Labouseur v. Harleysville Mutual Insurance

379 S.E.2d 291, 298 S.C. 213, 1989 S.C. App. LEXIS 61
CourtCourt of Appeals of South Carolina
DecidedFebruary 6, 1989
Docket1286
StatusPublished
Cited by4 cases

This text of 379 S.E.2d 291 (Labouseur v. Harleysville Mutual Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals of South Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Labouseur v. Harleysville Mutual Insurance, 379 S.E.2d 291, 298 S.C. 213, 1989 S.C. App. LEXIS 61 (S.C. Ct. App. 1989).

Opinion

Goolsby, Judge:

The dispositive issue presented by this appeal is whether the South Carolina Workers’ Compensation Commission has exclusive jurisdiction over the subject matter of an action that is brought by an employer against a workers’ compensation insurance carrier and the carrier’s agent for an alleged cancellation of a workers’ compensation insurance policy. The employer, John Labouseur, who operates a restaurant business known as Turpins, brought this action against Harleysville Mutual Insurance Company and its agent, R. V. Chandler and Sons, Inc. Both Harleysville Mutual and Chandler moved to dismiss the complaint and alternatively moved for summary judgment. Acting only on the motions to dismiss, there being no affidavits, depositions, or other materials of record, the circuit court held that the Commission did not have exclusive subject matter jurisdiction over the action. Harleysville Mutual and Chandler appeal. We reverse.

*215 Labouseur’s complaint asserts two causes of action based upon an alleged cancellation by Harleysville Mutual and Chandler of a workers’ compensation insurance policy sold Labouseur by Chandler and issued by Harleysville Mutual. One cause of action seeks a declaratory judgment regarding whether the policy “provided workers’ compensation liability coverage” at the time an employee of Labouseur allegedly sustained an accident arising out of and in the course of her employment with Labouseur and thereby required Harleysville Mutual to pay the costs of defending the injured employee’s claim and to “pay any sums to which the injured employee ... may be entitled” under the workers’ •compensation act. The other cause of action seeks damages for the alleged wrongful termination by Harleysville Mutual and Chandler of the policy, including “[djamages for the payment of compensation claims which would have been covered under the insurance contract----”

In South Carolina, “[a]ll questions arising under” the South Carolina Workers’ Compensation Act, except as otherwise provided in the act and if not settled by agreement of the parties interested therein with the approval of the Commission, shall be determined by the Commission. CODE OF LAWS OF SOUTH CAROLINA § 42-3-180 (1976).

Nowhere does the act otherwise provide that questions relating to the cancellation of a workers’ compensation insurance policy are not to be determined by the Commission. Absent such a provision, the jurisdiction conferred on the Commission by the act to determine “all questions arising under” the act “includes the right and duty to hear and determine questions of fact and law respecting the existence of insurance coverage and liability of the insurance carrier,” grounded as both questions are on the alleged cancellation by Harleysville Mutual and Chandler of the policy. Greene v. Spivey, 236 N. C. 435, 445, 73 S. E. (2d) 488, 495-96 (1952); see Travelers Insurance Co. v. Hawaii Roofing, Inc., 64 Haw. 380, 383 and 386, 641 P. (2d) 1333, 1336 and 1337 (1982) (wherein the court held in an action to determine which of two carriers was responsible for providing benefits to an injured worker that the legislature had removed the circuit court from the adjudicative process in workers’ compensa *216 tion cases by the enactment of a statute prescribing that “[ujnless otherwise provided, the director of labor and industrial relations shall have original jurisdiction over all controversies and disputes arising under this chapter” and by the enactment of a statute disallowing declaratory relief “[wjhere ... a statute provides a special form of remedy for a specific type of case”); cf. Williams Furniture Corp. v. Southern Coatings & Chemical Co., 216 S. C. 1, 7, 56 S. E. (2d) 576, 578 (1949) (“It is ... well settled that ordinarily the Court will refuse a declaration ‘where a special statutory remedy has been provided____’ ”).

Our Supreme Court’s decision in Banks v. Batesburg Hauling Co., 202 S. C. 273, 24 S. E. (2d) 496 (1943), while directly supporting the proposition that the Commission may regulate the cancellation by insurance carriers of workers’ compensation insurance policies, buttresses our conclusion that the Commission, and not the circuit court, should determine the questions raised by Labouseur’s complaint.

Banks involved a challenge to the validity of a rule of the Commission requiring an insurance carrier to notify the Commission when it cancelled a workers’ compensation policy. Cf. S. C. Code Annot., Industrial Comm., Reg. 67-34 (1976) (“Any evidence of compliance issued to the Industrial Commission on behalf of any employer by an insurance carrier shall not ... be cancelled, until at least thirty (30) days have elapsed after a notice of termination has been received by the Industrial Commission____”) The Supreme Court, without raising on its own the issue of subject matter jurisdiction of the Commission to determine a question of this kind, upheld the challenged rule and the Commission’s finding that the policy was not effectively cancelled because of the insurance carrier’s failure to comply with the rule. In reaching this conclusion, the Supreme Court characterized the rule attacked by the insurance carrier as a rule which “implement[ed] the [workers’ compensation law] without violating it____” 202 S. C. at 280, 24 S. E. (2d) at 499.

Banks suggests to us that the Supreme Court recognized, albeit implicitly, that subject matter jurisdicition to decide *217 questions relating to the cancellation of a workers’ compensation policy reposes exclusively in the Commission and that the Commission’s action in adopting a rule regulating cancellation of such policies served merely to effectuate the purposes of the workers’ compensation act.

Aside from the question of cancellation, each cause of action alleged by Labouseur in his complaint raises an issue directly related to the enforcement of the workers’ compensation act in that each expressly seeks as damages from Harleysville Mutual and Chandler the amount Labouseur may be required to pay the injured employee in compensation. Clearly, the question of the amount of compensation, if any, payable to an employee injured in an industrial accident is one that “aris[es] under” the act. It is also one that only the Commission has the authority to determine. Cook v. Mack’s Transfer & Storage, 291 S. C. 84, 352 S. E. (2d) 296 (Ct. App. 1986), cert. denied, 292 S. C. 230, 355 S. E. (2d) 861 (1986).

The questions, then, of whether Harleysville Mutual’s policy covered the risk at the time of injury and whether Harleysville Mutual and Chandler cancelled the policy, are questions that should be resolved in this instance by the Commission in the proceeding concerned with the injured employee’s claim for compensation. 4 LARSON, WORKMEN’S COMPENSATION § 92.40 at 17-37-17-46 (1988); see Spivey v. Oakley’s General Contractors, 32 N. C. App. 488, 490, 232 S. E. (2d) 454, 455 (1977) (“There can be little doubt that, prior to the time the employer settled with the employee, the Commission had jurisdiction to determine the validity of the cancellation.”); cf. Williams Furniture Corp. v. Southern Coatings & Chemical Co., supra

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Bluebook (online)
379 S.E.2d 291, 298 S.C. 213, 1989 S.C. App. LEXIS 61, Counsel Stack Legal Research, https://law.counselstack.com/opinion/labouseur-v-harleysville-mutual-insurance-scctapp-1989.