Alexis Jones v. Progressive Northern Insurance Company

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

Alexis Jones, Respondent-Appellant,

v.

Progressive Northern Insurance Company, Appellant-
Respondent.

Appellate Case No. 2023-000654

Appeal From Chester County
Brian M. Gibbons, Circuit Court Judge

Unpublished Opinion No. 2025-UP-074
Heard December 3, 2024 – Filed February 26, 2025
Withdrawn, Substituted, and Refiled April 16, 2025

AFFIRMED

Jeffery Logan Cannon, of Shaw And Cannon, LLC, of
Rock Hill; and John S. Nichols, of Bluestein Thompson
Sullivan LLC, of Columbia, both for Appellant.

John Robert Murphy and Megan Noelle Walker, both of
Murphy & Grantland, PA, of Columbia, for Respondent.
PER CURIAM: Alexis Jones, a Medicaid recipient, was involved in a car
accident and sustained injuries. Her medical expenses originally totaled
$27,786.17 but were subsequently adjusted to $1,323.60 and paid for by Medicaid.
Jones was also covered by an automobile insurance policy (the Policy) from
Progressive Northern Insurance Company (Progressive) which included a $10,000
medical payments provision for "incurred" medical expenses. On appeal,
Progressive argues the circuit court erred in finding it breached the insurance
contract by paying Jones the reduced amount of expenses paid by Medicaid instead
of the entire $10,000 policy limit. It argues the term "incurred" means only the
amount actually paid by Medicaid. On cross-appeal, Jones argues the circuit court
erred in denying her claims that Progressive's refusal to pay the entire $10,000
medical payment policy limit was (1) made in bad faith, (2) a breach of the
covenant of good faith and fair dealing, (3) a breach of its fiduciary duty, (4) a
breach of contract accompanied by a fraudulent act, and (5) a violation of S.C.
Code Ann. § 38-77-144 (2015). She also asserts the circuit court erred in declining
to award her attorney's fees pursuant to S.C. Code Ann. § 38-59-40 (2015). We
affirm.

1. We hold the circuit court properly found Progressive breached the contract and
awarded Jones the full policy limit; however, the circuit court erred in finding the
term "expenses incurred" was ambiguous. See Gibson v. Epting, 426 S.C. 346,
351, 827 S.E.2d 178, 181 (Ct. App. 2019) ("Ambiguity of a contract is a question
of law, which we review de novo."); McCord v. Laurens Cnty. Health Care Sys.,
429 S.C. 286, 292-93, 838 S.E.2d 220, 223 (Ct. App. 2020) ("To be ambiguous,
contract language must be susceptible to two different but plausible meanings.").
Our supreme court has held that the words "expenses incurred" in an automobile
insurance policy are not ambiguous and should be taken in the plain and ordinary
sense of the words. See Gordon v. Fid. & Cas. Co. of N.Y., 238 S.C. 438, 444, 120
S.E.2d 509, 512 (1961) (finding there was "no uncertainty or ambiguity in the
language of the policy" in regards to the phrase "expense incurred," and the words
"must be taken in the plain and ordinary sense in which they are generally used and
understood"); id. ("[I]n cases where there is no ambiguity, contracts of insurance,
like other contracts, must be construed according to the terms which the parties
have used, to be taken and understood in their plain, ordinary and popular sense.").
Black's Law Dictionary defines "incur" as "[t]o be liable or subject to." Black's
Law Dictionary 768 (6th Ed. 1990). "South Carolina law defines 'expense
incurred' for insurance purposes as 'a thing for which there exists [an] obligation to
pay, either express or implied.'" See Barker v. Washington National Insurance
Company, No. 9:12-CV-1901-PMD, 2013 WL 1767620, at *5 (D.S.C. Apr. 24,
2013) (quoting Gordon, 238 S.C. at 445, 120 S.E.2d at 512).
However, we find the circuit court properly determined that Jones incurred medical
expenses in excess of what Progressive paid. Once Jones was treated by the
medical providers, she became liable for or subject to the costs of the care—
regardless of her insurance coverage. Progressive relies heavily on the Gordon
case. In Gordon, however, the plaintiff received free medical care from a military
hospital. See Gordon, 238 S.C. at 441, 120 S.E.2d at 510. Further, his claim was
based on an appraisal from two doctors and utilizing the prevailing rates in the area
since he was not billed for the services he received. Id. Gordon's medical services
were free so he was not obligated to pay for the services rendered. Id. Therefore,
he did not "incur" an expense. Id. In this case, Jones did not receive free medical
care. She was charged for the services rendered, and she was billed for the same.
When Jones went for treatment, she had no way to know what treatment she
needed, how much it would cost, or how much would be covered by Medicaid.
Once she received the treatment, she was billed the full amount. While the bills
were adjusted for Medicaid at some point, most of the bills in the record show the
full amount charged with no adjustment for Medicaid. Therefore, while we
acknowledge that her costs were eventually adjusted and paid by Medicaid, Jones
still incurred the full amount charged and was responsible for ensuring the bills
were paid.

The Policy must be construed in favor of Jones. See id. at 444, 120 S.E.2d at 512
(explaining "the terms of an insurance policy must be construed most liberally in
favor of the insured"). First, the Policy does not provide a definition of "incurred"
that differs from what case law has established. Furthermore, there is no provision
in the Policy providing for a different (or lesser) payment amount when the insured
is covered by Medicaid.1 Accordingly, we believe the circuit court properly found
Progressive breached the contract because Jones incurred $27,786.17 in medical
expenses and, therefore, Progressive was obligated to pay her the entire $10,000
medical payment under the Policy.

2. We hold the circuit court properly dismissed Jones's bad faith claim. See
HHHunt Corp. v. Town of Lexington, 389 S.C. 623, 631, 699 S.E.2d 699, 703 (Ct.
App. 2010) ("In reviewing the dismissal of an action pursuant to Rule 12(b)(6),
SCRCP, the appellate court applies the same standard of review as the [circuit]
court."); id. at 632, 699 S.E.2d at 703 ("[T]he [circuit] court must base its ruling

1
Progressive relies heavily on an unpublished order from Barker, No.
9:12-CV-1901-PMD, 2013 WL 1767620, at *5. However, the insurance contract
in Barker contained a provision which provided the insurer would only pay the
Medicare adjusted amount. We do not have such a provision in this case.
solely on allegations set forth in the complaint."). Jones originally asserted three
closely related claims against Progressive: bad faith, breach of duty of good faith
and fair dealing, and breach of fiduciary duty. As the circuit court pointed out in
its order and Jones acknowledged in her brief, we believe these three causes of
action are redundant and are best analyzed together under a bad faith claim.

Neither party disputes that the first, second, or fourth elements required for a bad
faith claim are met in this case. See Cock-N-Bull Steak House, Inc. v. Generali Ins.
Co., 321 S.C. 1, 6, 466 S.E.2d 727, 730 (1996) (explaining the elements of an
action for bad faith include (1) a "mutually binding contract of insurance between
the plaintiff and the defendant," (2) the insurer's refusal to pay benefits due under
the contract, (3) the refusal is a result of insurer's bad faith or unreasonable action,
and (4) which causes damage to the insured (quoting Crossley v. State Farm Mut.
Auto. Ins. Co., 307 S.C. 354, 359-60, 415 S.E.2d 393, 396-97 (1992))). As to the
third element, we believe there is no evidence that Progressive acted in bad faith.
See Dowling v. Home Buyers Warranty Corp., 303 S.C. 295, 297, 400 S.E.2d 143,
144 (1991) ("An insured may recover damages for a bad faith denial of coverage if
he or she proves there was no reasonable basis to support the insurer's decision to
deny benefits under a mutually binding insurance contract."). Progressive denied
Jones the full policy limits based upon its misapplication of Gordon and Barker.
Although we disagree with Progressive's interpretation of those cases, we do not
find Progressive acted in bad faith. Additionally, because we hold the circuit court
properly dismissed the bad faith claim and made no finding that the denial was
without reasonable cause, we do not reach the issue of attorney's fees.

3. We hold the circuit court properly dismissed Jones's claim for breach of contract
accompanied by a fraudulent act. See HHHunt Corp., 389 S.C. at 631, 699 S.E.2d
at 703 ("In reviewing the dismissal of an action pursuant to Rule 12(b)(6), SCRCP,
the appellate court applies the same standard of review as the [circuit] court.");
Conner v. City of Forest Acres, 348 S.C. 454, 465-66, 560 S.E.2d 606, 612 (2002)
("[T]o have a claim for breach of contract accompanied by a fraudulent act, the
plaintiff must establish three elements: (1) a breach of contract; (2) fraudulent
intent relating to the breaching of the contract and not merely to its making; and (3)
a fraudulent act accompanying the breach."); id. at 466, 500 S.E.2d at 612 ("The
fraudulent act is any act characterized by dishonesty in fact or unfair dealing.").
There is no evidence of an independent fraudulent act that accompanied
Progressive's breach of contract because its failure to analyze and apply the
relevant or proper cases when considering Jones's claim was part of the breach.
See Minter v. GOCT, Inc., 322 S.C. 525, 530, 473 S.E.2d 67, 70 (Ct. App. 1996)
(explaining there must be "evidence of an independent fraudulent act which
accompanied the breach").

4. We hold the circuit court correctly found section 38-77-144 does not provide a
private cause of action. See HHHunt Corp., 389 S.C. at 631, 699 S.E.2d at 703
("In reviewing the dismissal of an action pursuant to Rule 12(b)(6), SCRCP, the
appellate court applies the same standard of review as the [circuit] court."). We
find the Legislature did not intend to provide insureds a private cause of action
under section 38-77-144. See § 38-77-144 ("If an insurer sells no-fault insurance
coverage which provides [PIP], medical payment coverage, or economic loss
coverage, the coverage shall not be assigned or subrogated and is not subject to a
setoff."). The statute does not expressly create a civil liability on behalf of the
insurer, and we find the Legislature intended only to protect insureds from an
insurance company applying a setoff. See Denson v. Nat'l Cas. Co., 439 S.C. 142,
151, 886 S.E.2d 228, 233 (2023) ("The main factor in determining whether a
statute gives rise to a private cause of action is legislative intent, which is
determined primarily from the language of the statute."); id. at 151-52, 886 S.E.2d
at 233 ("Generally, when a statute does not expressly create civil liability, a duty
will not be implied unless the statute was enacted for the special benefit of a
private party."). Accordingly, we hold the Legislature did not enact this statute
with the intention of providing an insured with an additional cause of action when
an insurance company improperly reduces the amount it is obligated to pay
pursuant to the policy. Therefore, we find the court did not err.

AFFIRMED.

WILLIAMS, C.J., and MCDONALD and TURNER, JJ., concur.