Moore v. Globe American Casualty Co.

208 S.W.3d 868, 2006 Ky. LEXIS 338, 2006 WL 3751214

• Court: Kentucky Supreme Court
• Decided: December 21, 2006
• Docket: 2005-SC-000544-DG
• Status: Published

Opinions

Opinion of the Court by

Justice SCOTT.

In 1995, Ralph Morgan was involved in a head-on collision with a vehicle owned by Patricia Moore, Appellant. Polly Rice, the other Appellant, was a passenger in Moore’s vehicle at the time of the accident. Neither Mr. Morgan, nor the owner of the vehicle he was driving, had insurance to cover the vehicle. Thereafter, the Appellants made claims for uninsured motorist (UM) benefits against Appellant Moore’s automobile insurance carrier, Globe American Insurance Casualty Co., Appellee. Globe denied coverage because Appellant Moore had rejected UM motorist coverage in her insurance application.

The Appellants then sued Mr. Morgan, the owner of the vehicle Morgan was driving, the insurance agency who sold Moore’s policy, and the Appellee. The trial court granted the Appellee summary judgment finding that Moore’s rejection of UM coverage was binding. On appeal, the Court of Appeals affirmed, after which this Court granted discretionary review. We affirm the Court of Appeals’ decision.

FACTS

After the summary judgment, Moore and Rice filed a motion to alter, amend or vacate the findings of fact, conclusions of law and judgment of the trial court. In their motion, Moore and Rice asserted their entitlement to UM benefits on the basis that the insurance policy that Moore obtained from Globe did not follow the requirements of Kentucky law as it applies to UM coverage, and therefore, Moore should be found to have UM coverage as a matter of law. We disagree.

ARGUMENT

Rejection in the application

The Appellants’ argue that the insurance application contained an improper explanation of UM coverage because UM coverage is mandatory and must be included in the basic minimum coverage package of each automobile insurance policy sold in Kentucky. Their argument is based on KRS 304.20-020(1), which requires insurers providing automobile liability or motor vehicle liability policies of insurance in Kentucky, to provide coverage for insured persons legally entitled to recover damages against uninsured motor vehicles. However, this statute also provides that the named insured shall have the right to reject UM coverage in writing.

In Moore’s application, she rejected the UM coverage by checking the appropriate responses, as well as, not checking the applicable coverage box on the front of the application. Specifically, on page one of the application, she chose the coverage she needed and did not select UM or under-insured motorist (UIM) coverage. Then, on page two, she checked the block that stated, “I hereby reject both of the above coverages,” denoting UM and UIM coverages. Thus, the trial court found Moore rejected the UM coverage, even though she stated she never read her application and signed it after it was filled out by an employee of Globe’s local agent.

In Midwest Mutual Insurance Company v. Wireman, 54 S.W.3d 177 (Ky.App.2001), the Court of Appeals held an insured can waive UM coverage by signing the application for liability coverage, even if the insured alleges the agent never explained the meaning of UM coverage to him. “All persons are presumed to know the law and the mere lack of knowledge of the contents of a written contract for insurance cannot serve as a legal basis for avoiding its provisions.” Id. at 181-82.

Here, Moore signed the application rejecting the UM coverage. Since there was no genuine issue as to the facts, the trial court properly granted summary judgment to Globe. See Steelvest v. Scansteel, 807 S.W.2d 476 (Ky.1991).

Moore also contends that if Globe’s application had been structured differently, she would have been less likely to reject the UM coverage. She further claims that the layout of the application was deceptive, leading a consumer to overlook the statutory importance of UM coverage. Thus, she now argues, this Court should rewrite her policy granting UM coverage, speculating that she would have purchased UM coverage, even at the higher premium, if the application for insurance had been different. However, it is clear from the record that Moore did not choose either UM or UIM coverage on the first page of the application. Further, on the second page of the application she checked a box that rejected both. All of these elections were followed by her signature.

We simply find no fault with the organization and structure of Globe’s application for its policy as it contains the blocks for UM and UIM coverage which can then be appropriately rejected as is expressly provided for in KRS 304.20.020(1). The logical effect of reading all of KRS 304.20-020(1) is to recognize the General Assembly’s decision that an insurance company may either offer UM coverage as a part of its basic package of coverage, or it may choose to offer UM coverage as a supplemental coverage. Here, Moore simply rejected UM coverage, thus, the trial court was correct in granting summary judgment.

CONCLUSION

Moore rejected UM coverage which was her right under KRS 304.20-020(1) and there were no genuine issues as to any material fact concerning this rejection. The trial court, as a matter of law, properly applied Wireman, supra, and found UM coverage was rejected. The Court of Appeals affirmed, and we now affirm.

GRAVES, MINTON, and NOBLE, JJ„ concur. LAMBERT, C.J., dissents by separate opinion, with WINTERSHEIMER, J., joining that dissent.

WINTERSHEIMER, J., also dissents by separate opinion, with LAMBERT, C.J., joining that dissent.

McANULTY, J., not sitting.