Traynum v. Scavens , 416 S.C. 197 ( 2016 )


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  •        THE STATE OF SOUTH CAROLINA
    In The Supreme Court
    Loretta Traynum and Leonard Traynum, Appellants,
    v.
    Cynthia Scavens and Progressive Direct Insurance Co.,
    Respondents.
    Appellate Case No. 2013-002797
    Appeal from Aiken County
    Doyet A. Early, III, Circuit Court Judge
    Opinion No. 27629
    Heard December 3, 2015 – Filed April 20, 2016
    AFFIRMED
    Blake A. Hewitt and John S. Nichols, both of Bluestein,
    Nichols, Thompson & Delgado, L.L.C., of Columbia,
    and Tom Young, Jr., of Law Offices of Tom Young, Jr.,
    P.C., of Aiken, for Appellants.
    J.R. Murphy and Wesley B. Sawyer, both of Murphy &
    Grantland, P.A., of Columbia, for Respondents.
    David C. Marshall and R. Hawthorne Barrett, both of
    Turner Padget Graham & Laney, P.A., of Columbia, for
    Amicus Curiae, Property Casualty Insurers Association
    of America.
    JUSTICE KITTREDGE: Loretta Traynum and Leonard Traynum (collectively,
    Appellants) appeal the trial court's grant of summary judgment to Respondent
    Progressive Direct Insurance Co. (Progressive), arguing the trial court incorrectly
    held that Progressive made a meaningful offer of underinsured motorist (UIM)
    coverage via its website. We affirm.
    I.
    In April 2007, Loretta Traynum (Traynum) purchased an automobile insurance
    policy from Progressive through Progressive's website. Instead of selecting one of
    the preset packages Progressive offered, all of which contained UIM coverage by
    default, Traynum created a custom package which did not include UIM coverage.
    Traynum also increased the preset deductibles for comprehensive and collision
    coverages. The result of these changes was a lower monthly premium. Traynum
    then electronically signed a form acknowledging Progressive offered her optional
    UIM coverage and that she rejected that coverage.
    Thereafter, in November 2007, Traynum and Cynthia Scavens were involved in an
    automobile accident, from which Appellants claimed more than $175,000 in
    damages. Appellants brought claims against Scavens for negligence and loss of
    consortium, which were settled for $100,000, the limits of Scavens's liability
    coverage. As the settlement did not fully satisfy Appellants' damages, Appellants
    also brought a declaratory judgment action against Progressive claiming
    Progressive did not make a meaningful offer of UIM coverage to Traynum, as
    required by law, and asking the court to reform Traynum's policy to include UIM
    coverage in the amount of the policy's liability limits.1
    Appellants and Progressive filed cross-motions for summary judgment.
    Progressive noted it made an offer of UIM coverage to Traynum on its website and
    Traynum electronically signed a form rejecting that offer, while Appellants argued
    the offer was insufficient and therefore Traynum's rejection of UIM coverage was
    ineffective. The trial court granted Progressive's motion for summary judgment,
    concluding that Progressive made a meaningful offer of UIM coverage to
    1
    "If [an] insurer fails to comply with its duty to make a meaningful offer [of UIM
    coverage], the policy will be reformed by operation of law to include UIM
    coverage up to the limits of liability insurance carried by the insured." Ray v.
    Austin, 
    388 S.C. 605
    , 611, 
    698 S.E.2d 208
    , 212 (2010) (citing Butler v. Unisun Ins.
    Co., 
    323 S.C. 402
    , 405, 
    475 S.E.2d 758
    , 760 (1996)).
    Traynum, which she knowingly rejected. Appellants contend this was error and
    ask this Court to reform Traynum's policy to include UIM coverage. We decline to
    do so.
    II.
    A.
    "An appellate court reviews the granting of summary judgment under the same
    standard applied by the trial court . . . ." Quail Hill, L.L.C. v. Cnty. of Richland,
    
    387 S.C. 223
    , 235, 
    692 S.E.2d 499
    , 505 (2010) (citing Brockbank v. Best Capital
    Corp., 
    341 S.C. 372
    , 379, 
    534 S.E.2d 688
    , 692 (2000)). "[A] trial court may grant
    a motion for summary judgment 'if the pleadings, depositions, answers to
    interrogatories, and admissions on file, together with the affidavits, if any, show
    that there is no genuine issue as to any material fact and that the moving party is
    entitled to a judgment as a matter of law.'" 
    Id. at 234,
    692 S.E.2d at 505 (quoting
    Rule 56(c), SCRCP).
    Appellants' claim against Progressive is entirely predicated upon the allegation that
    Progressive's offer of UIM coverage was inadequate. When there is no factual
    dispute about its content or form, whether an offer of UIM coverage is sufficient is
    a question of law. See Wiegand v. U.S. Auto. Ass'n, 
    391 S.C. 159
    , 163, 
    705 S.E.2d 432
    , 434 (2011). "Appellate courts may decide questions of law with no particular
    deference to the [trial] court's findings." Wachovia Bank, N.A. v. Blackburn, 
    407 S.C. 321
    , 328, 
    755 S.E.2d 437
    , 441 (2014) (citing Verenes v. Alvanos, 
    387 S.C. 11
    ,
    15, 
    690 S.E.2d 771
    , 772–73 (2010)).
    B.
    In South Carolina, insurers must "offer, at the option of the insured, [UIM]
    coverage up to the limits of the insured liability coverage." S.C. Code Ann. § 38-
    77-160 (2015). In the seminal case of State Farm Mutual Automobile Insurance
    Co. v. Wannamaker, this Court held that "the statute mandates the insured to be
    provided with adequate information, and in such a manner, as to allow the insured
    to make an intelligent decision of whether to accept or reject the coverage." 
    291 S.C. 518
    , 521, 
    354 S.E.2d 555
    , 556 (1987). Under Wannamaker, for an offer of
    UIM coverage to be valid,
    (1) the insurer's notification process must be commercially reasonable,
    whether oral or in writing; (2) the insurer must specify the limits of
    optional coverage and not merely offer additional coverage in general
    terms; (3) the insurer must intelligibly advise the insured of the nature
    of the optional coverage; and (4) the insured must be told that optional
    coverages are available for an additional premium.
    
    Id. at 521,
    354 S.E.2d at 556 (citing Hastings v. United Pac. Ins. Co., 
    318 N.W.2d 849
    (Minn. 1982)). This amounts to a requirement that, to be valid, an offer of
    UIM coverage must be "a meaningful one." 
    Id. at 522,
    354 S.E.2d at 557. "If the
    insurer fails to comply with its duty to make a meaningful offer, the policy will be
    reformed by operation of law to include UIM coverage up to the limits of liability
    insurance carried by the insured." Ray v. Austin, 
    388 S.C. 605
    , 611, 
    698 S.E.2d 208
    , 212 (2010) (citing Butler v. Unisun Ins. Co., 
    323 S.C. 402
    , 405, 
    475 S.E.2d 758
    , 760 (1996)).
    After Wannamaker, the General Assembly enacted section 38-77-350 of the South
    Carolina Code as a safe-harbor provision, creating a conclusive presumption of a
    meaningful offer of UIM coverage under certain conditions. See, e.g., 
    id. at 611,
    698 S.E.2d at 212 (noting that compliance with section 38-77-350 creates "a
    presumption that a meaningful offer of UIM coverage has been made") (citing S.C.
    Code Ann. § 38-77-350(A)–(B) (2015))). Subsection (A) requires the Department
    of Insurance (the Department) to promulgate a form for insurers to use when
    making the required offer of optional coverages to new applicants, which must
    include
    (1) a brief and concise explanation of the coverage;
    (2) a list of available limits and the range of premiums for the
    limits;
    (3) a space to mark whether the insured chooses to accept or
    reject the coverage and a space to state the limits of coverage the
    insured desires;
    (4) a space for the insured to sign the form that acknowledges
    that the insured has been offered the optional coverages; [and]
    (5) the mailing address and telephone number of the insurance
    department that the applicant may contact if the applicant has
    questions that the insurance agent is unable to answer.
    S.C. Code Ann. § 38-77-350(A)(1)–(5). Subsection (B) states,
    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.
    
    Id. § 38-77-350(B)
    (emphasis added). Our precedents thus recognize that an
    insurer can establish it made a meaningful offer of UIM coverage by proving either
    it is entitled to the conclusive presumption of section 38-77-350(B) or it satisfied
    the requirements of Wannamaker. See, e.g., 
    Ray, 388 S.C. at 612
    , 698 S.E.2d at
    212 ("Even where the insurer is not entitled to the statutory presumption that a
    meaningful offer of UIM coverage was made, the insurer can still demonstrate that
    a meaningful offer of UIM coverage was made to the insured under Wannamaker."
    (citing Floyd v. Nationwide Mut. Ins. Co., 
    367 S.C. 253
    , 264, 
    626 S.E.2d 6
    , 12
    (2005))).
    C.
    Appellants acknowledge they are not contesting the content of Progressive's offer
    of UIM coverage, but rather the method by which the offer was communicated to
    and rejected by Traynum through Progressive's website. Because the transaction
    occurred online, it is governed by South Carolina's version of the Uniform
    Electronic Transactions Act (the UETA).2
    Under the UETA, "[a]n electronic signature satisfies a law requiring a signature."
    S.C. Code Ann. § 26-6-70(D) (2007). The UETA also allows offers to be
    communicated online, declaring that
    [i]f parties agree to conduct a transaction by electronic means and a
    law requires a person to provide, send, or deliver information in
    2
    S.C. Code Ann. §§ 26-6-10 to -210 (2007 & Supp. 2015).
    writing to another person, the requirement is satisfied if the
    information is provided, sent, or delivered in an electronic record
    capable of retention by the recipient at the time of receipt.
    
    Id. § 26-6-80(A)
    (2007). Moreover, the UETA endorses automated transactions
    between an "electronic agent"3 of a company and a consumer:
    In an automated transaction:
    ....
    . . . a contract may be formed by the interaction of an electronic
    agent and an individual, . . . including by an interaction in which the
    individual performs actions that the individual is free to refuse to
    perform and which the individual knows or has reason to know will
    cause the electronic agent to complete the transaction or performance
    ....
    
    Id. § 26-6-140
    (2007).
    Below, we analyze Appellants' arguments consistently with the purpose and
    provisions of the UETA.
    III.
    Appellants contend the trial court erred in granting Progressive summary judgment
    because Progressive's website was confusing and not designed to effectively
    communicate the offer of UIM coverage to Traynum. Therefore, Appellants argue,
    Progressive was not entitled to a presumption of a meaningful offer of UIM
    coverage and Traynum's policy should be reformed to include that coverage. We
    disagree.
    A.
    Progressive maintains records of all online transactions that result in a purchase,
    which are stored as a series of images that preserve Progressive's website exactly
    3
    An "electronic agent" is defined as "a computer program or an electronic or other
    automated means used independently to initiate an action or respond to electronic
    records or performances in whole or in part, without review or action by an
    individual." 
    Id. § 26-6-20(6)
    (2007).
    as it appeared to the purchaser, screen by screen. Progressive also maintains
    records of all electronic signatures, making it possible to review everything
    Traynum saw and signed when she purchased the insurance policy on Progressive's
    website.
    These images indicate that Traynum rejected the preset packages Progressive
    offered and chose instead to create a custom insurance package without UIM
    coverage. The preset packages all included UIM coverage, and it is
    uncontroverted that Progressive recommends consumers purchase a policy with
    UIM coverage equal to the policy's liability limits. The website also included
    hyperlinks to explanations of the various types of coverage, including UIM, none
    of which Traynum clicked.
    After choosing her coverage, Traynum provided her electronic signature three
    times. The second of those signatures was below a document entitled "Offer of
    additional uninsured motorist coverage and optional [UIM] coverage" (the Offer
    Form). Traynum filled out the "Policyholder Electronic Signature" below the
    Offer Form, which stated,
    I, (LORETTA TRAYNUM), represent that I am the person
    whose name appears on the signature line of the document presented
    above, and that I viewed the document at the recommended text size.
    I acknowledge and agree to the statements, terms[,] and
    conditions in the document above, and that by typing my name below
    and clicking the "Continue" button, I am electronically signing the
    document. This will have the same legal effect as signing the
    document with a written signature and shall be valid evidence of my
    intent and agreement to be bound.
    The Offer Form reflected and confirmed Traynum's rejection of additional
    uninsured motorist coverage and optional UIM coverage. By completing the
    Policyholder Electronic Signature, Traynum also consented to her signature of the
    "Applicant's acknowledgement," which was contained in the Offer Form and
    stated,
    By my signature, I acknowledge that I have read—or I have had
    read to me—the above explanations and offers of additional uninsured
    motorist coverage and optional [UIM] coverage. . . .
    My signature below further acknowledges that I understand the
    coverages as they have been explained to me, and the type and
    amounts of coverage marked on the preceding pages have been
    selected by me. This is the type and amount of insurance coverage I
    wish to purchase.4
    In granting Progressive summary judgment, the trial court found that the Offer
    Form contained the information required by section 38-77-350(A). The trial court
    further held that, pursuant to the UETA, Progressive effectively communicated the
    Offer Form to Traynum, who effectively signed it. Therefore, the trial court held
    Progressive was entitled to the conclusive presumption of section 38-77-350(B).
    B.
    Appellants argue that Progressive is not entitled to the presumption of section 38-
    77-350(B) because Progressive's website communicated the Offer Form in a
    confusing and misleading way. Appellants also argue there was not strict
    compliance with section 38-77-350(B) because there was no meaningful
    interaction between Traynum and Progressive, as is contemplated by the statute's
    requirement that a form offering UIM coverage be "completed by an insurance
    producer or a representative of the insurer." Therefore, according to Appellants,
    allowing Progressive to utilize the statute's conclusive presumption would violate
    the principles behind section 38-77-350 and Wannamaker.5
    4
    Traynum did not personally type her name on the signature line under the
    acknowledgment, but the form and signature were completed automatically based
    upon Traynum's earlier selections. Notwithstanding Traynum's signature, she
    never read the Offer Form.
    5
    As already mentioned, Appellants are not contesting the Offer Form's content, but
    the method by which the Offer Form was communicated to and completed by
    Traynum. As the trial court correctly noted, the Offer Form Traynum signed was
    essentially identical to the form promulgated by the Department, which has been
    held to satisfy the requirements of section 38-77-350(A). See, e.g., 
    Butler, 323 S.C. at 408
    , 475 S.E.2d at 761 (noting the court of appeals had previously found
    the Department-created form satisfied the requirements of section 38-77-350
    (quoting Osborne v. Allstate Ins. Co., 
    319 S.C. 479
    , 487, 
    462 S.E.2d 291
    , 295 (Ct.
    App. 1995)) (citing S.C. Code Ann. §§ 38-77-160, -350)), superseded by statute on
    other grounds, Act of July 2, 1997, No. 154, § 3, 1997 S.C. Acts 931, 950–51
    (codified as amended at S.C. Code Ann. § 38-73-470 (2015)), as recognized in
    We agree with the trial court that the method by which Progressive communicated
    the offer of UIM coverage to Traynum and obtained Traynum's signature complied
    with section 38-77-350. Under the UETA, Traynum's electronic signature was as
    effective as a handwritten signature. See S.C. Code Ann. § 26-6-70(D).
    Progressive's online communication of the offer of UIM coverage was effective
    because Traynum agreed to interact with Progressive electronically by choosing to
    purchase insurance through Progressive's website and she had the ability to
    download and save or print the Offer Form. See 
    id. § 26-6-80(A).
    Finally, despite
    Appellants' assertion that there was no meaningful interaction between Traynum
    and Progressive, the UETA, as already noted, expressly endorses this kind of
    transaction. See 
    id. § 26-6-140.
    Progressive's website acted as the company's
    electronic agent, completing the Offer Form based on Traynum's selections of
    coverage and presenting it to Traynum in a format that was easily viewable,
    printable, and savable.
    We thus find, based on the evidence in the record, that Progressive is entitled to the
    conclusive presumption of a meaningful offer of UIM coverage provided by
    section 38-77-350. Traynum rejected the recommended preset coverage packages,
    all of which included UIM coverage, instead choosing to create a customized
    package and decline UIM coverage. Appellants cannot now invoke the fact
    Traynum did not avail herself of the opportunity to read the Offer Form and the
    detailed description of UIM coverage it contained to defeat the statutory
    presumption.
    We also note that the ability to purchase insurance online benefits consumers by
    allowing them to shop from the comfort of their own homes and avoid the time
    constraints and pressures associated with face-to-face interactions with sales
    agents. We therefore decline to add to the statutory requirements of section 38-77-
    350 and frustrate the purpose of the UETA by judicially engrafting an additional
    burden onto those transactions. Our law requires insurers to meaningfully offer
    UIM coverage and, if they comply with section 38-77-350's mandates, creates a
    conclusive presumption such an offer was made. Appellants cannot escape this
    fact merely because Traynum purchased insurance online.
    Moody v. Dairyland Ins. Co., 
    354 S.C. 28
    , 31–32, 
    579 S.E.2d 527
    , 529 (Ct. App.
    2003).
    Moreover, having made a statutorily compliant offer, consideration of
    Wannamaker is unnecessary. See, e.g., Grinnell Corp. v. Wood, 
    389 S.C. 350
    , 357,
    
    698 S.E.2d 796
    , 799 (2010) (noting that if an insurer offers UIM coverage on a
    form that satisfies the requirements of section 38-77-350(A), "section 38-77-
    350(B) provides a conclusive presumption in favor of the insurer that the insured
    made a knowing waiver of the option to purchase additional coverages" and
    Wannamaker is a fallback position insurers may resort to if an offer does not
    comply with section 38-77-350 (emphasis added)); cf. Wilkinson ex rel. Wilkinson
    v. Palmetto State Transp. Co., 
    382 S.C. 295
    , 307, 
    676 S.E.2d 700
    , 706 (2009)
    (noting resolution of a case on one ground makes consideration of remaining issues
    unnecessary); Duvall v. S.C. Budget & Control Bd., 
    377 S.C. 36
    , 42, 
    659 S.E.2d 125
    , 128 (2008) ("The Court must presume the Legislature intended its statutes to
    accomplish something and did not intend a futile act." (citing TNS Mills, Inc. v.
    S.C. Dep't of Revenue, 
    331 S.C. 611
    , 620, 
    503 S.E.2d 471
    , 476 (1998))).
    IV.
    For the reasons discussed above, we affirm the trial court's grant of summary
    judgment to Progressive.
    AFFIRMED.
    PLEICONES, C.J., BEATTY, HEARN, JJ., and Acting Justice Jean H. Toal,
    concur.