Nationwide v. Smith

THE STATE OF SOUTH CAROLINA

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT

BE CITED OR RELIED ON AS PRECEDENT
IN ANY PROCEEDING

EXCEPT AS PROVIDED BY RULE 239(d)(2),
SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Nationwide Insurance Company,       
Respondent.

v.

Barbara Smith, David Smith and Donald M. Brandt, Defendants,

of whom Barbara Smith and David Smith are,       
Appellants.

Appeal from Bamberg County

James D. Bailey, Special Referee

Unpublished Opinion No. 2004-UP-333

Submitted May 12, 2004 – Filed May 17,
2004

REVERSED

James B. Jackson, Jr., of Orangeburg, for Appellants.

Darra J. Vallini, of Lexington, for Respondent.

PER CURIAM:  David and Barbara Smith appeal
from the special referee’s order granting Nationwide Insurance Company’s motion
for summary judgment.  We reverse.

FACTS
AND PROCEDURAL BACKGROUND

On August 25, 1999, David Smith drove
his employer’s log truck, a 1988 Kenworth Tractor, to Georgia on company business. 
While in Georgia, the truck experienced mechanical problems and Smith called
Donald Brandt, whom Smith then believed was his employer, for assistance. 
Brandt arrived at the scene driving his personal vehicle.  He decided to tow
the log truck behind his vehicle and drive back to South Carolina.  Smith
steered the disabled log truck while it was being towed.  During the tow of
the log truck, two tires on Brandt’s vehicle “blew out,” forcing both vehicles
off the road and down a hillside.  Smith was injured as a result of this accident.

On the date of the accident, Smith believed Brandt
was his employer.  Smith subsequently learned of Brandt’s purported transfer
of the 1988 Kenworth Tractor to his daughter, Chastity Connelly, on August
1, 1999, under the name Connelly Specialty Post Poles and Lumber.  Brandt’s
attempted transfer to his daughter of ownership of his company assets, including
the log truck, was part of his apparent efforts to defraud a judgment creditor. 
On July, 12, 1999, a judgment in excess of one million dollars was entered
in Bamberg County against Brandt.
[1]

While a bill of sale was executed transferring
the Kenworth Tractor to Chastity and her company,
[2] Connelly Specialty Post Poles and Lumber, neither the bill of sale
nor the certificate of title were filed with the South Carolina Department
of Public Safety. [3]   Moreover,
prior to the one million dollar judgment, there had never “been any discussion
by [Brandt] to [Chastity] or by [Chastity] to [Brandt] that she was going
to get into any transportation business.”  Nevertheless, Chastity claimed
to be Smith’s employer on the day of the accident, August 25, and only
on that day.  Not knowing whether Brandt or Chastity was his true employer
on August 25, Smith named both Brandt and Chastity in his worker’s compensation
claim.  That claim was settled, with contributions from both Brandt’s and
Chastity’s respective companies, prior to the issuance of a final decision
by the Worker’s Compensation Commission.  The orders approving the settlement
agreements refer to Brandt as the “alleged employer” and Chastity as the “employer.”

Smith and his wife subsequently filed a negligence
action against Brandt.  Brandt’s personal vehicle was covered by a Nationwide
insurance policy.  Nationwide filed a declaratory judgment action, seeking
a determination that it owed no duty to insure Brandt.  Specifically, Nationwide
argued against coverage because it claimed Smith was employed by Brandt at
the time of the accident, and Brandt’s policy specifically excluded employees
from coverage.  The matter was referred to a special referee.  Nationwide
filed a motion for summary judgment based primarily upon depositions taken
in the worker’s compensation action.  The special referee granted the motion,
finding Brandt was Smith’s employer on August 25, 1999, as a matter of law. 
The Smiths appeal.

STANDARD
OF REVIEW

Summary judgment is appropriate when “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 a judgment as a matter
of law.” Rule 56(c), SCRCP; see also Tupper v. Dorchester
County, 326 S.C. 318, 325, 487 S.E.2d 187, 191 (1997); Wells v. City
of Lynchburg, 331 S.C. 296, 301, 501 S.E.2d 746, 749 (Ct. App. 1998). 
In reviewing the grant of a summary judgment motion, this court applies
the same standard which governs the circuit court: summary judgment is proper
when “there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.” Rule 56(c), SCRCP;
Baughman v. Am. Tel. & Tel. Co., 306 S.C. 101, 114-15, 410 S.E.2d
537, 545 (1991).  “In determining whether any triable issues of fact exist,
the evidence and all inferences which can be reasonably drawn from the evidence
must be viewed in the light most favorable to the nonmoving party.”  Strother
v. Lexington County Recreation Comm’n, 332 S.C. 54, 61, 504 S.E.2d 117,
121 (1998).

DISCUSSION

The Smiths argue the special
referee erred in granting Nationwide’s motion for summary judgment.  We
agree.

The relevant section of the Nationwide
policy on Brandt’s personal vehicle excludes coverage for “injury to
an employee of any insured while engaged in employment.”

We find that, based upon the pleadings,
exhibits, and deposition testimony in this case, the special referee
erred in granting Nationwide’s motion for summary judgment.  In granting
summary judgment the special referee improperly assigned credibility
to Smith’s initial belief that he was employed by Brandt on August 25. [4]   The special referee ignored
the appropriate summary judgment standard in “find[ing] Mr. Smith’s
testimony is more credible than that offered by Mr. Brandt and Mr. Brandt’s
daughter, Chastity.”  See Heirs v. Mullens, 310 S.C. 63,
68, 425 S.E.2d 57, 60 (Ct. App. 1992) (stating “matters of credibility
should not be determined at the summary judgment stage.”).  The special
referee further ignored the following deposition testimony of Brandt
and Chastity, respectively:

Q:
On the date
of this accident, August 25, 1999, who was Mr. Smith working for?

A[by Brandt]: 
On the day of the
accident?

Q:
Yes, sir.

A:
Who was he
working for?

Q:
Yes, sir.

A:
He was working
for Connelly Post Specialty.

...

Q:
Do you know
of any documents or personnel files … to a Mr. Smith?

A[by Chastity]:
No.  He only was
employed for one day.

Q:
All right. 
And what day was that?

A:
August the
25th, 1999.

The special referee inexplicably determined
that this record yielded but one conclusion, that is, Brandt was David
Smith’s employer on August 25, 1999.  Viewing the facts and inferences
in a light most favorable to the Smiths, this record, at a minimum,
creates a genuine issue of material fact as to whether Brandt or Chastity
was David Smith’s employer on August 25, rendering summary judgment
inappropriate.

CONCLUSION

The special referee’s order granting Nationwide’s
motion for summary judgment is

REVERSED.

ANDERSON, HUFF, and KITTREDGE, JJ., concur.

[1]        Chastity understood her father’s reason for the transfer
to her of his business interests: “[W]ell, the end of July, we decided
that we were going to switch my father’s truck into my name and I was
going to buy the truck from him due to a huge lawsuit against him in
July of ’99…actually, my father asked me about the truck due to his
lawsuit.  That was the whole reason we—he wanted to get it out of his
name….”

[2]        The term “company” is used loosely, for Chastity produced
little in terms of business records at her deposition in response to
Smith’s subpoena.

[3]        The bill of sale reflected a payment of $10,500.  It
is admitted, however, that no payment was ever made or intended.  Brandt
maintained insurance on the log truck after the August 1 “purchase.”

[4]        As noted, Smith was initially unaware of the purported
transfer of the Kenworth Tractor from Brandt to Chastity.