Kingston v. State Farm Automobile Insurance Co. ( 2015 )

2015 UT App 28THE UTAH COURT OF APPEALS
MARTYN E. KINGSTON AND LOUISE D.S. KINGSTON,
Plaintiffs and Appellants,
v.
STATE FARM AUTOMOBILE INSURANCE COMPANY AND STATE FARM
FIRE AND CASUALTY COMPANY,
Defendants and Appellees.
Opinion
No. 20131045-CA
Filed February 5, 2015
Third District Court, Silver Summit Department
The Honorable Todd M. Shaughnessy
No. 110500838
Bret M. Hanna and Thomas E. Shaw, Attorneys
for Appellants
Paul M. Belnap, Jennifer R. Carrizal, and Nicholas
E. Dudoich, Attorneys for Appellees
JUDGE J. FREDERIC VOROS JR. authored this Opinion, in which
JUDGES STEPHEN L. ROTH and MICHELE M. CHRISTIANSEN
concurred.
VOROS, Judge:
¶1 This case arises from an insurance claim made after an
automobile collision involving an underinsured driver. Because
of the risk posed by underinsured motorists, state law contains a
default coverage provision. This provision mandates that all
automobile insurance policies provide underinsured motorist
(UIM) coverage limits equal to (1) the maximum UIM limits
available under that policy or (2) that policy’s liability limits,
whichever is less, unless the insured purchases coverage in a
lesser amount or rejects UIM coverage altogether by signing an
acknowledgment form containing specified disclosures. Here,
Kingston v. State Farm
the district court ruled on summary judgment that the insureds
were not entitled to default maximum UIM coverage, because
the insurer had adequately informed them about UIM coverage
and the insureds had knowingly opted for lower coverage limits.
We affirm that ruling.
BACKGROUND
¶2 This case involves two insurance policies: an Automobile
Insurance Policy and a $1,000,000 Personal Liability Umbrella
Policy. Plaintiffs Martyn E. Kingston and Louise D.S. Kingston
are the insureds under both policies. State Farm Automobile
Insurance Company issued the Automobile Policy; State Farm
Fire and Casualty Company issued the Umbrella Policy
(collectively, State Farm). After the accident giving rise to this
case, State Farm paid the Kingstons an amount equal to the UIM
coverage limits stated in the Automobile Policy. However, the
Kingstons contend that because State Farm failed to comply with
statutory requirements, they are entitled to an additional
$150,000 under the Automobile Policy and an additional
$1,000,000 under the Umbrella Policy.
¶3 In 2004, the Kingstons purchased the Umbrella Policy.
The Umbrella Policy application stated, ‚If the applicant does
not want Uninsured/Underinsured Motor Vehicle Coverage, or
does not have Uninsured/Underinsured Motor Vehicle Coverage
limits of 250/500, the Rejection below must be signed.‛ On the
Umbrella Policy application, applicants could check a box
rejecting UIM coverage ‚on all vehicles‛ or a box rejecting
coverage ‚on recreational vehicles only.‛ State Farm’s
representative checked both boxes. Mr. Kingston reviewed the
information contained in the Umbrella Policy application and
signed it. Ms. Kingston did not sign the Umbrella Policy
application.
20131045-CA 2 2015 UT App 28Kingston v. State Farm
¶4 In 2006, the Kingstons insured their new Subaru Outback
with State Farm. State Farm offered the Kingstons the option to
purchase UIM coverage to complement their ordinary collision
coverage.1 As part of the process of purchasing UIM coverage,
State Farm presented the Kingstons with a ‚Selection/Rejection
of Underinsured Motorist Coverage Form‛ as required under
section 31A-22-305.3 of the Utah Insurance Code (the UIM
statute). See Utah Code Ann. § 31A-22-305.3(2)(b) (LexisNexis
Supp. 2008). The Selection/Rejection Form notified the Kingstons
of the scope of their UIM coverage:
This coverage selection or rejection shall be
applicable to the policy of insurance on the vehicle
described below [the Subaru], on all future
renewals of the policy, and on all replacement
policies unless and until I make an express written
request to add or increase the coverage(s). I sign
this acknowledgment on behalf of all applicants
and insureds under the policy.
The Kingstons each signed and dated the Selection/Rejection
Form after selecting UIM coverage limits of $100,000 per person
and $300,000 per occurrence (100/300). The 100/300 limits were
for an amount less than the policy’s maximum liability limits of
$250,000 per person and $500,000 per occurrence (250/500). State
Farm issued policy number 050-0493 for the Subaru.
¶5 In 2008, the Kingstons purchased another vehicle, a
Chevrolet Suburban, and garaged the Subaru. State Farm
1. The UIM issues we discuss could also arise with respect to
uninsured motorist (UM) coverage. See Utah Code Ann. § 31A-
22-305 (LexisNexis 2014). But here the driver at fault was under-,
rather than un-, insured. Accordingly, we address only the UIM
statute and associated caselaw.
20131045-CA 3 2015 UT App 28Kingston v. State Farm
substituted the Chevrolet for the Subaru on the Automobile
Policy but made no other changes to the policy. State Farm did
not obtain from the Kingstons a fresh Selection/Rejection Form
naming the Chevrolet. And State Farm did not send the
Kingstons a notice ‚reasonably explain*ing+ the purpose of
*UIM+ coverage.‛ See id. § 31A-22-305.3(2)(b)(iv). Under the 2012
version of the UIM statute, this ‚Important Notice Regarding
Uninsured and Underinsured Motor Vehicle Coverage‛
(Important Notice) should have been sent within thirty days of
the date the Kingstons substituted the Chevrolet for the Subaru.
See id. § 31A-22-305.3(3)(c)(iii) (LexisNexis Supp. 2012).2
¶6 Two months later, State Farm sent the Kingstons a notice
stating that it had automatically renewed the Automobile Policy
(the Automatic Renewal). The Automatic Renewal notice stated
the 100/300 UIM policy limits and listed the Chevrolet as the
covered vehicle. The Automatic Renewal also directed the
Kingstons to contact State Farm if they wanted to increase their
UIM coverage to 250/500.
¶7 Months later, while driving the insured Chevrolet, Ms.
Kingston suffered injuries in a collision with an underinsured
driver. The Kingstons filed a claim, and State Farm paid
$100,000, an amount equal to the limit of the Kingstons’ UIM
liability coverage under the Automobile Policy. More than two
years after accepting the $100,000 payment, the Kingstons sent a
letter to State Farm seeking an additional $150,000 under the
Automobile Policy and $1,000,000 under the Umbrella Policy.
State Farm declined to pay the additional benefits, and the
Kingstons sued.
2. As explained below, the Kingstons contend that the 2012
version of the statute applies to this dispute. See supra ¶¶ 19–23.
20131045-CA 4 2015 UT App 28Kingston v. State Farm
¶8 The Kingstons alleged that State Farm failed to
adequately inform them of UIM coverage for the Chevrolet in
two respects. First, they asserted State Farm failed to obtain a
fresh Selection/Rejection Form when adding the Chevrolet to the
Automobile Policy. See id. § 31A-22-305.3(2)(b) (LexisNexis Supp.
2008). Second, they asserted that State Farm failed to send the
Kingstons an Important Notice about UIM coverage within
thirty days of the Kingstons’ acquiring the Chevrolet. See id.
§ 31A-22-305.3(3)(c)(iii) (LexisNexis Supp. 2012).
¶9 The Kingstons also alleged that State Farm owed them the
maximum $1,000,000 of coverage under the Umbrella Policy. The
2004 Umbrella Policy application required the Kingstons to sign
a rejection provision if they opted to reject maximum UIM
coverage. Mr. Kingston signed the rejection provision. The
Kingstons asserted that they were nevertheless entitled to the
$1,000,000 maximum coverage for three reasons. First, they
asserted that the Umbrella Policy application violated the UIM
statute because the application did not ‚reasonably explain[] the
purpose of underinsured motorist coverage.‛ See Utah Code
Ann. § 31A-22-305.3(2)(b)(iv) (LexisNexis Supp. 2008). Second,
they asserted that Mr. Kingston’s rejection did not bind Ms.
Kingston, the injured driver. And third, they asserted that the
rejection provision of the Umbrella Policy application was
ambiguous.
¶10 After discovery, the Kingstons moved for partial
summary judgment. State Farm responded with a cross-motion
for partial summary judgment. The district court denied the
Kingstons’ motion and granted State Farm’s motion. The district
court ruled that State Farm was ‚not obligated to provide
coverage in excess of the $100,000 limit‛ stated in the
Automobile Policy and that the Kingstons were ‚not entitled to
umbrella coverage.‛ The Kingstons timely appealed.
20131045-CA 5 2015 UT App 28Kingston v. State Farm
ISSUES
¶11 First, the Kingstons contend that the district court erred in
denying them $250,000 in UIM coverage under the Automobile
Policy pursuant to the default provision of the UIM statute. See
id. § 31A-22-305.3(2)(b); id. § 31A-22-305.3(3)(c)(iii) (LexisNexis
Supp. 2012).
¶12 Second, the Kingstons contend that the district court erred
in denying them the maximum $1,000,000 coverage under the
Umbrella Policy. See id. § 31A-22-305.3(2)(b)(iv) (Supp. 2008).
¶13 Summary judgment is appropriate when ‚the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with affidavits, if any, show 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.‛ Utah R. Civ. P. 56(c). We review a
district court’s ‚legal conclusions and ultimate grant or denial of
summary judgment for correctness, and view[] the facts and all
reasonable inferences drawn therefrom in the light most
favorable to the nonmoving party.‛ Orvis v. Johnson, 2008 UT 2,
¶ 6, 177 P.3d 600 (citation and internal quotation marks omitted).
ANALYSIS
I. The Automobile Insurance Policy
¶14 The UIM statute requires that ‚*f+or new policies written
on or after January 1, 2001,‛ insurers must provide uninsured
motorist coverage limits equal to the maximum UIM limits
available under that policy or that policy’s liability coverage
limits, whichever is less, unless the insured waives maximum
20131045-CA 6 2015 UT App 28Kingston v. State Farm
UIM coverage. See Utah Code Ann. § 31A-22-305.3(2)(b)
(LexisNexis Supp. 2008).3
¶15 Utah passed the uninsured and underinsured motorist
statutes ‚in response to an urgent concern that citizens of the
state did not understand the consequences of not carrying
uninsured or underinsured motorist coverage.‛ Iverson v. State
Farm Mut. Ins. Co., 2011 UT 34, ¶ 16, 256 P.3d 222. The UM/UIM
statutes require that insurers notify policyholders about the
UM/UIM coverage options available to them. Id. ¶ 17; see also
General Sec. Indem. Co. of Ariz. v. Tipton, 2007 UT App 109, ¶¶ 11–
15 & n.6, 158 P.3d 1121 (detailing the legislative history and
public policy considerations motivating Utah’s UM/UIM
statutes). The UM/UIM statutes do not require insureds to
purchase UM/UIM coverage; instead, they permit insureds to
select a lower amount of UM/UIM coverage than the amount of
liability coverage they have, or none at all. But the statutes
require insurers to ‚affirmatively inform*+ insureds about the
costs of various levels of UM[/UIM] coverage before they decide
whether to purchase it and in what amounts.‛ Tipton, 2007 UT
App 109, ¶ 12 (first alteration in original) (citation and internal
quotation marks omitted).
¶16 If an insurer issues a ‚new‛ automobile insurance policy
without obtaining a waiver of UIM coverage from the insured,
3. This section was amended in 2014. Utah Code Ann. § 31A-22-
305.3 (LexisNexis 2014). Because this dispute arose before the
amendments were passed, they do not affect our analysis. See
State v. Clark, 2011 UT 23, ¶ 11, 251 P.3d 829 (holding that unless
a statutory provision ‚is expressly declared to be retroactive‛ or
its ‚purpose . . . is to clarify the meaning of an earlier
enactment . . . . the retroactivity ban holds, and courts must
apply the law in effect at the time of the occurrence regulated by
that law‛ (citations and internal quotation marks omitted)).
20131045-CA 7 2015 UT App 28Kingston v. State Farm
the insured receives UIM coverage in the maximum amount that
she could have purchased under the type of policy she owns,
rather than the amount she in fact purchased. See id. ¶¶ 20, 22–23
(concluding that the maximum UM coverage ‚available by the
insurer under the insured’s . . . policy‛ refers to the maximum
amount the insured could have purchased rather than the
amount actually purchased).
¶17 The Kingstons contend that they are entitled to $250,000,
rather than $100,000, in benefits under the Automobile Policy.
The Kingstons’ Automobile Policy had liability coverage of
$250,000 per person or $500,000 per occurrence. Because $250,000
is ‚the lesser of the limits of the insured’s motor vehicle liability
coverage or the maximum underinsured motorist coverage
limits available by the insurer under the insured’s motor vehicle
policy,‛ the Kingstons are entitled to this amount of coverage if
State Farm failed to obtain a UIM waiver. See Utah Code Ann.
§ 31A-22-305.3(2)(b) (LexisNexis Supp. 2008).
¶18 The Kingstons signed such a waiver when they purchased
the Automobile Policy in 2006 but not when they added the
Chevrolet to the policy in 2008. The Kingstons assert that by
substituting the Chevrolet for the Subaru on the Automobile
Policy and issuing the Automatic Renewal State Farm issued a
‚new policy‛ without obtaining a fresh Selection/Rejection Form.
See id. They also assert that State Farm violated the UIM statute
by failing to send them an Important Notice explaining the
purpose of UIM insurance within thirty days of adding the
Chevrolet to the Automobile Policy. The Kingstons argue that
these two violations triggered the default provision of the UIM
statute, and as a result they are entitled to the policy limit of
$250,000. See id. § 31A-22-305.3(3)(c)(iii) (LexisNexis Supp. 2012).
A. The Selection/Rejection Form
¶19 The Kingstons first assert that State Farm violated the
UIM statute by failing to obtain a fresh Selection/Rejection Form
20131045-CA 8 2015 UT App 28Kingston v. State Farm
when it issued the Automatic Renewal replacing the Subaru
with the Chevrolet on the Automobile Policy.
¶20 As explained above, the UIM statute requires that ‚*f+or
new policies written on or after January 1, 2001,‛ insurers
provide underinsured motorist coverage ‚equal to the lesser of
the limits of the insured’s motor vehicle liability coverage or the
maximum underinsured motorist coverage limits available by
the insurer under the insured’s motor vehicle policy.‛ Id. § 31A-
22-305.3(2)(b) (LexisNexis Supp. 2008). An insured can decline
maximum UIM coverage by signing a Selection/Rejection Form
that, among other things, ‚waives the higher coverage,‛
‚reasonably explains the purpose of underinsured motorist
coverage,‛ and ‚discloses the additional premiums required to
purchase underinsured motorist coverage.‛ Id. § 31A-22-
305.3(2)(b)(iii)–(v).
¶21 Accordingly, the Kingstons are entitled to the higher
coverage limits mandated by this section only if the Automatic
Renewal qualifies as a ‚new policy.‛ The Kingstons signed a
Selection/Rejection Form when they purchased the Automobile
Policy in 2006. In 2008, State Farm issued the Kingstons the
Automatic Renewal listing the Chevrolet as the insured vehicle.
But the Kingstons did not sign a fresh Selection/Rejection Form.
Because State Farm issued the Automatic Renewal after January
1, 2001 without obtaining a fresh Selection/Rejection Form, it
violated the UIM statute if the Automatic Renewal constituted a
‚new policy.‛
¶22 Whether the Automatic Renewal constituted a ‚new
policy‛ depends upon what definition of ‚new policy‛ applies in
this case. Prior to 2012, the UIM statute did not define ‚new
policy.‛ We first consider whether the definition of ‚new policy‛
added in 2012 to the UIM statute applies to this 2008 dispute. If
not, we apply the pre-2012 common-law definition of ‚new
policy.‛ Generally, ‚we apply the law as it exists at the time of
20131045-CA 9 2015 UT App 28Kingston v. State Farm
the event regulated by the law in question.‛ State v. Clark, 2011
UT 23, ¶ 13, 251 P.3d 829. ‚A provision of the Utah Code is not
retroactive, unless the provision is expressly declared to be
retroactive.‛ Utah Code Ann. § 68-3-3 (LexisNexis 2011).
¶23 The 2012 version of the UIM statute specifies that the
statutory definition of ‚new policy‛ applies retroactively in
certain cases:
[The definition of ‚new policy‛+ applies
retroactively to any claim arising on or after
January 1, 2001 for which, as of May 1, 2012, an
insured has not . . . filed a complaint in a court of
competent jurisdiction.
Id. § 31A-22-305.3(3)(e)(i) (LexisNexis Supp. 2012). In this case,
the accident giving rise to the Kingstons’ claim occurred after
January 1, 2001, but they filed their complaint on November 4,
2011. Therefore, by its own terms, the statutory definition of
‚new policy‛ in the 2012 version of the statute does not apply to
this case.
¶24 We accordingly turn to caselaw. The Utah Supreme Court
defined ‚new policy‛ in Iverson v. State Farm Mutual Insurance
Co., 2011 UT 34, 256 P.3d 222. This definition constitutes ‚the law
as it exist[ed] at the time of the event regulated by the law in
question,‛ see Clark, 2011 UT 23, ¶ 13. Accordingly, Iverson’s
interpretation of ‚new policy‛ governs. In Iverson, our supreme
court held that ‚an individual has a ‘new policy’ under the
statute if she enters a new contractual relationship with her
insurer, or if there is a material change in her existing policy.‛
2011 UT 34, ¶ 20. Declining to ‚categorically say that a particular
change is always material or immaterial,‛ the court concluded
that the primary focus should be on whether a change to a policy
‚would meaningfully alter the risk relationship between the
insurer and the insured.‛ Id. ¶ 22.
20131045-CA 10 2015 UT App 28Kingston v. State Farm
¶25 ‚*T+o determine whether a change to an existing policy is
so material that it creates a new policy under the *UIM+ statute,‛
id., we consider three relevant, though not determinative,
factors: (1) whether ‚the change to the policy was one requested
by the insured or a routine . . . change made by the insurance
company‛; (2) whether ‚the average insured would want to
reevaluate the amount of risk she would be willing to bear under
the policy‛ in response to the policy change; and (3) whether the
‚character of the changes would lead the average insured to
believe she was receiving a new policy.‛ Id.¶26 Considering the ‚totality of circumstances,‛ id., noted
above, the district court concluded that the substitution of the
Chevrolet for the Subaru did not constitute a ‚material change[]
to an existing policy that alter[ed] the risk relationship between
the insurer and the insured,‛ see id. ¶ 15. We agree.
¶27 The Automatic Renewal consisted of a single form, clearly
labeled ‚Auto Renewal.‛ State Farm had sent an ‚Auto
Renewal‛ form to the Kingstons on at least four prior occasions
during their business relationship. The Automatic Renewal
listed the Chevrolet as the insured vehicle under policy number
050-0493, the same policy number State Farm issued for coverage
of the Subaru. The Kingstons were not required to complete a
new application. The Automatic Renewal did not change the
insureds, the premium, or the coverages. In particular, the
Kingstons’ 100/300 UIM coverage remained the same. In fact,
‚the Automatic Renewal directed them to contact State Farm if
they wished to increase their UIM coverage.‛ They did not do
so.
¶28 The substitution of vehicles on the policy ‚was one
requested by the insured.‛ Id. ¶ 22. But the Kingstons give no
reason why ‚the average insured would want to reevaluate the
amount of risk she would be willing to bear under the policy,‛
see id.; nor would the insured have a reason to reevaluate where,
20131045-CA 11 2015 UT App 28Kingston v. State Farm
as here, the amount of risk was identical under the original
policy and the Automatic Renewal. Nor have the Kingstons
shown that ‚the character of the change*+ would lead the
average insured to believe she was receiving a new policy.‛ See
id. On the contrary, the character of the change—pursuant to
which insureds, premiums, and coverages all remained the
same—as well as the title of the document (‚Automatic
Renewal‛), would lead the average insured to believe that she
was receiving a renewal of the original policy, not a new policy.
The Chevrolet was merely ‚a newly acquired or replacement
motor vehicle covered under the terms of the *existing+ policy.‛
Utah Code Ann. § 31A-22-305.3(2)(a)(ii)(B) (LexisNexis Supp.
2008).
¶29 Because the substitution of the Chevrolet for the Subaru
constituted neither a ‚new contractual relationship with *State
Farm+,‛ nor a ‚material change in *the Kingstons’+ existing
policy,‛ the Automobile Policy does not qualify as a ‚new
policy‛ for purposes of the UIM statute. See Iverson v. State Farm
Mut. Ins. Co., 2011 UT 34, ¶ 20, 256 P.3d 222. Accordingly, the
UIM statute did not require State Farm to obtain a fresh
Selection/Rejection Form for the Chevrolet.
¶30 The Kingstons next argue that even if the substitution of
the Chevrolet did not create a ‚new policy‛ under the statute,
State Farm was nonetheless required to obtain a fresh
Selection/Rejection Form for the Chevrolet because the original
form by its own terms applied only to the Subaru. In support of
this argument, the Kingstons rely on this passage in the
Selection/Rejection Form:
This coverage selection or rejection shall be
applicable to the policy of insurance on the vehicle
described below [the Subaru], on all future renewals of
the policy, and on all replacement policies unless and
until I make an express written request to add or
20131045-CA 12 2015 UT App 28Kingston v. State Farm
increase the coverage(s). I sign this
acknowledgment on behalf of all applicants and
insureds under the policy.
(Emphasis added.) The Kingstons assert that the phrase
‚replacement policies‛ contains an ambiguity because it could be
read to refer to replacement policies on the Subaru only (a
reading that would favor them) or to replacement policies on
vehicles replacing the Subaru (a reading that would favor State
Farm). This ambiguity, they contend, must be resolved in their
favor.
¶31 But the district court’s ruling did not rely on the phrase
the Kingstons challenge. The quoted provision refers not only to
‚replacement policies,‛ but also to ‚all future renewals of the
policy.‛ And as the district court observed, ‚whether the policy
was ‘replaced’ or not, it was clearly ‘renewed,’ meaning that the
selection/rejection form continued to apply.‛ Because the
Automatic Renewal qualified as a ‚future renewal*+ of the
policy,‛ the UIM statute did not require State Farm to obtain a
fresh Selection/Rejection Form from the Kingstons.
B. The Important Notice
¶32 The Kingstons next assert that the 2012 version of the
UIM statute required State Farm to send an Important Notice to
them within thirty days of adding the Chevrolet to the
Automobile Policy. The Kingstons argue that ‚whenever a
consumer buys a new car, one of two things must happen: either
the insurance company must get a selection/rejection form, or it
must send out the [Important Notice] within thirty days of the
purchase of that vehicle.‛ They argue that because State Farm
did not obtain a new signed Selection/Rejection Form for the
Chevrolet, ‚the Kingstons were entitled to such notice‛ in a
timely manner. State Farm concedes that it did not provide the
Important Notice. But it denies any obligation to do so on the
ground that the Important Notice requirement set forth in the
20131045-CA 13 2015 UT App 28Kingston v. State Farm
2012 version of the UIM statute does not apply retroactively to
this 2008 dispute.
¶33 The Important Notice requirement, which first appeared
in the 2012 version of the UIM statute, requires insurers to notify
policyholders of the purpose of UIM coverage:
If an additional motor vehicle is added to a
personal lines policy where underinsured motorist
coverage has been rejected, or where underinsured
motorist limits are lower than the named insured’s
motor vehicle liability limits, the insurer shall
provide a notice to a named insured within 30 days
that: (A) reasonably explains the purpose of
uninsured motorist coverage; and (B) encourages
the named insured to contact the insurance
company or insurance producer for quotes as to
the additional premiums required to purchase
uninsured motorist coverage . . . .
Utah Code Ann. § 31A-22-305.3(3)(c)(iii) (LexisNexis Supp.
2012). But the events giving rise to this dispute occurred in 2008.
Therefore, State Farm must adhere to the Important Notice
requirement only if it applies retroactively.
¶34 ‚A provision of the Utah Code is not retroactive, unless
the provision is expressly declared to be retroactive.‛ Id. § 68-3-3
(LexisNexis 2011). The 2012 version of the UIM statute specifies
that subsection (3)(b) is retroactive, but is silent as to the
provision at issue here, subsection (3)(c). See id. § 31A-22-
305.3(3)(e)(i) (Supp. 2012).
¶35 Because we must ‚seek to give effect to omissions in
statutory language by presuming all omissions to be
purposeful,‛ Marion Energy, Inc. v. KFJ Ranch P’ship, 2011 UT 50,
¶ 14, 267 P.3d 863, we must conclude subsection (3)(c)(iii)’s
Important Notice requirement applies only prospectively.
20131045-CA 14 2015 UT App 28Kingston v. State Farm
Accordingly, State Farm was not required to provide Important
Notice in 2008.
¶36 Furthermore, as the district court noted, retroactively
applying the Important Notice provision would produce absurd
results:
[T]he statute would impose a duty on an insurer to
do something the insurer had no way of knowing it
was required to do. Under the *Kingstons’+ theory,
State Farm had to send a 30-day notice in
July/August of 2008, even though the 30-day notice
requirement did not become part of the statute
until 2012—years later.
We agree with the district court that the statute does not
command the impossible—in this case, time travel—from
insurers.
¶37 In conclusion, we affirm the district court’s partial
summary decision pertaining to the Automobile Policy. The
district court did not err in concluding that State Farm was not
required to obtain a new Selection/Rejection Form when it
substituted the Chevrolet for the Subaru. Nor did the district
court err in concluding that State Farm was not required to
provide the Kingstons the Important Notice required under the
2012 version of the UIM statute.4
4. The Kingstons also argue that ‚even assuming the
[Selection/Rejection Form] could apply to the 2008 Chevrolet,
State Farm must establish that the Kingstons directed State
Farm‛ to replace the Subaru with the Chevrolet. Because, the
Kingstons argue, State Farm cites ‚no evidence for that
assertion,‛ it ‚cannot meet that burden.‛ However, the
Kingstons do not explain why this argument favors them.
(continued<)
20131045-CA 15 2015 UT App 28Kingston v. State Farm
II. The Umbrella Policy
¶38 The Kingstons also contend the district court erred in
rejecting their claim for $1,000,000 under the Umbrella Policy.
The Kingstons assert three reasons for this result. First, they
argue that the Umbrella Policy application failed to ‚reasonably
explain*+ the purpose of uninsured motorist coverage.‛ Utah
Code Ann. § 31A-22-305.3(2)(b)(iv) (LexisNexis Supp. 2008).
Second, the Kingstons argue that Mr. Kingston could not sign
the Umbrella Policy rejection on Ms. Kingston’s behalf, because
‚Utah law is clear that a husband is not an agent for his wife as a
matter of law.‛ See, e.g., Fox v. Lavender, 56 P.2d 1049, 1052 (Utah
1936) (noting that the ‚mere fact that there was the relationship
of husband and wife does not show agency‛). Finally, the
Kingstons assert that the Umbrella Policy application contains
ambiguities that should be construed against State Farm as a
matter of law. See, e.g., Farmers Ins. Exch. v. Versaw, 2004 UT 73,
¶ 24, 99 P.3d 796 (‚*B+ecause insurance policies are adhesion
contracts, they are to be construed liberally in favor of the
insured . . . so as to promote and not defeat the purposes of
insurance.‛ (citation and internal quotation marks omitted)).
¶39 The difficulty with the Kingstons’ argument on this point
lies in the fact that it challenges only one of two grounds for the
district court’s ruling. ‚This court will not reverse a ruling of the
trial court that rests on independent alternative grounds where
the appellant challenges only one of those grounds.‛ Salt Lake
County v. Butler, Crockett & Walsh Dev. Corp., 2013 UT App 30,
(2003 UT App 170, ¶ 13, 72 P.3d 138; see also Utah R. App.
P. 24(a)(9). Furthermore, our review of the record indicates the
record does not support it.
20131045-CA 16 2015 UT App 28Kingston v. State Farm
¶ 28, 297 P.3d 38; see also Simmons Media Group, LLC v. Waykar,
LLC, 2014 UT App 145, ¶¶ 32–35, 335 P.3d 885.
¶40 The district court set forth two independent, alternative
rationales for granting partial summary judgment to State Farm
on the question of the Kingstons’ Umbrella Policy. First, the
court concluded that under the terms of the Umbrella Policy, the
Kingstons were required to carry UIM coverage of $250,000/
$500,000 on the underlying Automobile Policy to qualify for
UIM umbrella benefits.5 The court ruled—properly, as we hold
above—that the Kingstons’ Automobile Policy did not provide
$250,000/$500,000 UIM coverage, nor were they entitled to this
coverage by operation of law. ‚Thus,‛ the court concluded,
‚based on the terms of the Umbrella Policy itself, State Farm has
no obligation to pay benefits.‛
¶41 The Kingstons do not challenge this ground for the
district court’s ruling. Accordingly, under the authorities cited
above, we affirm the ruling of the district court.
¶42 After explaining the principal ground for its ruling, the
court continued, ‚But even if the foregoing was not true, the
Kingstons as a matter of law, would still not be entitled to the
benefits under the umbrella policy, because the umbrella policy
is not a motor vehicle insurance policy and compliance with the
uninsured/underinsured motorist statutes is not required.‛ If the
district court got that right, whether Ms. Kingston received the
notices and made the waivers required by the UIM statute
makes no difference. The Kingstons challenge this ground for
the court’s ruling. As explained above, even if this challenge
succeeded, reversal would not result. But in any event, their
challenge falls short.
5. The Kingstons do not dispute this reading of the Umbrella
Policy.
20131045-CA 17 2015 UT App 28Kingston v. State Farm
¶43 The Kingstons contend that because the Umbrella Policy
‚actually covers damages caused by uninsured/underinsured
motorists, it would be logical to apply the uninsured/
underinsured motorist statute to such a policy.‛ They
acknowledge that ‚Utah has not determined whether or not an
umbrella policy such as the one at issue here is covered by
UM/UIM coverage statutes.‛ But, they assert, other states have
done so. Under their analysis, the Umbrella Policy would be
subject to the requirement that it include ‚underinsured motorist
coverage under Section 31A-22-305.3, unless affirmatively
waived.‛ See Utah Code Ann. § 31A-22-302(1)(c) (LexisNexis
Supp. 2008). In other words, the Kingstons would be entitled by
operation of law to additional UIM coverage—perhaps as much
as $1,000,000.
¶44 State Farm responds that ‚creation of the UIM statute had
nothing to do with umbrella policies,‛ that the statute evinces no
clear legislative intent to apply to umbrella policies, and that a
‚strong majority‛ of state courts hold that UM/UIM
requirements do not apply to umbrella policies.
¶45 We conclude that the Kingstons have not shown that the
full panoply of protections found in the UIM statute apply to an
umbrella policy on the ground that it supplements the UIM
coverage of an insured’s automobile policy. Such a showing
would require an analysis of the text of section 31A-22-305.3 and
of the specific provisions of the Umbrella Policy. The parties
have not engaged in this level of analysis. For example, the
Kingstons have not identified the portion of the statute that they
contend refers to umbrella policies. And while they refer to the
Umbrella Policy application, they point to no provision of the
Umbrella Policy itself that would allow us to conclude that the
Umbrella Policy meets the statutory requirements of an
automobile insurance policy. See id. § 31A-22-303(1)(a). We are
unwilling to adopt a new and expansive reading of the UIM
statute without adequate briefing of the issue.
20131045-CA 18 2015 UT App 28Kingston v. State Farm
¶46 Furthermore, our review of the law of other states
suggests that umbrella policies differ from the automobile
insurance policies referred to in UM/UIM statutes. For example,
the Supreme Judicial Court of Maine rejected a similar argument
in Dickau v. Vermont Mutual Insurance Co., 2014 ME 158. There,
the insured, Dickau, urged the court to interpret the term ‚motor
vehicle insurance policies‛ in Maine’s UM statute ‚to include
any policy that contains any provision for any coverage of a
motor vehicle, including umbrella policies.‛ Id. ¶ 32 (emphasis in
original). The court stated, ‚Because this interpretation would
require us to ignore the history of insurance law, set aside the
meaning of well-established terms of art, and reject the counsel
of dozens of decisions from other jurisdictions, we decline to
interpret ‘motor vehicle insurance policies’ in *Maine’s UM
statute+ as Dickau suggests.‛ Id.
¶47 The court noted, ‚On numerous grounds, a majority of
jurisdictions treat ‘automobile or vehicle insurance,’ or some
derivation thereof, as a term of art with a meaning
distinguishable from the references to motor vehicles found in
an umbrella policy.‛ Id. ¶ 33 (citations omitted). The court
continued, ‚A motor vehicle insurance policy describes the
particular drivers and the particular vehicles for which the
insurance is afforded, and its premiums are calculated with
reference to the specific attributes of those vehicles and drivers—
i.e., the age, condition, and safety features of the vehicles, and
the age and accident history of the insured drivers.‛ Id. In
contrast, it noted, ‚Dickau’s umbrella policy refers only to
‘*a+utos’ in general, without describing any particular
automobiles.‛ Id. (alteration in original).
¶48 The court also observed that ‚motor vehicle insurance
relates only to liability arising out of the use or ownership of
motor vehicles. Dickau’s umbrella policy, in contrast, insures
him against liability stemming from activities associated with his
use of watercraft and aircraft, as well as homeowners’ liability
20131045-CA 19 2015 UT App 28Kingston v. State Farm
and general personal liability.‛ Id. ¶ 35 (citation omitted).
Additionally, ‚*m+otor vehicle insurance premiums, reflecting
their status as primary insurance based on vehicle-specific
liability, are also significantly higher than premiums for the
catastrophic basic liability of umbrella policies.‛ Id. ¶ 36 (citation
omitted). ‚In summary,‛ the court concluded, ‚the very nature
of UM coverage differs from that of umbrella coverage. UM
coverage is ‘first-party coverage’ in that it pays an amount to the
insured based on a third party’s liability; umbrella coverage is
third-party coverage, payable to a third party based on the
insured’s liability.‛ Id. ¶ 37 (citations omitted).
¶49 Finally, here the fact that State Farm Automobile
Insurance Company issued the Automobile Policy whereas State
Farm Fire and Casualty Company issued the Umbrella Policy
underscores the difference in the character of the two policies.
¶50 In sum, because the Kingstons challenge the district
court’s ruling on the Umbrella Policy on only one of the court’s
two ‚independent alternative grounds,‛ see Salt Lake County v.
Butler, Crockett & Walsh Dev. Corp., 2013 UT App 30, ¶ 28, 297
P.3d 38, they have not shown that the district court erred in
granting partial summary judgment for State Farm on this issue.
Furthermore, even if the district court’s ruling rested solely on
its backup rationale, the Kingstons have not demonstrated error
in that rationale.
CONCLUSION
¶51 We affirm the order of the district court in all respects.
20131045-CA 20 2015 UT App 28