Kiser v. Wolfe

• Decision Date: 02 June 2011
• Docket Number: No. E2009–01529–SC–R11–CV.,E2009–01529–SC–R11–CV.
• Citation: 353 S.W.3d 741
• Parties: Randall D. KISER v. Ian J. WOLFE et al.
• Court: Tennessee Supreme Court

353 S.W.3d 741

Randall D. KISER

v.Ian J. WOLFE et al.

No. E2009–01529–SC–R11–CV.

Supreme Court of Tennessee, at Nashville.

June 2, 2011 Session.1Aug. 24, 2011.

Christopher D. Markel, Chattanooga, Tennessee, for the appellant, Randall Kiser.

N. Mark Kinsman and J. Chad Hogue, Chattanooga, Tennessee, for the appellee, Consumers Insurance Company.

OPINION

GARY R. WADE, J., delivered the opinion of the Court, in which CORNELIA A. CLARK, C.J., JANICE M. HOLDER, and WILLIAM C. KOCH, JR., JJ., joined. SHARON G. LEE, J., filed a separate opinion concurring in part and dissenting in part.

GARY R. WADE, J.

The plaintiff, an employee of the insured, was injured while driving the insured's tow truck. He filed suit against the defendant and later sought to invoke the insured's uninsured motorist policy in an amount equal to the liability coverage for bodily injury. The insurer filed a motion for partial summary judgment, seeking to limit uninsured motorist coverage to the amount listed on the first page of the policy rather than the amount otherwise fixed by statute. The trial court denied the motion, but the Court of Appeals reversed. We affirm the judgment of the Court of Appeals, holding that the insured was entitled to a partial summary judgment. When the insured signs an application indicating the selection of uninsured motorist coverage lower than the liability limits, but neglects to initial a provision designed to confirm the selection of coverage less than the standard provided by statute, the “in writing” requirement under Tennessee Code Annotated section 56–7–1201(a)(2) (2008) has been satisfied. The cause is remanded to the trial court for the entry of partial summary judgment and such other proceedings, as may be necessary.

On May 5, 2005, Randall D. Kiser (the “Plaintiff”) was seriously injured while driving a tow truck for his employer, Ken Lawson, who conducted business as Lawson Towing Service (“Lawson”). A car driven by Ian J. Wolfe (the “Defendant”) crossed over the center line of Frontage Road in Bradley County and struck the Plaintiff's vehicle. On November 1, 2005, the Plaintiff filed suit, alleging that the negligent acts of the Defendant were the sole and proximate cause of the collision and seeking $1,500,000 in damages. Because the Defendant, who conceded that the Plaintiff was without fault in the accident, tendered the policy limits of his liability insurance coverage, the Plaintiff joined Consumers Insurance Company (“Consumers”), Lawson's insurer, as an additional defendant pursuant to the uninsured motorist statutes. See generally Tenn.Code Ann. §§ 56–7–1201 to –1206 (2008).² While Consumers claimed uninsured motorist bodily injury limits of $60,000 and sought offsets against that sum for advanced medical payments and the amount tendered by the Defendant's insurer, the Plaintiff contended that he was entitled to coverage under the Consumers policy in the amount of $1,000,000, the extent of Lawson's liability insurance.

The Plaintiff's claim for higher coverage was based upon Tennessee Code Annotated 56–7–1201(a), which requires uninsured motorist coverage in the same amount as the bodily injury liability limits unless the amount is rejected in writing. He asserted that the application for insurance indicated that Lawson did not reject uninsured motorist coverage lower than the amount of the liability coverage, as required by the statute, and that Consumers was, therefore, liable for any amount not in excess of $1,000,000.

In response, Consumers acknowledged having provided liability insurance coverage for Lawson Towing Service in the amount of $1,000,000, but asserted that the first page of the three-page application demonstrated that Lawson, on September 10, 2002, elected to limit the uninsured motorist coverage for bodily injury to $60,000. Consumers filed a motion for partial summary judgment seeking a ruling that its exposure to the claim was limited to $60,000. In support, Consumers produced a copy of the application, offered proof by the insurance agent's deposition that Lawson signed the application, and also provided documentation that from the date the policy was issued until the time of the Plaintiff's injury, Lawson had renewed the policy on two occasions without requesting an increase in either the uninsured motorist coverage or the liability coverage, and also had paid premiums for thirty months based upon the lower uninsured motorist limits. The Plaintiff did not challenge the contents of the affidavit filed in support of Consumers' motion for summary judgment or otherwise question the authenticity of the three-page application.

The trial court denied the motion, observing as follows:

1.... The page with a signature notes an “effective date” of the policy of insurance of September 10, 2002, and contains a section for an insured-applicant to acknowledge that “uninsured bodily injury and property damage coverage have been explained to me. I have been offered the options of selecting UM limits equal to my liability limits, UM limits lower than my liability limits, or to reject UM bodily injury and/or UM property damage coverages entirely.” Below this section, on the same page, appear several blanks, for the insured to initial acknowledgment of the aforementioned, and his selection of UM limits contained in the application, his rejection of all UM coverage, and/or rejection only of UM property damage coverage. It is undisputed that each blank in this section on the signature page was not initialed by the insured.

2. The record contains no testimony from Mr. Lawson as to his intent in these matters. Further, both parties have declined the option of obtaining testimony from Mr. Lawson as to his intent in these matters, and have agreed to proceed based upon the Court's interpretation of the application and facts in the record.

The trial court concluded that the application was inadequate to establish uninsured motorist limits lower than the liability coverage extended under the policy and further commented as follows:

If [Lawson] comes in and says that he didn't intend to have any more than what he had on the UM or some other way expresses that his signature was intended to be a rejection, then I think that proof needs to be in the record, but just on the instrument itself you're stuck with your paperwork, and it's not sufficient.

At the request of Consumers, the trial court granted an interlocutory appeal by permission. See Tenn. R.App. P. 9.

The Court of Appeals reversed and remanded, directing that Consumers' motion for partial summary judgment be granted and holding that the requirements for the “written selection of uninsured/underinsured motorist benefits lower than liability limits is met when the insured signs an application containing a lower selection but neglects to initial a block provided for that purpose.” Kiser v. Wolfe, No. E2009–01529–COA–R9–CV, 2010 WL 2160780, at *1 (Tenn.Ct.App. May 28, 2010). The rationale for its ruling was that an insurer, in order to meet its burden of proof, must only demonstrate “that the insured voluntarily signed an insurance contract application that clearly stated an uninsured/underinsured ... amount lower than the bodily injury liability amount.” Id. at *7. In a petition to rehear, the Plaintiff asserted that the trial court had based its ruling upon only the third page of the attachment to Consumers' motion for summary judgment without reference to the other two pages, the first of which shows, in bold print, liability coverage of $1,000,000 and uninsured motorist coverage of $60,000. The Court of Appeals summarily denied the petition. This Court granted the Plaintiff's application for permission to appeal in order to clarify the nature of the writing necessary to comply with the statute.

Standard of Review and Statutory Interpretation

Initially, summary judgment may only be granted when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Tenn. R. Civ. P. 56.04; Hannan v. Alltel Publ'g Co., 270 S.W.3d 1, 5 (Tenn.2008); Byrd v. Hall, 847 S.W.2d 208, 214 (Tenn.1993). In this instance, the facts are not in dispute. The question this Court has chosen to address is whether Lawson's signature on an insurance application indicating lower coverage than the liability limits, but with an uncompleted section designed to confirm either acceptance of a lower amount or rejection altogether, is sufficient to fulfill the statutory requirement that the selection of lower uninsured motorist coverage be in written form. Statutory interpretation, of course, presents a question of law and our review is de novo with no presumption of correctness. Carter v. Quality Outdoor Prods., Inc., 303 S.W.3d 265, 267 (Tenn.2010) (citing Perrin v. Gaylord Entm't Co., 120 S.W.3d 823, 826 (Tenn.2003)).

Analysis

The applicable statute provides as follows:

(a) Every automobile liability insurance policy delivered, issued for delivery or renewed in this state, covering liability arising out of the ownership, maintenance, or use of any motor vehicle designed for use primarily on public roads and registered or principally garaged in this state, shall include uninsured motorist coverage, subject to provisions filed with and approved by the commissioner, for the protection of persons insured under the policy who are legally entitled to recover compensatory damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting from injury, sickness or disease.

(1) The limits of the uninsured motorist coverage shall be equal to the bodily injury liability limits stated in the policy.

Tenn.Code Ann. § 56–7–1201(a)–(a)(1) (emphasis added).

There is a provision, however, that permits a policy holder to either decline uninsured motorist coverage or select lower limits:

(2) However, any named insured may reject in writing the uninsured motorist...