Moultrie v. Progressive Direct Ins. Co., 2:16-cv-03174-DCN
| Decision Date | 18 October 2017 |
| Docket Number | No. 2:16-cv-03174-DCN,2:16-cv-03174-DCN |
| Court | U.S. District Court — District of South Carolina |
| Parties | SHAWN MOULTRIE, Plaintiff, v. PROGRESSIVE DIRECT INSURANCE COMPANY, Defendant. |
This matter is before the court on cross-motions for summary judgment filed by defendant Progressive Direct Insurance Company ("Progressive") and plaintiff Shawn Moultrie ("Moultrie"). For the reasons set forth below, the court denies both motions.
This declaratory judgment action is before the court to clarify the rights under the underinsured motorist coverage ("UIM") provision of an automobile insurance policy ("the Policy") that Progressive issued to Moultrie for his 2012 Harley Davidson motorcycle. Moultrie purchased the Policy online through the Progressive website at Capital City Bikes in Columbia, South Carolina on November 21, 2015. This online purchase occurred because Moultrie had to show proof of insurance before he could lease or buy the 2012 Harley Davidson motorcycle. During the online purchase of the Policy, Capital City Bikes employee Gayle Case ("Case") assisted Moultrie in purchasing the Policy.
On November 27, 2015, Moultrie, who was riding the 2012 Harley Davidson motorcycle at the time, was seriously injured in a motor vehicle collision in Moncks Corner, South Carolina by an unknown driver. The Policy provided liability coverage of up to $100,000 per person and $300,000 per accident, but did not provide UIM coverage. Moultrie alleges that Progressive did not make a meaningful offer of UIM coverage as required under S.C. Code Ann. § 38-77-350 and other court decisions on this issue. He now asks the court to reform the Policy to include $100,000 in UIM coverage for the 2012 Harley Davidson motorcycle.
Progressive filed its motion for summary judgment on April 12, 2017, to which Moultrie responded on April 25, 2017. Progressive replied on May 2, 2017. Moultrie filed its motion for summary judgment on April 13, 2017, to which Progressive responded on April 27, 2017. Moultrie filed a reply on May 3, 2017, and Progressive filed a sur-reply on May 15, 2017. These motions have been fully briefed and are now ripe for the court's review.
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "Rule 56(c) of the Federal Rules of Civil Procedure requires that the district court enter judgment against a party who, 'after adequate time for discovery . . . fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'" Stone v. Liberty Mut. Ins. Co., 105 F.3d 188, 190 (4th Cir. 1997) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). Any reasonable inferences are to be drawn in favor of the nonmoving party. See Webster v. U.S. Dep't of Agric., 685 F.3d 411, 421 (4th Cir. 2012). However, to defeat summary judgment, the nonmoving party must identifyan error of law or a genuine issue of disputed material fact. See Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); see also Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003).
Although the court must draw all justifiable inferences in favor of the nonmoving party, the nonmoving party must rely on more than conclusory allegations, mere speculation, the building of one inference upon another, or the mere existence of a scintilla of evidence. See Anderson , 477 U.S. at 252; Stone, 105 F.3d at 191. Rather, "a party opposing a properly supported motion for summary judgment . . . must 'set forth specific facts showing that there is a genuine issue for trial.'" Bouchat, 346 F.3d at 522 (quoting Fed. R. Civ. P. 56(e) (2002) (amended 2010)). If the adverse party fails to provide evidence establishing that the factfinder could reasonably decide in his favor, then summary judgment shall be entered "regardless of '[a]ny proof or evidentiary requirements imposed by the substantive law.'" Id. (quoting Anderson, 477 U.S. at 248).
Both summary judgment motions turn on the same issue—whether Progressive made a meaningful offer of the optional UIM coverage to Moultrie such that the court is precluded from reforming the Policy. In South Carolina, there are two ways for an insurer to make a meaningful offer: (1) the § 38-77-350(B) statutory presumption and (2) the Wannamaker test. Liberty Mut. Fire Ins. Co. v. McKnight, 125 F. Supp. 3d 602, 611 (D.S.C. 2015). As the court explains below, there is a genuine issue of material fact whether the UIM provision was signed. Therefore, there is no statutory presumption of a meaningful offer under § 38-77-350(B) as interpreted by the Supreme Court of South Carolina in Traynum v. Scavens, 786 S.E.2d 115 (S.C. 2016). An insurer can still provethat it made a meaningful offer under the test outlined in State Farm Mutual Automobile Insurance Co. v. Wannamaker, 354 S.E.2d 555 (S.C. 1987), but the parties have not briefed this issue sufficiently for the court to determine whether there has been a meaningful offer under this test. Accordingly, the court denies both summary judgment motions.
The issue before the court is narrow—whether there is a genuine issue of material fact if Moultrie electronically signed the UIM form for the Policy. As the court explains below, it finds that there is.
As an initial matter, the parties dispute the admissibility of the computer code and the screenshots from Progressive's internal document retention system. Moultrie contends that in its Requests for Production, it specifically asked for "data," "electronic files," "recordings," "screenshots" and "electronic files" relating to the Policy and meaningful offer of UIM coverage. ECF No. 22 at 3. According to Moultrie, Progressive objected to these requests for production as "not relevant and not reasonably calculated to lead to the discovery of admissible evidence." Now that Progressive is relying on these same, previously "not relevant" screenshots and metadata, and indeed has attached these documents as exhibits to its motion for summary judgment as well as its response to Moultrie's Motion for Summary Judgment, Moultrie contends that the court should not consider these documents as part of the record for summary judgment purposes. The primary purpose of the discovery rules in the Federal Rules of Civil Procedure is to avoid just this type of litigation by surprise. See Tyson v. Trigg, 50 F.3d 436, 445 (7th Cir. 1995) (). Rule 37 sets out that the default sanction for a violation of Rule 26's disclosure requirements is barring the use of the undisclosed evidence going forward. See Fed. R. Civ. P. 37(c)(1). There is an exception where the failure to disclose was "substantially justified or is harmless." Id. The court agrees that Moultrie suffered surprise and prejudice by Progressive's use of this evidence that was not turned over during the discovery process yet used at the summary judgment stage. Progressive's refusal to disclose documents that it now uses to support its summary judgment argument is neither harmless nor substantially justified. Since the screenshots of Moultrie's electronic signature in Progressive's internal document retention system, the computer code that is cited in Garcia's affidavit, and the screenshots from the Tealeaf system were not disclosed to Moultrie during discovery, the court will not consider them.
Moultrie argues that he never electronically signed the UIM coverage provision, and that the signature was instead prepopulated onto the coverage provisions through Progressive's own website. ECF No. 16 at 4. In support of this argument, Moultrie offers screenshots taken from the Tealeaf Technology system of the UIM provision, where the three box fields where an applicant can click and type in his name to provide assent to the optional UIM coverage is blank. This lack of screenshots, as well as the lack of Moultrie's electronic signature for underinsured motorist coverage, Moultrie argues, is conclusive that he, as the named insured, never gave the required signature.
Under S.C. Code Ann. § 38-77-350(B):
If this form is signed by the named insured, after it has been completed by an insurance producer or a representative of the insurer, it is conclusively presumed that there was an informed, knowing selection of coverage and neither the insurance company nor an insurance agent is liable to the named insured or another insured under the policy for the insured's failure to purchase optional coverage or higher limits.
If Moultrie did indeed provide an electronic signature on the UIM form, the South Carolina Supreme Court has held that an electronic signature rejecting optional underinsured motorist coverage binds the insured, and triggers the statutory conclusive presumption of a meaningful offer.1 Traynum v. Scavens, 786 S.E.2d 115 (S.C. 2016). Moultrie contends that a prepopulated signature on a coverage form does not fulfill the statutory mandates of § 38-77-350. Progressive rebuts that under Traynum, Progressive's practice of prepopulating portions of the UIM form has been upheld as compatible with § 38-77-350(b), and the simple fact that the UIM form was prepopulated does not in and of itself mean that there was no meaningful offer. However, while the Traynum court certainly states that an electronic signature is "as effective as" a handwritten signature for triggering the statutory presumption of § 38-77-350, it does not address whether a prepopulated form without the named insured's electronic signature triggers that same statutory presumption. Indeed, the word "prepopulated" is nowhere...
To continue reading
Request your trial