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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA AIKEN DIVISION Encompass Insurance Company of America, Plaintiff, vs. ) ) ) ) ) ) )

C/A No. 1:09-1465-MBS

ORDER

Montgomery Mutual Insurance Company and Teresa W. Galloway

)

) ) Defendantd ) ___________________________________ )

I. BACKGROUND1 On June 6, 2007, Teresa W. Galloway ("Galloway") was involved in a motor vehicle accident in Floyd County, Georgia ("the accident") while she was a passenger in a vehicle that was owned and operated by her sister, Jeanne Collins. The other vehicle involved in the accident was driven by Joyce A. Vasser ("Vasser"), the at-fault driver. At the time of the accident, Jeanne Collins was the named insured on the basic liability automobile policy issued by Montgomery Mutual Insurance Company ( "Montgomery"). The policy also provided uninsured motorists insurance ("UIM") coverage. The Montgomery policy was issued and delivered to Jeanne Collins in the State of Georgia. Jeanne Collins paid the premium for her policy with Montgomery. The Montgomery policy provides UIM coverage to Galloway since Galloway was an occupant of the Montgomery vehicle at the time of the accident.

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The facts stated herein were derived from the parties' Joint Stipulations of Fact. See Entry 20.

At the time of the accident, Galloway was a named insured under a basic liability automobile policy issued by Encompass Insurance Company of America ("Encompass") that also provided underinsured motorist (UIM) coverage. The Encompass policy was issued and delivered to Galloway in the State of South Carolina. Galloway paid the premium for her policy with Encompass. The Encompass policy provides UIM coverage to Galloway as a named insured. State Farm, Vasser's automobile liability insurer, has paid its liability policy limits of $25,000 to Galloway. Galloway's damages from the accident exceed $25,000. As a result of the accident, Galloway filed a tort suit in Georgia against the at-fault driver. The Georgia case is stayed pending the resolution of this matter. II. DISCUSSION There are two issues before the court: (A) whether South Carolina or Georgia law governs the parties' insurance coverage dispute, and (B) whether the Encompass policy or the Montgomery policy provides primary coverage. Each issue is discussed in turn below. A. Choice of Law

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