Silver v. Slusher
| Decision Date | 03 May 1988 |
| Docket Number | No. 64879,64879 |
| Citation | 1988 OK 53,770 P.2d 878 |
| Parties | Randall SILVER and Mikala Silver, individually, parents, and next of kin of Michael R. Silver, deceased, minor child, Plaintiffs-Appellants, v. Christine Annette SLUSHER, a/k/a Christine Annette Stingley, Ken Becknell, individually and d/b/a Cowboy Country, Ricky B. Henderson, Defendants, and Farmers & Merchants Insurance Co., Defendant-Appellee. |
| Court | Oklahoma Supreme Court |
Certiorari to the Court of Appeals, Division 3.
In an action by the named insureds for the benefits of uninsured motorist coverage mandated by 36 O.S.1981 § 3636, the District Court, Cleveland County, Preston Trimble, Judge, gave summary judgment for the insurer. The Court of Appeals reversed. Upon insurer's petition, certiorari is granted.
OPINION OF THE COURT OF APPEALS VACATED;TRIAL COURT'S SUMMARY JUDGMENT AFFIRMED.
Clifton D. Naifeh, Naifeh & Woska, P.C., Oklahoma City, for plaintiffs-appellants, Randall Silver and Mikala Silver.
Jim W. Lee, Barry R. Davis, Lee, Beuch and Davis, Oklahoma City, for defendant-appellee, Farmers & Merchants Ins. Co.
The dispositive issue is whether the terms of 36 O.S.1981 § 3636 1 impose an affirmative duty upon insurers to provide an explanation of uninsured motorist coverage [UMC] to the named insureds as an indispensable precondition for a statutorily effective rejection. We answer in the negative.
Randall and Mikala Silver [insureds or the Silvers] were named insureds of an automobile insurance policy with Farmers & Merchants Insurance Co. [insurer or Farmers], which was purchased in 1975. At that time Mikala Silver rejected uninsured motorist coverage for both her husband, Randall, and for herself by signing a statement which accompanied the insurance application. 2 The forms were believed to have been filled out by the insurance agent on Randall's instructions. 3
The next year they received by mail from the same agent another application for insurance and again opted to exclude UMC from the Farmers policy. 4 Before both insureds signed the rejection statement, Randall allegedly telephoned the agent's office for an explanation of UM coverage. He claims to have been told by an unidentified person that UMC covers only property damage caused by an uninsured motorist. It is asserted that relying on that answer, Randall signed the form, instructed his wife to do the same, and mailed it back to the agent. Randall allegedly relied upon this information about UMC when he once more signed a rejection statement five years later and authorized his mother to sign two others on his behalf. 5
In late 1983 the Silvers' minor child was killed when struck by an uninsured motorist. The insureds sued and took judgment against the driver for a sum that exceeds the aggregate limits of public liability coverage provided by Farmers ($10,000.00 per person/$20,000.00 per occurrence) on each of three vehicles which were then owned by the Silvers. Admitting that UM coverage had been rejected and hence neither purchased nor included in any policy issued to them by Farmers, the Silvers nonetheless sued their insurer for UM benefits because of its failure to explain UM coverage to Randall Silver "properly, fully and adequately." They alleged Farmers is liable for all damages occasioned by their son's death because it failed to secure Randall's "knowing and intelligent" rejection of UMC.
Although, when urged to do so, the trial court refused to dismiss the claim, it postponed deciding whether the insureds had knowingly rejected UMC. After a hearing summary judgment was rendered for Farmers and the Silvers appealed. 6 Neither the legal theory of the Silvers' claim nor that on which the trial court rested its decision for Farmers is apparent from the record. If the trial court was correct under any theory this court's duty is to affirm the judgment. 7
The insureds' single pleading against Farmers is far more revealing in what it does not allege than in what may be divined from its meager contents. Even though the Silvers averred that Farmers "improperly informed [Randall Silver] that [UMC] would only cover property damage if [the insureds] or their family members were involved in a collision with an uninsured motorist," they stated no common-law claim for bad faith, intentional misrepresentation or fraud. 8 They sought neither coverage based on breach of contract or estoppel nor rescission of their rejection on grounds of mutual mistake of law or of fact. 9 Their theory was grounded solely upon a breached "duty to inform." They alleged Randall Silver "lacked the requisite informed consent to sign a rejection" of UM coverage as a result of Farmers' failure to inform him that UMC provides benefits in the event bodily injuries are sustained from the negligence of an uninsured motorist. If the claim so stated were legally cognizable under the breach-of-duty-to-inform theory, though questions of material fact would be present, the insureds might be entitled to recover at least the minimum statutory UM protection. 10
The insureds' action against Farmers appears to be neither ex contractu nor ex delicto. Recovery under the theory of constructive fraud is also unavailable to them. 11 Insofar as the Silvers' suit was pressed to establish their demand for uninsured motorist protection mandated by § 3636, the gravamen of the claim was breach of some duty to explain UM coverage as a precondition to a statutorily effective rejection. 12
36 O.S.1981 § 3636 13 IMPRESSES NO AFFIRMATIVE DUTY
UPON INSURERS TO PROVIDE AN EXPLANATION OF UMC TO NAMED
Insurance is a contract. 36 O.S.1981 § 102. 14 The relationship between the insured and insurer clearly is contractual in nature, 15 and we find nothing in § 3636 that alters the traditionally commercial setting in which insurance policies are purchased. Our UMC statute creates no fiduciary obligations, and its scheme is not consistent with consumer protection laws. 16 Rather, the essence of § 3636 is regulatory. 17 Its object is to provide UM protection only for those who do not reject it in writing.
No challenge is made here either to the legal sufficiency of Farmers' offer of increased UMC limits 18 or to the insureds' opportunity to reject UM coverage entirely. As offeror, Farmers had no contractual duty voluntarily to explain the terms of its offer or the advantages and disadvantages to procuring UM coverage. 19 Nothing in § 3636 makes it necessary for an insurer to make an express offer to exclude UMC from its policy anterior to the named insured's decision to opt out of the mandated protection. 20 All that is required by § 3636 for an effective rejection is a writing signed by the named insured. 21 An initial rejection suffices to relieve insurers of their statutory obligation to include UMC in subsequent renewals, unless the named insured requested the omitted coverage in writing. 22
There are three separate sources which give rise to the creation of rights under Oklahoma law: the state constitution, her statutes and her common law. 23 In the context of this case, the general principles of contracts, insofar as they apply to insurance policies, are instituted not only by general statute, 24 but also by the Insurance Code itself. 25 The common law supplements our statutes. It remains in full force unless it is clearly and expressly modified or abrogated by our constitution or by statute. 26 Because § 3636 contains no language which alters the basic, arms' length nature of the insured-insurer relationship, we decline to read into the UM statute a duty charging insurers with the responsibility of detailed and formalistic explanation as an indispensable precondition for securing from the named insured a statutorily effective rejection of uninsured motorist coverage. 27 Where no duty exists, there can be no right. 28 Since Farmers stood obligated neither by contract nor by statute to apprise the insureds of all the facts about UMC, there was no right subject to waiver. We hold that no disputed material issue of fact came to be tendered below. Summary judgment must hence be affirmed. 29
The result reached today is not inconsistent with that portion of Hicks v. State Farm Mutual Automobile Insurance Company 30 which dealt with the validity of a named insured's UMC rejection. 31 When called upon to carry out the public policy mandate of our UM statute, this court has consistently respected the contractual nature of the insured-insurer relationship and the applicability of contract principles. 32 The rules of waiver and estoppel do not afford a gauge for measuring the efficacy of a UM rejection. 33 Like other jurisdictions before us, we refuse today to impose supra-statutory duties upon insurers by judicial fiat. 34
COURT OF APPEALS' OPINION VACATED; TRIAL COURT'S SUMMARY JUDGMENT AFFIRMED.
The coverage termed "uninsured motorist coverage" is surely one of the most remarkable contractual undertakings ever devised, for uninsured motorist coverage does not insure uninsured motorists, (third parties); nor does it insure vehicles; rather, uninsured motorist coverage affords first-party coverage to person(s) for whom the insurance contract is being written. It, thus, matches the complexity of the underlying policy and affords benefits on account of a wide variety of losses: medical expense, lost earnings, pain and suffering, including death. In this state, the indemnity language of uninsured motorist coverage, as mandated by 36 O.S. 1981 § 3636 is this:
"The policy ... shall provide coverage ... for the protection of persons...
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