vehicle in the accident. S.C. Code Ann. § 38-77-160.

[6]	InsurancePersons Covered InsuranceExtent of loss or liability in general
	An insured is a “Class II insured,” and thus may not stack coverage under multiple policies, if none of his vehicles are involved in the accident. S.C. Code Ann. § 38-77-160.

[7]	InsuranceExtent of loss or liability in general
	An insured’s Class I status as an insured or named insured who has a vehicle in the accident, and not ownership of the vehicle in the accident, is the determinative measure of an insured’s ability to stack coverage under more than one policy.

[8]	InsuranceFunction of, and limitations on, courts, in general InsuranceLanguage of policies InsurancePlain, ordinary or popular sense of language
	Court must enforce, not write, contracts of insurance and must give policy language its plain, ordinary, and popular meaning; in doing so, court must not extend or defeat coverage that was never intended by parties.

[9]

InsuranceSubstitute automobiles InsurancePersons Covered Insurance”Stacking”

Automobile policy was ambiguous as to whether rental car that insured was driving at time of accident, which was temporary substitute car that replaced insured’s vehicle identified on Declarations page of policy while vehicle was being repaired, was “your car,” i.e., insured’s car, and thus would be construed in insured’s favor to qualify insured as class I insured at time of accident who had vehicle in accident, and therefore, insured was entitled to stack coverage for underinsured motorist (UDIM) benefits under multiple policies; although temporary substitute car was, by its very terms, a non-owned car, policy also stated that, “if a car qualifies as both a non-owned car and a temporary substitute car, then it is considered a temporary substitute car only.” S.C. Code Ann. § 38-77-160.

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

Appeal from Lexington County, G. Thomas Cooper, Jr., Circuit Court Judge

Attorneys and Law Firms

Alfred Johnston Cox and Jessica Ann Waller, both of Gallivan, White & Boyd, PA, of Columbia, for Petitioner.

Stephen H. Cook and John K. Koon, both of Koon Cook and Walters, LLC, of Columbia, for Respondent.

Opinion

JUSTICE HEARN:

*1 Respondent Myra Windham was seriously injured while driving a rental car¹ that constituted a temporary substitute vehicle under her State Farm policy. In this declaratory judgment action instituted by Petitioner State Farm, we are asked to determine whether Windham can stack her underinsured motorist (“UIM”) coverage pursuant to section 38-77-160 of the South Carolina Code. The circuit court agreed with State Farm that stacking was prohibited, and the court of appeals reversed. Because both parties offer reasonable interpretations of the policy language, we believe an ambiguity exists, which we construe against the drafter. Accordingly, we agree with the court of appeals that Windham can stack and affirm as modified.

FACTUAL AND PROCEDURAL HISTORY

Within the span of only six days and through no fault of her own, Myra Windham was in two car accidents. The first, on September 29, 2012, rendered her car inoperable. Consequently, on the date of the second accident, October 5, 2012, she was driving the rental car provided to her through the insurance of the first accident’s at-fault driver.

In the second accident, Windham sustained injuries that exceeded the tortfeasor’s liability insurance and sought to stack her UIM policies. Windham was insured under five separate policies² with State Farm at the time of the second accident. Though she was permitted to collect under one UIM policy, State Farm denied she could stack.

The parties stipulated the rental car in question meets the definition of a “temporary substitute car” as defined in Windham’s State Farm policies. Further, the parties stipulate the rental car is not a vehicle shown under the “YOUR CAR” heading of the declarations page on any of the policies issued to Windham or her husband, nor does the car meet the definition of “owned by” in the policies.

Upon cross-motions for summary judgment, the circuit court found the policy’s “not owned by” language controlled and thus stacking was prohibited. The court of appeals reversed, relying on a separate policy provision that states when a car is both a non-owned vehicle and a “temporary substitute car,” it is considered a temporary substitute car only. We then granted certiorari.

STANDARD OF REVIEW

^{[1] [2] [3]}“An appellate court reviews the granting of summary judgment under the same standard applied by the trial court pursuant to Rule 56, SCRCP.” Brockbank v. Best Capital Corp., 341 S.C. 372, 379, 534 S.E.2d 688, 692 (2000). Each side in this dispute asserts the case involves a legal question, i.e., an analysis of Windham’s policy with State Farm and its interplay with S.C. Code Ann. § 38-77-160. “Determining the proper interpretation of a statute is a question of law, and this Court reviews questions of law de novo.” Town of Summerville v. City of N. Charleston, 378 S.C. 107, 110, 662 S.E.2d 40, 41 (2008). Further, while declaratory judgment actions are generally “neither legal nor equitable[,]” assessing coverage under an insurance policy “is [an action] at law.” Auto-Owners Ins. Co. v. Rhodes, 405 S.C. 584, 593, 748 S.E.2d 781, 785 (2013).

LAW/ANALYSIS

I. S.C. Code Ann. § 38-77-160

*2 ^{[4] [5] [6]}Stacking enables the insured to recover under more than one policy. See Nationwide Ins. Co. v. Rhoden, 398 S.C. 393, 400 n.3, 728 S.E.2d 477, 481 n.3 (2012). In South Carolina, an individual must be a Class I insured in order to stack. See Ohio Cas. Ins. Co. v. Hill, 323 S.C. 208, 211, 473 S.E.2d 843, 845 (Ct. App. 1996). “A Class I insured is an insured or named insured who has a vehicle in the accident. An insured is a Class II insured if none of his vehicles are involved in the accident.” Id. (emphasis added). Here we are asked to determine whether Windham, as the operator of a rental car, is a Class I or Class II insured.

The General Assembly has set forth this delineation between Class I and Class II:

If none of the insured’s or named insured’s vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with the excess or underinsured coverage.

S.C. Code Ann. § 38-77-160 (emphasis added). Windham argues this language plainly includes rental car drivers, whereas State Farm contends the statute excludes all non-owners. In our view, neither position is supported by the statutory language.³

^[7]Contrary to State Farm’s argument, this Court has previously recognized that the possessive relationship—“Insured’s … vehicle”—means something less than ownership. Concrete Servs., Inc. v. U.S. Fid. & Guar. Co., 331 S.C. 506, 513, 498 S.E.2d 865, 868 (1998)⁴. Equally true, however, is that the relationship between driver and vehicle must be sufficient to make the possessive language logical. See Montgomery v. Spartanburg Cnty. Assessor, 419 S.C. 77, 81, 795 S.E.2d 866, 868 (Ct. App. 2016) (“This court must read the statute so that no word, clause, sentence, provision or part shall be rendered surplusage, or superfluous.”) (internal quotations omitted). Accordingly, the parties may contract for the coverage of certain, specifically defined vehicles; rental cars could be covered by the policy, but the statute in no way mandates that result. Thus, just as the court of appeals did, we must look to the policy itself to determine whether the parties intended Windham’s relationship to her rental car be sufficient to render her a Class I driver, able to stack.

II. Windham’s policy with State Farm

*3 ^{[8] [9]}This Court “must enforce, not write, contracts of insurance and [ ] must give policy language its plain, ordinary, and popular meaning.” Fritz-Pontiac-Cadillac-Buick v. Goforth, 312 S.C. 315, 318, 440 S.E.2d 367, 369 (1994). In doing so, the Court must not “extend or defeat coverage that was never intended by the parties.” Id.

Relevant portions of Windham’s policy state:

Non-Owned Car means a car that is in the lawful possession of you or any resident relative and that neither:

1. is owned by: a. you; b. any resident relative; c. any other person who resides primarily in your household; or d. an employer of any person described in a., b., or c. above; nor

2. has been operated by, rented by, or in the possession of: a. you; or b. any resident relative during any part of each of the 31 or more consecutive days immediately prior to the date of the accident or loss …

Owned By means: 1. owned by; 2. registered to; or 3. leased, if the lease is written for a period of 31 or more consecutive days …

Temporary Substitute Car means a car that is in the lawful possession of the person operating it and that … replaces your car for a short time while your car is out of use due to its: a. breakdown; b. repair; c. servicing, d. damage; or e. theft; and neither you nor the person operating it own or have registered. If a car qualifies as both a non-owned car and a temporary substitute car, then it is considered a temporary substitute car only …

Your Car means the vehicle shown under “YOUR CAR” on the Declarations Page. Your car does not include a vehicle that you no longer own or lease.

If a car is shown on the Declarations Page under “YOUR CAR[,”] and you ask us to replace it with a car newly owned by you, then the car being replaced will continue to be considered your car until the earliest of:

1. the end of the 30th calendar day immediately following the date the car newly owned by you is delivered to you;

2. the date this policy is no longer in force; or 3. the date you no longer own or lease the car being replaced.

State Farm contends, and the circuit court agreed, that only owned vehicles or those listed as “your car” on the declarations page can stack, and there is no basis in the policy for finding that a temporary car is an owned vehicle under the policy. In reply, Windham argues the label temporary substitute car implies it took the place of her owned car for the duration of its temporary use. State Farm claims the policy intends to treat a temporary car as a non-owned car because “by its very definition, a ‘temporary substitute car cannot be ‘owned by’ an insured.” It comes to this conclusion by analyzing the section defining a temporary substitute car as a car “you nor the person operating it own or have registered.” State Farm then ties this to its argument that the legislature intended ownership as a prerequisite to stacking in most cases under section 38-77-160.

Immediately following the sentence quoted by State Farm is this provision which we find significant⁵ : “If a car qualifies as both a non-owned car and a temporary substitute car, then it is considered a temporary substitute car only.” Windham contends the only apparent purpose of this sentence is to remove temporary substitute cars from the consequences of being non-owned cars. While normally all temporary cars would be considered non-owned because, as State Farm points out, they are by their definition not owned, the policy ostensibly exempts them from this consequence by denominating them temporary substitute cars only. While it is debatable that this alone transforms them into owned vehicles, that is nevertheless a reasonable interpretation. On one hand temporary substitute vehicles are not-owned, but on the other, the policy clearly states they are not to be considered non-owned. Thus, both a finding of coverage and a finding against coverage could be reasonably supported by a reading of the policy language concerning non-owned and not non-owned.

*4 State Farm posits that these inconsistent interpretations should be resolved by reading the UIM section in isolation which lists coverage exclusions and, it argues, purposefully omits temporary substitute cars from being exempted from those exclusions. However, this does not explain what the sentence under construction actually means nor does it remove the ambiguity created, because the basis of these exclusions still rests on ownership⁶, returning us to the question of precisely where a car that is “not non-owned,” as temporary substitute cars are reasonably articulated to be, fits within this policy.

Offering only the circular argument that the policy is facially clear because it is⁷, State Farm produces no viable resolution to the inconsistencies presented. Therefore, facing diametrically-opposing yet reasonable interpretations, the policy is ambiguous and, construing the provision against the drafter, Windham should be permitted to stack her UIM coverage. See Gaskins v. Blue Cross-Blue Shield of South Carolina, 271 S.C. 101, 105, 245 S.E. 2d 598, 600 (1978) (“The terms of an insurance policy must be construed most liberally in favor of the insured, and if the policy, words and language of the policy, when considered as a whole, give rise to a patent ambiguity or are capable of two or more reasonable interpretations, at least one of which favors coverage, that construction which is most favorable to the insured must be adopted.”); S.C. State Budget & Control Bd., Div. of Gen. Servs., Ins. Reserve Fund v. Prince, 304 S.C. 241, 248, 403 S.E.2d 643, 647 (1991) (holding that when an “internal inconsistency in the policy renders it ambiguous and when a policy is susceptible to more than one reasonable interpretation, one of which would provide coverage, this Court must hold as a matter of law in favor of coverage”) (internal quotations omitted); USAA Prop. & Cas. Ins. Co. v. Clegg, 377 S.C. 643, 655, 661 S.E.2d 791, 797 (2008) (holding that conflicting terms in an insurance policy are construed against the insurer).⁸

*5 Therefore, we find the policy’s contradictory provisions support both positions advanced by the parties. Construing this ambiguity in favor of coverage for the insured, Windham is a Class I insured able to stack.

For the forgoing reasons, the court of appeals is AFFIRMED AS MODIFIED.

Acting Justices John D. Geathers and H. Bruce Williams, concur.

JAMES, J., dissenting in a separate opinion in which FEW, J., concurs.

JUSTICE JAMES:

I dissent. Windham has been paid the $100,000 in UIM coverage to which she is entitled. The provisions of the State Farm policy align with applicable statutes and, under these facts, unambiguously prohibit Windham from stacking UIM coverage because none of her vehicles was involved in the accident.

BACKGROUND

Windham and her husband were the named insureds under five State Farm automobile insurance policies that covered separate vehicles; one policy covered their Toyota Camry. Each policy contains identical language, and each provides $100,000 in UIM coverage for covered damages. The Camry was damaged in a two-car wreck on September 29, 2012, with a driver insured by Allstate. Allstate provided Windham a rental vehicle owned by Enterprise Leasing Corporation. Six days later, Windham was driving the rental vehicle and was involved in a second accident with Jennifer McArdle. Windham claims the second accident was McArdle’s fault and further claims she sustained damages exceeding the total of McArdle’s liability insurance coverage and the $500,000 in UIM coverage from her five State Farm policies. Windham has been paid the full amount of McArdle’s liability coverage. State Farm paid Windham the $100,000 limit of UIM coverage from one policy and claims Windham cannot stack UIM coverage from the other four policies. State Farm commenced this declaratory judgment action to resolve the stacking issue.

The parties filed cross-motions for summary judgment, and the circuit court granted State Farm’s motion, concluding Windham could not stack UIM coverage under the terms of her policy and South Carolina Code section 38-77-160 (2015). The circuit court explained the “clear and unambiguous language” of Windham’s policy prohibits stacking when the insured is injured in a vehicle that is not “owned by” the insured. The circuit court found that because the rental car was not “owned by” Windham, the policy prohibited stacking. The circuit court further ruled the policy’s anti-stacking provision was consistent with section 38-77-160: “Because there is no dispute that Windham did not own the vehicle involved in the accident and [because] none of her vehicles were involved in the accident, she did not ‘have’ a vehicle in the accident as is required by the statute.” See S.C. Code Ann. § 38-77-160 (“If none of the insured’s or named insured’s vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with the excess or underinsured coverage.”).

The court of appeals reversed. State Farm Mut. Auto. Ins. Co. v. Windham, 432 S.C. 134, 850 S.E.2d 633 (Ct. App. 2020). The court of appeals explained section 38-77-160 permits a Class I insured to stack UIM coverage, and “a Class I insured is an insured or named insured who ‘has’ a vehicle involved in the accident.” Id. at 149, 850 S.E.2d at 641 (alteration omitted) (quoting Nationwide Mut. Ins. Co. v. Rhoden, 398 S.C. 393, 401, 728 S.E.2d 477, 481 (2012)). The court of appeals held Windham “had” a vehicle involved in the accident because the rental car met the policy definition of “temporary substitute car” and, therefore, “took the place of her vehicle[.]” Id.

*6 The court of appeals did not meaningfully discuss the policy’s anti-stacking provision, but it appears the court of appeals held the provision conflicts with section 38-77-160 and is unenforceable. See id. at 148, 850 S.E.2d at 640 (“We have never required ‘ownership’ as a prerequisite to stacking…. Accordingly, we hold that prior cases requiring a person to ‘have’ a vehicle involved in the accident as a prerequisite to stacking mean[s] only that a person must be a Class I insured.” (emphasis omitted) (quoting Concrete Servs., Inc. v. U.S. Fid. & Guar. Co., 331 S.C. 506, 513, 498 S.E.2d 865, 868 (1998))).

The relevant portion of section 38-77-160 states,

If, however, an insured or named insured is protected by uninsured or underinsured motorist coverage in excess of the 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. If none of the insured’s or named insured’s vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with the excess or underinsured coverage.

(emphasis added). In case law, we have explained stacking in terms of Class I and Class II insureds. A Class I insured is a named insured, his or her spouse, or resident relative who “has a vehicle involved in the accident.” S.C. Farm Bureau Mut. Ins. Co. v. Mooneyham, 304 S.C. 442, 443 n.1, 405 S.E.2d 396, 397 n.1 (1991); Fireman’s Ins. Co. v. State Farm Mut. Auto. Ins. Co., 295 S.C. 538, 544, 370 S.E.2d 85, 88 (1988); Concrete Servs., 331 S.C. at 512, 498 S.E.2d at 868. A Class II insured is a named insured, his or her spouse, or resident relative “whose vehicle was not involved in the accident.” Mooneyham, 304 S.C. at 443 n.1, 405 S.E.2d at 397 n.1; Fireman’s Ins. Co., 295 S.C. at 544, 370 S.E.2d at 88; Concrete Servs., 331 S.C. at 512-13, 498 S.E.2d at 868. Absent policy provisions broadening the right to stack UIM coverage, only Class I insureds can stack such coverage.

“[I]nsurance policies are contracts to be interpreted in accord with contract law.” Crossmann Cmtys. of N.C., Inc. v. Harleysville Mut. Ins. Co., 395 S.C. 40, 52, 717 S.E.2d 589, 595 (2011). I will first review the State Farm policy to ascertain the parties’ intent. See Nationwide Ins. Co. of Am. v. Knight, 433 S.C. 371, 375, 858 S.E.2d 633, 635 (2021) (explaining that a coverage analysis begins with the insurance policy and then looks to whether its provisions “violate[ ] any legislatively-expressed public policy”).

STIPULATIONS AND POLICY PROVISIONS

The parties entered into several stipulations of fact, most of which relate to policy provisions pertinent in this case. These stipulations and policy provisions are:

First, Windham and her husband are the insureds under each policy.

Second, none of the Windhams’ vehicles was involved in the second accident.

Third, the rental vehicle was a “temporary substitute car.” Each policy defines “Temporary Substitute Car” as:

[A] car that is in the lawful possession of the person operating it and that:

1. replaces your car for a short time while your car is out of use due to its:

a. breakdown;

b. repair;

c. servicing;

d. damage; or

e. theft; and

2. neither you nor the person operating it own or have registered.

The temporary substitute car provision also states, “If a car qualifies as both a non-owned car and a temporary substitute car, then it is considered a temporary substitute car only.”

*7 Fourth, each policy defines “Non-Owned Car” as:

[A] car that is in the lawful possession of you or any resident relative and that neither:

1. is owned by:

a. you;

b. any resident relative;

c. any other person who resides primarily in your household; or

d. an employer of any person described in a., b., or c. above; nor

2. has been operated by, rented by, or in the possession of:

a. you; or

b. any resident relative

during any part of each of the 31 or more consecutive days immediately prior to the date of the accident or loss.

Fifth, the parties stipulate the rental vehicle was not “owned by” Windham. Each policy defines “Owned By” as:

1. owned by;

2. registered to; or

3. leased, if the lease is written for a period of 31 or more consecutive days, to.

Sixth, the rental vehicle is not shown on any declarations page as “YOUR CAR.” Each policy defines “Your Car” as “the vehicle shown under ‘YOUR CAR’ on the Declarations Page. Your car does not include a vehicle that you no longer own or lease.”

Seventh, the UIM section of each policy contains the following paragraph concerning an insured’s ability to stack coverage:

3. If:

a. you or any resident relative sustains bodily injury or property damage:

(1) while occupying a motor vehicle not owned by you or any resident relative; or

(2) while not occupying a motor vehicle; and

b. Underinsured Motor Vehicle Coverage provided by this policy and one or more other vehicle policies issued to you or any resident relative by the State Farm Companies apply to the same bodily injury or property damage, then

the maximum amount that may be paid from all such policies combined is the single highest limit provided by any one of the policies. We may choose one or more policies from which to make payment.

Paragraph 3 prohibits stacking if the insured is injured while occupying a vehicle that is not “owned by” the named insured, his or her spouse, or resident relative. This paragraph unambiguously prohibits Windham from stacking and does not violate section 38-77-160.

ANALYSIS

I. The policy unambiguously prohibits stacking when an insured is injured in an accident while occupying a temporary substitute car.

As noted above, the last sentence of the “temporary substitute car” definition provides, “If a car qualifies as both a non-owned car and a temporary substitute car, then it is considered a temporary substitute car only.” Because Windham’s rental car qualifies as both, it is a temporary substitute car only. Windham stipulates the rental car does not meet the policy definition of a car “owned by” her, and the policy’s anti-stacking provision plainly provides Windham cannot stack if she was “occupying a motor vehicle not owned by [her] or any resident relative.”

In the face of Windham’s stipulation that the rental car was not “owned by” her, Windham curiously argues that because the rental car is a temporary substitute car and not a “non-owned car,” the rental car must “be treated like an owned vehicle even though [Windham] does not actually own it.” Equally curious is Windham’s argument that her previously damaged Camry was “involved” in the second accident for stacking purposes, as she stipulated that none of her vehicles was involved in that accident.

*8 The majority rightly acknowledges the reasonableness of State Farm’s argument that under the policy’s terms, a temporary substitute car is not “owned by” the insured. However, the majority joins in Windham’s torture of the plain language of the policy and concludes:

While normally all temporary [substitute] cars would be considered non-owned because, as State Farm points out, they are by their definition not owned, the policy ostensibly exempts them from this consequence by denominating them temporary substitute cars only. While it is debatable that this alone transforms them into owned vehicles, that is nevertheless a reasonable interpretation.

(emphasis added). In reaching this conclusion, the majority ignores the parties’ stipulation that Windham did not own the rental car. The majority then concludes State Farm’s and Windham’s interpretations are equally reasonable and therefore result in an ambiguity in the policy that must be resolved against State Farm. The majority rewrites the policy to provide that if rental cars qualify as both non-owned cars and temporary substitute cars, they are “not non-owned,” thus transforming them into owned cars. I disagree because there is no ambiguity. Even absent the stipulations, the only reasonable interpretation of the policy is that Windham did not own the rental car.

Advancing a similar argument, Windham cites Bell v. Progressive Direct Insurance Co.⁹ for the proposition that State Farm’s reading of the policy “ignores the principle that insurance contracts are to be read in accordance with reasonable expectations of insureds.” Specifically, Windham points to the definition of “temporary substitute car” as a car that “replaces” a car listed on the declarations page. Windham claims it was her reasonable expectation that the rental car “replace” the Camry for all purposes under the policy, including UIM coverage. Windham’s invocation of the doctrine of reasonable expectations should fail, as we specifically noted in Bell that “the doctrine cannot be used to alter the plain terms of an insurance policy.” Id. at 581, 757 S.E.2d at 407. The plain terms of the State Farm policy compel the conclusion that the rental car was not owned by Windham.

II. Windham did not have a vehicle involved in the accident.

As acknowledged by the majority and the court of appeals, a Class I insured is a named insured, his or her spouse, or resident relative who has a vehicle involved in the accident. Windham, 432 S.C. at 146, 850 S.E.2d at 639. Only a Class I insured may stack UIM coverage. Concrete Servs., 331 S.C. at 509, 498 S.E.2d at 866; see Mooneyham, 304 S.C. at 444, 405 S.E.2d at 397.¹⁰

In their effort to determine what it means “to have” a vehicle involved in the accident, the court of appeals and the majority mistakenly seize upon our isolated statement in Concrete Services that “[w]e have never required ‘ownership’ as a prerequisite to stacking” to conclude section 38-77-160 contains no ownership requirement. Windham, 432 S.C. at 149, 850 S.E.2d at 641 (quoting Concrete Servs., 331 S.C. at 513, 498 S.E.2d at 868). A proper reading of Concrete Services demonstrates section 38-77-160 prohibits stacking when the named insured is injured in a vehicle owned by neither the named insured, his or her spouse, nor a resident relative.

*9 Concrete Services presented two certified questions related to stacking. Ann Mickle was injured while driving a vehicle owned by her husband’s company, Concrete Services. Concrete Services was the named insured on the vehicle’s insurance policy, and Mickle’s husband was the sole shareholder of Concrete Services. Answering the first certified question, we held Mickle was not a Class I insured because the corporation—the named insured—could not possibly have a spouse or resident relatives. We therefore held Mickle could not stack.

Even though our answer to the first certified question resolved the case, we then turned to the second certified question: “Where the South Carolina Appellate Courts have required an insured to ‘have’ a vehicle involved in the accident in order to stack UIM coverage, is it required that the insured own the vehicle involved in the accident?” Concrete Servs., 331 S.C. at 508, 498 S.E.2d at 865. We answered that certified question “no” and held section 38-77-160 does not require the insured to personally own the vehicle involved in the accident in order to stack. We held, “[I]n order to ‘have’ a vehicle involved in the accident, it is necessary only that the insured qualify as a Class I insured.” Id. at 513, 498 S.E.2d at 868. We recognized that in many instances, the spouse or resident relative of the named insured does not own the insured vehicle. We explained that under the Class I definition, “it is patent that one may be the spouse or relative of a named insured and reside in the same household without owning the vehicle. We have never required ‘ownership’ as a prerequisite to stacking; on the contrary, we have consistently held the determinative factor is Class I status.” Id. (footnote omitted).

The context of our holding in Concrete Services is key. The majority isolates the statement “[w]e have never required ‘ownership’ as a prerequisite to stacking” and concludes section 38-77-160 is completely devoid of any ownership requirement. This reading of Concrete Services ignores the plainly stated context of our holding—even if the named insured’s spouse or resident relative does not personally own the vehicle involved in the accident, that person may stack UIM coverage if the named insured had a vehicle involved in the accident. At the least, we require the named insured to own the vehicle. Accordingly, the majority’s reliance on Concrete Services for the blanket proposition that ownership is not a prerequisite to stacking is misplaced.

Ultimately, the answer to the question of whether section 38-77-160 contains an ownership requirement lies in the language employed by the General Assembly. To repeat, section 38-77-160 provides, “If none of the insured’s or named insured’s vehicles is involved in the accident, coverage is available only to the extent of coverage on any one of the vehicles with the excess or underinsured coverage.” “Insured” is defined to include the named insured, his or her spouse, and resident relatives. See S.C. Code Ann. § 38-77-30(7). Incorporating this definition, section 38-77-160 plainly allows a policy to prohibit stacking if the named insured, his or her spouse, or resident relatives do not own a vehicle involved in the accident. This interpretation is supported by both the plain language of the statute and an in-context review of Concrete Services.

CONCLUSION

“As a general rule, insurers have the right to limit their liability and to impose conditions on their obligations provided they are not in contravention of public policy or some statutory inhibition.” Williams v. Gov’t Emps. Ins. Co. (GEICO), 409 S.C. 586, 598, 762 S.E.2d 705, 712 (2014). The anti-stacking provision in Windham’s policy does not contravene section 38-77-160, nor does it expand Windham’s right to stack beyond the statutory minimum required by section 38-77-160.

*10 Because the rental car was not owned by Windham, her husband, or a resident relative, Windham did not “have” a vehicle involved in the accident. Windham has been paid the $100,000 in UIM coverage to which she is entitled, and she cannot stack additional UIM coverage under the terms of the policy. Therefore, I would reverse the court of appeals’ decision.

FEW, J., concurs.

All Citations

— S.E.2d —-, 2022 WL 16627087

Footnotes
1	To be clear, under the terms of this policy, “temporary substitute cars” do not include all rental cars, but only those used while the insured’s car is inoperable for one of the enumerated reasons. For example, vehicles rented while on vacation, for moving furniture or other goods, or while on a work trip would not qualify as temporary substitute cars under this policy.
2	Windham paid for the maximum $100,000 of UIM coverage on each vehicle.
3	This Court has already once found the relevant language in section 38-77-160 ambiguous “at best” and turned to public policy to guide an interpretation. Rhoden, 398 S.C. at 402, 728 S.E.2d at 482 (“Thus, at best, the statutory language is ambiguous, and until the legislature clarifies this particular provision of section 38–77–160 to the contrary, the public policy … governs this case.”).
4	State Farm asserts the holding in Concrete Services that “[w]e have never required ‘ownership’ as a prerequisite to stacking” is irrelevant to Windham’s case. We disagree. Though answering a certified question in which the first issue was dispositive, the Court chose to continue to the second question to “clarify apparent confusion concerning whether, in order to stack UIM coverage, an insured must own the vehicle involved in the accident[.]” Concrete Servs., 331 S.C. at 512, 498 S.E.2d at 868. We concluded that ownership is not required, and “on the contrary, we have consistently held the determinative factor is Class I status.” Id. at 513, 498 S.E.2d at 868. The Court came to this conclusion in Concrete Services after noting that prior cases assessed only Class I status, leaving the door open to classes of people who do not own the vehicle. Id. at 513, 498 S.E.2d at 868 (“Under that definition, it is patent that one may be the spouse or relative of a named insured and reside in the same household without owning the vehicle.”). We therefore reiterate that Class I status, and not ownership, is the determinative measure of an insured’s ability to stack.
5	Although we find this sentence key to the policy’s ambiguity, we are mindful that it cannot be alone dispositive. See Beaufort Cnty. School Dist. v. United Nat. Ins. Co., 392 S.C. 506, 516, 709 S.E.2d 85, 90 (Ct. App. 2011) (“An insurance contract is read as a whole document so that one may not, by pointing out a single sentence or clause, create an ambiguity.”) (internal quotations omitted). Instead, we look to the policy as a whole and consider this sentence in tandem with the plain language arguments asserted by Windham.
6	The “Underinsured Motor Vehicle Coverage” section of the policy does limit stacking under “If Other Underinsured Motor Vehicle Coverage Applies,” paragraph three, but only on the basis of ownership: “If: a. you or any resident relative sustains bodily injury or property damage: (1) while occupying a motor vehicle not owned by you or any resident relative … the maximum amount that may be paid from all such policies combined is the single highest limit provided by any one of the policies. We may choose one or more policies from which to make payment.” (emphasis in original). The question of whether “not non-owned” means owned still infects the interpretation of this section and thus this section alone does not rescue the policy term from ambiguity.
7	Unlike the dissent, we do not view the stipulations as dispositive or this insurance policy as a model of clarity. While the parties stipulated that the rental car did not qualify as “owned by[,]” they also stipulated that it was a “temporary substitute vehicle[.]” Neither of these stipulations resolve the fundamental question of whether the driver of a temporary substitute vehicle can stack because we must view the policy as a whole.
8	Counsel for Windham argued before the circuit court that this provision of the policy was ambiguous, but the circuit court ruled in favor of the insurer. Thereafter, the court of appeals found the plain language of the policy dispositive and did not discern an ambiguity. While neither party has argued before us that this policy is ambiguous, their competing interpretations are both reasonable, therefore creating an ambiguity which must be construed against State Farm and in favor of coverage. Clegg, 377 S.C. at 655, 661 S.E.2d at 797.
9	407 S.C. 565, 578-81, 757 S.E.2d 399, 405-07 (2014).
10	Of course, the insurer and the insured can contract for coverage greater than what is minimally required by statute.

End of Document

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