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Insurance – Auto – UM – Workers’ Compensation – ‘Legally Entitled to Recover’ – First Impression

The plaintiff-passenger was injured when, while she was riding in her co-worker’s car in the course of their employment, the co-worker negligently caused an accident. The Workers’ Compensation Act prevents plaintiff from obtaining a judgment against the co-worker, so plaintiff is not “legally entitled to recover” any amount from the co-worker; therefore, plaintiff is not entitled to uninsured motorist coverage under the clear language of S.C. Code Ann. § 38-77-150.

We reverse the Court of Appeals’ decision, which upheld the circuit court decision that plaintiff could recover uninsured motorist (UM) coverage from her co-worker’s and her own auto insurers.

We assume, without deciding, that the co-worker was an uninsured motorist (her insurer denied coverage).

Our UM statute provides in part, “(A) No automobile insurance policy or contract may be issued or delivered unless it contains a provision by endorsement or otherwise, herein referred to as the uninsured motorist provision, undertaking to pay the insured all sums which he is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle . . . .

“(B) No action may be brought under the uninsured motorist provision unless copies of the pleadings in the action establishing liability are served in the manner provided by law upon the insurer writing the uninsured motorist provision. The insurer has the right to appear and defend in the name of the uninsured motorist in any action which may affect its liability and has thirty days after service of process on it in which to appear.”

Under our Workers’ Compensation Act (the Act), the employer receives immunity from tort actions by the employee. However, UM coverage sounds, not in tort, but in contract. Thus, an employee injured within the course and scope of his employment may, in appropriate circumstances, recover both workers’ compensation benefits and UM benefits, as the exclusivity provision of the Act does not automatically bar all contractual claims for UM benefits.

However, looking solely at the language used by our General Assembly in the UM statute, we find the phrase “legally entitled to recover” is wholly unambiguous: it means a plaintiff has secured a judgment against an at-fault defendant after overcoming any defenses the defendant may have presented. We reject the lower courts’ interpretation of the UM statute as requiring a plaintiff to show only fault and resulting damages. Such a reading automatically negates any defenses the at-fault driver could present, such as the statute of limitations, comparative negligence, or statutory immunity. We see nothing in the language of the UM statute to suggest the legislature intended that result.

We believe our legislature, like the legislatures of the overwhelming majority of jurisdictions around the country, intended the Act to be the exclusive remedy since the injured employee will never be “legally entitled to recover” against his co-employee.

Furthermore, § 38-77-150(B) states that an action for UM benefits may not be brought “unless copies of the pleadings in the action establishing liability” are served on the insurer, and the insurer “has the right to appear and defend in the name of the uninsured motorist in any action which may affect its liability.” From this language, it is manifest the General Assembly has imposed several hurdles as conditions precedent to recovering UM benefits: (1) an injured motorist must file a tort suit against the at-fault driver prior to seeking contractual UM benefits from an insurer, and (2) a copy of the pleadings from that tort suit must be served on the insurer so as to allow it to limit its possible exposure in the event of an adverse judgment.

Thus, an insurer must be served with copies of the pleadings in the underlying tort suit against the uninsured motorist, and those pleadings must include the formal allegations by the parties of their respective claims and defenses.

The fact that the “pleadings” that must be served on the insurers include possible defenses necessarily lends support to our conclusion that the UM statute requires a factfinder to consider the presence and viability of any defenses to liability in a separate tort action. Were we to read “legally entitled to recover” as only requiring fault and resulting damages, an injured motorist would never need to acknowledge the existence or merit of any possible defenses to liability, thereby contravening the purpose of the notice provision in § 38-77-150(B).

Here, plaintiff did not file a separate tort suit against her co-worker, much less secure a judgment against her, so she is not “legally entitled to recover” against the co-worker. While it is understandable why plaintiff did not sue her co-worker in tort—the Act indisputably provides the co-worker with an ironclad defense to any possible liability—plaintiff’s failure to follow the substantive requirements of the UM statute are fatal to any possible claim against petitioners for UM benefits.

We note that plaintiff—who paid for UM and UIM coverage—will not receive the benefit of her contractual bargain with her insurer, through no fault of her own. However, we are constrained by our judicial role to interpret the law as written and not to create exceptions to plainly-worded statutes.


Connelly v. Main Street America Group (Lawyers Weekly No. 010-006-23, 15 pp.) (John Kittredge, J.) Appealed from Richland County Circuit Court (Jocelyn Newman, J.) Thomas Frank Dougall, Michal Kalwajtys, Eugene Hamilton Matthews Alfred Johnston Cox and Kendall Patricia Crawford for petitioners; John Kassel, Theile Branham McVey and Bert Glenn Utsey for respondents; John Robert Murphy and Megan Noelle Walker for amicus curiae. S.C. S. Ct.

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