Nancy Morris v. South Carolina Insurance Reserve Fund

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Nancy Morris, as Personal Representative of the Estate of
David Allan Woods, Plaintiff,

v.

State of Fiscal Accountability Authority, South Carolina
Insurance Reserve Fund, Andrew J. Bland, Richard T.
Burkholder, Leemon E. Carner, Pricilla Bland, Jerry
Speissegger Jr., Defendants,

Of Whom Nancy Morris, as Assignee of Andrew J.
Bland, PFC; Leemon E. Carner, PFC; Jerry Speissegger,
Jr., PFC; Priscilla Garrett, SGT; and Richard T.
Burkholder, SGT; is the Appellant,

And

South Carolina Insurance Reserve Fund is the
Respondent.

Appellate Case No. 2021-000502

Appeal From Richland County
L. Casey Manning, Circuit Court Judge

Unpublished Opinion No. 2024-UP-288
Submitted December 1, 2023 – Filed July 31, 2024

AFFIRMED
Garrett Brendan Johnson, of Elrod Pope Law Firm, of
Rock Hill, for Appellant.

Andrew F. Lindemann, of Lindemann Law Firm, P.A., of
Columbia, for Respondent.

PER CURIAM: In this declaratory judgment action, Nancy Morris, as personal
representative of the estate of David Allan Woods, appeals the circuit court's order
granting South Carolina Insurance Reserve Fund's (the IRF's) motion for summary
judgment. Morris argues the circuit court erred by finding (1) her action for bad
faith was barred by the statute of limitations, (2) the assignments rendered this
matter not justiciable, (3) there was no breach of any contractual duties, and (4)
there was no evidence to support a Tyger River 1 claim for bad faith refusal to
settle. We affirm. 2

Facts

Woods died in November 2010 while in custody at Berkeley County's Hill-Finklea
Detention Center after detention center employees failed to provide him with
medical attention. Morris brought a survival and wrongful death action pursuant to
42 U.S.C. § 1983 (the underlying case) against several defendants, including
correctional officers Andrew Bland, Leemon E. Carner, Jerry Speissegger Jr.,
Richard T. Burkholder, and Priscilla Garrett Bland (collectively, the Assignors) in
their individual and official capacities. The case was removed to the United States
District Court for the District of South Carolina, and a jury trial proceeded against
the Assignors. On October 17, 2014, a jury returned a verdict against the
Assignors and awarded $500,000 in actual damages and $2,450,000 in punitive
damages. The district court granted the Assignors' request for setoff, reducing the
actual damages award to $171,875, and awarded Morris attorney's fees and costs of
$386,743.62. The Assignors appealed, and the United States Court of Appeals for
the Fourth Circuit upheld the verdicts. Morris v. Bland, 666 F. Appx. 233 (4th Cir.

1
Tyger River Pine Co. v. Md. Cas. Co., 170 S.C. 286, 170 S.E. 346 (1933)
(holding an insurer could be held liable for unreasonable refusal to settle a claim
within policy limits).
2
We decide this case without oral argument pursuant to Rule 215, SCACR.
2016). The parties stipulated Morris's attorney's fees for the appeal totaled
$25,768.75.

At the time of Woods's death, Berkeley County maintained a policy of General
Tort Liability Insurance issued by the IRF with policy limits of $600,000 per
occurrence. After the appeal, the IRF tendered the full policy limits of $600,000 to
Morris in partial satisfaction of the judgments against the Assignors. In addition,
Morris signed an agreement captioned "Partial Satisfaction of Judgment" reflecting
the IRF's payment of the full policy limits and supplemental payments for
attorney's fees, costs, and post-judgment interest. By the time the circuit court
issued the order from which Morris appeals, the IRF had tendered $992,013.63.

About three years after the district court trial, Morris executed an "Assignment of
Rights and Covenant Not to Execute" (the Assignments) with each of the
Assignors. The Assignments assigned to Morris

any and all claims he/she may have against the [IRF]
and/or any other persons, firms, government
organizations, or entities that arise out of [the underlying
case,] . . . includ[ing] . . . claims arising out of
the . . . bad-faith conduct, and/or breach of contract by
the I[RF] . . . in relation to[] the handling of [the
underlying case]; . . . for any claims the [Assignors] may
have against the [IRF] that arise out of any insurance
coverage applicable to the instant case; and the right to
collect all actual and punitive damages, attorney's fees, or
costs that may arise from those claims.

In consideration of the Assignments, Morris "covenant[ed] not to execute against
any assets of the [Assignors]," "not to institute any further claims, lawsuits,
bankruptcy proceedings, or other causes of action against the [Assignors] to
enforce or collect on the [district court] judgment."

Prior to filing the current action, Morris filed a declaratory judgment in South
Carolina state court against the Assignors, the IRF, and the State Fiscal
Accountability Authority (SFAA) (collectively, the Defendants) to recover the
outstanding punitive damages award under the General Tort Liability Insurance
policy issued by the IRF. The circuit court granted the Defendants' motion for
summary judgment and denied Morris's request for declaratory relief. The circuit
court concluded the Assignments rendered the action non-justiciable because they
relieved the Defendants of any further personal liability and therefore any duty of
the insurers to indemnify was extinguished, relieving the IRF and SFAA of any
further liability. Morris appealed, and this court affirmed the circuit court's
conclusion that the Assignments rendered Morris's claims moot. See Morris v.
State Fiscal Accountability Auth., Op. No. 2023-UP-201 (S.C. Ct. App. filed Oct.
18, 2023) (per curium), petition for cert. filed, Feb. 1, 2024.

Morris brought the current action as the Assignors' assignee on November 6, 2017,
alleging causes of action for breach of contract, negligence, and bad faith against
the IRF for its handling of the underlying case. The IRF moved for summary
judgment on April 5, 2019, arguing (1) the applicable statutes of limitations barred
Morris's claims; (2) Morris relieved the Assignors of their personal liability to pay
the judgments against them by executing the Assignments, and therefore relieved
the IRF of any further liability to pay such judgments; (3) the policy lacked any
specific contract provisions that imposed the contractual duties Morris alleged in
her complaint; and (4) no evidence supported Morris's claim for bad faith because
she never made a demand to settle the underlying case within the policy limits of
$600,000, and she rejected a settlement offer of $600,000 prior to trial.

The circuit court ruled in favor of the IRF. It concluded Morris's claims accrued
no later than the end of the district court trial and the applicable statutes of
limitations thus barred her claims. The circuit court next held that by signing the
covenants not to execute as to each of the Assignors, Morris agreed to extinguish
their personal liability to pay any of the remaining debt, thereby relieving the IRF,
as the liability insurer, of any liability to pay under the Tort Liability Policy. The
circuit court next found Morris failed to identify any contract language in the Tort
Liability Insurance Policy that created the contractual duties that she alleged in her
amended complaint and therefore her breach of contract claim failed as a matter of
law. Finally, the circuit court concluded the IRF was entitled to summary
judgment as to Morris's Tyger River bad faith failure-to-settle claim. It reasoned
that the IRF made a settlement offer for the full policy limits of $600,000 two
months before the district court trial commenced and Morris rejected the offer.
The circuit court further held Morris provided no evidence the IRF acted in bad
faith because the lowest demand she made in the underlying case was for
$1 million, which exceeded the policy limits. The circuit court additionally found
there was no evidence the Assignors ever demanded or requested the IRF pay the
policy limits in settlement of the claims against them. Morris filed a motion to
reconsider pursuant to Rule 59(e), SCRCP, which the circuit court denied. This
appeal followed.
Standard of Review

When reviewing a grant of summary judgment, this court applies the same
standard as the circuit court pursuant to Rule 56(c) of the South Carolina Rules of
Civil Procedure. Wright v. PRG Real Est. Mgmt., Inc., 426 S.C. 202, 211, 826
S.E.2d 285, 290 (2019). Rule 56(c) provides the circuit court shall grant summary
judgment "if 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. "When the circuit court grants summary judgment on a
question of law, we review the ruling de novo." Stoneledge at Lake Keowee
Owners' Ass'n, Inc. v. Clear View Constr., LLC, 413 S.C. 615, 620, 776 S.E.2d
426, 429 (Ct. App. 2015).

I. Breach of Contractual Duties

Morris argues the Tort Liability Policy required the IRF to "pay on behalf of the
insured all sums [that] the insured shall become legally obligated to pay as
damages because of personal injury." She contends that whether the IRF's failure
to settle the underlying action for the full policy limits violated this provision
created a question of fact. We disagree.

We hold the circuit court did not err by concluding the IRF was entitled to
judgment as a matter of law as to Morris's breach of contract claims. See Maro v.
Lewis, 389 S.C. 216, 222, 697 S.E.2d 684, 688 (Ct. App. 2010) (holding the
plaintiff in a breach of contract action has "the burden . . . [of] prov[ing] the
contract, its breach, and the damages caused by such breach" (quoting Fuller v. E.
Fire & Cas. Ins. Co., 240 S.C. 75, 89, 124 S.E.2d 602, 610 (1962))); see also Sides
v. Greenville Hosp. Sys., 362 S.C. 250, 255, 607 S.E.2d 362, 364 (Ct. App. 2004)
("[T]he party seeking summary judgment has the initial responsibility of
demonstrating the absence of a genuine issue of material fact." (quoting Baughman
v. Am. Tel. & Tel. Co., 306 S.C. 101, 115, 410 S.E.2d 537, 545 (1991))); id. ("Once
the moving party carries its initial burden [of demonstrating the absence of a
genuine issue of material fact], the opposing party must come forward with
specific facts that show there is a genuine issue of fact remaining for trial."). Here,
Morris alleged the IRF breached the Tort Liability Policy by "not settling [her]
claim for an amount up to and including the full policy limits" and "not accepting
her reasonable settlement offer within policy limits." Even assuming the contract
contained such an obligation, it is undisputed that the IRF tendered its policy limits
of $600,000 in partial satisfaction of the judgment against the Assignors. It is
further undisputed that the IRF offered to settle up to its policy limits of $600,000
two months prior to trial and Morris rejected the offer. Further, in a letter dated
September 2013 that she attached as an exhibit to her complaint, Morris indicated
she was withdrawing a previous demand of $1 million that she made of Berkeley
County and the IRF due to their failure to pay this demand and she instead stated
she would accept $3 million to settle her claims. Based on the foregoing and
viewing the evidence in the light most favorable to Morris, we conclude Morris
failed to demonstrate a genuine issue of material fact existed as to her breach of
contract claims because the evidence conclusively shows the IRF did not fail to
settle her claims within policy limits. See Singleton v. Sherer, 377 S.C. 185, 197,
659 S.E.2d 196, 202 (Ct. App. 2008) ("Summary judgment is appropriate if 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 judgment as a matter of law.").

II. Tyger River Bad Faith Claim

Morris argues the IRF acted unreasonably and in bad faith in processing her claim
under its insurance contract by offering less than its policy limits to settle the case
on two occasions prior to trial. She additionally argues summary judgment was
inappropriate because she was denied the opportunity to conduct meaningful
discovery and if she had been able to do so, discovery would have likely shown the
case would have been resolved in the summer of 2013 had the IRF tendered its
policy limits at that point. We disagree.

Viewing the evidence in the light most favorable to Morris, we hold no genuine
issue as to any material fact exists as to her claim for bad faith refusal to settle
because the evidence conclusively shows the IRF offered its policy limits prior to
trial and Morris rejected the offer. See Am. Fire & Cas. Co. v. Johnson, 332 S.C.
307, 311, 504 S.E.2d 356, 358 (Ct. App. 1998) ("Bad faith is a knowing failure on
the part of the insurer to exercise an honest and informed judgment in processing a
claim."); id. ("[A]n insurer acts in bad faith where there is no reasonable basis to
support the insurer's decision."); Trotter v. State Farm Mut. Auto. Ins. Co., 297
S.C. 465, 475, 377 S.E.2d 343, 349 (Ct. App. 1988) ("[A] liability insurer owes its
insured a duty to settle a personal injury claim covered by the policy, if settlement
is the reasonable thing to do. If an insurer undertaking the defense of a suit
covered by the policy unreasonably refuses or fails to settle within the policy limits,
it is liable to the insured for the amount of the judgment against him in excess of
the policy limits." (citation omitted) (emphasis added)); Doe v. S.C. Med.
Malpractice Liab. Joint Underwriting Ass'n, 347 S.C. 642, 649, 557 S.E.2d 670,
674 (2001) ("An insurer who unreasonably refuses or fails to settle a covered claim
within the policy limits is liable to the insured for the entire amount of the
judgment obtained against the insured regardless of the limits contained in the
policy."); Crossley v. State Farm Mut. Auto. Ins. Co., 307 S.C. 354, 359, 415
S.E.2d 393, 396-97 (1992) ("The elements of a cause of action for bad faith refusal
to pay first[-]party benefits under a contract of insurance are: (1) the existence of a
mutually binding contract of insurance between the plaintiff and the defendant; (2)
refusal by the insurer to pay benefits due under the contract; (3) resulting from the
insurer's bad faith or unreasonable action in breach of an implied covenant of good
faith and fair dealing arising on the contract; (4) causing damage to the insured.");
Charleston Cnty. Sch. Dist. v. State Budget & Control Bd., 313 S.C. 1, 8, 437
S.E.2d 6, 10 (1993) ("As we noted in Nichols[ v. State Farm Mut. Auto. Ins. Co.,
279 S.C. 336, 306 S.E.2d 616 (1983),] the first-party cause of action is in reality
merely a different aspect of the duty first identified by this Court in Tyger
River. . . . The application of the Tyger River Doctrine to an insurer's handling of a
claim for first-party benefits was a natural extension of the policy behind the
doctrine."). It is undisputed the IRF tendered its policy limits of $600,000 in
partial satisfaction of the district court judgment against the Assignors. It is further
undisputed the IRF offered to settle for its policy limits of $600,000 two months
prior to trial and Morris rejected the offer. Thus, the evidence conclusively shows
the IRF offered its policy limits to settle Morris's claims prior to trial, and Morris
rejected the offer. No authority we have identified requires an insurer to offer to
settle a claim in excess of policy limits prior to trial. See, e.g., Trotter, 297 S.C. at
475, 377 S.E.2d at 349 ("If an insurer undertaking the defense of a suit covered by
the policy unreasonably refuses or fails to settle within the policy limits, it is liable
to the insured for the amount of the judgment against him in excess of the policy
limits." (emphasis added)). Further, we reject Morris's argument that further
discovery would have likely shown the parties could have settled the case sooner.
See Guinan v. Tenet Healthsystems of Hilton Head, Inc., 383 S.C. 48, 54-55, 677
S.E.2d 32, 36 (Ct. App. 2009) ("A party claiming summary judgment is premature
because they have not been provided a full and fair opportunity to conduct
discovery must advance a good reason why the time was insufficient under the
facts of the case[] and why further discovery would uncover additional relevant
evidence and create a genuine issue of material fact."). Based on the foregoing, we
hold there is no genuine issue as to any material fact and the IRF was entitled to
summary judgment as a matter of law as to Morris's claim for bad faith refusal to
settle.3

3
Because our disposition of the foregoing issues is dispositive of Morris's
remaining issues on appeal, we decline to address these issues. See Futch v.
Conclusion

For the foregoing reasons, the circuit court's order granting summary judgment in
favor of the IRF is

AFFIRMED.

GEATHERS and VINSON, JJ., and BROMELL HOLMES, A.J., concur.

McAllister Towing of Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598
(1999) (holding an "appellate court need not address remaining issues when [the]
disposition of [a] prior issue is dispositive").