Blevins v. Gov't Employees Ins. Co.

• Decision Date: 28 July 2011
• Docket Number: No. 1 CA–CV 10–0272.,1 CA–CV 10–0272.
• Citation: Blevins v. Gov't Employees Ins. Co., 227 Ariz. 456, 258 P.3d 274, 613 Ariz. Adv. Rep. 20 (Ariz. App. 2011)
• Parties: Michael BLEVINS, Plaintiff/Appellee,v.GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant/Appellant.
• Court: Arizona Court of Appeals

227 Ariz. 456

258 P.3d 274

613 Ariz. Adv. Rep. 20

Michael BLEVINS, Plaintiff/Appellee,

v.GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant/Appellant.

No. 1 CA–CV 10–0272.

Court of Appeals of Arizona, Division 1, Department C.

July 28, 2011.

Jones, Skelton & Hochuli, P.L.C. by Eileen Dennis GilBride, Jennifer Erickson, Sanford K. Gerber, Phoenix, Attorneys for Defendant/Appellant.Palumbo Wolfe by Scott I. Palumbo and Treon Aguirre Newman & Norris, P.C. by Brett L. Slavicek, Phoenix, Attorneys for Plaintiff/Appellee.

AMENDED OPINION

PORTLEY, Judge.

¶ 1 We are asked to decide whether Arizona Revised Statutes (“A.R.S.”) section 20–259.01(B) (Supp. 2010) requires that an insured sign a form rejecting underinsured motorist (“UIM”) coverage. Because the statute does not require a signed form, we reverse the summary judgment granted to Michael Blevins and remand this matter to the trial court with instructions to enter summary judgment for Government Employees Insurance Company (“GEICO”).

FACTS AND PROCEDURAL BACKGROUND

¶ 2 Blevins purchased auto insurance from GEICO in August 2006. His insurance policy indicated that he purchased liability coverage but rejected UIM coverage.¹

¶ 3 Blevins was injured in a January 2008 auto accident. After he settled with the other driver, he submitted a claim to GEICO because the other driver was underinsured. GEICO denied his claim.

¶ 4 Blevins then sued GEICO for a declaratory judgment, breach of contract, and bad faith. After both parties moved for partial summary judgment on the declaratory judgment issue, the trial court granted Blevins summary judgment. The parties then settled the remaining claims, and GEICO appealed after the final judgment was entered. The only issue on appeal is whether Blevins is entitled to UIM coverage pursuant to § 20–259.01(B).

DISCUSSION

¶ 5 Summary judgment is appropriate when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Ariz. R. Civ. P. 56(c). We independently determine whether any issue of material fact exists and whether the court properly applied the law. Prince v. City of Apache Junction, 185 Ariz. 43, 45, 912 P.2d 47, 49 (App.1996). Because the burden is on the party requesting summary judgment, the evidence and all reasonable inferences that follow are construed in favor of the opposing party. Nat'l Bank of Ariz. v. Thruston, 218 Ariz. 112, 116, ¶ 17, 180 P.3d 977, 981 (App.2008). When the evidence is disputed, but a reasonable jury could only find for the plaintiff or defendant, the court should uphold a grant of summary judgment. Orme Sch. v. Reeves, 166 Ariz. 301, 309, 802 P.2d 1000, 1008 (1990).

I. Blevins' Motion for Summary Judgment

¶ 6 The key issue is whether § 20–259.01(B) requires that an insurer obtain a written rejection of UIM coverage from an insured. The relevant part of the statute provides that:

Every insurer writing automobile liability or motor vehicle liability policies shall also make available to the named insured thereunder and shall by written notice offer the insured and at the request of the insured shall include within the policy underinsured motorist coverage which extends to and covers all persons insured under the policy, in limits not less than the liability limits for bodily injury or death contained within the policy. The selection of limits or rejection of coverage by a named insured or applicant on a form approved by the director shall be valid for all insureds under the policy. The completion of such form is not required where the insured purchases such coverage in an amount equal to the limits for bodily injury or death contained in the policy.

A.R.S. § 20–259.01(B).²

¶ 7 The first sentence of the statutory subsection requires that the insurer “both ‘offer’ and ‘make available’ UIM coverage.” Tallent v. Nat'l Gen. Ins. Co., 185 Ariz. 266, 267, 915 P.2d 665, 666 (1996); see Ballesteros v. Am. Standard Ins. Co. of Wis., 226 Ariz. 345, 347, ¶ 8, 248 P.3d 193, 195 (2011). After the offer is made, the insured must affirmatively request the coverage. State Farm Mut. Auto. Ins. Co. v. Ash, 181 Ariz. 167, 173, 888 P.2d 1354, 1360 (App.1994); see Tallent, 185 Ariz. at 268, 915 P.2d at 667; Garcia v. Farmers Ins. Co., 191 Ariz. 410, 412, ¶ 23, 956 P.2d 537, 539 (App.1998). If the insurer does not provide the statutorily mandated offer, the insured is entitled to receive UIM coverage as a matter of law. Estate of Ball v. Am. Motorists Ins. Co., 181 Ariz. 124, 126–27, 888 P.2d 1311, 1313–14 (1995) (quoting Ins. Co. of N. Am. v. Santa Cruz, 166 Ariz. 82, 85, 800 P.2d 585, 588 (1990)).

¶ 8 GEICO presented evidence that it provided Blevins with the statutorily mandated written offer. Blevins did not controvert that fact. See Orme Sch., 166 Ariz. at 311, 802 P.2d at 1010. Moreover, it is undisputed that Blevins failed to sign the written offer or otherwise provide any written indication that he was rejecting UIM coverage.³ GEICO argues that a written rejection of UIM coverage is unnecessary; the plain language of § 20–259.01(B) only requires that the insurer provide a written offer.

¶ 9 The trial court disagreed with GEICO and granted summary judgment. Focusing on the second and third sentences of § 20–259.01(B), the court stated:

The statutory language envisions “[t]he selection of limits or rejection of coverage by a named insured or applicant on a form approved by the director.” This means that, in order for coverage less than policy limits to take effect, the policyholder must affirmatively so indicate on the approved form. Significantly, the identical requirement applies both to selection of limits less than policy limits and to complete rejection.

(Alteration in original.)

¶ 10 Our decision in Ash would appear to resolve the issue. There, we considered a similar argument and held that “[t]he insurer need only make the written offer. The insured must then request that the offered coverage be included in his policy. No express rejection is required.” 181 Ariz. at 173, 888 P.2d at 1360.

¶ 11 Ash, however, interpreted a prior version of § 20–259.01(B). ⁴ The statute was amended in 1992 and 2003. The 1992 amendment added the second sentence to § 20–259.01(B), which provides “[t]he selection of limits or rejection of coverage by a named insured ... on a form approved by the director shall be valid.” 1992 Ariz. Sess. Laws, ch. 147, § 1 (2d Reg. Sess.). The third sentence was added eleven years later and provides that “[t]he completion of such form is not required where the insured purchases such a coverage in an amount equal to the limits for bodily injury or death contained in the policy.” 2003 Ariz. Sess. Laws, ch. 86, § 1 (1st Reg. Sess.).

¶ 12 Blevins argues that these two amendments implicitly overrule our holding in Ash. We disagree.

¶ 13 We review issues of statutory interpretation de novo. City of Tucson v. Clear Channel Outdoor, Inc., 209 Ariz. 544, 547, ¶ 8, 105 P.3d 1163, 1166 (2005). Our principal goal when interpreting a statute is to give effect to the legislature's intent. Blum v. State, 171 Ariz. 201, 205, 829 P.2d 1247, 1251 (App.1992). We primarily rely on the language of the statute and interpret the terms according to their common meaning. Mercy Healthcare Ariz., Inc. v. Ariz. Health Care Cost Containment System, 181 Ariz. 95, 98, 887 P.2d 625, 628 (App.1994). “When the language of a statute is clear and unambiguous, a court should not look beyond the language but rather ‘simply apply it without using other means of construction, assuming that the legislature has said what it means.’ ” Cundiff v. State Farm. Mut. Auto. Ins. Co., 217 Ariz. 358, 360, ¶ 8, 174 P.3d 270, 272 (2008) (quoting Hughes v. Jorgenson, 203 Ariz. 71, 73, ¶ 11, 50 P.3d 821, 823 (2002)) (internal quotation marks omitted). But when the language is ambiguous, we may also look to the historical background, the consequences, and the purpose of the statute. Phx. Newspapers, Inc. v. Dep't of Corrs., 188 Ariz. 237, 244, 934 P.2d 801, 808 (App.1997).

¶ 14 Our supreme court has stated that § 20–259.01 is “remedial, and should be liberally construed in order to carry out the intent of the Legislature.” Calvert v. Farmers Ins. Co. of Ariz., 144 Ariz. 291, 294, 697 P.2d 684, 687 (1985). “[T]he purpose of the Uninsured Motorist Act is ‘to guarantee that responsible drivers will have an opportunity to protect themselves and their loved ones as they would others.’ ” Estate of Ball, 181 Ariz. at 127, 888 P.2d at 1314 (quoting Ormsbee v. Allstate Ins. Co., 176 Ariz. 109, 112, 859 P.2d 732, 735 (1993)). To effectuate the legislature's intent, we have required strict compliance with the statute. Id. at 128, 888 P.2d at 1315 (“Requiring strict compliance with the statute is not form over substance.”).

¶ 15 The plain language of the 1992 amendment does not require a written rejection of UIM coverage nor does it require that an insured use a form approved by the Arizona Department of Insurance (“ADOI”) to select or reject coverage. 1992 Ariz. Sess. Laws, ch. 147, § 1 (2d Reg. Sess.) (“The selection of limits or rejection of coverage by a named insured ... on a form approved by the director shall be valid.”). It simply states that if the named insured ⁵ selects or rejects coverage on a form approved by ADOI, that selection or rejection is valid for all insureds under the policy. See id.

¶ 16 If the legislature wanted to require an insured to complete a form, or otherwise expressly reject UIM coverage, it could have done so explicitly. ⁶ For example, in 1997, the legislature amended § 20–259.01 to require that “[t]he department ... prescribe a consumer information and coverage selection form to be signed by the purchaser and to be used by all insurers offering automobile coverage.” ⁷ 1997 Ariz. Sess. Laws, ch. 125, § 1 (1st Reg. Sess.) (emphasis added). The legislature did not, however, remove the requirement that “the selection of limits of coverage for uninsured and...