Groover v. Torkell

• Decision Date: 25 June 1982
• Citation: 645 S.W.2d 403
• Parties: William L. GROOVER, Jr., and wife, Melanie Groover, Individually, and William L. Groover, Jr., as next friend of Janet Carole Groover and Janet Carole Groover, Individually, Plaintiffs-Appellees, v. William Earl TORKELL, Jr., and United Services Automobile Association, Defendants-Appellants.
• Court: Tennessee Court of Appeals

Page 403

645 S.W.2d 403

William L. GROOVER, Jr., and wife, Melanie Groover Individually, and William L. Groover, Jr., as next friend of Janet Carole Groover and Janet Carole Groover, Individually Plaintiffs-Appellees, v. William Earl TORKELL, Jr., and United Services Automobile Association, Defendants-Appellants.

Court of Appeals of Tennessee Middle Section, at Nashville.

June 25, 1982.

Permission to Appeal Denied by

Supreme Court Oct. 25, 1982.

James M. Doran, Jr., Manier, White Herod, Hollabaugh & Smith, P.C., Nashville, for defendants-appellants.

James W. Cameron, III, Ben C. Fordham, Tune, Entrekin & White, Nashville, for plaintiffs-appellees.

OPINION

CANTRELL, Judge.

In this action for uninsured motorist benefits the trial court directed a verdict for the plaintiff on the question of whether the insurance company gave him an opportunity to purchase more than the minimum of uninsured motorist coverage and, after a jury verdict adverse to the plaintiff on the question of whether he would have purchased any more than the minimum coverage had he been given the opportunity, the trial judge granted judgment notwithstanding the verdict and entered a judgment for the plaintiff for the full amount of the liability coverage in his policy. These actions of the trial judge are the subject of the issues raised on appeal.

William L. Groover, Jr. brought this action against the United Services Automobile Association, alleging that the company violated T.C.A. § 56-7-1201 by failing to provide him an opportunity to purchase higher than minimum uninsured motorist coverage. This action was joined in the trial court with one filed by Mr. Groover against the uninsured driver but the trial court ordered separate trials.

At the trial of this action the Circuit Judge directed a verdict in favor of Mr. Groover under T.C.A. § 56-7-1201 which provides in pertinent part:

Effective September 1, 1974, every insured purchasing or renewing a policy of insurance under the provisions of the first paragraph of this section shall be provided an opportunity to also purchase uninsured motorist insurance limits greater in amount than the requirements of § 55-12-107.

The Court found that USAA had failed to provide Mr. Groover with an opportunity to purchase higher than the minimum uninsured motorist limits. The case went to the jury on the issue of damages only. The trial court instructed the jury that Mr. Groover had the burden of proof as to damages and asked the jury to report on two questions: (1) Whether Mr. Groover would have purchased higher uninsured motorist coverage had it been offered to him; and (2) if so, how much would he have purchased? The jury returned a verdict for the defendant USAA on the first question which dispensed with the need to return a verdict on the second one.

Mr. Groover appealed the case to this Court. This Court in a written opinion found that the case was not ready for appeal under Rule 3, Tennessee Rules of Appellate Procedure, since the issue of liability as to the uninsured motorist had not been disposed of in the court below. The Court remanded the case to the lower court to await the disposition of the lawsuit involving the uninsured driver.

On remand the trial court granted Mr. Groover's motion for a judgment, notwithstanding the verdict on the issue of whether he would have, in fact, secured a higher coverage for uninsured motorists if he had been given the opportunity. The court entered a judgment for the full amount of the liability coverage contained in Mr. Groover's policy.

The Insurance Company's first issue on appeal concerns the Court's action in directing the verdict for Mr. Groover on whether he was given an opportunity to purchase increased uninsured motorist benefits.

We are of the opinion that this issue has merit and it was error for the trial court to direct a verdict on this question. As the statute quoted above indicates, all that is required is that the insurance company "provide an opportunity" to purchase increased coverages for uninsured motorists. Arguably, all that the statute requires is that the insurance company provide such coverages if the policyholder demands them. However, the statute has been construed in two cases before this Court, Cox v. State Farm Mutual Automobile Insurance Co., Tenn.App. (filed Nov. 30, 1979 at Nashville), and Cook v. United States Fidelity & Guaranty Co., Tenn.App. (filed Feb. 9, 1980 at Nashville). In Cox, the Court said:

The 1974 amendment requires that the insurance company provide the insured an "opportunity" to purchase higher limits of uninsured motorist coverage. The amendment requires more than that the insurance company make available uninsured motorist coverage in excess of the minimum limits although a rejection by the insured is not required. An opportunity must be given, and the burden of proof is upon the insurance company to show that the opportunity was given.

The Court then went on to discuss the facts of that case which showed that the plaintiff, a man of limited reading ability, was not given sufficient notice that increased coverage was available because he was not furnished a brochure prepared by the company for that purpose. The Court concluded:

It is apparent that plaintiff did not have sufficient information from the computer premium notice alone to understand that he could purchase excess uninsured motorist limits. For him to have the necessary information under the facts at bar, it was necessary that he have the brochure.

In Cook, the Court found that the plaintiff on at least four occasions had received a premium notice with the following language printed at the bottom: "ADDITIONAL UNINSURED MOTORIST COVERAGE IS AVAILABLE. PLEASE CONTACT YOUR AGENT FOR DETAILS." This information, according to the Court, was sufficient to satisfy the statutory requirement that the insured be given an opportunity to purchase higher limits of uninsured motorist coverage. The Court went on to say:

That plaintiff understood that higher limits of uninsured motorist coverage could be obtained is apparent from the above testimony. In view of plaintiff's testimony, the fact that defendant might have chosen another method of informing plaintiff of her opportunity to purchase higher limits of uninsured motorist coverage or that defendant did, in fact, send out a "stuffer" containing a more detailed explanation of the coverage to holders of policies which, unlike plaintiff's, were not directly billed from defendant is of no consequence. Defendant, under the facts at bar, offered plaintiff the "opportunity to also purchase" higher limits of uninsured motorist insurance as required by T.C.A. § 56-1148. [currently T.C.A. § 56-7-1201]

From these two cases we conclude that if the plaintiff knew that uninsured motorist coverage in amounts above the minimum required by law could be purchased at the time of purchasing a new policy or making a renewal of an existing policy, or at the time of any other policy change, the statute has been complied with.

Relevant to that question there is testimony in the record from which the jury could have concluded that the plaintiff had the knowledge required to elect to purchase higher uninsured motorist coverage if he so desired. The proof showed that in the fall of 1975 the plaintiff contacted USAA and requested a rate quotation. In response to this request USAA mailed Mr. Groover a rate "package" on September 8, 1975. The package contained a rate "jacket" which describes various company and coverage features. Uninsured motorist coverage is one feature mentioned on the jacket as follows:

Uninsured motorist coverage protects against loss due to personal injury to the insured and family members caused by an uninsured or hit-and-run driver of another vehicle. When a limit higher than the minimum uninsured motorist, excess uninsured motorist coverage, is purchased, under-insured motorist protection is included at no additional charge. Under-insured motorist coverage provides protection if you are injured by another person who is insured for bodily injury limit liability, but whose bodily injury limits are inadequate to compensate you for your losses.

The rate "package" also includes a brochure which specifically discusses uninsured motorist coverage. That brochure, described in the record as Form 2193, explains uninsured motorist coverage, describes the insurance requirements of the state, discusses the available uninsured motorist coverage options, recommends higher limits, and actually shows the insured how to order higher limits. Form 2193 states:

If your Bodily Injury (BI) liability limits are above the required minimum, you have the option to increase your UM limits up to the BI limits in your policy. For example, if your State's Financial Responsibility Law requires you to carry a minimum BI liability limits of $10,000 (per person)/20,000 (per occurrence) and you carried our recommended BI liability limits of $100,000/$200,000, you could increase your UM to any limits available up to $100,000/$200,000.

Mr. Grover purchased a USAA policy in February 1976 for an initial term of one year. USAA mails its insured a renewal notice sixty days prior to the renewal date of the policy under the Company's standard practice. That notice would have gone to Mr. Groover in Georgia in late December 1976 or early January 1977. Form 2193 is included in the renewal notice. A renewal policy was mailed to Mr. Groover approximately twenty days prior to the actual...