Mar 24, 2012 | Car Accidents, Personal Injury, Uncategorized
This case makes a critical distinction between tort law and contract causes of action. Here, the alleged defect in the product (cruise control in truck) only resulted in harm to the product itself. Fortunately, the defect did not cause an accident that injured or killed. Rather, the vehicles caught fire and were consumed. As a result, the Court affirmed that the only recovery available to the vehicle owners was under contract liability, not a tort action. Tort liability is only an option where a product defect causes harm to other property or personal injury. This distinction is critical is determining what damages you can seek. Of course, we are always grateful when only property damage is involved. Property can always be replaced. You and your family cannot.
At Reeves, Aiken & Hightower, LLP, all of our attorneys are seasoned trial lawyers with over 70 years combined experience. Whether it is criminal or civil, our litigators are regularly in Court fighting for our clients. Two of our firm’s partners, Art Aiken and Robert Reeves, are inducted lifetime members of the Million Dollar Advocates Forum. Mr. Reeves has also been named one of the Top 100 lawyers for South Carolina in 2012 by the National Trial Lawyers Organization. Our attorneys include a former SC prosecutor, a former public defender, a former NC District Attorney intern, a former Registered Nurse (RN), and former insurance defense attorneys. As a result of their varied backgrounds, they understand the potential criminal, insurance, and medical aspects of complex injury cases. We would welcome an opportunity to sit down and personally review your case. Compare our attorneys’ credentials to any other law firm. Then call us today at 877-374-5999 for a private consultation. Or visit our firm’s website at www.rjrlaw.com.
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Jeffrey M. Sapp, Jr., Appellant,
v.
Ford Motor Company, Respondent.
Appeal from Jasper County
John C. Few, Circuit Court Judge
and
Bryan D. Smith, Appellant,
v.
Ford Motor Company, Respondent.
Appeal from York County
S. Jackson Kimball, III, Special Circuit Court Judge
Opinion No. 26754
Heard April 21, 2009 – Filed December 21, 2009
AFFIRMED IN RESULT
Karl S. Brehmer and L. Darby Plexico, III, both of Brown & Brehmer, Columbia, for Appellants Jeffrey M. Sapp, Jr. and Bryan D. Smith.
Curtis Lyman Ott and Carmelo B. Sammataro, both of Turner Padget Graham & Laney, of Columbia, for Respondent.
Ryan A. Earhart, Erin E. Richardson, and Patrick C. Wooten, all of Nelson, Mullins, Riley & Scarborough, of Charleston, for amicus curiae South Carolina Defense Trial Attorneys’ Association.
CHIEF JUSTICE TOAL: In these consolidated appeals, the trial courts found the economic loss rule precluded Appellants’ tort claims and granted judgment in favor of Respondent Ford Motor Company. We affirm the dismissal, and overrule Colleton Preparatory Academy, Inc. v. Hoover Universal Inc., 379 S.C. 181, 666 S.E.2d 247 (2008) to the extent it expands the narrow exception to the economic loss rule articulated in Kennedy v. Columbia Lumber & Mfg. Co., 299 S.C. 335, 384 S.E.2d 730 (1989).
FACTUAL/PROCEDURAL BACKGROUND
I. Sapp Appeal
In 2004, Appellant Jeffrey M. Sapp purchased a 2000 Ford F-150 truck from Atlantic Coast Construction for $5,000. The truck had 190,000 miles on it at the time of sale and Sapp bought it “as is.” On May 16, 2005, while Sapp was driving the truck, the cruise control stopped working, and the truck caught fire shortly after Sapp parked.
The fire did not injure Sapp or damage any property other than the vehicle itself. He filed a claim with his insurance company, and approximately three months later, the truck was repaired and returned to him. The repair costs were approximately $7,000.
Sapp filed suit against Ford alleging causes of action for negligence, strict liability, breach of warranty, and fraud/misrepresentation. Sapp alleged Ford knew of a design defect in the cruise control switch, which would short circuit and cause a fire in the engine compartment. The trial court granted summary judgment as to all causes of action and specifically found that the economic loss rule precluded the tort claims.
II. Smith Appeal
On January 31, 2006, Appellant Bryan D. Smith’s 2000 Ford F-150 truck caught fire and was completely destroyed. Smith filed suit against Ford alleging causes of action for negligence, strict liability, breach of warranty, and negligent misrepresentation. Smith alleged Ford knew of the same design defect alleged in Sapp’s complaint. The master-in-equity dismissed Smith’s tort claims pursuant to the economic loss rule.
STANDARD OF REVIEW
Summary judgment is appropriate where there is no genuine issue of material fact and it is clear that the moving party is entitled to a judgment as a matter of law. Rule 56(c), SCRCP. In determining whether any triable issues of fact exist, the evidence and all inferences that can be reasonably drawn from the evidence must be viewed in the light most favorable to the nonmoving party. Koester v. Carolina Rental Ctr., 313 S.C. 490, 493, 443 S.E.2d 392, 394 (1994).
Any party may move for a judgment on the pleadings under Rule 12(c), SCRCP. A judgment on the pleadings is proper where there is no issue of fact raised by the complaint that would entitle plaintiff to judgment if resolved in plaintiff’s favor. Russell v. City of Columbia, 302 S.C. 86, 89, 406 S.E.2d 338, 339 (1991).
LAW/ANALYSIS
Appellants argue the trial courts erred in granting summary judgment based on the economic loss rule. We disagree.
The economic loss rule is a creation of the modern law of products liability. Under the rule, there is no tort liability for a product defect if the damage suffered by the plaintiff is only to the product itself. Kennedy v. Columbia Lumber & Mfg. Co., 299 S.C. 335, 341, 384 S.E.2d 730, 734 (1989). In other words, tort liability only lies where there is damage done to other property or personal injury. Id.
The purpose of the economic loss rule is to define the line between recovery in tort and recovery in contract. Contract law seeks to protect the expectancy interests of the parties. Tort law, on the other hand, seeks to protect safety interests and is rooted in the concept of protecting society as a whole from physical harm to person or property. In the context of products liability law, when a defective product only damages itself, the only concrete and measurable damages are the diminution in the value of the product, cost of repair, and consequential damages resulting from the product’s failure. Stated differently, the consumer has only suffered an economic loss. The consumer has purchased an inferior product, his expectations have not been met, and he has lost the benefit of the bargain. In this instance, however, the risk of product failure has already been allocated pursuant to the terms of the agreement between the parties. On the other hand, the parties have not bargained for the situation in which a defective product creates an unreasonable risk of harm and causes personal injury or property damage. Accordingly, where a product damages only itself, tort law provides no remedy and the action lies in contract; but when personal injury or other property damage occurs, a tort remedy may be appropriate.
In Kennedy, we held the economic loss rule does not preclude a homebuyer from recovering in tort against the developer or builder where the builder violates an applicable building code, deviates from industry standards, or constructs a house that he knows or should know will pose a serious risk of physical harm. Such an exception was and still remains necessary to protect homeowners. As explained in Kennedy, the mechanics of home purchasing have evolved and drastically changed over the past two hundred years and, accordingly, courts have shifted from following the doctrine of caveat emptor (“let the buyer beware”) to the doctrine ofcaveat venditor (“let the seller beware”).[1] A home is typically an individual’s single largest investment and is a completely different type of manufactured good than any other type of product that a consumer will buy. Moreover, courts have recognized that the transaction between a builder and a buyer for the sale of a home largely involves inherently unequal bargaining power between the parties. For these reasons, we created this narrow exception to the economic loss rule to apply solely in the residential home context.
The rule announced in Kennedy followed a long line of South Carolina cases directed toward protecting consumers only in the residential home building context,[2] and we noted that this holding followed cases from around the country expanding protections afforded to homebuyers and imposing tort liability on residential homebuilders.[3]
In Colleton Preparatory Academy, Inc. v. Hoover Universal Inc., 379 S.C. 181, 666 S.E.2d 247 (2008), this Court was faced with the issue of whether to expand the Kennedy exception to the economic loss rule beyond the residential home building context to all manufacturers. The majority held that the economic loss rule will not preclude a plaintiff from filing a products liability suit in tort where only the product itself is injured when the plaintiff alleges breach of duty accompanied by a clear, serious, and unreasonable risk of bodily injury or death. The dissent argued that this decision not only broadly expanded the exception to the economic loss rule, but also completely altered the law on products liability in South Carolina. In our view, the traditional economic loss rule provides a more stable framework and results in a more just and predictable outcome in products liability cases. Accordingly, we overrule Colleton Prep to the extent it expands the narrow exception to the economic loss rule beyond the residential builder context.
Furthermore, like the dissent in Colleton Prep, we, too, are cautious in permitting negligence actions where there is neither personal injury nor property damage. Imposing liability merely for the creation of risk when there are no actual damages drastically changes the fundamental elements of a tort action, makes any amount of damages entirely speculative, and holds the manufacturer as an insurer against all possible risk of harm. Carolina Winds Owners’ Ass’n, Inc. v. Joe Harden Builder, Inc., 297 S.C. 74, 87, 374 S.E.2d 897, 905 (Ct. App. 1988).
The Kennedy opinion did not signal a watershed moment in products liability law in South Carolina, nor did it alter the application of the economic loss rule in products liability cases. The Kennedy court specifically noted that “[t]he ‘economic loss rule’ will still apply where duties are created solely by contract. In that situation, no cause of action in negligence will lie.” Kennedy, 299 S.C. at 347, 384 S.E.2d at 737. Several opinions from the federal courts that were issued prior to Kennedy found South Carolina’s economic loss rule precluded a negligence action against a manufacturer,[4] and subsequent cases found that, in light of and notwithstanding Kennedy, the economic loss rule prohibited negligence actions against a manufacturer where duties were created solely by contract and where the product only injured itself or where the damage was contemplated by the parties’ contract.[5] We conclude the federal courts were correct in this regard.
At the time of our decision in Kennedy, we had no intention of the exception extending beyond residential real estate construction and into commercial real estate construction. Such a progression was in error and we now correct that expansion. Much less did we intend the exception to the economic loss rule to be applied well beyond the scope of real estate construction in an ordinary products liability claim. We emphasize the exception announced in Kennedy is a very narrow one, applicable only in the residential real estate construction context.
Turning to the merits of the instant appeals, we hold the trial courts properly granted judgment in favor of Ford on Appellants’ tort claims. The only damage caused by the defect in the trucks was damage to the trucks themselves – purely an economic loss to Appellants. Therefore, the economic loss rule precludes Appellants’ recovery in tort.
CONCLUSION
For the above reasons, we affirm the ruling of the trial courts.
PLEICONES and KITTREDGE, JJ., concur. WALLER, J., concurring in result only. BEATTY, J., concurring in result only in a separate opinion.
JUSTICE BEATTY (concurring in result): I concur but write separately. This Court heralded a change in its view of the economic loss rule in Kennedy v. Columbia Lumber & Mfg. Co., 299 S.C. 335, 384 S.E.2d 730 (1989). The Court gave no indication that its new analytical framework was limited to residential housing construction. In proclaiming its new framework, the Court set about a review of the Court of Appeals’ economic loss analysis in Carolina Winds Owners’ Ass’n v. Joe Harden Builder, Inc., 297 S.C. 74, 374 S.E.2d 897 (Ct. App. 1988). In rejecting the opinion of the Court of Appeals, this Court concluded that the traditional analysis of the economic loss rule was problematical. The Court, referring to the analysis of the Court of Appeals, stated:
Where a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only “economic” losses. Conversely, where a purchaser buys a product which is defective and physically harms him, his remedy is in either tort or contract. This is so, the analysis provides, because his losses are more than merely “economic.”
We find that this legal framework generates difficulties. This is so because the framework’s focus is on consequence, not action. Builder “A” and Builder “B” can be equally blameworthy, and build equally shoddy housing, but because Builder “A”‘s negligence happened to be discovered early enough, no one was harmed. It hardly seems fair that Builder “A” should profit from a diligent buyer’s discovery, or because he was fortunate.
The framework we adopt focuses on activity, not consequence. If a builder performs construction in such a way that he violates a contractual duty only, then his liability is only contractual. If he acts in a way as to violate a legal duty, however, his liability is both in contract and in tort.
A builder is no less blameworthy in such a case where lady luck has smiled upon him and no physical harm has yet occurred. We discounted the necessity of showing physical harm in Terlinde, 275 S.C. 395, 271 S.E.2d 768 (1980), in which we considered and declined to adopt arguments asserting the “economic loss” rule contained in theTerlinde briefs.
Kennedy, 299 S.C. at 345-46, 384 S.E.2d at 736-37 (emphasis added).
Today, this Court would overrule Colleton Preparatory Acad., Inc. v. Hoover Universal, Inc., 379 S.C. 181, 666 S.E.2d 247 (2008).[i] Colleton adheres to the Kennedy analysis framework. If it is wrongly decided, then Kennedy should be overruled as well and this Court should simply say that the economic loss rule is not applicable to residential home building. Of course, this would not explain the negative treatment of the rule in other areas such as professional services. See Tommy L. Griffin Plumbing & Heating v. Jordan, Jones & Goulding, Inc., 320 S.C. 49, 55, 463 S.E.2d 85, 88-89 (1995) (finding design professionals, including engineers, may have a duty separate and distinct from contractual duties such that the economic loss doctrine would not prohibit a tort action);Beachwalk Villas Condo. Ass’n v. Martin, 305 S.C. 144, 146-47, 406 S.E.2d 372, 374 (1991) (finding a special duty for architects);Lloyd v. Walters, 276 S.C. 223, 226, 277 S.E.2d 888, 889 (1981) (finding an attorney liable for economic loss to a corporate shareholder when attorney breached a duty to the corporation); but see McCullough v. Goodrich & Pennington Mortgage Fund, Inc., 373 S.C. 43, 53, 644 S.E.2d 43, 49 (2007) (rejecting the notion of a special duty in the secured transactions arena).
The inconsistent treatment of the doctrine, by use of varying analytical frameworks, does not provide the bench and bar guidance in the proper application of the doctrine. The Court should simply pronounce a list of areas to which public policy prohibits the application of the economic loss doctrine and forego any legal analysis.
[1] A more complete history of the evolution of the law in this area, along with several additional useful sources, can be found atKennedy, 299 S.C. at 342-44, 384 S.E.2d at 735-36.
[2] See Roundtree Villas Ass’n, Inc. v. 4701 Kings Corp., 282 S.C. 415, 321 S.E.2d 46 (1984) (holding that where the lender undertook to repair defects in the housing units in order to facilitate further sales, the lender could be held liable in tort for negligent repairs); Terlinde v. Neely, 275 S.C. 395, 271 S.E.2d 768 (1980) (holding that a subsequent purchaser of a home may pursue a cause of action in contract or tort against a developer); Lane v. Trenholm Bldg. Co., 267 S.C. 497, 229 S.E.2d 728 (1976) (holding that when a new building is sold, there is an implied warranty of fitness for its intended use which springs from the sale itself);Rutledge v. Dodenhoff, 254 S.C. 407, 175 S.E.2d 792 (1970) (recognizing that a builder-vendor of a new home gives its purchasers an implied warranty of fitness); Rogers v. Scyphers, 251 S.C. 128, 161 S.E.2d 81 (1968) (recognizing a builder’s duty to refrain from constructing housing it knows or should know will pose a serious risk of physical harm).
[3] See Huang v. Garner, 203 Cal. Rptr. 800 (Cal. App. 1984); Barnes v. Mac Brown & Co., 342 N.E.2d 619 (Ind. 1976); Village Cross Keys Inc. v. The United States Gypsum Co., 556 A.2d 1126 (Md. 1989); Oates v. JAG, Inc., 333 S.E.2d 222 (N.C. 1985); New Mea Construction Corp. v. Harper, 497 A.2d 534 (N.J. 1985); Sewell v. Gregory, 371 S.E.2d 82 (W. Va. 1988).
[4] See Laurens Electric Cooperative v. Altec Industries, 889 F.2d 1323 (4th Cir. 1989) (prohibiting a products liability claim where the only injury sustained was to the product itself); 2000 Watermark Ass’n v. Celotex Corp., 784 F.2d 1183 (4th Cir. 1986) (prohibiting a tort claim against a defendant who negligently installed defective shingles pursuant to our economic loss rule); Purvis v. Consolidated Energy Products Co., 674 F.2d 217 (4th Cir. 1982) (holding under South Carolina’s economic loss rule, a tobacco farmer could not maintain an action against a barn manufacturer because his only injury was an economic loss to his tobacco crop and the barn itself).
[5] See Palmetto Linen Service, Inc. v. U.N.X., Inc., 205 F.3d 126 (4th Cir. 2000) (upholding the dismissal of plaintiff’s negligence claim pursuant to South Carolina’s economic loss rule where defendant’s chemical dispensing system harmed only plaintiff’s linens because the destruction of the linens was a “natural and foreseeable result of a malfunction” and the parties contemplated this allocation of risk in their contract); Myrtle Beach Pipeline Corp. v. Emerson Elec. Co., 843 F. Supp. 1027 (D.S.C. 1993), aff’d, 46 F.3d 1125 (4th Cir. 1995) (dismissing plaintiff’s tort claim where defendant’s product, an air eliminator, ruptured causing an oil spill because plaintiff’s loss was only to the defective air eliminator since plaintiff did not own the property which the defective air eliminator damaged).
[i] Colleton Preparatory Academy, Inc. limited recovery to the cost of repair suffered by the plaintiff even in a tort action when there is no bodily injury. However, it did not require the plaintiff to wait until injury occurred to bring an action in tort.
Mar 18, 2012 | Car Accidents, Personal Injury, Uncategorized, Workers' Compensation
At Reeves, Aiken & Hightower LLP, our lawyers are experienced workers’ compensation attorneys. Robert J. Reeves is a former intensive care unit Registered Nurse (RN) who has actually treated patients with the same type of serious injuries he now represents in workers’ compensation cases. Both Robert J. Reeves and Arthur K. Aiken are former insurance defense attorneys who know what to anticipate and how to prepare for trial and insurance company tactics. During our twenty-two (22) years each of practicing law, we have handled virtually every type of workers’ compensation injury, including neck, back, shoulder, knee accidents, closed head / brain injury, herniated disks, bulging disks, diskectomy surgery, fusion procedures, arthroscopy, automobile accidents on the job, psychological / post traumatic stress, permanent and total disability claims, and wrongful death. We welcome the opportunity to sit down and personally discuss your case. Compare our attorneys’ credentials to any other firm. Then call us for a private consultation. www.rjrlaw.com
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Francis Ike Johnson, Respondent,
v.
Sonoco Products Company and GAB Robins, Inc., Appellants.
Appeal From Darlington County
James E. Lockemy, Circuit Court Judge
Opinion No. 26584
Heard November 19, 2008 – Filed January 20, 2009
AFFIRMED AS MODIFIED; AND REMANDED
Michael A. Farry and David A. Wilson, both of Horton, Drawdy, Ward & Jenkins, of Greenville, for Appellants.
Vernon F. Dunbar, of Turner, Padget, Graham & Laney, of Greenville, for Respondent.
PER CURIAM: Appellants Sonoco Products Company and GAB Robins, Inc. (collectively, Sonoco) argue the circuit court erred in granting Respondent Francis Ike Johnson’s motion to compel payment of his workers’ compensation benefits during the pendency of the underlying appeal. We disagree and affirm. We find that the circuit court’s award of workers’ compensation benefits in the underlying appeal was not stayed during the appeal. As a result, we conclude the circuit court retained authority to compel the payment of compensation benefits pursuant to Rule 225(a), SCACR. We further affirm Johnson’s entitlement to interest and related sanctions. We modify the order of the circuit court only insofar as the effective date of Johnson’s entitlement to relief. We remand to the circuit court to calculate Johnson’s entitlement to interest as of June 15, 2005, thirty days following entry of the circuit court order awarding Johnson benefits.
I.
The single commissioner awarded benefits to Johnson. The commission reversed, and Johnson appealed to the circuit court. The circuit court reversed the commission and awarded benefits to Johnson. Sonoco’s motion to reconsider was denied, and the circuit court order became final on May 16, 2005.
Sonoco appealed to the Court of Appeals, which affirmed the judgment of the circuit court. Johnson v. Sonoco Products Co., Op. No. 2006-UP-281 (S.C.Ct.App. filed Sept. 20, 2006). Sonoco unsuccessfully sought rehearing in the Court of Appeals. We subsequently denied Sonoco’s petition for a writ of certiorari. The remittitur was sent to the lower court on June 13, 2007.
Prior to the conclusion of the underlying appeal, Johnson filed a motion to compel payment of the compensation benefits in the circuit court, together with a subsequent motion in the circuit court for sanctions (interest and a ten percent penalty) against Sonoco. Sonoco objected to the jurisdiction of the circuit court on two grounds: (1) the award of workers’ compensation benefits was stayed during the appeal, and (2) absent a remand from the appellate court, the circuit court lacked jurisdiction to consider Johnson’s motions. The circuit court rejected Sonoco’s arguments and awarded relief, calculating Johnson’s entitlement to interest as of the date of the single commissioner’s order, May 29, 2002, and assessing a ten percent penalty. The circuit court’s initial order granting relief was filed December 20, 2006, and an amended order was filed on March 6, 2007, following Sonoco’s motion for reconsideration. Sonoco appealed. Thereafter, as noted above, the underlying appeal became final and the remittitur was sent to the lower court.
Following the circuit court order of March 6, 2007, Sonoco paid Johnson his compensation benefits, but continued with the current appeal challenging the award of interest and ten percent penalty. The appeal is before us pursuant to Rule 204(b), SCACR, certification.
II.
The first issue we must resolve is whether the appeal in the underlying case stayed Sonoco’s responsibility to make weekly compensation payments to Johnson. Rule 225(a), SCACR, provides the general rule that service of a notice of appeal in a civil matter automatically stays matters affected by the appeal. Some of the exceptions to this rule are found in Rule 225(b), which sets forth a non-exhaustive list. Rule 225 expressly provides that exceptions to the general rule extend beyond the list in subsection (b) and are found in statutes, court rules, and case law.
This Court provided such case law when it previously addressed this issue of whether an award of workers’ compensation benefits by the circuit court would be stayed by the service of the notice of appeal in Case v. Hermitage Cotton Mills, 236 S.C. 515, 534, 115 S.E.2d 57, 67-68 (1960). In Hermitage this Court stated:
[I]f the Commission should deny him compensation and upon his appeal the circuit court should reverse the Commission and hold his claim compensable, the weekly payments to be made by the employer pending determination of an appeal from that judgment to the Supreme Court should commence from the date of the circuit court’s judgment and should not be calculated retroactively from the date of the Commission’s decision.
Id. In making this determination, this Court interpreted section 72-356 of the South Carolina Code (1952). Hermitage, 236 S.C. at 534, 115 S.E.2d at 67. This section is substantially similar to section 42-17-60 of the South Carolina Code (Supp. 2007). We hold that the rule in Hermitage is on point. Therefore, when the commission’s denial of benefits is reversed and the award is made by the circuit court, the weekly payments are not stayed by the appeal.[1]
We further note that we have already made such a ruling in this case. In an order issued by this Court on November 14, 2006, this Court granted Sonoco’s motion for an extension of time to file its petition for certiorari, and we specifically stated that the award of benefits to Johnson “is not stayed by the pendency of this matter.” This Court went on to cite section 42-17-60; Rule 225, SCACR;Hermitage, 236 S.C. 515, 115 S.E.2d 57; and McLeod v. Piggly Wiggly Carolina Co., 280 S.C. 466, 313 S.E.2d 38 (Ct. App. 1984).
We next turn to the authority of the circuit court to compel, in the absence of a remand order, the weekly payments during the pendency of the appeal. The answer is unambiguously provided in Rule 225(a), SCACR, which states, “[t]he lower court . . . retains jurisdiction over matters not affected by the appeal including the authority to enforce matters not stayed by the appeal.” (emphasis added). The circuit court retained authority to compel the payment of weekly benefits, and Sonoco’s arguments to the contrary are without merit. No remand from the appellate court was necessary. Moreover, because the awards of interest and penalty are inextricably linked to Sonoco’s nonpayment of benefits, we follow the rationale of Hermitage and hold that the matters of interest and penalty were not stayed by the appeal.
Sonoco further challenges the authority of the circuit court to award interest and assess the ten percent penalty under section 42-9-90 of the South Carolina Code (1976). Sonoco contends such an award rests exclusively in the Workers’ Compensation Commission. We find this issue is not preserved. The issue first appears in Sonoco’s motion seeking reconsideration of the circuit court’s December 20, 2006 order. An issue may not be raised for the first time in a motion to reconsider. Commercial Credit Loans, Inc. v. Riddle, 334 S.C. 176, 186, 512 S.E.2d 123, 129 (Ct. App. 1999) (“Further, because the transcript of the proceedings below is omitted from the record, it appears the first time Commercial Credit made this argument was in its Rule 59(e) motion for reconsideration. Accordingly, this issue is not properly preserved for our review.”). The matters of interest and the ten percent penalty were squarely before the circuit court, and Sonoco’s pre-hearing written responses to Johnson’s motions did not raise the section 42-9-90 challenge. Moreover, the transcript of the hearing in the circuit court is not included in the record on appeal. Medlock v. One 1985 Jeep Cherokee VIN 1JCWB7828FT129001, 322 S.C. 127, 132, 470 S.E.2d 373, 376 (1996) (“The appellant has the burden of providing this court with a sufficient record upon which to make a decision.”); Smith v. Ridgeway Chemicals, Inc., 302 S.C. 303, 306, 395 S.E.2d 742, 744 (Ct. App. 1990) (“It is incumbent upon an appellant to present a record sufficient to permit a review of a trial judge’s rulings.”). We therefore affirm the awards of interest and ten percent penalty. Johnson is additionally entitled to interest on the ten percent penalty.
We do agree with Sonoco’s final assignment of error that Johnson is not entitled to interest from the date of the single commissioner’s order. We are guided by the reasoning of Hermitage. 236 S.C. at 534, 115 S.E.2d at 67-68 (“[U]pon his appeal [if] the circuit court should reverse the Commission and hold his claim compensable, the weekly payments to be made by the employer pending determination of an appeal from that judgment to the Supreme Court should commence from the date of the circuit court’s judgment and should not be calculated retroactively from the date of the Commission’s decision.”). This Court in Hermitage cited to section 72-356 of the South Carolina Code (1952) in referencing a thirty-day supersedeas on appeals from an award of benefits. Id.
Section 72-356 is the predecessor to section 42-17-60 of the South Carolina Code (Supp. 2007). The thirty-day time period for appeals remains a part of section 42-17-60, with the provision that “after that time, the employer is required to make weekly payments of compensation and to provide medical treatment ordered . . . .” Because the commission denied Johnson’s claim and the circuit court awarded benefits, we apply this statutory thirty-day supersedeas following the entry of the circuit court order, after which the compensation payments should have been made. There was no legitimate reason to justify or excuse Sonoco’s failure to pay compensation benefits to Johnson during the pendency of the underlying appeal. Johnson is therefore entitled to an award of interest calculated from June 15, 2005, which is thirty days from the award of benefits in the circuit court. We remand to the circuit court for the sole purpose of calculating the interest due Johnson.
III.
The award of workers’ compensation benefits by the circuit court was not stayed by the appeal. Pursuant to Rule 225(a), the circuit court had jurisdiction to compel the payment of benefits, as well as interest and penalty, during the pendency of the appeal. We affirm the circuit court in its entirety, save the effective date of the award of interest. The matter is remanded to the circuit court to calculate the award of interest calculated from June 15, 2005.[2]
AFFIRMED AS MODIFIED; AND REMANDED.
TOAL, C.J., WALLER, BEATTY, KITTREDGE, JJ., and Acting Justice James E. Moore, concur.
[1] We recognize the procedure followed in this case has been statutorily modified. For injuries occurring on or after July 1, 2007, appeals from the Workers’ Compensation Commission go directly from the commission to the Court of Appeals. See Act 111, 2007 S.C. Acts 111.
[2] The principle payment of the ten percent penalty ($20,513) should be made promptly. Moreover, the parties can compute the amount of interest due Johnson, and we urge the parties, through counsel, to do so and bring this unreasonably protracted litigation to an end. The circuit court should not be further burdened with this unnecessary litigation.
Mar 17, 2012 | Car Accidents, Personal Injury, Uncategorized
The blogpost below discusses new guidelines for businesses that rent power boats on Lake Norman. However, these safety concerns apply to all who go to popular lakes including Lake Norman, Lake Wylie and Lake Murray. Every summer, people love to spend the day in the water. Sailboats, personal water craft (jet skis), fishing boats, and motor boats all have to share the lake with each other as well as skiers and swimmers. Please be safe this summer and watch out for one another. Know the rules of the water and follow them. Before you take a water craft out, whether you own or rent, take the time to learn how to safely operate your boat or jet ski. And, we highly recommend you and your family enroll in a boating safety course. We love the water. And, we hope everyone has a great summer. But always remember to Be Safe. Get home.
At Reeves, Aiken & Hightower, LLP, all of our attorneys are seasoned trial lawyers with over 70 years combined experience. Whether it is criminal or civil, our litigators are regularly in Court fighting for our clients. Two of our firm’s partners, Art Aiken and Robert Reeves, are inducted lifetime members of the Million Dollar Advocates Forum. Mr. Reeves has also been named one of the Top 100 lawyers for South Carolina in 2012 by the National Trial Lawyers Organization. Our attorneys include a former SC prosecutor, a former public defender, a former NC District Attorney intern, a former Registered Nurse (RN), and former insurance defense attorneys. As a result of their varied backgrounds, they understand the potential criminal, insurance, and medical aspects of complex injury cases. We would welcome an opportunity to sit down and personally review your case. Compare our attorneys’ credentials to any other law firm. Then call us today at 877-374-5999 for a private consultation. Or visit our firm’s website at www.rjrlaw.com
Following accident, Lake Norman explores boat rental ordinance
Posted by BoatingIndustry.com on March 14, 2012
After an accident left a woman with serious injuries following a day on the water with an inexperienced boat operator last summer, the Lake Norman Marine Commission accelerated its action to create an ordinance regulating boat rentals on the North Carolina lake.
The commission had previously discussed an ordinance to ensure rented boats are operated safely, but it was boat rental operators who brought it to the forefront and spurred it into action, said Ron Shoultz, chairman of the committee.
The commission formed a committee of both rental operators and law enforcement that will have three months to create proposed rules for rental boat companies.
“We are really trying to get people that are familiar with the industry and get their feedback,” Shoultz said. “We are not going to make up rules or regulations that boat operations will say, ‘What are you doing?’ We want it to be self-policing.”
Brian MacArthur, owner of Saltshaker Marine, which rents powerboats on Lake Norman, attended a recent meeting by the commission and said he is in favor of the ordinance – as long as it is within reason.
“I am all for regulation of safety on the water and do not approve of boat rentals that jeopardize anyone’s safety. I know my company does follow the proper procedures,” said MacArthur, whose company uses a safety checklist that covers operating and safety procedures with the operator.
Following last year’s boating accident, Shoultz said boat rental companies, many of which use processes similar to those at Saltshaker Marine, received unfair criticism from the media. The ordinance is aimed to ensure all boat rental companies are mandating safety to the best of their abilities.
“You can have the best boater and instructor in the world, and [tragedy] can still happen,” he said. “We are not going to say, ‘to rent a boat you have to take this nine-hour class.’ The bottom line is to improve safety and ensure a standard that all boat rental companies would adhere to.”
Since 2008, boat rental companies in the state of Washington have adhered to a process similar to what has been discussed for Lake Norman.
Washington is gradually transitioning to an ordinance that mandates boater education for boat owners, which is already in effect for boaters under the age of 40.
However, rental companies are only mandated to use a dockside checklist that takes approximately 10 minutes to walk through with the operator.
Jim French, boating education specialist for Washington State Parks, said requiring boater education for the rental community would deter tourists and customers who spontaneously decide to rent a boat. Therefore, the checklist ensures an understanding while taking a reasonable amount of time, according to French.
Similar to at Lake Norman, French said Washington depends on its law enforcement to ensure the checklist is preventing dangerous boaters from hitting the water.
“The local law enforcement that patrols the waterways notice a novice behind that boat, they can tell us the rental checklist needs a few items added on,” French said.
Mar 17, 2012 | Car Accidents, Personal Injury, Uncategorized, Workers' Compensation
At Reeves, Aiken & Hightower LLP, our lawyers are experienced workers’ compensation attorneys. Robert J. Reeves is a former intensive care unit Registered Nurse (RN) who has actually treated patients with the same type of serious injuries he now represents in workers’ compensation cases. Both Robert J. Reeves and Arthur K. Aiken are former insurance defense attorneys who know what to anticipate and how to prepare for trial and insurance company tactics. During our twenty-two (22) years each of practicing law, we have handled virtually every type of workers’ compensation injury, including neck, back, shoulder, knee accidents, closed head / brain injury, herniated disks, bulging disks, diskectomy surgery, fusion procedures, arthroscopy, automobile accidents on the job, psychological / post traumatic stress, permanent and total disability claims, and wrongful death. We welcome the opportunity to sit down and personally discuss your case. Compare our attorneys’ credentials to any other firm. Then call us at 803-548-4444 for a private consultation. Or visit our firm’s website at www.rjrlaw.com.
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Marsha Tennant, Petitioner,
v.
Beaufort County School District, Employer, and S.C. School Board Insurance Trust, Carrier, of whom Beaufort County School District is Respondent.
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
Appeal from Beaufort County
Curtis L. Coltrane, Circuit Court Judge
Opinion No. 26616
Heard January 7, 2009 – Filed March 16, 2009
AFFIRMED
James H. Moss, Esquire and H. Fred Kuhn, both of Moss, Kuhn & Fleming, of Beaufort, for Petitioner.
Kirsten L. Barr, Jamie C. Guerrero, and Kathryn C. Thompson, all of Trask and Howell, of Mt. Pleasant, for Respondent.
CHIEF JUSTICE TOAL: In this workers’ compensation case, the single commissioner denied benefits, and the full commission, the circuit court, and the court of appeals affirmed. Tennant v. Beaufort County Sch. Dist. Op. No. 2007-UP-056 (S.C. Ct. App. filed February 8, 2007). This Court granted a writ of certiorari to review the court of appeals’ decision. We affirm.
FACTUAL/PROCEDURAL BACKGROUND
Petitioner Marsha Tennant worked as a special education teacher for thirty years prior to working for Respondent in that same role. In the fall of 2001, after being employed for approximately one year with Respondent, two new aides were assigned to assist Petitioner with her students in the classroom. As the year progressed, Petitioner was concerned that the aides were not performing their job in violation of federal Individualized Education Programs regulations and worried that the aides’ performances would jeopardize the education program. Both Petitioner and the aides complained to the supervisor.
On October 18, 2001, after an argument with the aides, Tennant felt faint and went to the nurse’s office, where the nurse recorded Petitioner’s blood pressure as elevated. Petitioner later returned to the nurse’s office complaining of chest pains and dizziness. The nurse recorded a higher blood pressure and called an ambulance. The emergency room doctor diagnosed Petitioner with a stress reaction.
At the hearing, Petitioner’s family doctor (“Family Doctor”) testified that Petitioner suffered a panic attack that was caused by work conditions and diagnosed Petitioner with “situational depression and panic disorder.” Additionally, Petitioner submitted the deposition testimony of a licensed social worker (“Sociologist”) who began treating Petitioner at her psychotherapy practice after the anxiety attack. Sociologist diagnosed Petitioner with post traumatic stress disorder and continued panic attacks and concluded that Petitioner should not return to work as a special education teacher. Respondent submitted a letter from a psychiatrist (“Psychiatrist”) who evaluated Petitioner. She concluded that Petitioner suffered a single anxiety attack, but that Petitioner did not require additional medical treatment and could return to work.
The single commissioner found that Petitioner failed to prove that the conditions of her employment were either extraordinary or unusual. Additionally, the single commissioner gave greater weight to the testimony of Psychiatrist than to the testimonies of Family Doctor and Sociologist and ruled that Sociologist was not qualified to render an opinion on causation under South Carolina case law. The full commission ruled that Sociologist’s testimony should be made a part of the record, but affirmed the denial of benefits. The circuit court and the court of appeals found that substantial evidence in the record supported a finding that Petitioner did not suffer a compensable injury, and therefore, affirmed the full commission’s decision.
We granted a writ of certiorari to review the court of appeals’ decision, and Petitioner presents the following issue for review:
Did the court of appeals err in affirming the order denying benefits because the full commission’s decision is not support by substantial evidence?
STANDARD OF REVIEW
This Court must affirm the findings of fact made by the full commission if they are supported by substantial evidence. Lark v. Bi-Lo, Inc., 276 S.C. 130, 136, 276 S.E.2d 304, 307 (1981). Substantial evidence is not a mere scintilla of evidence, but evidence which, considering the record as a whole, would allow reasonable minds to reach the conclusion the agency reached. Tiller v. Nat’l Health Care Ctr., 334 S.C. 333, 338, 513 S.E.2d 843, 845 (1999).
LAW/ANALYSIS
Petitioner argues that the court of appeals erred in affirming the full commission’s finding that she did not suffer a compensable injury. We disagree.
In order to recover for mental injuries caused solely by emotional stress, or “mental-mental” injuries, the claimant must show that she was exposed to unusual and extraordinary conditions in her employment and that these unusual and extraordinary conditions were the proximate cause of the mental disorder. Powell v. Vulcan Materials Co., 299 S.C. 325, 384 S.E.2d 725 (1989). This standard, also known as the “heart attack standard,” balances the employee’s interests with the employer’s interests and provides a framework which ensures that the claimant shows that she suffered a work-related injury. Requiring a claimant to prove exposure to “unusual or extraordinary” circumstances in a mental-mental injury claim is consistent with the heightened burden required to prove a claim for intentional infliction of emotional distress claims, a cause of action that also allows recovery for mental injuries in the absence of physical injury. See Hasson v. Scalise Builders of South Carolina, 374 S.C. 352, 356, 650 S.E.2d 68, 71 (2007), quoting Ford v. Hutson, 276 S.C. 157, 166, 276 S.E.2d 776, 780 (1981) (recognizing that “where physical harm is lacking, the courts should look initially for more in the way of extreme outrage as an assurance that the mental disturbance claimed is not fictitious”).
In the instant case, Petitioner alleges that the aides’ insubordination created the unusual and extraordinary conditions, which caused her panic attack. Petitioner testified that the aides would walk out of the classroom and refused to escort the children to the bathroom and that several of her students regressed in their progress as a result of the aides’ actions. She also testified that she reported her concerns to her supervisor, but the supervisor sided with the aides and would not help her.
We find substantial evidence in the record supports the full commission’s findings. Although the conflict may have been stressful, it was not an unusual or extraordinary circumstance of Petitioner’s employment. Neither the aides nor Petitioner’s supervisor threatened her, and the conflict never involved physical contact. Petitioner admits that a special education teacher is an inherently stressful job, and Social Worker conceded that a panic attack may be triggered absent unusual or extraordinary circumstances. Additionally, Petitioner’s supervisor testified that conflicts like the one between Petitioner and the aides were not unusual. In our view, cases in which the Court has found unusual and extraordinary circumstances that resulted in a mental injury involve much more extreme and severe facts. See Shealy v. Aiken County, 341 S.C. 448, 455, 535 S.E.2d 438, 442 (2000) (finding the combination of death threats, gun incidents with violent drug dealers, high tension confrontations, fear of being uncovered, and loss of security as a police officer constituted unusual or extraordinary conditions of employment when they occur over several months);Stokes v. First Nat. Bank, 306 S.C. 46, 50, 410 S.E.2d 248, 250 (1991) (concluding that the extreme prolonged increase in employee’s work hours, combined with additional job responsibilities, constituted unusual and extraordinary conditions of employment); Powell, 299 S.C. at 328, 384 S.E.2d at 727 (holding that an intense verbal exchange between the employee and the supervisor constituted unusual and extraordinary condition of employee’s work).
Accordingly, we hold that substantial evidence in the record exists to support the commission’s decision that Petitioner failed to meet her burden that she suffered a compensable injury.
CONCLUSION
For the foregoing reasons, we affirm the court of appeals’ decision upholding the denial of benefits.
WALLER, PLEICONES, BEATTY and KITTREDGE, JJ., concur.
Mar 17, 2012 | Car Accidents, Personal Injury, Uncategorized, Workers' Compensation
At Reeves, Aiken & Hightower LLP, our lawyers are experienced workers’ compensation attorneys. Robert J. Reeves is a former intensive care unit Registered Nurse (RN) who has actually treated patients with the same type of serious injuries he now represents in workers’ compensation cases. Both Robert J. Reeves and Arthur K. Aiken are former insurance defense attorneys who know what to anticipate and how to prepare for trial and insurance company tactics. During our twenty-two (22) years each of practicing law, we have handled virtually every type of workers’ compensation injury, including neck, back, shoulder, knee accidents, closed head / brain injury, herniated disks, bulging disks, diskectomy surgery, fusion procedures, arthroscopy, automobile accidents on the job, psychological / post traumatic stress, permanent and total disability claims, and wrongful death. We welcome the opportunity to sit down and personally discuss your case. Compare our attorneys’ credentials to any other firm. Then call us for a private consultation. www.rjrlaw.com
THE STATE OF SOUTH CAROLINA
In The Supreme Court
David H. Barton, Employee, Claimant,
v.
William Ian Higgs d/b/a Iyanel Enterprises and Total Home Exteriors, Inc., Employers, and Key Risk Insurance and SC Uninsured Employers Fund, Carrier, Defendants,
Of Whom Total Home Exteriors, Inc., Employers, and Key Risk Insurance are the Respondents,
and SC Uninsured Employers Fund is the Petitioner.
ON WRIT OF CERTIORARI TO THE COURT OF APPEALS
Appeal from Greenville County
D. Garrison Hill, Circuit Court Judge
Opinion No. 26594
Heard November 18, 2008 – Filed February 9, 2009
REVERSED
Amy V. Cofield, of Lexington, and Latonya Dilligard Edwards, of Columbia, for Petitioner.
David A. Wilson and Michael A. Farry, both of Horton, Drawdy, Ward & Jenkins, of Greenville, for Respondents.
CHIEF JUSTICE TOAL: In this workers’ compensation case, the court of appeals held that Petitioner South Carolina Uninsured Employers’ Fund (the Fund) was responsible for paying benefits to an injured employee. Barton v. Higgs, 372 S.C. 109, 641 S.E.2d 39 (Ct. App. 2007). We granted a writ of certiorari to review that decision and now reverse.
Factual/Procedural Background
David Barton (Claimant) was employed by William Higgs d/b/a Iyanel Enterprises (Iyanel), which served as the roofing subcontractor for Respondent Total Home Exteriors (Total Home). On November 22, 2003, Claimant sustained a compensable injury when he fell from a roof. At the time of the accident, Iyanel did not have workers’ compensation insurance, and thus, as the higher-tier contractor, Total Home remained liable to pay Claimant benefits. Total Home sought to transfer liability to the Fund pursuant to S.C. Code Ann. § 42-1-415 (Supp. 2007).
At the hearing before the single commissioner, the president of Total Home testified that he received a Certificate of Insurance from Higgs showing that Iyanel had a workers compensation policy in effect from September 13, 2003 through September 13, 2004. The Certificate listed Total Home as the certificate holder and Jackie Perry Insurance Agency (Insurance Company) as the producer, but the Certificate was not signed in the blank listed for “Authorized Representative.” Higgs testified that he paid for the workers’ compensation insurance and that an employee of the Insurance Company issued the Certificate of Insurance. Nonetheless, coverage was never bound, resulting in Iyanel not being insured on the date of the accident.
The single commissioner found that Iyanel had attempted in good faith to obtain workers’ compensation insurance and presented the Certificate of Insurance to Total Home, upon which Total Home relied in good faith. Accordingly, the single commissioner ruled that liability should be transferred to the Fund. The full commission, the circuit court, and the court of appeals affirmed the single commissioner’s decision to transfer liability.
We granted a writ of certiorari and the Fund presents the following issue for review:
Did the court of appeals err in affirming the decision to transfer liability to the Fund pursuant to § 42-1-415?
Standard of Review
When reviewing an appeal from the workers’ compensation commission, the appellate court may not weigh the evidence or substitute its judgment for that of the full commission as to the weight of evidence on questions of fact. Therrell v. Jerry’s Inc., 370 S.C. 22, 26, 633 S.E.2d 893, 894-95 (2006). However, the appellate court may reverse the full commission’s decision if it is based on an error of law. Id. The issue of interpretation of a statute is a question of law for the Court. Catawba Indian Tribe of South Carolina v. State, 372 S.C. 519, 524, 642 S.E.2d 751, 753 (2007).
Law/Analysis
The Fund argues that the court of appeals erred in affirming the decision to transfer liability because the Certificate of Insurance was unsigned. We agree.
Under the Workers’ Compensation Act, a general contractor is considered the “statutory employer” of a subcontractor’s employees and is liable to pay workers’ compensation benefits to the subcontractor’s employee injured on the job. See S.C. Code Ann. § 42-1-410 (2006). Thus, “[t]he employee of the sub-contractor may look to the prime contractor for workers’ compensation benefits without regard to whether the sub-contractor is covered by a workers’ compensation insurance policy.” Freeman Mechanical, Inc. v. J.W. Bateson Co., Inc., 316 S.C. 95, 97, 447 S.E.2d 197, 198 (1994). The purpose of this statute is to protect the employee and assure coverage in the event of an injury.
In 1996, however, the Legislature created a narrow exception to this rule which provides that the general contractor may transfer the responsibility to pay benefits:
[U]pon the submission of documentation to the commission that a contractor or subcontractor has represented himself to a higher tier subcontractor, contractor, or project owner as having workers’ compensation insurance at the time the contractor or subcontractor was engaged to perform work, the higher tier subcontractor, contractor, or project owner must be relieved of any and all liability under this title except as specifically provided in this section.
Section 42-1-415(A). However, to transfer liability to the Fund, the higher-tier contractor “must collect documentation of insurance . . . on a standard form acceptable to the commission.” The workers’ compensation commission has promulgated a regulation providing that a Certificate of Insurance “shall serve as documentation of insurance” and that the Certificate “must be dated, signed, and issued by an authorized representative of the insurance carrier for the insured.” S.C. Code Reg. 67-415 (Supp. 2007). In other words, liability may be transferred from the higher tier contractor to the Fund only after the higher tier contractor has properly documented the subcontractor’s claim that it retains workers’ compensation insurance. This statutory scheme provides an ultimate safety net for general contractors against a subcontractor’s act of fraud.
In the instant case, by failing to collect a signed Certificate of Insurance form, Total Home failed to meet the requirement as set forth in the regulation. Even assuming Iyanel was not acting fraudulently in submitting the unsigned form, Total Home could have easily investigated the absence of the signature and determined that Iyanel did not have a valid policy. In our view, public funds should not be expended where Respondent could have discovered the mistake by acting in accordance with the regulations.
We recognize that the full commission found that the form was a valid documentation and, as the agency charged with administering the Workers’ Compensation Act, this decision should be given great deference. See Dunton v. S.C. Bd. of Exam’rs in Optometry, 291 S.C. 221, 223, 353 S.E.2d 132, 133 (1987) (recognizing that the construction of a statute by the agency charged with its administration will be accorded the most respectful consideration). However, we hold that the full commission’s decision should not be upheld because the interpretation is clearly contrary to its own regulation. See Brown v. South Carolina Dep’t of Health and Envtl. Control, 348 S.C. 507, 560 S.E.2d 410 (2002) (holding that while the Court typically defers to an agency’s construction of its own regulation, where the plain language of the regulation is contrary to the agency’s interpretation, the Court will reject the interpretation).
Conclusion
For the foregoing reasons, we reverse the decision of the court of appeals and hold that Total Home may not transfer liability to the Fund.
KITTREDGE, J., and Acting Justices James E. Moore and Donna S. Strom, concur. WALLER, J., dissenting in a separate opinion.
JUSTICE WALLER: I respectfully dissent. In my opinion, the Court of Appeals correctly held that respondent Total Home “met all of the statutory requirements to transfer liability.” Barton v. Higgs, 372 S.C. 109, 117, 641 S.E.2d 39, 43 (Ct. App. 2007). Accordingly, I would affirm in result.
S.C. Code Ann. § 42-1-415 provides that when a subcontractor “has represented himself” to a general contractor as having workers’ compensation insurance at the time the subcontractor “was engaged to perform work,” the general contractor “must be relieved of any and all liability.” The statute further states that the general contractor “must collect documentation of insurance … on a standard form acceptable to the commission.” S.C. Code Ann. § 42-1-415 (Supp. 2008).
A review of some additional facts is in order. The president for Total Home testified that he would not have given Iyanel Enterprises a contract without obtaining a certificate of workers’ compensation insurance. Likewise, the testimony of William Higgs confirmed that before Iyanel could work as a subcontractor on jobs for Total Home, Total Home required him to get a certificate of insurance. According to Higgs, he went to the Jackie Perry Insurance Agency, paid his money for the policy, and obtained the certificate. Despite the issuance of the certificate by the Perry Agency, the coverage was never bound, resulting in Iyanel not being insured on the date of Claimant’s accident.
The record reflects that the Perry Agency had employed someone who issued certificates of insurance without the coverage being bound. Therefore, the only fraud that seems to have occurred in this case is by an employee of the insurance agency, not by the subcontractor. Although the majority concedes that section 42-1-415 is designed to protect a general contractor from fraud, the end result of the majority’s reasoning is that Total Home becomes a victim of fraud simply because it was not committed by the subcontractor.
More importantly, however, the majority seems to gloss over the fact that the express requirements of the statute clearly were met in the instant case. Instead, the majority opinion focuses its attention on the regulation’s requirements.[1] This runs contrary to settled precedent.
Although regulations authorized by the Legislature generally have the force of law, a regulation may not alter or add to a statute. Goodman v. City of Columbia, 318 S.C. 488, 490, 458 S.E.2d 531, 532 (1995); Banks v. Batesburg Hauling Co., 24 S.E.2d 496, 499 (1943); see also Society of Prof’l Journalists v. Sexton, 283 S.C. 563, 567, 324 S.E.2d 313, 315 (1984) (“Although a regulation has the force of law, it must fall when it alters or adds to a statute.”).
The Goodman case is instructive. Goodman involved S.C. Code § 42-17-50, the workers’ compensation statute which allows “an application for review” of the single commissioner’s order by the Full Commission. The Commission promulgated Regulation 67-701 which requires that a specific form be filed (Form 30). The petitioner in Goodman did not file a Form 30, but instead wrote the Commission a letter “expressing his desire to appeal.” Goodman, 318 S.C. at 490, 458 S.E.2d at 532. On direct appeal, the Court of Appeals found the petitioner’s letter did not substantially comply with section 42-17-50.
On certiorari, this Court reversed. The Goodman court stated that Regulation 67-701 “adds the requirement of applying for review with a particular form, thereby adding to the statute. Insofar as Reg. 67-701 increases the threshold requirements of section 42-17-50, the specifications set forth in the statute must prevail.” Id. at 490-491, 458 S.E.2d at 532 (emphasis added). The Court in Goodman therefore held that that petitioner’s letter constituted substantial compliance with section 42-17-50. Id. at 491, 458 S.E.2d at 532.
The instant case is analogous to Goodman in that there was substantial compliance with the applicable statute. Total Home requested and received documentation of Iyanel’s insurance on a form authorized by the Commission. All the substantive parts of the form were filled in – it listed Higgs as being insured with a workers’ compensation policy (including a policy number and coverage dates), and also listed Total Home as the certificate holder.
The only thing missing was a signature. In my opinion, requiring such strict compliance with the regulation would only serve to frustrate legislative intent.[2] The obvious purpose of section 42-1-415 is to encourage a higher tier contractor to require proof that its subcontractors carry workers’ compensation insurance. Therefore, if the higher tier contractor substantially complies with the document collection requirement, it should not be ultimately liable when the subcontractor turns out to not actually be insured. See§42-1-415; Goodman, supra.
In addition, nowhere in the statute is there a requirement that the higher tier contractor verify the authenticity of the documentation of insurance. Nevertheless, the majority suggests that Total Home “could have easily investigated the absence of the signature and determined that Iyanel did not have a valid policy.” First, I disagree that section 42-1-415 imposes this burden on the general contractor. Moreover, I also disagree that under the facts of this case, any such investigation would have uncovered the fraud apparently committed by a rogue employee of the insurance agency.[3]
Put simply, the majority’s focus on the absence of a signature literally “elevat[es] form over substance.” South Carolina Second Injury Fund v. American Yard Prods., 330 S.C. 20, 24, 496 S.E.2d 862, 864 (1998). At the very least, the majority has elevated regulation over statute, and in my opinion, this runs contrary to well-settled law. See, e.g., Goodman, supra; Society of Prof’l Journalists v. Sexton, supra.
In sum, because I believe the majority opinion overlooks precedent which stands for the principle that a regulation should not trump the language and intent of the statute, I respectfully dissent.
[1] The Fund’s sole argument, with which the majority agrees, is that because the form was unsigned, it did not meet the requirements of the applicable regulation. Regulation 67-415 provides the following information about the term “documentation of insurance” used in the statute:
For purposes of Section 42-1-415, the ACORD Form 25-S, Certificate of Insurance, as published by the ACORD Corporation and as issued by the insurance carrier for the insured, shall serve as documentation of insurance. The Certificate of Insurance must be dated, signed, and issued by an authorized representative of the insurance carrier for the insured.
S.C. Code Reg. 67-415(A) (Supp. 2008). The ACORD Form 25-S is a standard insurance industry form.
[2] See, e.g., South Carolina Second Injury Fund v. American Yard Prods., 330 S.C. 20, 22, 496 S.E.2d 862, 863 (1998) (this Court’s primary function when interpreting a statute is to ascertain and give effect to the intent of the legislature).
[3] For example, if Total Home had called the Perry Agency to verify the unsigned documentation, it is quite possible that the employee who was not binding the coverage could have simply lied to cover up his/her own fraudulent activity.
Mar 17, 2012 | Car Accidents, Personal Injury, Uncategorized
At Reeves, Aiken & Hightower, LLP, all of our attorneys are seasoned trial lawyers with over 70 years combined experience. Whether it is criminal or civil, our litigators are regularly in Court fighting for our clients. Two of our firm’s partners, Art Aiken and Robert Reeves, are inducted lifetime members of the Million Dollar Advocates Forum. Mr. Reeves has also been named one of the Top 100 lawyers for South Carolina in 2012 by the National Trial Lawyers Organization. Our attorneys include a former SC prosecutor, a former public defender, a former NC District Attorney intern, a former Registered Nurse (RN), and former insurance defense attorneys. As a result of their varied backgrounds, they understand the potential criminal, insurance, and medical aspects of complex injury cases. We would welcome an opportunity to sit down and personally review your case. Compare our attorneys’ credentials to any other law firm. Then call us today at 877-374-5999 for a private consultation. Or visit our firm’s website at www.rjrlaw.com
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Noel and Elizabeth Dillon, Appellants/Respondents,
v.
Neil Frazer, Respondent/Appellant.
Appeal From Greenville County
G. Edward Welmaker, Circuit Court Judge
Opinion No. 26629
Heard January 8, 2009 – Re-filed June 1, 2009
AFFIRMED IN PART; REVERSED IN PART
Cynthia Barrier Patterson, of Columbia, and Donald R. Moorhead, of Greenville, for Appellant/Respondents.
C. Stuart Mauney and T. David Rheney, both of Gallivan, White & Boyd, of Greenville, for Respondent/Appellant.
JUSTICE PLEICONES: This action arose out of an automobile accident in which Noel Dillon was injured due to Neil Frazer’s admitted negligence. The men were co-employees of a company located in Ontario, Canada and both were residents of Ontario. After a jury verdict for $6,000, Dillon[1] appealed the trial court’s refusal to grant a new trial absolute on damages. Frazer appealed four points, all relating to whether or not Dillon’s action should have been barred by the exclusivity statute found in Ontario workers’ compensation law. We certified the case pursuant to Rule 204(b), SCACR. We now affirm the trial court’s ruling refusing to apply Ontario law, reverse the trial court’s refusal of a new trial absolute as to damages, and remand.
FACTS
In 2002, Dillon and Frazer were employed by Massiv Die-Form (Massiv), a Canadian corporation with no facilities or place of business in South Carolina. The men were in Greenville, South Carolina working for Massiv. During their visit, Dillon and Frazer stayed at a hotel in Greenville and drove a rental car, all of which was paid for by Massiv. Both Dillon and Frazer were paid 30 minutes per day for the travel time between their hotel and the worksite. Frazer was the only employee authorized to drive the rental car.
Dillon sustained injuries in a car accident when Frazer ran a stop sign in a car in which Dillon was a passenger. Dillon was transported by ambulance to a hospital, where it was determined that he had eight fractured ribs on his right side and two on his left, a fractured sternum, a fractured clavicle, a fractured left thumb, and a punctured lung. He was admitted to the hospital where he remained for two days. Once back in Canada, Dillon received physical therapy. The remainder of his care was covered by the Canadian Health System and those costs were not sought in this action.
Due to his punctured lung, Dillon was not medically able to fly back to Canada until the Friday following his release from the hospital. He did not return to work for at least 10 weeks. Initially, Dillon returned to full-time work, but performed fewer overtime hours than prior to his injuries. Dillon testified that, prior to the accident, he worked roughly between 900 and 1,100 hours of overtime and double time each year. He stated that, after the accident, the number of hours he was able to work diminished.
Frazer admitted liability, so the only questions remaining for the jury were the amount of damages due Dillon and whether Dillon’s wife was entitled to damages for loss of consortium. All told, Dillon’s hospital care in Greenville amounted to $10,518. Dillon also claimed $320 for EMS transportation to the hospital and $1,188 in physical therapy bills. In addition to compensation for medical care, Dillon also contended that he was entitled to $509,168 in lost past and future earnings, including $101,350 in lost wages from the date of injury to the estimated trial date and $407,818 for the post-trial period, based on calculations by Dillon’s expert.
During deliberations, the jury sent questions to the judge asking whether any compensation had been paid to Dillon by a third party. The jury awarded Dillon $6,000 and found for Frazer on the consortium claim by Dillon’s wife. Dillon moved for a new trialnisi additur or in the alternative, for a new trial absolute as to damages only. The trial court granted Dillon’s motion for additur and increased the damages by $15,000, bringing the total amount of damages to $21,000. He denied all other motions.
I.
New trial absolute
Dillon argues on appeal that the trial court erred by not granting a new trial absolute as to damages. We agree.
The trial court has sound discretion when addressing questions of excessiveness or inadequacy of verdicts, and its decision will not be disturbed absent an abuse of discretion. Toole v. Toole, 260 S.C. 235, 239, 195 S.E.2d 389, 390 (1973). “The trial court must grant a new trial absolute if the amount of the verdict is grossly inadequate or excessive so as to shock the conscience of the court and clearly indicates the figure reached was the result of passion, caprice, prejudice, partiality, corruption or some other improper motive. The failure of the trial judge to grant a new trial absolute in this situation amounts to an abuse of discretion and on appeal this Court will grant a new trial absolute.” Vinson v. Hartley, 324 S.C. 389, 404-05, 477 S.E.2d 715, 723 (Ct. App. 1996). When considering a motion for a new trial based on the inadequacy or excessiveness of the jury’s verdict, the trial court must distinguish between awards that are merely unduly liberal or conservative and awards that are actuated by passion, caprice, prejudice, or some other improper motive. Elam v. S.C. Dept. of Transp., 361 S.C. 9, 602 S.E.2d 772 (2004).
DISCUSSION
In Kalchthaler v. Workman, 316 S.C. 499, 450 S.E.2d 621 (Ct. App. 1994), the Court of Appeals held that a party, having requested and been granted an additur, cannot complain of the amount. However, this does not preclude a party that is granted additur from appealing the trial judge’s refusal to grant a new trial absolute. Sullivan v. Davis, 317 S.C. 462, 467, 454 S.E.2d 907, 911 (Ct. App. 1995).
Dillon presented evidence of over $500,000 in damages as a result of the accident. While Frazer contested portions of Dillon’s claim, unchallenged testimony at trial established the following damages: $10,518 in medical bills, $320.00 for EMS transportation to the hospital, $1,188 in physical therapy bills, and $18,000 in lost wages and overtime pay. This totals $30,026 in undisputed damages.
We find the jury verdict of $6,000 irreconcilably inconsistent with the unchallenged evidence presented at trial. The disparity between the award and the admitted damages goes beyond a merely conservative award and suggests that the jurors were motivated by improper considerations.
This suggestion is borne out by the following three questions asked by the jury during deliberations: (1) if it could see the deposition of the human resources director for Massiv; (2) whether Dillon received any compensation while he was not working during the ten weeks after the accident; and (3) whether medical bills for the accident were paid for, and if so, by whom. The trial judge responded that those matters “are not for your concern.” The jury’s verdict demonstrates that the jury failed to follow the court’s instruction.
In Sullivan, supra, the jury sent questions to the trial judge inquiring as to what medical expenses had been covered by insurance.Id. at 466, 454 S.E.2d at 910. The jury awarded $20,000 despite the plaintiff’s medical bills totaling roughly $130,000, leading the Court of Appeals to conclude that “[t]he jurors obviously did not follow the court’s instructions to disregard insurance. . . . Therefore we must set it aside and grant a new trial absolute.” Id. at 466-67, 454 S.E.2d at 910-11. In the instant case, the record demonstrates that the jury ignored the trial court’s instruction to disregard matters relating to third party payment of medical bills.
The jury’s award of $6,000 in the face of over $30,000 in undisputed damages is grossly inadequate and demonstrates that the verdict was actuated by improper motivation. No plausible reason for the amount of the verdict has been advanced. For these reasons, the trial court erred in not granting Dillon’s motion for a new trial absolute.
II.
Application of Ontario law
Frazer argues in relation to the Ontario worker’s compensation exclusivity law, that the trial court erred: (1) in refusing to apply the exclusivity law; (2) in refusing to admit evidence on the exclusivity law; (3) in refusing to charge the jury on the exclusivity law; and (4) in denying Frazer’s motion for judgment notwithstanding the verdict based on application of the exclusivity law. Because each point hinges on the applicability of Ontario worker’s compensation law and the exclusivity law, we address these points as one and affirm on the ground that Frazer failed to plead Ontario law and so, is barred under Rules 12(b) and 8(c). See Rule 12(b), SCRCP (every defense must be asserted in the responsive pleading); Rule 8(c), SCRCP (in a responsive pleading a party “shall set forth affirmatively . . . any other matter constituting an avoidance or affirmative defense.”).[2]
Even if Frazer’s argument was preserved, we find that lex loci delicto properly governs this case. See Lister v. Nationsbank of Delaware, 329 S.C. 133,, 143, 494 S.E.2d 449, 454 (Ct. App. 1998) (In choice of law in South Carolina, the general rule is that the substantive law governing a tort action is the law of the state where the injury occurred.); Oshiek v. Oshiek, 244 S.C. 249, 136 S.E.2d 303, 305 (1964), overruled on other grounds (In tort cases, the law of the place where the injury was occasioned or inflicted governs in respect of the right of action.).
CONCLUSION
For the reasons stated above, we affirm the trial court’s refusal to apply Ontario law and reverse the denial of Dillon’s motion for a new trial absolute. Since Frazer admitted liability, we remand for a new trial on damages only.
TOAL, C.J., WALLER, BEATTY and KITTREDGE, JJ., concur.
[1] Though Elizabeth Dillon filed Notice of Appeal, she did not pursue her appeal.
[2] Frazer asserted South Carolina worker’s compensation law in his pleadings, but did not include Ontario worker’s compensation law. The trial court denied his motion to amend his pleadings to include Ontario law.
