Ballesteros v. American Standard

• Decision Date: 23 December 2009
• Docket Number: No. 2 CA-CV 2009-0123.,2 CA-CV 2009-0123.
• Citation: 222 P.3d 292
• Parties: Luis BALLESTEROS and Alma Ballesteros, husband and wife; Guadalupe Portillo; Gerardo Portillo; Ricardo Portillo; Manuel Portillo; Ruben Portillo; Guadalupe Portillo Jr.; and Patricia Yerena, Plaintiffs/Appellees, v. AMERICAN STANDARD INSURANCE COMPANY OF WISCONSIN, a foreign corporation doing business in the state of Arizona as American Family Insurance Company; American Family Mutual Insurance Company, a foreign corporation doing business in the state of Arizona; Shirlee Kopin; and Shawn D. Morris, Defendants/Appellants.
• Court: Arizona Court of Appeals

222 P.3d 292

Luis BALLESTEROS and Alma Ballesteros, husband and wife; Guadalupe Portillo; Gerardo Portillo; Ricardo Portillo; Manuel Portillo; Ruben Portillo; Guadalupe Portillo Jr.; and Patricia Yerena, Plaintiffs/Appellees, v. AMERICAN STANDARD INSURANCE COMPANY OF WISCONSIN, a foreign corporation doing business in the state of Arizona as American Family Insurance Company; American Family Mutual Insurance Company, a foreign corporation doing business in the state of Arizona; Shirlee Kopin; and Shawn D. Morris, Defendants/Appellants.

No. 2 CA-CV 2009-0123.

Court of Appeals of Arizona, Division 2, Department B.

December 23, 2009.

Law Office of Elliot Glicksman, P.L.L.C. By Elliot Glicksman, and Gabroy, Rollman & Bossé, P.C. By John Gabroy and Richard Brown, Tucson, Attorneys for Plaintiffs/Appellees.

Lewis and Roca LLP By Steven J. Hulsman, Brenden J. Griffin, and Lawrence A. Kasten, Tucson, Attorneys for Defendants/Appellants.

Modrall, Sperling, Roehl, Harris & Sisk, P.A. By Brian K. Nichols, Albuquerque, NM, Attorneys for Amicus Curiae Progressive Casualty Insurance Company.

OPINION

VÁSQUEZ, Judge.

¶ 1 American Standard Insurance Company of Wisconsin ("American Standard") appeals the trial court's grant of partial summary judgment in favor of Luis Ballesteros, his wife, and other statutory beneficiaries of decedent Manuela Portillo (collectively "Ballesteros") on their breach of contract claim arising out of an automobile insurance policy and the court's denial of American Standard's motions for partial summary judgment. Ballesteros alleged American Standard had failed to offer effectively uninsured/underinsured motorist ("UM/UIM") coverage under the policy by not providing a written offer in Spanish.

¶ 2 American Standard asserts the trial court erred in denying its motion for summary judgment, based on the court's finding it was not immune from litigation under the UM/UIM coverage statute, A.R.S. § 20-259.01. It also argues the court erred in granting Ballesteros's motion for summary judgment and concluding that, by not providing a Spanish-language form, it had failed appropriately to make available to and offer Ballesteros UM/UIM coverage. In the alternative, American Standard contends a factual dispute remains whether Ballesteros knowingly had declined UM/UIM coverage. For the reasons that follow, we affirm the trial court's denial of American Standard's motions for partial summary judgment but reverse the court's entry of partial summary judgment for Ballesteros and remand for further proceedings consistent with this decision.

Facts and Procedural Background

¶ 3 We view the facts in the light most favorable to American Standard, the party against whom summary judgment was granted. Corbett v. ManorCare of Am., Inc., 213 Ariz. 618, ¶ 2, 146 P.3d 1027, 1030-31 (App. 2006). In March 2001, Ballesteros, whose primary language is Spanish, purchased an automobile insurance policy from American Standard, doing business as American Family Insurance ("AFI"), through its insurance agent Shawn Morris. Morris had provided Ballesteros a form written only in English for the selection or rejection of UM/UIM coverage. Ballesteros signed the form, apparently indicating he had declined coverage. In September, Ballesteros's mother-in-law, an insured under the policy, was killed in a collision with an uninsured driver. Ballesteros filed a claim for UM/UIM benefits under the policy, which American Standard denied through its claims adjuster, Shirlee Kopin.

¶ 4 Ballesteros filed this civil action against American Standard, American Family Mutual Insurance Company (AFMIC), Kopin, and Morris, alleging breach of contract, bad faith, consumer fraud, and breach of fiduciary duty and seeking class certification pursuant to Rule 23(a) and (b)(3), Ariz. R. Civ. P.¹ After unsuccessfully attempting to remove the case to federal court, American Standard filed two motions for partial summary judgment, which the trial court denied. The court also denied the defendants' motion for reconsideration, and this court declined special action jurisdiction. The trial court subsequently denied Ballesteros's request for class certification.

¶ 5 Ballesteros moved for partial summary judgment on the "legal issue of whether Defendant [American Standard] violated ... § 20-259.01 by presenting [him] with an English-language form offering [UM/UIM] coverage ... and failing to provide him with a Spanish-language form." The trial court granted the motion, finding American Standard had not "establish[ed] by appropriate evidence that the notice offered to Mr. Ballesteros was reasonably calculated to bring to his attention that which was being offered" because it had not provided him a Spanish-language form. The court entered judgment on Ballesteros's breach of contract claim in the amount of $50,499 and included the requisite language pursuant to Rule 54(b), Ariz. R. Civ. P., certifying its judgment as a final, appealable order. American Standard timely filed a notice of appeal. This court has jurisdiction pursuant to A.R.S. § 12-2101(B).

Standard of Review

¶ 6 Whether summary judgment is appropriate is a question of law we review de novo. Nelson v. Phoenix Resort Corp., 181 Ariz. 188, 191, 888 P.2d 1375, 1378 (App. 1994). We will affirm a grant of summary judgment when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Ariz. R. Civ. P. 56(c); see also Orme Sch. v. Reeves, 166 Ariz. 301, 305, 802 P.2d 1000, 1004 (1990). And, although the denial of a motion for summary judgment is generally a nonappealable interlocutory order, we may consider such denials when we otherwise have jurisdiction over the appeal, as we do here. In re 1996 Nissan Sentra, 201 Ariz. 114, ¶ 16, 32 P.3d 39, 44 (App.2001).

Discussion

I. Application of Safe Harbor

¶ 7 The central issue in this case involves the interpretation of § 29-259.01. That statute provides, in pertinent part:

Every insurer writing automobile liability or motor vehicle liability policies shall make available to the named insured ... and by written notice offer the insured ... uninsured [and underinsured] motorist coverage which extends to and covers all persons insured under the policy.... The selection of limits or rejection of coverage by a named insured or applicant on a form approved by the director is valid for all insureds under the policy.

On appeal, American Standard argues the plain language of the second sentence of this statute, which was added in 1992, 1992 Ariz. Sess. Laws, ch. 147, § 1, provides a "safe harbor" for insurers, insulating them from litigation. It maintains "that if a customer declines an offer of UM/UIM coverage by signing a [Department of Insurance ("DOI")]-approved form," then that decision "is valid," and it asserts it followed this "bright line, safe harbor procedure by making its written offer to ... Ballesteros using a form the DOI had reviewed, modified, and approved." Thus, American Standard contends that in denying its motion for summary judgment and rejecting the safe harbor, "the [trial] court acted contrary to the statute's plain language as previously interpreted by this Court and the Supreme Court, and to the statute's legislative history."

¶ 8 In his complaint and subsequent filings below, Ballesteros had asserted that "because of [American Standard]'s failure to provide [him] with a written offer for selection/rejection of UM and UIM coverage in Spanish, [he was] deemed to have UM and UIM coverage up to the amount of the[] liability coverage." American Standard moved for summary judgment on this claim, relying, in part, on what it asserted was the safe harbor language in § 20-259.01. The trial court denied the motion, concluding, "It is the purp[os]e of the statute to guarantee the opportunity for responsible drivers to protect themselves and their loved ones through the purchase of UM/UIM coverage." And, it concluded, the case law interpreting § 20-259.01 "does not ... stand for the proposition that an insurer can provide a primarily Spanish speaking and reading applicant with an offer written in English without more. This court finds that there is no `safe harbor' under these circumstances." The trial court later denied the defendants' motion for reconsideration on the same grounds.

¶ 9 Preliminarily, we address American Standard's contention that "this court and the [Arizona] Supreme Court have already concluded [the statute] create[s] a safe harbor ... when a DOI-approved form is used." As support for this argument, American Standard relies on Tallent v. National General Insurance Co., 183 Ariz. 304, 310, 903 P.2d 612, 618 (App.1995) (Tallent I), decided by Division One of this court, and the supreme court's opinion vacating and reversing that decision in Tallent v. National General Insurance Co., 185 Ariz. 266, 915 P.2d 665 (1996) (Tallent II). Although instructive, we do not find those cases have the dispositive weight American Standard ascribes to them. The supreme court vacated Tallent I in its entirety and did not adopt its "safe harbor" language in Tallent II; that language therefore does not govern our analysis.² And in Tallent II the supreme court said only that "[p]erhaps questions [challenging the sufficiency of offers for UM/UIM coverage] will not arise in the future because the law now provides that `[t]he selection of limits or the rejection of coverage by a named insured ... on a form approved by the ... [DOI] shall be valid for all insureds.'" 185 Ariz. at 267 n. 2, 915 P.2d at 666 n. 2 (second alteration in Tallent II), quoting § 20-259.01(B). This language does not support American Standard's assertion that the courts have concluded a "safe harbor" exists under § 20-259.01. We need not reach this issue, however, because even assuming, without deciding, a safe harbor generally exists, we would conclude it is not absolute and does not apply under the...