Home / Top Legal News / Punitives not apportioned for split-limit auto policy

Punitives not apportioned for split-limit auto policy

Drivers who’ve been injured by underinsured motorists have received a potentially significant legal ruling in their favor, as the South Carolina Supreme Court has ruled that any punitive damages awarded to accident victims don’t have be apportioned between those sustained for bodily injury and property damage under their insurance policies.



In 2015, a drunken driver crossed over the center line and crashed into a vehicle in which Jack Poole and his wife, Jennifer, were riding. Jack was seriously injured in the collision, and Jennifer’s injuries were fatal. After the at-fault driver’s liability carrier tendered its policy limits, Poole sought recovery from an underinsured motorist (UIM) policy the couple had with GEICO.

Like many drivers, the Pooles had a split-limits insurance policy, meaning that the insurer has a specific maximum liability amounts for different components of a claim. In their case, their policy provided coverage of up to $100,000 per person for bodily injury, and $50,000 for property damage. That distinction was crucial in their case because while the Pooles suffered significant bodily injury, their property damages were minimal because they were riding in a vehicle owned by Jennifer’s mother.

As a result, GEICO tendered the full policy limits for bodily injury, but refused Poole’s request for the $50,000 in property damage coverage in anticipation of a large punitive damages award, contending that the UIM damages were traceable only to bodily injury.

GEICO sought a declaratory judgment stating that it wasn’t liable for any punitive damages under the property damage provision. U.S. District Judge Joseph Anderson found that the question presented a novel issue of law and presented a certified question to the South Carolina Supreme Court asking if punitive damages must be apportioned pro rata between those sustained for bodily injury and those sustained for property damage if an insured seeks coverage under a split limits auto insurance policy.



In a July 5 opinion, the Supreme Court unanimously rejected GEICO’s argument and found that state law did not require punitive damages to be apportioned. Justice Kaye Hearn, writing for the court, said that South Carolina’s UIM statute does not mention allocation, nor indicate that bodily injury and property damage must be analyzed separately before determining whether UIM coverage is triggered. Moreover, Hearn wrote, punitive damages serve to provide plaintiffs with a measure of compensation distinct from compensatory damages.

“While actual damages may be traceable directly to bodily injury and property damage, punitive damages are not so easily divisible,” Hearn wrote. “Reading the statutes to require allocation of punitive damages would result in adding language to the statutes, rather than merely interpreting them. If the General Assembly intended to require the allocation of punitive damages, it could have done so with clear, express language.”

The court also rejected GEICO’s due process argument, noting that its exposure to punitive damages would still be limited by the terms of the UIM policy, and its public policy arguments. The court declined to address GEICO’s argument based on the contractual language of the UIM policy, saying that the trial court was better positioned to consider such arguments.

Christy Tyner and Ronnie Maxwell of Maxwell Law Firm in Aiken represented Poole. Tyner said that the court’s decision is important not only to their clients, but to injured people throughout the state.

“I’ve already had one attorney contact me and say they had a similar issue, and they sent this ruling to the insurance company, and the company has already tendered the property damages limit,” Tyner said. “So we’re already seeing it happen.”

J.R. Murphy and Wesley Sawyer of Murphy & Grantland in Columbia represented GEICO. Murphy declined to comment on the ruling, citing the ongoing nature of the case.

The seven-page decision is Government Employees Insurance Co. v. Poole (Lawyers Weekly No. 010-072-18). The full text of the opinion is available online at sclawyersweekly.com.

Follow David Donovan on Twitter @SCLWDonovan

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