Newman v. Cornerstone National Insurance , 234 Ariz. 377 ( 2014 )

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
KATELIN NEWMAN, Plaintiff/Appellant,
v.
CORNERSTONE NATIONAL INSURANCE COMPANY dba FREEDOM
NATIONAL INSURANCE SERVICES, Defendant/Appellee.
No. 1 CA-CV13-0082
FILED 3-27-2014
Appeal from the Superior Court in Maricopa County
No. CV2011-099023
The Honorable David O. Cunanan, Judge
AFFIRMED
COUNSEL
Warnock, MacKinlay, & Carman, PLLC, Phoenix
By Brian R. Warnock and Krista M. Carman
Counsel for Plaintiff/Appellant
Elardo, Bragg, Appell & Rossi, P.C. , Phoenix
By John A. Elardo and Amanda Nelson
Counsel for Defendant/Appellee
NEWMAN v. CORNERSTONE
Opinion of the Court
OPINION
Judge Jon W. Thompson delivered the opinion of the Court, in which
Presiding Judge Lawrence F. Winthrop and Judge Margaret H. Downie
joined.
T H O M P S O N, Judge:
¶1 This opinion addresses whether a premium price is required
on a written offer of underinsured (UIM) motorist coverage pursuant to
Arizona Revised Statutes (A.R.S.) § 20-259.01(B) (Supp. 2012). 1 Plaintiff
Katelin Newman (Newman) appeals from the trial court’s judgment in
favor of Cornerstone National Insurance Company (Cornerstone). We
affirm, holding no premium price is required for a written offer of UIM
coverage to be valid.
1 Section 20-259.01(B), regulating offers of UIM, reads in pertinent part:
Every insurer writing automobile liability or motor vehicle
liability policies shall also make available to the named
insured thereunder and shall by written notice offer the
insured and at the request of the insured shall include
within the policy underinsured motorist coverage which
extends to and covers all persons insured under the policy,
in limits not less than the liability limits for bodily injury or
death contained within the policy. The selection of limits or
rejection of coverage by a named insured or applicant on a
form approved by the director shall be valid for all insureds
under the policy.
The background and legislative history of uninsured motorist (UM) and
underinsured motorist (UIM) coverage in Arizona can be found in
Ballesteros v. American Standard Ins. Co. of Wisconsin, 226 Ariz. 345, 346, ¶ 8,
248 P.3d 193, 194 (2011).
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NEWMAN v. CORNERSTONE
Opinion of the Court
¶2 In May 2011, Newman was seriously injured in an
automobile accident. The policy limits of both her own insurance and the
adverse party’s insurance were insufficient to cover the loss. Newman
sought payment of UIM benefits from her insurer Cornerstone.
Cornerstone rejected the UIM claim, relying on a waiver form declining
UIM coverage Newman had signed in 2010. Newman filed suit against
Cornerstone and sought partial summary judgment asserting
Cornerstone’s UIM coverage “offer” was deficient under A.R.S. § 20-
259.01(B) in that it lacked a premium price. Cornerstone filed a cross-
motion for summary judgment on the basis that Newman had waived
UIM benefits. The trial court, relying primarily on Garcia v. Farmers Ins.
Co. of Arizona, found for Cornerstone and against Newman. See 191 Ariz.
410, 956 P.2d 537 (App. 1998). Final judgment was entered and Newman
timely appealed.
¶3 Arizona Rule of Civil Procedure 56(a) allows a trial court to
enter summary judgment when “there is no genuine dispute as to any
material fact and the moving party is entitled to judgment as a matter of
law.” We review a summary judgment determination de novo, viewing
the facts and inferences drawn from those facts in the light most favorable
to the party against whom judgment was entered. Brookover v. Roberts
Enters., Inc., 215 Ariz. 52, 55, ¶ 8, 156 P.3d 1157, 1160 (App. 2007). We will
affirm summary judgment if it is correct for any reason. City of Tempe v.
Outdoor Sys., Inc., 201 Ariz. 106, 111, ¶ 14, 32 P.3d 31, 36 (App. 2001).
¶4 Newman asserts that the trial court erred in entering
summary judgment for Cornerstone. She argues that to comply with
A.R.S. § 20-259.01 the insurer must “make available” and “offer” UIM
coverage, which she argues must necessarily include providing definite
terms such as a premium quote in the blank space provided on the form
approved by the Arizona Department of Insurance. To this end, Newman
cites, generally, to Tallent v. National Gen. Ins. Co., 185 Ariz. 266, 915 P.2d
665 (1996) and Ballesteros, 226 Ariz. 345, 248 P.3d 193, and, more
specifically, to Melendez v. Hallmark Ins. Co., 232 Ariz. 327, 305 P.3d 392
(App. 2013) (holding insurer’s UIM offer was ineffectual when it offered
no premium price and was on a form that failed to comply with
Department of Insurance guidelines) (depublished by order of the
Arizona Supreme Court August 27, 2013).
¶5 Cornerstone, in response, asserts that no Arizona statute or
case law requires the insurer to include the premium price in the offer. It
further notes that while A.R.S. § 20–259.01 does not require insurers to use
forms approved by the Department of Insurance, its use of an approved
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NEWMAN v. CORNERSTONE
Opinion of the Court
form is considered conclusive evidence it complied with the statute. See
Ballesteros, 226 Ariz. at 350, ¶ 21, 248 P.3d at 198. For these reasons,
Cornerstone asserts that the trial court correctly granted it judgment. We
agree.
¶6 Statutory interpretation is a question of law that we review
de novo. People's Choice TV Corp. v. City of Tucson, 202 Ariz. 401, 403, ¶ 7,
46 P.3d 412, 414 (2002). Where the statutory language is clear, we hold to
the plain meaning of its terms. Rineer v. Leonardo, 194 Ariz. 45, 46, ¶ 7, 977
P.2d 767, 768 (1999). As “[o]ur goal in interpreting statutes is to fulfill the
intent and purpose of the legislature” we look first to the plain language
of the statute “as the most reliable indicator of its meaning.” Garden Lakes
Cmty. Ass'n, Inc. v. Madigan, 204 Ariz. 238, 241, ¶ 14, 62 P.3d 983, 986 (App.
2003); New Sun Bus. Park, LLC v. Yuma Cnty., 221 Ariz. 43, 46, ¶ 12, 209
P.3d 179, 182 (App. 2009). The plain language of A.R.S. § 20-259.01 does
not require insurers to provide a UIM premium quote as part of the offer
of coverage to insureds. The statute merely requires insurers to “make
available” by “written offer” UIM coverage in an amount not less than the
liability limits for bodily injury or death. See A.R.S. § 20-259.01(B); Tallent,
185 Ariz. at 266, 915 P.2d at 666.
¶7 Courts are “not at liberty to rewrite [a] statute under the
guise of judicial interpretation.” State v. Patchin, 125 Ariz. 501, 502, 610
P.2d 1062, 1063 (App. 1980). Rather, “[t]he choice of appropriate wording
rests with the Legislature.” City of Phoenix v. Butler, 110 Ariz. 160, 162, 515
P.2d 1180, 1182 (1973). The statute is very specific regarding what the
offer must contain and we will not substitute our judgment by imposing
any additional statutory requirements. See Tallent, 185 Ariz. at 268, 915
P.2d at 667 (“[w]e find nothing in [A.R.S. § 20–259.01] justifying the
imposition of this additional requirement. If the legislature desires such an
addition, it may create one.”); Ballesteros, 226 Ariz. at 349, ¶ 17, 248 P.3d at
197 (“[i]f the legislature desires to add such a requirement, it may do so . .
. but it is not our place to rewrite the statute”).
¶8 Likewise, the case law cited by Newman interpreting A.R.S.
§ 20-259.01 does not require the inclusion of a premium quote to satisfy
the “offer” requirement of the statute. Our supreme court in Tallent used
the plain meaning of “offer”: “[t]o bring to or before; to present for
acceptance or rejection; to hold out or proffer; to make a proposal to; to
exhibit something that may be taken or received or not” after finding the
word “offer” in A.R.S. § 20-259.01 to be so unambiguous that there was no
“need to determine what the legislature intended by using that term.”
185 Ariz. at 267-68, 915 P.2d at 666-67 (citations omitted). The supreme
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NEWMAN v. CORNERSTONE
Opinion of the Court
court held that the insurer’s written notice to the insured was a sufficient
offer of UIM coverage despite the notice’s lack of explanation of the
benefit because:
The imposition of a requirement for an explanation of
coverage is, we believe, both unwarranted by the statute and
unwise . . . The statute requires an offer of UIM coverage-
not a treatise on UIM coverage. National's form certainly
seems sufficient to cause any insured or potential insured
who has questions about the meaning of UM or UIM
coverages to ask for an explanation.
Id. at 268, 915 P.2d at 667.
¶9 The Ballesteros case similarly provides no basis for holding
an insurer's offer must list the premium to be charged for UIM coverage.
See 226 Ariz. at 346–47, ¶¶ 1, 6, 248 P.3d at 194–95. In Ballesteros, the
supreme court examined whether UM coverage offered by way of an
English language form to a Spanish speaker constituted a valid offer to
make such coverage available. Id. The court concluded the notice was
sufficiently clear that a reasonable reader would understand that coverage
was being offered that, “if accepted, would bind the insurer to provide the
offered coverage.” Id. at 349, ¶ 11, 248 P.3d at 196.
¶10 As noted by the trial court, this court has also examined the
“offer” component of A.R.S. § 20-259.01. 2 In Garcia, we held that Farmers
made a valid UIM offer where there was no premium quote and Farmers
2 Given this result, we need not expound at length as to how contracts
may be entered even without enumerated price terms. See, e.g., Goodman
v. Physical Res. Eng'g, Inc., 229 Ariz. 25, 27, ¶ 7, 270 P.3d 852, 854 (App.
2011); Banner Health v. Medical Sav. Ins. Co., 216 Ariz. 146, 163 P.3d 1096
(App. 2007) (price terms were supplied by the hospitals' rates filed with
Department of Health Services). Premium amounts are presumably
ascertainable by reference to the Underwriting Rules and Rate Manual
once the coverage limits are selected. In the course of this litigation,
Cornerstone disclosed its rate manual and the rate of UIM/UM coverage
to Newman.
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NEWMAN v. CORNERSTONE
Opinion of the Court
had pre-selected the coverage amount for the insureds. 3 191 Ariz. at 412,
¶ 19, 956 P.2d at 539. We found: “Farmers adequately offered UIM
coverage. The election form did ‘bring before’ and ‘hold out’ to the
Garcias that UIM coverage was available. The form referred to the
applicable limits and indicated how the Garcias could change their policy.
Nothing more is required under Tallent.” Id. Garcia did not require a
premium quote to fulfill the statutory requirements, and we similarly find
no basis for requiring it here. Cornerstone’s offer of UIM coverage to
Newman satisfied the requirements of A.R.S. § 20-259.01. 4
3 That the notice did not contain a premium quote was an issue made
clear in the dissent by Judge Fidel. See Garcia, 191 Ariz. 412, ¶ 29, 956 P.2d
539.
4 Although we have reached the merits of the offer, we note that it is
undisputed that Newman signed the UIM waiver form on December 16,
2010, and that the form used by Cornerstone was approved by the
Department of Insurance in 2007. The Ballesteros court held:
After passage of the 1992 amendment, if an insurer provides
and the insured signs a DOI–approved UM/UIM selection
form, the insurer has satisfied the statutory requirement to
“make available” and “by written notice offer” UM/UIM
coverage. Senate Committee Minutes 9 (“[T]he insurance
agent can use a form approved by the Director of the
Department of Insurance to satisfy [§ 20–259.01].”); Fact
Sheet (noting that § 20–259.01 “is satisfied if the insured
signs a form approved by the Department of Insurance
stating the amount of coverage desired”).
226 Ariz. at 350, ¶ 21, 248 P.3d at 198.
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NEWMAN v. CORNERSTONE
Opinion of the Court
¶11 For the above stated reasons, we decline to extend the
“offer” requirements of A.R.S. § 20-259.01 beyond the statutory language
enacted by our legislature and beyond the bounds laid out by our case
law. A premium quote is not a required term for a valid offer of UIM
coverage.
¶12 The trial court’s judgment is affirmed.
:MJT
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