RE v. << (2025)

ORDER

South Carolina Code Ann. § 34-31-20 (B) (2020) provides that the legal rate of interest on money decrees and judgments “is equal to the prime rate as listed in the first edition of the Wall Street Journal published for each calendar year for which the damages are awarded, plus four percentage points, compounded annually. The South Carolina Supreme Court shall issue an order by January 15 of each year confirming the annual prime rate. This section applies to all judgments entered on or after July 1, 2005. For judgments entered between July 1, 2005, and January 14, 2006, the legal rate of interest shall be the first prime rate as published in the first edition of the Wall Street Journal after January 1, 2005, plus four percentage points.”

The Wall Street Journal for January 2, 2025, the first edition after January 1, 2025, listed the prime rate as 7.50%. Therefore, for the period January 15, 2025, through January 14, 2026, the legal rate of interest for money decrees and judgments is 11.50% compounded annually.

OPINIONS

OF

THE SUPREME COURT

AND

COURT OF APPEALS

OF

SOUTH CAROLINA

ADVANCE SHEET NO. 2

January 8, 2025

Patricia A. Howard, Clerk

Columbia, South Carolina

www.sccourts.org

CONTENTS

THE SUPREME COURT OF SOUTH CAROLINA

PUBLISHED OPINIONS AND ORDERS

28249 – Therese Hood v. USAA 9

28250 – Jeane Whitfield v. Dennis K. Schimpf 23

Order – In the Matter of Billy R. Oswald 38

UNPUBLISHED OPINIONS

None

PETITIONS - UNITED STATES SUPREME COURT

None

EXTENSION TO FILE PETITION - UNITED STATES SUPREME COURT

None

PETITIONS FOR REHEARING

28241 – In the Matter of Richard Guy Bush Pending

28245 – Amanda Huskins v. Mungo Homes, LLC Pending

THE SOUTH CAROLINA COURT OF APPEALS

PUBLISHED OPINIONS

None

UNPUBLISHED OPINIONS

2025-UP-005 – SCDSS v. Karen A. Anise

2025-UP-006 – SCDSS v. Otis Goodwine (Filed January 3, 2025)

2025-UP-007 – SCDSS v. Bianca Winkler (Filed January 3, 2025)

2025-UP-008 – SCDSS v. Daniel and April Watkins (Filed January 6, 2025)

2025-UP-009 – The State v. Terry G. Gridine

2025-UP-010 – The State v. Bowen Gray Turner

PETITIONS FOR REHEARING

6079 – McMillan Pazdan Smith, LLC v. Donza Mattison (1) Pending

6088 – Jo Ann Blackwell v. Mary Black Health System, LLC Pending

6093 – Crescent Homes SC, LLC v. CJN, LLC Pending

EXTENSIONS TO FILE PETITION FOR REHEARING

None

PETITIONS – SUPREME COURT OF SOUTH CAROLINA

6037 – United States Fidelity and Guaranty Company v. Covil Corporation Pending

6038 – Portrait Homes v. Pennsylvania National Mutual Casualty Pending

6056 – The Boathouse at Breach Inlet, LLC v. Richard S. W. Stoney Pending

6058 – SCCCL v. SCDHEC Pending

6060 – Charles Blanchard v. 480 King Street, LLC Pending

6061 – In the Matter of Shawn T. Daily Pending

6065 – Kathleen Carter v. Joseph Carter Pending

6067 – The Estate of Delila Parrott v. Sandpiper Independent and Assisted Living Pending

6068 – East Cherry Grove Co., LLC v. The State of South Carolina Pending

6069 – John Deere Construction & Forestry Company v. North Edisto Logging, Inc. Pending

6070 – Spring Valley Interests, LLC v. The Best for Last, LLC Pending

6072 – Colonial Pipeline Co. v. SCDOR Pending

6074 – 315 Corley CW LLC v. Palmetto Bluff Development, LLC Pending

6076 – Synovus Bank v. SCDOR Pending

6081 – Maybank 2754, LLC v. Eugene J. Zurlo Pending

6082 – The State v. Kierin M. Dennis Pending

6084 – The State v. Nathaniel D. Rowland Pending

6087 – Francisco R. Rodriguez v. State Pending

2023-UP-311 – The State v. Joey C. Reid Pending

2024-UP-018 – Mare Baracco v. County of Beaufort Pending

2024-UP-077 – Brittany C. Foster v. State Pending

2024-UP-078 – Stephanie Gardner v. Berkeley County Sheriff's Office Pending

2024-UP-087 – Stonington Community Association, Inc. v. Carl D. Taylor Pending

2024-UP-114 – Robin Napier v. Mundy's Construction Pending

2024-UP-128 – The State v. Royal D. Williams, III Pending

2024-UP-129 – Devatee T. Clinton v. State Pending

2024-UP-160 – Adele Pope v. Alan Wilson (2) Pending

2024-UP-182 – The State v. Charles Barham Pending

2024-UP-190 – The State v. Kevin Herriott Pending

2024-UP-194 – Greg Simmons v. Palmer Simmons Pending

2024-UP-223 – Michael O. Brown v. State Pending

2024-UP-237 – Stefani Eddins v. Tall Sam I Am, LLC d/b/a Tabbuli Pending

2024-UP-239 – The State v. Antonio Gordon Pending

2024-UP-249 – The State v. Wendy M. Green Pending

2024-UP-253 – Julia Sibley-Jones v. Decide4Action, Inc. (2) Pending

2024-UP-255 – Michael K. Crowley v. Darlington County Pending

2024-UP-257 – Timothy Judy v. Alice Soto Pending

2024-UP-261 – Kenneth Pace v. Lake Emory Pending

2024-UP-262 – The State v. Johnathan O. Batchelor Pending

2024-UP-270 – In the Matter of James L. Williford Pending

2024-UP-271 – In the Matter of Andy E. Hyman Pending

2024-UP-274 – The State v. Brittany V. Martin Pending

2024-UP-281 – Eastwood Construction Partners, LLC v. GHD Brooks Creek Pending

2024-UP-285 – MAC Coastal Properties, Inc. v. Shoestring Retreat, LLC Pending

2024-UP-293 – Karen Petit v. Phyllis Krohn Pending

2024-UP-298 – Benjamin McDermott v. Sharon Melvin Pending

2024-UP-310 – A.D. and J.D. v. RCSD Two Pending

2024-UP-316 – Ed Medford v. Deepak Israni Pending

2024-UP-318 – Eugene W. Villanova v. Pacifica Skylyn, LLC Pending

2024-UP-321 – Dennis Cumbee, Jr. v. State Pending

2024-UP-358 – The State v. Angel M. Ibarra Pending

2024-UP-371 – Brian Foster v. State Pending

2024-UP-372 – Historic Beaufort Foundation v. City of Beaufort Pending

2024-UP-373 – West Street Farms, LLC v. City of Beaufort Pending

2024-UP-375 – Joseph Lewis v. Roberta Hardy Pending

2024-UP-378 – Stivers Brothers Automotive v. W. Warner Peacock Pending

THE STATE OF SOUTH CAROLINA

In The Supreme Court

Therese Hood, Petitioner,

v.

United Services Auto Association, Respondent.

Appellate Case No. 2023-000423

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

Appeal from Charleston County Kristi F. Curtis, Circuit Court Judge

Opinion No. 28249

Heard October 29, 2024

Filed January 8, 2025

AFFIRMED

Roy T. Willey, IV, Eric Marc Poulin, and Lane Douglas Jefferies, all of Poulin Willey Anastopoulo, LLC, of Charleston, for Petitioner.

Robert William Whelan, of Whelan, Mellen & Norris, LLC, of Charleston, for Respondent.

JUSTICE VERDIN:

Therese Hood brought this action against her underinsured motorist (UIM) carrier, United Services Automobile Association (USAA), asserting claims for both negligence and bad faith, among others. Following the jury's verdict in favor of USAA on the bad faith claim and in favor of Hood on her negligence claim, the trial court granted USAA's motion for JNOV on the negligence claim. Hood appealed to the court of appeals, which affirmed. We granted certiorari on two issues: (1) whether a first-party insured can bring both a negligence and bad faith claim against their UIM insurer; and (2) whether the court of appeals erred in holding USAA did not act in bad faith during settlement negotiations of Hood's UIM claim or in taking a disparate position on a key factual issue in two underlying tort actions. We find Hood's arguments entirely without merit and affirm.

I. FACTUAL AND PROCEDURAL HISTORY

On November 7, 2014, Therese Hood was in a three-car accident. In that accident, Hood was t-boned by Antonie Johnson, causing Hood to move into oncoming traffic and hit William and Mary Kuck head-on. As a result, three lawsuits began.

The Kucks sued Johnson and Hood (Kuck Action) to recover damages from the accident. As her liability insurer, USAA provided Hood with counsel. The main issue concerning Hood's liability was whether she had her headlights on at the time of the accident. Hood argued that they were on, providing testimony that her headlights were on auto and expert testimony that a lamp filament test showed her high beams were on at the time of the accident. The Kucks and Johnson argued that they were off, providing five eyewitnesses' testimony and the accident's police report as evidence.

Hood sued Johnson for her damages in the accident. After Johnson's insurance company paid its policy limits, USAA stepped into Johnson's shoes and defended the suit under Hood's UIM policy (UIM Action). Hood's UIM limits in her USAA policy were $1,000,000. Before trial, USAA and Hood mediated the claim, but they failed to settle as USAA's highest offer was $200,000, and Hood's lowest official offer was $600,000. At the end of mediation, USAA's counsel stated that $200,000 was the extent of his authority, though USAA gave its counsel authority of $250,000. Hood did not take the $200,000 offer, and the case proceeded to trial. At trial, Hood and USAA stipulated that Hood's headlights were off, but Hood argued her headlights did not have to be on at the time of the accident because it was not yet dark. In the end, Hood won this suit with the jury finding her 49% at fault. Even with a 49% reduction, the jury verdict exceeded Hood's $1,000,000 UIM limits. USAA then paid that sum to Hood.

While the UIM Action was still pending, Hood brought the third lawsuit against USAA, alleging bad faith, negligence, breach of contract, negligence per se, barratry, and outrage, alleging USAA took disparate positions on Hood's headlight use in the UIM Action than in the Kuck Action, did not offer its full settlement authority during mediation, and acted aggressively toward Hood during mediation of the UIM Action. Hood claimed she would have settled the UIM Action for $250,000 had USAA offered that sum. She claimed damages in the form of emotional distress caused by USAA's treatment of her during the UIM Action. She also claimed she incurred costs of $49,042.20 to prosecute the UIM Action, which she would not have incurred had USAA offered $250,000.¹

Before trial, the court granted USAA summary judgment on (1) the barratry cause of action because no evidence supported the claim; (2) the outrage cause of action because the conduct did not rise to the level of outrage; (3) the breach of contract cause of action because the award had been paid and the UIM limits tendered; and (4) the negligence per se cause of action. During trial, USAA made a directed verdict motion on the remaining causes of action, which the trial court granted in part. It held Hood was not entitled to excess verdict damages, that the jury could not consider USAA's conduct during mediation because USAA did not have a duty to offer the full amount of its settlement authority, and there was insufficient evidence of emotional distress. Thus, the court submitted only the claims of bad faith and negligence to the jury. The jury returned a verdict finding for USAA on the bad faith claim and for Hood on her negligence claim, awarding her compensatory damages of $49,042.20 and punitive damages of $250,000. USAA moved for JNOV, arguing a first-party insured could only bring a bad faith claim, not a negligence claim. The trial court granted that motion.

The court of appeals affirmed the trial court's decision, holding that a first-party insured has no separate cause of action in negligence under the duty of good faith and fair dealing. Hood v. United Servs. Auto. Ass'n, Op. No. 2023-UP-011 (Ct. App. 2023). The court of appeals also held Hood waived her challenges to the trial court's rulings on USAA's summary judgment and directed verdict motions because she failed to present these issues to the trial court in her post-trial motions. It also held that as an additional sustaining ground, no reasonable jury could find USAA acted in bad faith, explaining that USAA had no duty to offer its full reserves or settlement authority during mediation of the UIM Action and there was no evidence of USAA taking disparate positions as to Hood's headlights in the Kuck Action and the UIM Action. Hood filed a petition for rehearing, which the court of appeals denied. Hood then petitioned this Court for a writ of certiorari, which we granted in part.

II. Discussion

A. Bad Faith and Negligence Claims

Hood argues that our courts have recognized a negligence claim distinct from bad faith, so the jury's finding that USAA was negligent but did not act in bad faith should be upheld.² We disagree.

Whether a cause of action exists is a question of law that we review de novo. Moriarty v. Garden Sanctuary Church of God, 341 S.C. 320, 327, 534 S.E.2d 672, 675 (2000). South Carolina has never recognized a negligence claim between an insured and insurer and will not now.

We have long distinguished between a party's contract and tort liability. See, e.g., Colleton Preparatory Acad., Inc. v. Hoover Universal, Inc., 379 S.C. 181, 187, 666 S.E.2d 247, 250 (2008) (“The purpose of the economic loss rule is to define the line between tort and contract recovery.”), overruled on other grounds by Sapp v. Ford Motor Co., 386 S.C. 143, 687 S.E.2d 47 (2009). Where a contract exists, claims within the contract's scope must be brought under contract law. Tommy L. Griffin Plumbing & Heating Co. v. Jordan, Jones & Goulding, Inc., 320 S.C. 49, 54–55, 463 S.E.2d 85, 88 (1995) (“A breach of a duty which arises under the provisions of a contract between the parties must be redressed under contract, and a tort action will not lie. A breach of a duty arising independently of any contract duties between the parties, however, may support a tort action.”).

We have, however, found a special relationship where “the parties have entered into a mutually binding contract for insurance.” Pitts v. Jackson Nat'l Life Ins., 352 S.C. 319, 330, 574 S.E.2d 502, 507 (Ct. App. 2002). Due to this special relationship, a duty of good faith and fair dealing exists by operation of law, allowing plaintiffs to bring a tort claim for breach of that duty against their insurer. Id. at 330–31, 574 S.E.2d at 507; Tadlock Painting Co. v. Maryland Cas. Co., 322 S.C. 498, 503, 473 S.E.2d 52, 55 (1996). Under the duty of good faith and fair dealing, an insured can collect consequential damages by showing “bad faith or unreasonable action by the insurer in processing a claim” and punitive damages by showing “the insurer's actions were willful or in reckless disregard of the insured's rights.” Nichols v. State Farm Mut. Auto. Ins., 279 S.C. 336, 340, 306 S.E.2d 616, 619 (1983). The elements of a bad faith claim for failure to pay first-party benefits are

(1) the existence of a mutually binding contract of insurance between the plaintiff and the defendant; (2) refusal by the insurer to pay benefits due under the contract; (3) resulting from the insurer's bad faith or unreasonable action in breach of an implied covenant of good faith and fair dealing arising on the contract; (4) causing damage to the insured.

Howard v. State Farm Mut. Auto. Ins., 316 S.C. 445, 451, 450 S.E.2d 582, 586 (1994).

In South Carolina's seminal bad faith case, Tyger River Pine Co. v. Maryland Cas. Co., an employee sued his employer, Tyger River Pine Company (Tyger River), for injuries he sustained while working in the lumber mill. 170 S.C. 286, 287, 170 S.E. 346, 346 (1933). Both Tyger River and the employee would have settled the claim for Tyger River's insurance policy limits, but Tyger River's insurance company, Maryland Casualty Company, refused. Id. at 293, 170 S.E. at 348. Tyger River sued the insurer, asserting it “negligently, recklessly, willfully, contumaciously, and in bad faith ․ refused to settle the claim.” Id. at 289, 170 S.E. at 347. This court affirmed the jury's findings of negligence and bad faith, and held that an insurer had the duty to settle a claim “if that was the reasonable thing to do.” Id. at 294, 170 S.E. at 349. This holding, which only applied to third-party insureds, became known as the Tyger River Doctrine—a claim in itself, not a negligence claim. Id.; Nichols, 279 S.C. at 339–40, 306 S.E.2d at 619. This doctrine was also the underpinning for creating the bad faith claim for first-party insureds in Nichols.

In Nichols, we expanded the Tyger River Doctrine to first-party insureds. Nichols, 279 S.C. at 340, 306 S.E.2d at 619. In doing so, Nichols clarified the use of the word “negligence” in Tyger River. Nichols noted that the Tyger River Doctrine and the bad faith cause of action “are merely two different aspects of the same duty.” Id. at 339–40, 306 S.E.2d at 619. Nichols then stated that under the “bad faith cause of action ․ the jury is entitled to consider negligence on the issue of unreasonable refusal to pay benefits,” or that negligence acts as evidence in a bad faith claim. Id. at 342, 306 S.E.2d at 620. At bottom, Tyger River may have mentioned negligence, but Nichols held that bad faith is the insured's only tort cause of action and only applied to a bad faith refusal to pay benefits.

In the years after Nichols, we have reaffirmed the bad faith claim for first-party insureds and expanded it in a limited way. See Charleston Cnty. Sch. Dist. v. State Budget & Control Bd., 313 S.C. 1, 7–8, 437 S.E.2d 6, 9–10 (1993) (confirming that bad faith is a tort action and overruling previous cases that suggested otherwise); Howard, 316 S.C. at 451, 450 S.E.2d at 586 (reaffirming the elements of a bad faith refusal to pay first-party benefits under an insurance contract); Kleckley v. Nw. Nat'l Cas. Co., 338 S.C. 131, 134, 526 S.E.2d 218, 219 (2000) (reaffirming that a bad faith claim for “refusal to pay benefits does not extend to third parties who are not named insureds”); Mixson, Inc. v. American Loyalty Ins., 349 S.C. 394, 400, 562 S.E.2d 659, 662 (2002) (expanding a bad faith claim to include not just nonpayment of a legitimate claim but how that claim was processed (citing Tadlock Painting Co v. Maryland Cas. Co., 322 S.C. 498, 473 S.E.2d 52 (1996))); In re Mt. Hawley Ins., 427 S.C. 159, 169, 829 S.E.2d 707, 713 (2019) (highlighting the importance of a bad faith claim in advantaging citizens when dealing with the insurance industry). These cases did not change Nichols' fundamental holding.

In contrast, courts in this state have not allowed a negligence claim to enforce the duty of good faith and fair dealing. In fact, the district courts specifically have rejected a freestanding negligence claim as being duplicative of a bad faith claim. See, e.g., Skinner v. Horace Mann Ins., 369 F. Supp. 3d 649, 654 (D.S.C. 2019) (dismissing an insured's negligence claim because it was duplicative of the bad faith claim and noting unpublished district court opinions with similar findings).³

As the district court noted, a freestanding negligence claim would be duplicative of a bad faith claim. “To state a cause of action for negligence the plaintiff must allege facts which demonstrate the concurrence of three elements: (1) a duty of care owed by the defendant; (2) a breach of that duty by negligent act or omission; and (3) damage proximately caused by the breach.” Kleckley, 338 S.C. at 138, 526 S.E.2d at 221. “Without a duty, there is no actionable negligence.” Oblachinski v. Reynolds, 391 S.C. 557, 561, 706 S.E.2d 844, 846 (2011). Hood fails to call this Court's attention to any duty USAA owed her other than contractual duties, the breach of which would be addressed by a contract action, and the duty of good faith and fair dealing, the breach of which is addressed by a bad faith claim. Tommy L. Griffin Plumbing & Heating Co., 320 S.C. at 54–55, 463 S.E.2d at 88 (“A breach of a duty which arises under the provisions of a contract between the parties must be redressed under contract, and a tort action will not lie. A breach of a duty arising independently of any contract duties between the parties, however, may support a tort action.”).

Furthermore, South Carolina's case law contemplates negligence as merely evidence for a bad faith claim. See Nichols, 279 S.C. at 342, 306 S.E.2d at 620 (holding the jury was entitled to consider negligence on the issue of unreasonable refusal to pay benefits). At its core, negligence law is grounded in reasonableness. See Hart v. Doe, 261 S.C. 116, 122, 198 S.E.2d 526, 529 (1973) (defining negligence as “the failure to use due care,” i.e., “that degree of care which a person of ordinary prudence and reason would exercise under the same circumstances” (emphasis added)). We have also stated that an insured can show a breach of the duty of good faith and fair dealing through evidence of “bad faith or unreasonable action.” Nichols, 279 S.C. at 340, 306 S.E.2d at 619. However, our invoking reasonableness when establishing the duty of good faith and fair dealing only sets the evidence available to prove that duty's breach, not that negligence is another claim parties may use to enforce it. Id.; see Cock-N-Bull Steak House, Inc. v. Generali Ins., 321 S.C. 1, 6, 466 S.E.2d 727, 730 (1996) (“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.” (quoting Dowling v. Home Buyers Warranty Corp., II, 303 S.C. 295, 297, 400 S.E.2d 143, 144 (1991))).

Here, all of Hood's claims focus on (1) how USAA represented Hood in the Kuck Action against Hood and how it represented its own interests against Hood in the UIM Action; (2) how USAA's representatives treated Hood during mediation of the UIM Action; and (3) whether USAA breached its internal policies for litigation and mediation. All of these acts stem from the insurance contract. Thus, all these arguments fall under Hood's contract's scope and lead to one viable tort claim: bad faith. A negligence action would be entirely duplicative of that claim. See RFT Mgmt. Co. v. Tinsley & Adams L.L.P., 399 S.C. 322, 335–36, 732 S.E.2d 166, 173 (2012) (holding a breach of fiduciary duty claim was duplicative of a legal malpractice claim because a client's claim for breach of fiduciary duty arose out of the duty inherent in the attorney-client relationship and the same factual allegations and therefore failed as a matter of law).

Hood also argues that a negligence claim must be available within an insurance contract's scope because those seeking insurance but not yet under contract have that protection. Hood relies on Hinds v. United Ins. Co. of America, 248 S.C. 285, 149 S.E.2d 771 (1966), which is easily distinguishable because it did not deal with validly contracted parties but involved a negligent procurement claim and its accompanying duties. See also Orangeburg Sausage Co. v. Cincinnati Ins., 316 S.C. 331, 334 n.1, 450 S.E.2d 66, 68 n.1 (Ct. App. 1994) (finding negligence damages available from a negligent procurement claim that arose before contract formation, and bad faith damages available for harm suffered after contract formation). We have recognized that “where an insurance agent or broker, with a view toward being compensated, undertakes to procure insurance for a member of the public, the law holds the agent or broker to the exercise of good faith, and reasonable skill, care and diligence in performing the obligation.” Riddle-Duckworth, Inc. v. Sullivan, 253 S.C. 411, 421, 171 S.E.2d 486, 490 (1969). Thus, a negligent procurement case involves a separate and distinct duty of care from a bad faith claim, which is based on the duty of good faith and fair dealing.

We do not disagree with Hood's assertion that because “[t]he insurance business is affected with a public interest,” an insured party has to at least have the same level of protection as those seeking insurance. Nichols, 279 S.C. at 340, 306 S.E.2d at 619. However, insureds obtain that level of protection through a bad faith claim. Another claim covering those same actions would not provide more protections for those individuals.

In sum, we take this opportunity to clarify what was already clear: the only claims available to the insured under an insurance contract are contract and bad faith claims.

B. Bad Faith as an Additional Sustaining Ground

Hood argues the court of appeals erred in holding as an additional sustaining ground that USAA did not act in bad faith. First, the court of appeals stated it was “not aware of any authority supporting the proposition that an insurance company acts in bad faith by not offering to settle the case for the full amount of its authority or reserve.” Second, it found that USAA did not take a disparate position on Hood's headlight use in the UIM action as it did in the Kuck Action, noting USAA was only a party to the UIM Action, where it had a right to protect its interests, and was not a party to the Kuck Action. Hood argues that these additional sustaining holdings were error because a jury could have found that USAA lied about its reserves and settlement authority during mediation and did take disparate positions on Hood's headlights in the two cases. These arguments, too, are utterly meritless.

As for Hood's first contention concerning USAA's attorney's conduct during mediation of the UIM Action, Hood cites no authority to support her argument that USAA acted in bad faith in failing to disclose its reserves or settlement authority to Hood.⁴ See Transp. Ins. & Flagstar Corp. v. S.C. Second Inj. Fund, 389 S.C. 422, 432, 699 S.E.2d 687, 692 (2010) (finding an issue abandoned on appeal partly because the party cited no authority to support its argument). In contrast, our bad faith precedent has never required an insurance company to disclose or offer its reserves or full settlement authority to an insured, only that the insurance company act in good faith in paying an uncontested claim and in claim processing. See supra Section II.A (discussing the history of bad faith claims in South Carolina).

Once Johnson settled with Hood, USAA was allowed to step into Johnson's shoes to litigate the UIM Action for its own benefit; it was not required to simply hand over the UIM policy limits to Hood. See S.C. Code Ann. § 38-77-160 (2015) (providing an underinsured motorist (UIM) carrier “has the right to appear and defend in the name of the [UIM] in any action which may affect its liability”); Williams v. Selective Ins., 315 S.C. 532, 534, 446 S.E.2d 402, 404 (1994) (“[T]he intent of § 38-77-160 is to protect the insurance carrier's right to contest its liability for underinsured benefits.”); Crawford v. Henderson, 356 S.C. 389, 398, 589 S.E.2d 204, 209 (Ct. App. 2003) (“[O]nce the named defendant has settled for his liability policy limits, he no longer has a stake in the outcome of the litigation. The UIM carrier, on the other hand, still has a viable, financial interest in the case. As a result, the attorney for the UIM carrier represents the carrier and not the named defendant.”). USAA acted within its rights under the UIM policy in not disclosing its reserves or authority and as any other party would be expected to act in the adversarial process.

Other jurisdictions have found that an insurer does not have to disclose its reserves or settlement authority, even as discovery in a bad faith action, because this information does not “reflect an admission by the insurance company that a claim is worth a particular amount of money.” Silva v. Basin W., Inc., 47 P.3d 1184, 1190 (Colo. 2002) (en banc). In insurance law, “reserves” are “the funds insurance companies set aside to cover future expenses, losses, claims, or liabilities.” Id. at 1189 (citing Black's Law Dictionary 1307 (6th Ed. 1990)). The Colorado Supreme Court defined “settlement authority” as “an agent's ability to accept an offer of settlement that binds the principal up to and including a certain amount of money.” Id. It explained that an insurer's loss reserves were not the same as settlement authority as the “main purpose of a loss reserve is to comply with statutory requirements and to reflect, as accurately as possible, the insured's potential liability.” Id. (quoting Lipton v. Superior Ct., 56 Cal. Rptr. 2d 341, 349 (1 Cal. Ct. App. 1996); See, e.g., S.C. Code Ann. § 38-9-180 (2015) (setting forth the methods for insurers to calculate reserve amounts). The Colorado court noted that a reserve amount “does not automatically authorize a settlement at that figure.” Silva, 47 P.3d at 1189 (quoting Lipton, 56 Cal. Rptr. at 349). It also explained, “[s]tatutory requirements, limitations in the evaluation, and bargaining tactics limit the usefulness of reserves and settlement authority as valuations of a claim.” Id. at 1190.

Similarly, the Tenth Circuit held “[c]ompromise or settlement offers are not admissions of liability.” Signature Dev. Cos. v. Royal Ins. of Am., 230 F.3d 1215, 1223 (10th Cir. 2000). It refused to “infer that 'settlement authority invariably constitutes a final, objective assessment of a claim's worth to which an insurer may be held on penalty of bad faith.'” Id. at 1223–24 (quoting Kosierowski v. Allstate Ins., 51 F. Supp. 2d 583, 592 n.8 (E.D. Pa 1999)); see also Messer v. Universal Underwriters Ins., 598 S.W.3d 578, 590 (Ky. Ct. App. 2019) (adopting the majority rule that reserves do not represent an insurer's “objective assessment of a claims [sic] worth to which an insurer may be held” and rejecting the appellant's argument the carriers acted in bad faith by withholding the reserve amount while the parties followed the policies' arbitration procedure to resolve their dispute and value, or until she executed a release (quoting Silva, 47 P.3d at 1190) (alteration in original)); Voland v. Farmers Ins., 943 P.2d 808, 811–12 (Ariz. Ct. App. 1997) (rejecting plaintiff's argument that the UIM insurer acted in bad faith by withholding the amount of its settlement offer while the claim was arbitrated because “the settlement offer was simply a proposal to compromise and resolve the claim, nothing more and nothing less” and not an admission of the minimal amount owed to the plaintiff).

Likewise, courts in South Carolina have found that when an insurance company has a valid defense, it can offer and settle for less than the claim's objective value as long as the offer is reasonable. See Snyder v. State Farm Mut. Auto Ins., 586 F. Supp. 2d 453, 460–61 (D.S.C. 2010) (finding no bad faith where UIM insurer's settlement offer was reasonable); Collins v. Auto-Owners Ins. Co., 759 F. Supp. 2d 728, 741–42 (D.S.C. 2008) (finding no bad faith for an insurance company offering to settle for less than the claim's value because that offer was reasonable); Cock-N-Bull Steak House, Inc., 321 S.C. at 7, 466 S.E.2d at 730 (ruling against an insurer who had no reasonable basis to deny a claim); Crossley v. State Farm Mut. Auto. Ins., 307 S.C. 354, 360, 415 S.E.2d 393, 397 (1992) (holding there was no bad faith when there were reasonable grounds for the insurer to contest a claim). Thus, under South Carolina law, an insurance company's reserves do not act as an objective valuation of a claim's value and cannot be used to force a UIM carrier to offer to settle for that amount.

Here, USAA had reason to dispute Hood's claims, including five eyewitnesses and a police report showing that Hood's headlights were off. USAA had no duty to disclose its reserves and settlement authority to Hood or to offer $250,000 to settle the UIM action. Thus, under the facts of this case, the trial court did not err in holding as a matter of law that USAA's conduct in mediation did not support a claim for bad faith, and the court of appeals did not err in finding no evidence of bad faith as an alternate sustaining ground.

Hood also argues USAA had no right in the UIM Action to argue Hood's headlights were off. That argument is completely meritless for two related reasons. First, USAA only took one position here. As stated, USAA provided Hood with counsel in the Kuck Action, as required by the insurance policy. That lawyer had a “responsibility to advocate zealously on behalf of [Hood].” State v. Busse, 439 S.C. 104, 109, 886 S.E.2d 208, 211 (2023). In the Kuck Action, Hood maintained that she was not at fault because her headlights were on, and she secured expert testimony that her lights were on. USAA, however, was not a party to the Kuck Action. When USAA stepped into Johnson's shoes “for its own benefit” in the UIM Action, it was allowed to contest liability for UIM benefits and argue that Hood was at fault by not having her headlights on. S.C. Code Ann. § 38-77-160; Williams, 315 S.C. at 534, 446 S.E.2d at 404. Second, even if we were to agree with Hood that USAA could not in good faith argue during the UIM Action that Hood's lights were not on, Hood conceded during the trial of the UIM Action that her headlights were not on, and she did not call her expert to testify. It would be ludicrous indeed to conclude USAA could not pursue a defense in the UIM Action on a factual point Hood herself conceded. USAA's argument that Hood's lights were off was entirely reasonable under these facts. Hood's argument to the contrary borders on frivolous.

In short, the trial court correctly found that USAA's litigation position in the UIM Action did not support a finding of bad faith because (1) USAA was not a party to the Kuck Action and thus could not have taken a disparate position about Hood's headlights in the UIM Action; (2) USAA was allowed by Section 38-77-160 to contest its liability for UIM benefits; and (3) USAA's argument in the UIM action that Hood's headlights were not on was consistent with Hood's concession during the UIM Action.

Simply put, South Carolina law does not require an insurance company to disclose and offer its full reserves or full authority when it has a valid defense and may defend its interest when stepping into a defendant's shoes under a UIM policy. Thus, we affirm the court of appeals' alternative sustaining grounds.

III. Conclusion

Attorneys may have “an obligation to provide zealous representation” to their client, but they also have “a corresponding obligation to opposing parties, the public, [their] profession, the courts, and others to behave in a civilized and professional manner in discharging [their] obligations to [their] client[s].” In re White, 391 S.C. 581, 589, 707 S.E.2d 411, 415 (2011). We granted certiorari to say, in the strongest terms, that bringing a meritless claim fails to meet this obligation. We therefore hold that USAA defended the UIM Action in a manner clearly contemplated by statute, and USAA was not obligated to offer Hood the full amount of its reserve, nor was it obligated to offer the full amount of its settlement authority.⁵ A negligence action did not lie against USAA, and a bad faith action under these facts was wholly without merit. For the foregoing reasons, the court of appeals' decision is

AFFIRMED.

KITTREDGE, C.J., FEW and HILL, JJ., concur. JAMES, J., concurring in a separate opinion in which KITTREDGE, C.J., concurs.

JUSTICE JAMES:

I concur but write separately to comment further on the positions taken by Hood's lawyer throughout this bad faith case. Insurance carriers should be held to account if they act in bad faith, and no carrier should consider the majority opinion or this concurring opinion as a license to play fast and loose with obligations owed to insureds. Here, however, the argument that USAA acted in bad faith is baseless. It is indeed ironic that one of the claims initially pled on Ms. Hood's behalf against USAA was for barratry.

I.

During oral argument before the court of appeals, Ms. Hood's lawyer argued USAA had no legitimate defense to her UIM claim, even though the jury in the UIM Action found she was 49% at fault. Counsel acknowledged to the court of appeals that the jury's 49% allocation came from Ms. Hood's “stipulation at trial” that she would not contend her headlights were on. Counsel stated the stipulation was “a trial tactic,” because “the headlights had to be taken off the table in order for [Ms. Hood's] credibility not to be wrecked.” The fear Ms. Hood's credibility might be wrecked obviously arose from the accounts of five eyewitnesses that Ms. Hood's headlights were not on and from evidence that it was dark when the accident occurred. The headlight issue was perfectly teed up for the jury in the UIM Action.⁶

As the court of appeals held and the majority makes clear, USAA had every right to pursue the headlights issue in the UIM Action. I would be shocked had USAA not done so.⁷

II.

Ms. Hood's other claim of bad faith stems from the mediation of the UIM Action. It is also groundless. USAA gave Mr. Daniel, its attorney in the UIM Action, mediation authority of $250,000. As the mediation conference drew to a close, Ms. Hood's final firm demand was $600,000, but her attorney advised Mr. Daniel and the mediator that Ms. Hood might consider settling her UIM claim for between $300,000 and $400,000. Mr. Daniel offered $200,000 and advised Ms. Hood's attorney he had no more settlement authority. Mediation ended and USAA made no further offers. During discovery in the bad faith action, Hood's lawyer learned Mr. Daniel's authority (and USAA's reserve) in the UIM Action was $250,000. Then began counsel's refrain that USAA acted in bad faith because Mr. Daniel “lied” about his authority, with counsel for Ms. Hood contending she would have accepted $250,000 had it been offered. The accusation persisted in the bad faith action until the trial court correctly directed a verdict in favor of USAA on the issue.

The accusation resurfaced before the court of appeals, and the court of appeals properly rejected it. Then, four times in Ms. Hood's brief to this Court, her lawyer stated Mr. Daniel lied about his settlement authority. The trust given to an attorney to be a zealous advocate should hardly ever extend to calling opposing counsel a liar. This is especially true when—as here—an experienced lawyer should know the accusation is unfounded. To characterize Mr. Daniel's representation of his authority as a “lie” under these circumstances is inappropriate.

KITTREDGE, C.J., concurs.

THE STATE OF SOUTH CAROLINA

In The Supreme Court

Jeane Whitfield, Appellant,

v.

Dennis K. Schimpf, and Sweetgrass Plastic Surgery, LLC, Respondents.

Appellate Case No. 2023-000245

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

Appeal from Charleston County

Bentley Price, Circuit Court Judge

Opinion No. 28250

Heard October 2, 2024

Filed January 8, 2025

REVERSED AND REMANDED

Jesse Sanchez, of The Law Office of Jesse Sanchez; Daniel Scott Slotchiver and Andrew Joseph McCumber, of Slotchiver & Slotchiver, LLP; Brent Souther Halversen, of Halversen & Halversen, LLC, all of Mount Pleasant, all for Petitioner.

Todd W. Smyth and Allie Aleece Maples, of Smyth Whitley, LLC, of Charleston, for Respondents.

JUSTICE FEW:

Jeane Whitfield brought this medical malpractice action against Dr. Dennis Schimpf and Sweetgrass Plastic Surgery, LLC—Schimpf's medical practice—alleging Schimpf was negligent in performing breast augmentation-mastopexy surgery ¹ on Whitfield and he and other Sweetgrass employees were negligent in rendering post-operative care. The jury returned a verdict in favor of Schimpf and Sweetgrass, and the court of appeals affirmed. We granted Whitfield's petition for a writ of certiorari to review the court of appeals' decision affirming the trial court on two evidentiary rulings: (1) excluding evidence of bias Whitfield offered to impeach the testimony of Sweetgrass' office manager—Vicky Tolbert—about her sexual relationship with Schimpf and his wife, the salary she was paid by Sweetgrass, and free cosmetic surgical procedures she received from Schimpf; and (2) admitting testimony from Schimpf's expert witnesses based in part on their Rule 35, SCRCP, examinations of Whitfield. We find the court of appeals was correct to affirm on the second issue but erred in affirming the exclusion of the evidence of bias. We reverse and remand for a new trial.

I. Facts and Procedural History

Whitfield had breast augmentation surgery in 2009. Schimpf did not perform this original augmentation surgery. In 2013, Whitfield began experiencing discomfort under one of her breasts and scheduled a consultation with Schimpf at Sweetgrass. Schimpf recommended augmentation-mastopexy surgery to address “encapsulation,” which is heavy scar tissue surrounding a breast implant.

Schimpf operated on Whitfield on June 6, 2014. Schimpf removed Whitfield's breast implants and the scar tissue surrounding them, and then inserted smaller implants in their place. Schimpf also performed unrelated cosmetic procedures on her eyes, neck, and stomach at the same time as the augmentation-mastopexy procedure.

During a normal post-operative visit on June 10, Whitfield expressed concern with the way the sutured incision around the areola on her right breast was healing. She testified at trial she was told by Sweetgrass employees on June 10 that what she observed was part of the “natural progression of healing,” but the wound continued to worsen after the post-operative visit.

On June 20, Whitfield experienced severe chest pain and called an ambulance to transport her to Roper Hospital. The physician at the hospital ruled out possible cardiac issues, discharged Whitfield from the hospital, and told her to contact her plastic surgeon if the pain persisted.

On June 30, Whitfield requested an appointment to address her continuing pain. Schimpf saw her on July 1. During that appointment, Schimpf gave Whitfield two stitches to repair “wound dehiscence”² on her right breast and prescribed her antibiotics. Whitfield testified she called Schimpf's office multiple times after that appointment to complain of pain, but she was not given any further follow-up care. Whitfield then did an internet search for plastic surgeons to find another doctor to help her with her pain. She found Dr. Ram Kalus, who would later testify as one of her expert witnesses.

Kalus saw Whitfield on July 10 and determined the wound “was open.” Kalus testified the “wound separation” was about two-and-a-half centimeters on the right breast and about one centimeter on the left breast. Kalus also testified the exposed tissue beneath the wound was undergoing “fat necrosis.”³ Kalus referred her back to Schimpf for further treatment.

On July 11, Whitfield returned to Sweetgrass and was placed in an examination room with Schimpf and Vicky Tolbert—the office manager for Sweetgrass. Whitfield testified at trial that Schimpf was very angry she had gone to see another doctor and “let someone else see” the wound. She testified Schimpf opened up her wound and then “proceed[ed] to stitch [her] up with no anesthetic, no little cat needle, no cream or anything, no spray.” She stated that when Schimpf finished he threw his tray into the sink and told Whitfield to “get out of here.”

Whitfield testified that on July 13, 2014, while she was in the shower, her right breast “blew open all the way through” and blood poured out from the wound. Whitfield called Kalus who told her to go to the hospital immediately. Kalus testified he treated her at the hospital and the wound had worsened since he had seen her last. Kalus performed surgery on her the next day and removed her right implant to allow him to close the wound.

In March 2015, Kalus performed a second surgery at Whitfield's request to remove the left implant. He also removed 490 grams of tissue from her left side. Kalus later performed a fat grafting surgery on Whitfield to address the asymmetry from the tissue removal.

On May 30, 2017, Whitfield filed this medical malpractice lawsuit against Schimpf and Sweetgrass in Charleston County. The complaint alleged Schimpf was negligent because there was “too much tension placed surgically on the incision which led to inadequate blood flow, ischemia, and dehiscence of the wound margins, fat necrosis, and ultimately infection of the right breast.” The complaint also alleged Schimpf and Sweetgrass were negligent in failing to provide adequate post-operative care to Whitfield.

After a five-day trial, the jury returned a verdict in favor of Schimpf and Sweetgrass, finding on a special verdict form that Whitfield did not “prove by a greater weight or preponderance of the evidence that the Defendants deviated from the standard of care.” Whitfield appealed, and the court of appeals affirmed in an unpublished opinion under Rule 220(b) of the South Carolina Appellate Court Rules. Whitfield v. Schimpf, Op. No. 2022-UP-417 (S.C. Ct. App. filed Nov. 23, 2022). We granted Whitfield's petition for a writ of certiorari to review the court of appeals' decision.

II. Admissibility of Evidence of Tolbert's Bias

Whitfield argues the trial court erred in excluding three categories of evidence she offered to show bias on the part of Vicky Tolbert: (1) Tolbert's sexual relationship with Schimpf and his wife, (2) her salary at Sweetgrass, and (3) the free cosmetic procedures she received from Schimpf.

Before trial, Whitfield's attorney took Tolbert's deposition. Tolbert testified she had been in an on-again, off-again sexual relationship with Schimpf and his wife for the past nine years. She stated the last time they engaged in sexual relations was one week before the deposition. As an employee of Sweetgrass, Tolbert received a salary for her work. Tolbert testified she also received free plastic surgery procedures from Schimpf, including a breast augmentation, hernia repair, liposuction, fillers, Botox, and laser eye treatments.⁴

Schimpf filed a pretrial motion seeking to exclude this evidence. Schimpf argued the evidence should be excluded under Rules 401, 402, 403, 404, and 608(c), SCRE. The trial court heard the motion on the morning before trial, and stated, “Well, under Rule 403, I find it to be more prejudicial than probative.” However, the court declined to actually rule on the motion until Tolbert testified.

During trial, Whitfield called Tolbert as an adverse witness in her case-in-chief. Schimpf objected to a question Whitfield asked Tolbert about the amount of her salary at Sweetgrass. The trial court excused the jury and heard arguments about that objection, evidence of her sexual relationship with Schimpf and his wife, and evidence she received free medical procedures from Sweetgrass. Whitfield argued “the evidence of their relationship, how much Dr. Schimpf is compensating her financially, and also the evidence that we adduced from the depositions,” referring to the evidence of the sexual relationship, “is directly relevant to her credibility and her bias as a witness.”

For reasons not explained, the trial court then analyzed the admissibility of the evidence under Rule 608(a), SCRE—the subsection of Rule 608 dealing with attacking credibility with evidence of the witness's character for untruthfulness. The trial court concluded as to Rule 608(a), “I just don't think we have that here,” and explained, “I don't think that she's testified to anything contrary than she has in her deposition.” The trial court also stated, “I just don't see the probative value outweighing the prejudicial effect of it, of her testifying as to the relationship that she may have with the defendant.” The trial court concluded the testimony regarding Tolbert's relationship with Schimpf and his wife, her salary, and the free procedures she received was inadmissible and stated, “I don't think she's biased, in my opinion at this point in time ․ I don't think anything has been elicited as to the fact that she's been untruthful in any way.”

The court of appeals affirmed the trial court's decision to exclude the evidence of Tolbert's bias without discussion, citing Rule 103(a)(2), SCRE, and caselaw requiring a proffer of testimony to preserve an error arising from a trial court's exclusion of evidence. Whitfield, Op. No. 2022-UP-417, at 1.

We first address issue preservation. We then address whether the trial court erred in excluding the testimony under the Rules actually applicable to the question: Rules 401 and 402, 608(c), and 403, SCRE. Finally, we address whether any error requires reversal and a new trial.

a. Issue Preservation

Whitfield argues the court of appeals erred in determining she was required to proffer Tolbert's testimony. We agree. Rule 103(a)(2), SCRE, provides:

Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected, and ․ [i]n case the ruling is one excluding evidence, the substance of the evidence and the specific evidentiary basis supporting admission were made known to the court by offer or were apparent from the context.

Here, the parties met with the trial court in chambers before the pretrial hearing and discussed this evidence of bias. Although that meeting was not on the record, from the arguments in the pretrial hearing and during Tolbert's testimony, it is clear the trial court was aware that “the substance of the evidence” Whitfield was offering included (1) the sexual relationship between Schimpf and Tolbert, (2) Tolbert's salary at Sweetgrass, and (3) the free medical procedures Schimpf performed on Tolbert. As made clear by the plain language of Rule 103(a)(2), a proffer of specific questions and answers is not required if “the substance of the evidence and the specific evidentiary basis supporting admission were made known to the court.” There certainly are instances in which an actual proffer of testimony is necessary to adequately convey to the trial court “the substance of the evidence.” In this case, however, having informed the trial court of these three items of evidence, there is nothing an actual proffer of testimony would have added to the trial court's understanding of whether the evidence was relevant and admissible.⁵ Thus, no specific proffer of testimony was required and the court of appeals erred in determining the issue was unpreserved.

b. Admissibility

The central premise of the law of evidence is, “All relevant evidence is admissible ․” Rule 402, SCRE; State v. Jenkins, 436 S.C. 362, 391, 872 S.E.2d 620, 635 (2022). “'Relevant evidence' means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Rule 401, SCRE. “Proof of bias is almost always relevant because the jury, as finder of fact and weigher of credibility, has historically been entitled to assess all evidence which might bear on the accuracy and truth of a witness' testimony.” State v. Pipkin, 359 S.C. 322, 327, 597 S.E.2d 831, 833 (Ct. App. 2004) (quoting United States v. Abel, 469 U.S. 45, 52, 105 S. Ct. 465, 469, 83 L. Ed. 2d 450, 457 (1984)).

Tolbert's testimony about her sexual relationship with Schimpf, the compensation she received from him, and the complementary cosmetic procedures he performed on her made the existence of Tolbert's bias towards Schimpf more probable. While this evidence has no direct bearing on the medical care or treatment Whitfield received from Sweetgrass, it is relevant for the purpose of assessing Tolbert's credibility. Thus, the proposed testimony was relevant under Rule 401 and admissible under Rule 402.

In addition, Rule 608(c) provides, “Bias, prejudice or any motive to misrepresent may be shown to impeach the witness either by examination of the witness or by evidence otherwise adduced.” Under Rule 608(c), “anything having a legitimate tendency to throw light on the accuracy, truthfulness, and sincerity of a witness may be shown and considered in determining the credit to be accorded his testimony.” State v. Sims, 348 S.C. 16, 25, 558 S.E.2d 518, 523 (2002) (internal quotation marks omitted) (quoting State v. Jones, 343 S.C. 562, 570, 541 S.E.2d 813, 817 (2001)). “A witness' romantic relationship with a party is a source of potential bias of which the jury should be aware in order to fully evaluate the witness' testimony.” State v. Starnes, 340 S.C. 312, 325, 531 S.E.2d 907, 915 (2000).

Here, each of the three potential sources of Tolbert's bias in favor of Schimpf was clearly relevant under Rule 401 and admissible under Rules 402 and 608(c). The question then becomes whether the testimony could still have been excluded under some other rule. See Rule 402, SCRE (“All relevant evidence is admissible, except as otherwise provided by ․ these rules ․” (emphasis added)); Jenkins, 436 S.C. at 392, 872 S.E.2d at 636 (“When evidence is found relevant ․ the next question is whether any rule of evidence or provision of law operates to exclude the evidence.”). The trial court began its analysis of whether to exclude the evidence by considering Rule 608(a), SCRE. This is perplexing because Rule 608(a) permits the use of opinion or reputation evidence as to a witness's character for truthfulness or untruthfulness to attack or support the credibility of the witness,⁶ but the proposed testimony in this case did not involve reputation or opinion evidence, nor is it evidence of Tolbert's character for truthfulness or untruthfulness. Thus, the trial court erred by analyzing the question under Rule 608(a).

The trial court also relied on Rule 403, SCRE, stating initially at the pretrial hearing the evidence was “more prejudicial than probative,” and then during trial finding, “I just don't see the probative value outweighing the prejudicial effect of ․ her testifying as to the relationship that she may have with the defendant.” These two statements are based on a fundamental misunderstanding of the law set forth in Rule 403, and this misunderstanding undoubtedly led the trial court to make its erroneous ruling.

First, Rule 403 addresses only “unfair prejudice,” which is not the same as whether the evidence has a legitimate “prejudicial effect.” See State v. Jones, 440 S.C. 214, 245, 891 S.E.2d 347, 363 (2023) (differentiating between prejudice and “unfair” prejudice). To conduct a proper Rule 403 analysis, a trial court must distinguish “unfair” prejudice from the legitimate impact all evidence has on the outcome of a case. As our court of appeals recognized years ago, “Unfair prejudice does not mean the damage to a defendant's case that results from the legitimate probative force of the evidence; rather it refers to evidence which tends to suggest decision on an improper basis.” State v. Gilchrist, 329 S.C. 621, 630, 496 S.E.2d 424, 429 (Ct. App. 1998) (quoting United States v. Bonds, 12 F.3d 540, 567 (6th Cir. 1993); see also State v. Gray, 408 S.C. 601, 616, 759 S.E.2d 160, 168 (Ct. App. 2014) (“All evidence is meant to be prejudicial; it is only unfair prejudice which must be scrutinized under Rule 403.” (cleaned up) (quoting Gilchrist, 329 S.C. at 630, 496 S.E.2d at 429)). Evidence poses a danger of unfair prejudice when it has a “tendency to suggest a decision on an improper basis, commonly, though not necessarily, an emotional one.” State v. Holder, 382 S.C. 278, 290, 676 S.E.2d 690, 697 (2009) (quoting State v. Jackson, 364 S.C. 329, 334, 613 S.E.2d 374, 376 (2005)). Second, Rule 403 itself clearly states “evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice.” Rule 403, SCRE. Here, the trial court inexplicably reversed the Rule 403 standard and considered whether the probative value exceeded the prejudice.

The trial court's failure to apply the correct legal standard in these two respects was itself an abuse of discretion. See State v. Wallace, 440 S.C. 537, 543, 892 S.E.2d 310, 313 (2023) (“[T]he trial court—when ruling on the admission or exclusion of evidence—must ․ apply the correct law.” (first citing State v. Jones, 423 S.C. 631, 636, 817 S.E.2d 268, 270 (2018); and then citing State v. King, 422 S.C. 47, 68-69, 810 S.E.2d 18, 29 (2017))).

In addition, the trial court misunderstood its role in evaluating the admissibility of evidence. The trial court stated, “I don't think she's biased, in my opinion at this point in time,” and “I don't think anything has been elicited as to the fact that she's been untruthful in any way.” Our courts have consistently held that witness credibility is a question exclusively for the jury and a trial judge's personal view of whether a witness is telling the truth plays absolutely no part in the analysis of admissibility. See Tisdale v. Kerr McGee Chem. Corp., 266 S.C. 64, 67-68, 221 S.E.2d 531, 533 (1976) (“The credibility of the testimony of witnesses is, of course, a function of the jury, not the court ․ and it is the jury that decides what weight is to be given.” (citations omitted)); State v. Kromah, 401 S.C. 340, 358, 737 S.E.2d 490, 499-500 (2013) (“Our courts have previously held that the assessment of witness credibility is within the exclusive province of the jury ․” (cleaned up) (quoting State v. McKerley, 397 S.C. 461, 464, 725 S.E.2d 139, 141 (Ct. App. 2012))). A trial court may not exclude evidence of bias because the court believes the witness is not biased, nor evidence of credibility because it thinks the witness has not been untruthful; that is for the jury to determine. For all these reasons, we hold the trial court abused its discretion in excluding the evidence.

Schimpf nevertheless argues the testimony would have been excluded even under a proper Rule 403 analysis because it was unfairly prejudicial. See State v. Fuller, 425 S.C. 468, 478, 822 S.E.2d 910, 915 (Ct. App. 2019) (holding that even if evidence of bias was admissible under Rule 608(c), it was within the trial court's discretion to exclude the evidence under Rule 403). We disagree the evidence should have been excluded as to each category of evidence except the sexual relationship with Schimpf's wife.

The evidence has considerable probative value in demonstrating Tolbert's bias in favor of Schimpf. Tolbert's long-term sexual relationship with Schimpf made her more likely to provide favorable testimony on his behalf. The facts that Schimpf was giving Tolbert free cosmetic procedures and she was being compensated as an employee of Sweetgrass further increased the likelihood she would testify positively about both Schimpf and Sweetgrass. We find the probative value of this evidence is high. See Starnes, 340 S.C. at 325, 531 S.E.2d at 915.

Turning to unfair prejudice, we find no unfair prejudice in admitting evidence of Tolbert's salary and that she received free medical procedures as part of her compensation package. This information does not carry even the slightest risk of eliciting an emotional response that could unfairly divert the jury's attention away from the facts of the case and the applicable law. Unquestionably, therefore, the exclusion of this evidence was error.

As to Tolbert's sexual relationship with Schimpf, we do see some danger of unfair prejudice in the fear the information about Schimpf's extramarital relationship with a staff member would paint Schimpf's character in a negative light and distract the jury from the central issue in the case—whether Schimpf was negligent in rendering medical care. We agree with Schimpf this information had the potential to overshadow the facts relevant to the central issue—medical negligence—and unfairly influence the jury to make its decision on some basis other than whether Schimpf breached the applicable standard of medical care. Given the high probative value of a longstanding romantic relationship with the defendant as a source of potential bias, however, we find the probative value was not substantially outweighed by the danger of unfair prejudice. Thus, it was error to exclude the evidence of Tolbert's sexual relationship with Schimpf under Rule 403.

Our analysis differs, however, as to evidence of Tolbert's sexual relationship with Schimpf's wife. First, the record before us does not indicate that the evidence of Tolbert's relationship with Schimpf's wife adds any additional probative value beyond the fact Tolbert was in a sexual relationship with Schimpf himself. As far as we can tell, therefore, the probative value of this evidence in this case is zero. As to unfair prejudice, the fact Schimpf was involved in a three-way relationship with both his office manager and his wife is a bizarre circumstance that poses a substantially increased risk the jury may be distracted from the central issues in the case. The lack of any additional probative value in the evidence balanced against the significant danger the jury will judge Schimpf by his unconventional and inappropriate sexual conduct rather than by whether he breached the applicable standard of care causes us to agree with the trial court that evidence of Tolbert's sexual relationship with Schimpf's wife should have been excluded.

c. Reversible Error

Because Tolbert's testimony did not relate directly to the central issue in the case—medical negligence—we turn to the question of whether the trial court's error in excluding evidence of her bias requires that we reverse and grant Whitfield a new trial. As we recently stated, “Some errors—when considered in the context of the facts of a particular case—are so insignificant and inconsequential they do not require reversal ․” State v. Reyes, 432 S.C. 394, 405-06, 853 S.E.2d 334, 340 (2020). Rather, “to warrant reversal based on the admission or exclusion of evidence, the appealing party must show both the error of the ruling and prejudice.” Fields v. J. Haynes Waters Builders, Inc., 376 S.C. 545, 557, 658 S.E.2d 80, 86 (2008) (citing Fields v. Reg. Med. Ctr. Orangeburg, 363 S.C. 19, 26, 609 S.E.2d 506, 509 (2005), overruled on other grounds by Wallace, 440 S.C. at 542, 892 S.E.2d at 312). “Prejudice is a reasonable probability that the jury's verdict was influenced by the challenged evidence or the lack thereof.” Id.

Whitfield argues she was prejudiced by the trial court's error because “she had no other means by which to establish [Tolbert's] interest, bias, or partiality towards Dr. Schimpf at trial.” Specifically, Whitfield argues she was prejudiced by not being permitted to establish Tolbert's bias because Tolbert gave different testimony than Whitfield regarding Schimpf's hostile behavior during the July 11 post-operative procedure.

As described above, Whitfield testified that, during the July 11 visit during which Schimpf cleaned her wound and placed sutures in the wound in an attempt to close it, Schimpf was angry that Whitfield had shown her wound to another surgeon and he slammed his tray in the sink. Schimpf's anger gave Whitfield the impression Schimpf was embarrassed that another surgeon had seen his allegedly sloppy work. When Tolbert was asked whether Schimpf was angry during Whitfield's visit, however, she testified, “No. He would never be angry.” When Tolbert was asked whether Schimpf threw his tray in the sink she testified, “No. Dr. Schimpf would never do that.”

Dr. Michael Rosenberg—Whitfield's plastic surgery expert—testified that Schimpf deviated from the standard of care during the July 11 procedure by failing to take Whitfield into surgery to remove the implant. Rosenberg explained that by instead electing to place additional sutures in the wound, Schimpf increased the tension on the wound instead of relieving the tension by removing the implant. Specifically, Rosenberg testified,

I think one deviation [from the standard of care] was failure to intervene in a timely fashion in a developing problem. So, on the 11th, that patient needed to be -- Ms. Whitfield needed to be scheduled for surgery and she wasn't. But another deviation is apparently rather than take her to surgery and wash out the wound, debride any dead tissue, and most likely take out the implant, he elected to put sutures in to close it. So, this is an open wound now, there's an implant underneath. [The wound is] two and a half by one centimeter, and it's open because it was too tight. So, it didn't heal, it pulled apart. There's tension there. So, to think that the solution is to then place sutures and tighten it up again, it doesn't make a lot of sense.

Rosenberg then testified these deviations from the standard of care during the July 11 post-operative procedure were causes of her damages.

Thus, the factual dispute about Schimpf's mental state—whether he was angry because Whitfield showed another doctor his allegedly shoddy work—at the July 11 appointment was important to Whitfield's case. If Whitfield could prove Schimpf was not in a sound state of mind when treating her, particularly if the jury found reason not to believe Tolbert's testimony that Schimpf would “never be angry,” it would increase the likelihood the jury would find Schimpf deviated from the standard of care in the way Rosenberg claims. In addition, if Whitfield could prove Schimpf was angry at her for showing his work to another surgeon, this may have been viewed as an acknowledgment by Schimpf that there were problems with the quality of the work he did in the original surgery.

For these reasons, whether Schimpf was angry as Whitfield testified is a significant issue. The only outside witness to this interaction was Tolbert. Tolbert denied Schimpf was angry during the appointment. Thus, there was a credibility contest between Tolbert and Whitfield, and Whitfield was prejudiced by not being allowed to introduce evidence that Tolbert may have been biased towards Schimpf.

III. Admissibility of the Experts' Testimony based on Whitfield's Rule 35, SCRCP, Examinations

Whitfield argues the trial court erred in allowing Schimpf's previously-designated experts to offer opinion testimony based in part on their physical and mental examinations of her. During discovery, Schimpf filed a motion under Rule 35, SCRCP, to require Whitfield to undergo a mental examination by Dr. James Ballenger—Schimpf's psychiatry expert—and a physical examination by Dr. Jorge Perez—Schimpf's plastic surgery expert. Whitfield filed a memorandum in opposition, arguing that, under Fairchild v. South Carolina Department of Transportation, 398 S.C. 90, 727 S.E.2d 407 (2012), an adverse party's expert may not perform Rule 35 examinations on an opposing party because a retained expert is not “independent.” At a pretrial hearing regarding the motion, Schimpf argued there is nothing in the text of Rule 35 that requires the circuit court to appoint an “independent” examiner.⁷ Circuit Court Judge Alex Kinlaw granted Schimpf's motion and required Whitfield to submit to the examinations. Whitfield complied with the order and attended the examinations.

Whitfield filed a motion to “prevent the Defendants from introducing any evidence to the jury regarding the defense's plastic surgery and psychological examinations of Plaintiff.” Whitfield argued the experts' testimony about the examinations should be excluded because Fairchild established a party may not use his or her own expert to perform a Rule 35 examination. The trial court denied the motion, and Schimpf's experts testified to opinions based in part on their examinations of Whitfield. The court of appeals affirmed. Whitfield, Op. No. 2022-UP-417, at 2.

In her brief to this Court, Whitfield relies exclusively on Fairchild to support her argument the experts' testimony should have been excluded. The issue in Fairchild, however, was whether the trial court erred by denying a Rule 35 request. Rule 35 is a discovery provision, and Fairchild did not involve the admissibility of evidence. 398 S.C. at 106-11, 727 S.E.2d at 415-18. Whitfield's motion to prevent the experts from testifying based on their examinations does not mention a single evidentiary principle that would lead to the testimony's exclusion, nor does she point to an evidentiary rule in her brief to this Court. Instead, her argument is essentially that, because the discovery order was unlawful under Rule 35 and Fairchild—a point we find it unnecessary to address—the facts revealed through that discovery are inadmissible. Whitfield's arguments about the admissibility of the experts' testimony are indistinguishable from the arguments she made during the discovery dispute. She is attempting to recharacterize her discovery objection into an evidentiary objection. Thus, Whitfield's argument that it was error to exclude the experts' testimony because of Rule 35 and Fairchild is without merit.

IV. Conclusion

The trial court erred by refusing to admit evidence regarding Tolbert's sexual relationship with Schimpf, her salary, and the free cosmetic procedures she received from Schimpf. We reverse the court of appeals and remand to the court of common pleas for a new trial.

REVERSED AND REMANDED.

KITTREDGE, C.J., JAMES, HILL and VERDIN, JJ., concur.

The Supreme Court of South Carolina

In the Matter of Billy R. Oswald, Respondent.

Appellate Case No. 2025-000010

ORDER

The Office of Disciplinary Counsel asks this Court to place Respondent on interim suspension pursuant to Rule 17(b) of the Rules for Lawyer Disciplinary Enforcement (RLDE) contained in Rule 413 of the South Carolina Appellate Court Rules (SCACR).

IT IS ORDERED that Respondent's license to practice law in this state is suspended until further order of this Court.

John W. Kittredge C.J. FOR THE COURT

Columbia, South Carolina

January 3, 2025

FOOTNOTES

1.   Hood has no logical explanation of how she sustained actual damages, as she ended up receiving a verdict in the UIM Action for which USAA paid her $1,000,000, an amount far greater than the $250,000 for which she claims she would have settled.

2.   We note that Hood's arguments have shifted at every step of this litigation.

3.   The same law firm that represents Hood here represented the plaintiff in Skinner in her unsuccessful attempt to assert a negligence claim as well as a bad faith claim.

4.   A carrier's reserve and the settlement authority given to the representative of the carrier (an attorney or an adjuster, for example) are typically different sums, but here, USAA's reserve and settlement authority were the same, $250,000.

5.   Again, the reserve and the settlement authority were the same in this case.

6.   During oral argument before this Court, Ms. Hood's lawyer argued the critical liability issue during the trial of the UIM Action was not whether Ms. Hood's headlights were on or off, but rather whether headlights were required at the time of day when the wreck occurred. He stated Ms. Hood's position during the trial of the UIM Action was that the accident occurred during “civil twilight,” which he contends is a period after sunset when headlights need not be on. South Carolina Code section 56-5-4450 requires a vehicle's headlights to be on one-half hour after sunset and at such other times when “environmental factors severely reduce the ability to clearly discern persons and vehicles on the street or highway at a distance of five hundred feet ahead.” The record reflects the accident occurred from twenty-eight to thirty-two minutes after sunset, and witness Lee testified it was dark.

7.   USAA's counsel in the UIM Action testified during the bad faith trial that data from the “black box” from Ms. Hood's vehicle indicated she was traveling 62 miles per hour at impact. The speed limit was 45 miles per hour. The record is not clear whether the issue of speed was before the jury in the UIM Action.

1.   An “augmentation” is “plastic surgery to enlarge the breast, often by insertion of an implant.” Augmentation m., STEDMAN'S MEDICAL DICTIONARY 1149 (28th ed. 2006). A “mastopexy” is “[p]lastic surgery to elevate and reshape a ptotic breast; may or may not involve prosthetic augmentation.” Mastopexy, STEDMAN'S MEDICAL DICTIONARY, supra, at 1162. Whitfield had both an augmentation and mastopexy, where Schimpf performed a breast lift and removed Whitfield's existing implants and replaced them.

2.   “Dehiscence” is defined as “[a] bursting open, splitting, or gaping along natural or sutured lines.” Dehiscence, Stedman's Medical Dictionary, supra note 1, at 505. “Wound dehiscence” is the “disruption of apposed surfaces of a wound.” Wound d., Stedman's Medical Dictionary, supra note 1, at 505.

3.   “Fat necrosis” is “the death of adipose tissue, characterized by the formation of small (1-4 mm), dull, chalky, gray or white foci; these represent small quantities of calcium soaps formed in the affected tissue when fat is hydrolyzed into glycerol and fatty acids.” Fat n., Stedman's Medical Dictionary, supra note 1, at 1285.

4.   Tolbert clarified the free procedures were provided to all employees at Sweetgrass.

5.   In addition, Whitfield filed Tolbert's deposition transcript in the record during the pretrial hearing on the morning of trial. We do not rely on this filing, however, as Whitfield did not make a specific reference to the trial court at that time as to what the testimony was regarding the sexual relationship, nor did she later ask the trial court to review the important portions of the deposition.

6.   Rule 608(a), SCRE, provides:The credibility of a witness may be attacked or supported by evidence in the form of opinion or reputation, but subject to these limitations: (1) the evidence may refer only to character for truthfulness or untruthfulness, and (2) evidence of truthful character is admissible only after the character of the witness for truthfulness has been attacked by opinion or reputation evidence or otherwise.

7.   At the hearing, Schimpf correctly pointed out the word “independent” does not appear in the Rule. This Court has recently emphasized that trial courts should apply the language of the Rules. See Kitchen Planners, LLC v. Friedman, 440 S.C. 456, 463, 892 S.E.2d 297, 301 (2023) (clarifying the Rule 56(c), SCRCP, standard is “the 'genuine issue of material fact' standard set forth in the text of the Rule” and does not include the “mere scintilla” language added by case law); Deutsche Bank Nat'l Tr. Co. v. Est. of Houck, 440 S.C. 409, 412-13, 892 S.E.2d 280, 281-82 (2023) (abolishing the “logical relationship test” added by case law for the Rule 13(a), SCRCP, determination of whether a counterclaim is permissive or compulsory and clarifying the determination is “governed by the plain language of” the Rule). However, we need not address whether Rule 35 examiners must always be independent because, as we explain, Whitfield incorrectly relies on Rule 35—a discovery rule—for her evidence admissibility argument.

John W. Kittredge FOR THE COURT