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Note: In order to obtain self-insurer status with the South Carolina Department of Motor Vehicles (DMV), the Original Blue Ribbon Taxi Corp. (Applicant) obtained a letter of credit issued by Sumter National Bank (Issuer) to pay judgments for insurance claims against Applicant. The letter of credit was accepted by the DMV. When the General Assembly amended the statute to lower the minimum amount required to be maintained, Issuer and Applicant renewed and amended the letter of credit to reflect the minimum amount.

Subsequently DMV denied Applicant's application for renewal of its self-insurer status. In an administrative appeal, the DMV's senior hearing officer concluded that the statute gave the DMV discretion as to amounts. On appeal to the administrative court, the judge reversed, stating that the administrative hearing officer misconstrued the statute as if the DMV could deny self-insurer status to a party that was unable to pay "any judgments obtained" against it.

On appeal, the Court of Appeals of South Carolina, in an opinion by Anderson, J., affirmed. The opinion construed the statutory language. It provided that "eighty percent must be cash or an irrevocable letter of credit issued by a bank chartered in this State or a member bank of the federal reserve system, and the remaining twenty percent may be satisfied by the 'quick sale' appraised value of real estate located in the State, as certified by a licensed appraiser." The court concluded that it would be absurd to read this text as if a party must secure a letter of credit to cover "any judgments obtained." Instead, it read the text in the context of the minimum statutory limits in a related statute. The opinion also noted that Applicant had complied with all the statutory requirements regarding established financial responsibility.

[JEB/mcb]

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