Terence Sullivan v. Ocean 22 Vacation Owners' Association, Inc.

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

Terence Sullivan, Appellant.

v.

Ocean 22 Vacation Owners' Association, Inc.,
Respondent.

Appellate Case No. 2023-000969

Appeal From Horry County
R. Keith Kelly, Circuit Court Judge

Unpublished Opinion No. 2026-UP-016
Submitted October 1, 2025 – Filed January 21, 2026

REVERSED

Jeffrey Ryan Heiskell, of Georgetown, and Joseph Clay
Hopkins, of Charleston, both for Appellant.

Nicholas James Rivera, Russell Grainger Hines, and
Edward D. Buckley, Jr., of Charleston, all for
Respondent.

PER CURIAM: This appeal arises from the circuit court's dismissal of Terence
Sullivan's (Appellant's) complaint for lack of subject matter jurisdiction pursuant to
Rule 12(b)(1) of the South Carolina Rules of Civil Procedure. Appellant argues
the circuit court erred by (1) holding Ocean 22 Vacation Owners' Association (the
Association) was Appellant's statutory employer under the South Carolina
Workers' Compensation Act (the Act); and (2) ignoring case law that requires
statutory employers to procure workers' compensation insurance. We reverse.

FACTS

The Association is the owners' group for Hilton Grand Vacations Club Ocean 22
Myrtle Beach (the Property), a Hilton Grand Vacations, Inc. (HGV) timeshare
resort. The Association is registered with the South Carolina Secretary of State's
Office as a corporation. HGV, through its wholly owned subsidiary, Hilton Grand
Vacations Management (HGVM) (collectively, Hilton) entered into an agreement
with the Association to manage and operate the Property as a Hilton-branded
timeshare resort. The Association has no direct employees. The timeshare
structure was formalized in the "Declaration of Covenants, Conditions and
Restrictions and Vacation Ownership Instrument for Ocean 22 Vacation Suites"
(the Declaration). In the Declaration, the Association is defined as "a South
Carolina non-profit corporation, organized for the purposes set forth in this
Declaration. The Association manages the [Property] through the Board and the
Manager."

The Association entered into a management agreement (the Management
Agreement) with HGV, which allowed HGV to "manage and operate the Property
in accordance with the same practices and standards utilized in the management of
other Hilton Grand Vacation Club projects" and "maintain and repair the Property
to a first class resort standard." Pursuant to the Management Agreement, HGV
agreed to "employ, compensate[,] and supervise all persons necessary to manage,
maintain, administer and operate the [Property]." The Management Agreement
further allowed HGV to delegate and subcontract all or part of its obligations.
Appellant was hired by HGV to serve as a bell person at the Property. While
working at the Property, Appellant slipped on an algae spot on the sidewalk and
was injured. He sought and received $80,000 in workers' compensation benefits
through his direct employer, HGV. A Medicare Set Aside trust account was
established for Appellant in the amount of $57,285.31. Two months after settling
with HGV, Appellant filed suit against the Association, alleging causes of action
for (1) Premises Liability—Negligence/Gross Negligence as to an Invitee, and (2)
Negligent Hiring, Training, Supervision and Retention.

The Association moved to dismiss on October 15, 2021, arguing, as Appellant's
statutory employer, it was immune from tort liability. Following a hearing, the
circuit court granted the Association's motion and dismissed Appellant's complaint
with prejudice. The order held Appellant's exclusive remedy was dictated by the
Act, and as such, the circuit court "lacked the subject matter jurisdiction to
entertain his work[-]related injury claims." Appellant moved for reconsideration,
arguing (1) the circuit court erred in finding the Association was his statutory
employer specifically because the businesses of the Association and Hilton are
wholly separate and distinct, and (2) even if the Association was in fact Appellant's
statutory employer, the Association still was not entitled to tort immunity under the
Act because the Association did not establish that it maintained workers'
compensation insurance as required by the Act. The circuit court denied the
motion1 finding, inter alia, Appellant staked his entire argument "on the false
premise that the Association needed to secure the payment of workers'
compensation to avail itself of tort immunity." The court held language in the
Management Agreement explicitly showed Hilton was responsible for complying
with all applicable laws, "which necessarily includes complying with the insurance
requirements of the Act," and this was shown through the workers' compensation
settlement reached between Appellant and Hilton and its workers' compensation
insurance carrier, Starr Indemnity & Liability Company. This appeal followed.

STANDARD OF REVIEW2

"The determination of whether a worker is a statutory employee is jurisdictional
and therefore the question on appeal is one of law." Johnson v. Jackson, 401 S.C.
152, 159, 735 S.E.2d 664, 667 (Ct. App. 2012). "When deciding questions of law,
such as this one, this court has the power and duty to review the entire record and
decide the jurisdictional facts in accord with its view of the preponderance of the
evidence." Id. "It is South Carolina's policy to resolve jurisdictional doubts in
favor of the inclusion of employers and employees under the [Act]." Collins v.
Charlotte, 412 S.C. 283, 288, 772 S.E.2d 510, 513 (2015) (quoting Fortner v.

1
The court found, as an initial matter, that there were procedural issues as to both
of Appellant's arguments because they had not been raised prior to Appellant's
Motion to Reconsider. In any event, the court still addressed each argument on the
merits. Upon review of the record, we find these issues preserved.
2
The parties disagree on the proper appellate standard of review. Appellant argues
the proper standard is based on a motion for summary judgment. However, this
appeal challenges the circuit court's dismissal on the basis that the Association is
immune from tort liability to Appellant as Appellant's statutory employer.
Additionally, in its order, the circuit court explicitly dismisses the Appellant's
complaint due to lack of subject matter jurisdiction.
Thomas M. Evans Constr. & Dev., LLC, 402 S.C. 421, 429-30, 741 S.E.2d 538,
543 (Ct. App. 2013)).

LAW/ANALYSIS3

Appellant argues the circuit court erred in finding the Association was not required
to provide documentation of a workers' compensation insurance policy.4 We
agree.

A statutory employer pursuant to the Act is liable to pay workers' compensation to
any workman employed in the work as if the workman were directly employed by
the owner. S.C. Code Ann. § 42-1-400 (2015). However, to benefit from the
Act's protections, including immunity from tort liability, the statutory employer
must comply with the insurance requirements outlined in sections 42-5-10 and 42-
5-20 of the Act. Section 42-1-415 provides that higher-tier contractors,
subcontractors, or project owners must collect documentation of insurance at the
time a contractor or subcontractor is engaged to perform work. Failure to collect
proper documentation can result in liability for workers' compensation claims and
loss of immunity for the employer.

Here, there is no documentation the Association procured workers' compensation
insurance pursuant to the Act. In fact, the Association admitted at the hearing on
the motion to dismiss that it was unaware if it carried a workers' compensation
policy. Rather, it relied on the fact Hilton had workers' compensation insurance as
evidenced through Appellant's prior settlement with Hilton. To the extent the
Association and circuit court relied on the language in the Management Agreement
as documentation for a workers' compensation policy, we disagree. See Harrell,
337 S.C. at 322, 523 S.E.2d at 770 ("Whatever the parties contract to call their
relationship is not controlling in a statutory employment analysis."); S.C. Code
Ann. § 42-1-610 (2015) ("No contract or agreement, written or implied, and no

3
We first address Appellant's second issue.
4
The Association argues this issue is not properly before the court because
Appellant conceded Harrell v. Pineland Plantation, Ltd., 337 S.C. 313, 523 S.E.2d
766 (1999) applied and did not argue Poch v. Bayshore Concrete Products/South
Carolina, Inc., 405 S.C. 359, 747 S.E.2d 757 (2013) to the circuit court. While
Appellant never explicitly named Poch, he did raise the issue of procuring workers'
compensation insurance at the hearing. Accordingly, we find it preserved for
review.
rule, regulation or other device shall in any manner operate to relieve any
employer, in whole or in part, of any obligation created by this Title except as
otherwise expressly provided in this Title."); Wilson v. Daniel Int'l Corp., 260 S.C.
548, 552, 197 S.E.2d 686, 688 (1973) (stating the terminology used by the parties
is not controlling of their relationship). We find, based on the language in the Act
as well as case law, that to be entitled to tort immunity as a statutory employer, the
Association was required to provide documentation of a workers' compensation
insurance policy. See Glover v. U.S., 337 S.C. 307, 311, 523 S.E.2d 763, 765
(1999) (holding "an owner, within the meaning of S.C. Code § 42-1-400, must
comply with section 42-5-20 by either directly purchasing insurance to cover its
potential workers' compensation liabilities or qualifying as a self-insurer before the
owner may claim immunity under the Act's exclusive remedy provision"); Harrell,
337 S.C. at 327, 523 S.E.2d at 773 (finding "[a]n employer who refuses or neglects
to secure such compensation becomes liable either under the Act or in an action at
law . . . . Thus, an employer who fails to secure the payment of compensation as
prescribed in section 42-5-20 loses its immunity under the Act's exclusive remedy
provision."); 6 Arthur Larson, Workers' Compensation Law, § 67.22 (1998) ("A
common exception to the exclusiveness of the compensation remedy is the right of
suit against an employer who fails to secure his compensation liability by taking
out insurance or qualifying as a self-insured."); Poch, 405 S.C. at 379, 747 S.E.2d
at 767 (emphasizing that compliance with section 42-5-20 is a prerequisite for
immunity under the Act).5

5
Because we reverse on the basis the Association failed to comply with the Act by
neglecting to procure workers' compensation insurance, we decline to address
Appellant's argument that the circuit court erred in finding the Association was his
statutory employer under the Act. See Futch v. 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 disposition of a prior issue is dispositive).
If the Association was, in fact, the statutory employer, then it did not comply with
the Act's requirement to provide documentation of a workers' compensation policy.
If the Association was not the statutory employer, then it would not be eligible for
the immunity protections afforded by the Act. See S.C. Code Ann. § 42-5-10
("Every employer who accepts the compensation provisions of this Title shall
secure the payment of compensation to his employees in the manner provided in
this chapter."); Keene v. CNA Holdings, LLC, 436 S.C. 1, 13, 870 S.E.2d 156, 162
(2021) (emphasizing that the public policy behind the statutory employee doctrine
is to ensure coverage for workers, not to provide civil immunity to entities that do
not meet the definition of an employer under the Act); Posey v. Proper Mold &
Eng'g, Inc., 378 S.C. 210, 224, 661 S.E.2d 395, 403 (Ct. App. 2008) (reiterating
Based on the foregoing, the order of the circuit court is

REVERSED.6

WILLIAMS, C.J., and THOMAS and CURTIS, JJ., concur.

the Act "provides the exclusive remedy against an employer for an employee's
work-related accident or injury."); Wright v. Smallwood, 308 S.C. 471, 475, 419
S.E.2d 219, 221 (1992) ("Under the scheme [set forth in the Act], the employee
receives the right to swift and sure compensation; the employer receives immunity
from tort actions by the employee.")
6
We decide this case without oral argument pursuant to Rule 215, SCACR.