Charleston partner Charles Norris successfully represented State Farm in its appeal of a decision involving whether an insured who had not fully paid a premium was covered when he had a wreck.

The S.C. Court of Appeals said the plaintiff failed to show uninterrupted coverage and didn't show detrimental reliance on an employee's assurance that he would have uninterrupted coverage if the amount due was paid. An Anderson County trial court had previously ruled for the plaintiff.

"It's clear from this decision that representations of coverage by an agent after a loss has already occurred cannot resurrect or revive a policy that's already been cancelled," Mr. Norris told S.C. Lawyers Weekly.

The plaintiff was in a collision in 2002 two days after his policy expired for lack of a complete premium payments. Coverage would resume when the amount was paid. A State Farm employee had told him after the wreck that coverage would be uninterrupted if he made the payment. The plaintiff paid, but State Farm refused to honor the accident claim, saying that the policy wasn't in effect at the time of the collision.

The trial court ruled that coverage was uninterrupted because the plaintiff had paid what he owed before the end of the policy period and that the employee's representations precluded State Farm from denying coverage. A three-member panel of the Court of Appeals affirmed.

After the three-member panel affirmed the trial court in a 2-1 decision, State Farm petitioned for a rehearing, en banc. Rehearings, in particular rehearings en banc, are rarely granted, but here the court of appeals granted the petition. In April 2009 all nine judges of the court of appeals heard the petition for rehearing en banc. Judge Paula Thomas, who dissented in the decision of the three-judge panel, wrote the en banc decision reversing the trial court.

Writing the majority opinion, Judge Thomas said the trial court erred in interpreting the policy language because it failed to make a finding of ambiguity and then relied solely on a provision that dealt with the policy renewal, not reinstatement of uninterrupted coverage. Also, it erred in holding that the plaintiff's reliance on the insurance employee's post-collision representation of uninterrupted coverage was reasonable. The appellate court said reliance was just one element of estoppel and that the plaintiff could not have proved the other elements.

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