Nationwide Mutual Ins. Co. v. Walls
Annotate this CaseNationwide Mutual Insurance Company ("Nationwide") relied on flight-from-law enforcement and felony step-down provisions in an automobile liability insurance policy to limit its coverage to the statutory mandatory minimum. Following a bench trial and after issuance of the South Carolina Supreme Court's opinion in Williams v. Government Employees Insurance Co. (GEICO), 409 S.C. 586 (2014), the circuit court held the step-down provisions were void pursuant to Section 38-77-142(C) of the South Carolina Code (2015). The court of appeals reversed. Three individuals, Sharmin Walls, Randi Harper, and Christopher Timms, were passengers in a vehicle driven by Korey Mayfield that crashed in 2008 following a high-speed chase by law enforcement. Mayfield refused to pull over, and during the chase, the trooper's vehicle reached speeds of 109 miles per hour. All the passengers begged Mayfield to stop the car, but Mayfield refused. Eventually, the trooper received instructions to terminate the pursuit, which he did. Nevertheless, Mayfield continued speeding and lost control of the vehicle. Timms died in the single-car accident, and Walls, Harper, and Mayfield sustained serious injuries. After being charged with reckless homicide, Mayfield entered an Alford plea. At the time of the accident, Walls' automobile was insured through her Nationwide policy, which included bodily injury and property damage liability coverage with limits of $100,000 per person and $300,000 per occurrence. Walls also maintained uninsured motorist (UM) coverage for the same limits, but she did not have underinsured motorist (UIM) coverage. In reliance on the aforementioned provisions, Nationwide paid only $50,000 in total to the injured passengers (the statutory minimum as provided by law) rather than the liability limits stated in the policy. Safe Auto, Mayfield's insurance company, also paid a total of $50,000 to the passengers. Nationwide brought this declaratory judgment action requesting the court declare that the passengers were not entitled to combined coverage of more than $50,000 for any claims arising from the accident. Walls answered, denying there was any evidence that the flight-from-law enforcement and felony provisions applied. The South Carolina Supreme Court reversed the court of appeals, holding that section 38-77-142(C) rendered Nationwide's attempt to limit the contracted-for liability insurance to the mandatory minimum void.
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