Melendez v. Hallmark Insurance

305 P.3d 392, 232 Ariz. 327, 662 Ariz. Adv. Rep. 10, 2013 WL 2490182, 2013 Ariz. App. LEXIS 114
CourtCourt of Appeals of Arizona
DecidedJune 11, 2013
DocketNo. 1 CA-CV 12-0141
StatusPublished
Cited by12 cases

This text of 305 P.3d 392 (Melendez v. Hallmark Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Melendez v. Hallmark Insurance, 305 P.3d 392, 232 Ariz. 327, 662 Ariz. Adv. Rep. 10, 2013 WL 2490182, 2013 Ariz. App. LEXIS 114 (Ark. Ct. App. 2013).

Opinions

OPINION

KESSLER, Judge.

¶ 1 Plaintiff/Appellant Martina Ramos Melendez (“Melendez”) appeals the superior court’s grant of summary judgment in favor of Defendant/Appellee Hallmark Insurance Company (“Hallmark”). The court held that the form Hallmark used to offer Melendez uninsured and underinsured motorists coverage (“UM” and “UIM”) complied with Arizona Revised Statutes (“AR.S.”) section 20-259.01 (Supp. 2012).1 We hold that the offer did not comply with the statute because it did not include any information about any premium for UM and UIM coverage and thus could not create a binding contract if Melendez had accepted such coverage. Accordingly, we reverse the judgment and remand this case to the superior court with instructions to enter summary judgment in favor of Melendez.

FACTUAL AND PROCEDURAL HISTORY

¶ 2 The material facts are not in dispute. Melendez owned a vehicle insured by Hallmark when she and two passengers (C.G. and L.C.) were involved in a collision. As a result of the collision, Melendez sustained injuries resulting in nearly $36,000 in medical expenses. L.C.’s medical bills totaled about $5500, and C.G.’s medical bills were more than $95,000. The motorist at fault for the collision carried insurance liability with limits of $50,000/$100,000, and compensation was allocated as follows: Melendez ($50,000); L.C. ($10,000); and C.G. ($40,000).

¶ 3 Melendez filed a UIM claim with Hallmark. Hallmark denied compensation on the basis that Melendez had executed a form rejecting UM/UIM coverage. Melendez then [329]*329filed a complaint against Hallmark asserting that she is entitled to UIM coverage.2 After Hallmark answered and denied the allegations, Melendez filed a motion for partial summary judgment maintaining that she was not offered UM/UIM coverage because the form did not provide adequate information to accept or reject the offer of coverage. Melendez argued that “[t]he bare UIM/UM Selection Rejection Form with no premium quotes ... does not adequately offer insurance pursuant to [A.R.S. § 20-259.01], and does not comport with the [Arizona] Department of Insuranee’[s] own directive (see [A.R.S. §§ ] 20-398 [ (Supp.2012) ] and 20-1111 [ (2010) ]) and Regulatory Bulletin 2003-3.” Relying on Tallent v. National General Insurance Company, 185 Ariz. 266, 915 P.2d 665 (1996), Melendez asserted that “[a]n offer must contain ‘definite terms,’ including terms that enable the offered to assent to such definite terms” and that “[t]he absence of the definite term of the ‘offer’ (i.e. the premium) preclude[d] the Selection Rejection Form from constituting an ‘offer’ pursuant to [AR.S. § 20-259.01].”

¶4 In support of her motion, Melendez attached the declarations page of her Hallmark insurance policy reflecting her premium and coverages including the rejection of UM/UIM coverage, as well as the UM/UIM seleetion/rejection form she signed in 2009. That form generally described UM/UIM coverage, but did not include any coverage amounts or premiums, and expressly provided that “no coverage is provided by this document.” It then suggests the insured contact Hallmark “or your agent” if the insured has any questions about UM/UIM coverage and/or the amount of coverage available. Hallmark’s form specifies that Hallmark “will provide Uninsured/Underin-sured Motorist coverage in the same amount as the policy’s Bodily Injury Liability Limit” unless the insured rejects coverage or selects a lower amount of coverage. Melendez also attached a 2010 letter from the Arizona Department of Insurance (“ADOI”) informing Hallmark that the UM/UIM selection/rejection form submitted to ADOI failed to conform to the sample forms in ADOI’s Regulatory Bulletin 2003-03. The letter informed Hallmark that ADOI was giving it an opportunity to cure deficiencies or withdraw the filing. Citing A.R.S. §§ 20-398(A) and -1111, ADOI warned that if Hallmark did not comply, it would “disapprove the filing as ambiguous, misleading or deceptive or otherwise failing to comply with Arizona law.” According to ADOI, the UM/UIM form was deficient, in part, because:

The submitted forms do not comply with Arizona statutes ... The UNINSURED AND UNDERINSURED MOTORIST COVERAGE SELECTION FORM fails to conform to the forms included in our Regulatory Bulletin 2003-03. The form must include the company name and essentially the same information as the form included with the [Regulatory Bulletin 2003-3] (including Bodily Injury Limit on the policy and a place to show the premium for [UM and UIM] Coverages).

¶ 5 Hallmark simultaneously responded to Melendez’s motion for partial summary judgment and filed a cross-motion for partial summary judgment. Although Hallmark expressly agreed with Melendez’s statement of material facts, it maintained that A.R.S. § 20-259.01(B) does not specify anything other than that a “written offer” must be made to the insured and noted that the statute does not define what constitutes an “offer.” Relying primarily on Tallent, 185 Ariz. at 267-68, 915 P.2d at 666-67, and Garcia v. Farmers Insurance Company of Arizona, 191 Ariz. 410, 411-12, 956 P.2d 537, 538-39 (App.1998), Hallmark maintained that its selection/rejection form was a valid offer of UM/UIM coverage. Hallmark argued that common-law contract principles do not govern what constitutes a valid offer and that its offer was valid because a premium quote is not necessary to offer UM/UIM coverage under A.R.S. § 20-259.01. Hallmark did not dispute Melendez’s assertion that ADOI disapproved of Hallmark’s UM/UIM form, but rather argued that under A.R.S. § 20-259.01 it was not required to make an offer on an ADOI approved form. Hallmark maintained that the use of an ADOI approved form was [330]*330an acceptable, but not mandatory, method of offering UM/UIM coverage.

¶ 6 The superior court determined that under Garcia, Hallmark’s seleetion/rejection form was sufficient enough for an offer because it stated that Melendez had the right to get UM/UIM coverage in an amount equal to her liability limits, permitted the selection of lower limits, and permitted rejection of the coverage. The court did not think that the determination in Garcia was inconsistent with the statute and stated that “if I were writing [on] a blank page, I am not sure that that is how I would do it, but I think I am bound by Garcia." Accordingly, the court granted Hallmark’s motion and denied Melendez’s motion. Melendez filed a notice of appeal. Thereafter, the superior court entered a final signed judgment. Melendez filed an amended notice of appeal from the final signed judgment. We have jurisdiction pursuant to A.R.S. § 12-2101(A)(1) (Supp. 2012).

ISSUE ON APPEAL

¶ 7 Melendez contends that the selection/rejection form for UM/UIM insurance coverage did not constitute an “offer” for purposes of A.R.S.

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Bluebook (online)
305 P.3d 392, 232 Ariz. 327, 662 Ariz. Adv. Rep. 10, 2013 WL 2490182, 2013 Ariz. App. LEXIS 114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/melendez-v-hallmark-insurance-arizctapp-2013.