S.C. Supreme Court Reverses S.C. Court of Appeals; Holds Methamphetamine Is Not a Narcotic
The plain and ordinary meaning of narcotic in an insurance policy does not include methamphetamine according to a June 12, 2013 opinion of the S.C. Supreme Court. Finding the use of the term “narcotic” created, at a minimum, an ambiguity, the S.C. Supreme Court reversed a decision of the S.C. Court of Appeals.
In Hutchinson v. Liberty Life Insurance Co., the beneficiary of a mortgage life insurance policy brought suit against the insurer after it denied her benefits under exclusion (h) for injury resulting from the insured’s being “under the influence of any narcotic.” The term “narcotic” was not defined in the policy. It was undisputed that the insured was under the influence of methamphetamine at the time of his accidental death.
As you may recall from our October 18, 2011 post, the circuit court granted the plaintiff summary judgment holding methamphetamine is not a narcotic; however, the Court of Appeals reversed, holding, based on its widespread illegal use, a layperson would commonly understand methamphetamine to be a narcotic drug.
On appeal, the plaintiff argued the Court of Appeals erred in holding as a matter of law that the term narcotic is commonly understood to include methamphetamine. The Supreme Court agreed, finding the Court of Appeals improperly read the exclusion to deny coverage for any injury resulting from unlawful use of popular intoxicating substances:
The Court of Appeals appears to have read the term “narcotic” in exclusion (h) to mean any drug widely known to be used illegally. In our view, the use of the term “narcotic” in the exclusion rather than “unlawful drug” or “unlawful use of drug” creates, at minimum, an ambiguity as “narcotic” is a defined type of controlled substance rather than a generic term for illegally used substances. If there is any ambiguity it must be construed in favor of the petitioner.
(Internal citations omitted). Moreover, the court noted, pursuant to S.C. Code Ann. § 44-53-110, methamphetamine is defined as a controlled substance, not a narcotic. Accordingly, the Supreme Court found the Court of Appeals erred in reversing the trial court’s order because, applying South Carolina’s rules of insurance policy construction, methamphetamine is not a narcotic within the meaning of exclusion (h).
