South Carolina Supreme Court Says Passenger/Employee May Not Recover UM Benefits From Driver/Co-Worker Auto Carrier

South Carolina’s Exclusive Remedy Rule has prevented an employee from collecting $350,000 in uninsured motorist benefits for injuries she sustained in an automobile accident she was in while a passenger in a vehicle owned and driven by a co-employee.

Stephany Connelly and a co-worker named Freya Trezona were traveling in a vehicle owned and driven by Trezona. In a case which for the first time defines the intersection between the South Carolina uninsured motorist statute and that state’s workers’ compensation statute, Connelly began receiving workers’ compensation benefits but also made a claim for bodily injury and UM benefits with her own insurance carrier and with Trezona’s carrier.

Both companies denied the claim, maintaining Connelly’s sole remedy lay with the Workers’ Compensation Act. Both carriers denied the claims, so Connelly filed a declaratory judgment action.

The trial court held that Trezona’s vehicle was an ‘uninsured vehicle’ because her insurer had denied coverage. It further ruled in favor of Connelly, noting that although the uninsured motorist statute requires that Connelly be ‘legally entitled to recover’ from Trezona in order for her to be able to recover UM benefits, this statutory language was ambiguous because the phrase is not defined in either the South Carolina Code or either of the insurance policies and there is a jurisdictional split on the correct interpretation of the phrase.