Riffle v. State Farm Mut. Auto. Ins. Co., 20114

• Decision Date: 16 October 1991
• Docket Number: No. 20114,20114
• Citation: 410 S.E.2d 413,186 W.Va. 54
• Court: West Virginia Supreme Court
• Parties: Jason C. RIFFLE, Dottie J. Riffle, and Everett W. Riffle v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO.

Page 413

410 S.E.2d 413

186 W.Va. 54

Jason C. RIFFLE, Dottie J. Riffle, and Everett W. Riffle v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO.

No. 20114.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 18, 1991.

Decided Oct. 16, 1991.

Syllabus by the Court

1. "When an insurer is required by statute to offer optional coverage, it is included in the policy by operation of law when the insurer fails to prove an effective offer and a knowing and intelligent rejection by the insured." Syllabus Point 2, Bias v. Nationwide Mut. Ins. Co., 179 W.Va. 125, 365 S.E.2d 789 (1987).

2. W.Va.Code 33-6-31(b) [1988], mandates that when an insurer fails to prove an effective offer and a knowing and intelligent waiver by the insured, the insurer must provide the minimum coverage required to be offered under the statute.

Ronald F. Stein, Shaw & Stein, Point Pleasant, for plaintiffs.

R. Carter Elkins, Laura L. Gray, Campbell, Woods, Bagley, Emerson, McNeer and Herndon, Huntington, for defendant.

NEELY, Justice:

In this case the Circuit Court of Mason County has certified the following question to us:

Is an insurance carrier obligated to provide underinsurance coverage in the limits of $100,000 per person and $300,000 per occurrence, on each of four automobile liability insurance policies held by the plaintiffs, when the liability limits on each of the four policies are $25,000 per person and $50,000 per occurrence after the jury has ruled, pursuant to Bias v. Nationwide Mutual Ins. Co., 179 W.Va. 125, 365 S.E.2d 789 (1987), that the plaintiffs did not make a knowing and informed rejection of an offer of underinsurance coverage on the four policies at issue when the plaintiffs held a fifth policy which provided liability limits of $25,000/$50,000 and underinsurance coverage limits of $100,000/$300,000?

We answer the certified question in the negative.

I.

This certified question reaches us by stipulation of the parties. Jason Riffle was injured in an automobile accident on 6 November 1988. Mr. Riffle's friend, John Kinniard, was driving the car which belonged to Mr. Riffle's mother. After the accident, Mr. Riffle received $20,000 from Mr. Kinniard's insurance carrier and $130,000 from State Farm Insurance Company. The Riffles ¹ sued State Farm seeking underinsured motorist coverage on each of four other automobile liability policies issued by State Farm to the Riffles. ²

The liability limits on each of the four policies are $25,000 per person and $50,000 per occurrence. State Farm had previously offered the Riffles underinsured motorist coverage in excess of their own liability coverage on each of the policies for $100,000 per person and $300,000 per accident, which the Riffles did not accept. A jury decided that the Riffles' rejection of this coverage was not knowing and informed; therefore, the trial court held State Farm liable under this Court's decision in Bias v. Nationwide Mut. Ins. Co., 179 W.Va. 125, 365 S.E.2d 789 (1987).

The trial court ordered State Farm to pay $100,000 per person underinsured motorist coverage on each of the four policies. Apparently, the court decided that because the Riffles had not knowingly waived the $100,000 per person underinsured motorist coverage, the statute required State Farm to provide that amount of coverage. The parties then stipulated the certified question to this Court.

II.

The issue in this case is the application of W.Va.Code, 33-6-31(b) [1988] ³ and this Court's interpretation of that statute in Bias, supra, and Miller v. Hatton, 184 W.Va. 765, 403 S.E.2d 782 (1991). W.Va.Code, 33-6-31(b) [1988] provides in pertinent part:

[The insurer] shall provide an option to the insured with appropriately adjusted premiums to pay the insured all sums which he shall legally be entitled to recover as damages from the owner or operator of an uninsured or underinsured motor vehicle up to an amount not less than limits of bodily injury liability insurance and property damage liability insurance purchased by the insured without setoff against the insured's policy or any other policy....

Neither statutory construction nor the dictate of wise public policy supports the decision by the trial court. As we held in Syllabus Point 2 of Bias, supra:

When an insurer is required by statute to offer optional coverage, it is included in the policy by operation of law when the insurer fails to prove an effective offer and a knowing and intelligent rejection by the insured.

A.

The plain language of Bias provides that if an insurer fails to prove an effective offer and a knowing waiver of the statutorily required coverage, then that coverage becomes part of the policy by operation of law. "That coverage" is the amount of coverage that the insurer is required to offer under the statute. The statute requires the insurer to offer underinsured motorist coverage "up to an...