A recently decided First Circuit Case has held that an insurer may not “pick and choose” which UM Selection Form to enforce. In the particular case, the insurer first argued that a 2009 UM Selection Form precluded recovery under a UM Policy. It was ultimately determined that issues of fact remained as to whether UM coverage was knowingly rejected. After that decision was reached, the insurer then tried to rely on a 2004 form rejecting coverage. The Court held that the 2004 form was superseded by the 2009 form.
On November 19, 2009, an accident ending in a fatality occurred. The surviving spouse filed a lawsuit in which the UM carrier was named. The UM Carrier filed a motion for summary judgment alleging that the deceased rejected UM coverage relying on a 2009 rejection form. The trial court granted the motion. However, the appeals court reversed finding that there were issues of fact as to whether or not the deceased knowingly made an informed, meaningful rejection of UM coverage. In other words, the insurer met its initial burden of proving that the UM selection form was properly completed and signed in accordance with the Duncan requirements, thereby creating a rebuttable presumption that the coverage was rejected. However, plaintiffs offered sufficient evidence to rebut that presumption. Plaintiffs presented evidence that the insurer required the deceased to sign the selection form as a condition to maintain coverage. Plaintiffs successfully alleged that this denied her the statutory right to have UM coverage equal to the bodily injury limits in the policy.
Following the decision discussed above, the insurer field a second motion for summary judgment relying on a 2004 UM rejection form. Various objections to the validity of the form were raised. Plaintiffs also alleged that the validity of the 2004 form was no longer at issue because the 2009 form superseded the 2004 form.
The Court noted that the insurer required it’s insured to execute a new UM Selection form in 2009 and that the form was not executed in conjunction with a policy renewal. Furthermore, the Court noted that the insurer changed its position during the course of the litigation. During arguments regarding the 2009 form, plaintiffs argued that the 2004 form was flawed. In response, the insurer called the 2004 form “irrelevant” due to the 2009 form. Yet, once the MSJ was denied regarding the 2009 form, the insurer argued that the 2004 form was relevant and controlling.
The Court quoted Alexander v. Estate of McNeal (La. App. 3 Cir. 6/30/10), 44 So.3d 338, writ denied, 2010-1807 (La. 10/29/10), 48 So.3d 1093 stating “that second document ha[d] to stand for something, it ha[d] to mean something” and that the insurer “obviously … wanted the second form to have the full force of law.” Alexander, 44 So.3d at 340-341.
The Court held that the 2009 form superseded the 2004 form. It specifically noted that the “new” UM form was not executed in connection with a policy renewal and that the new form was required of the insured.
This case can best be summarized that an insurer should use caution whenever it requires its insureds to execute a UM form as courts will not allow them to pick and choose which selection form to enforce and a subsequent invalid form may supersede previous valid forms leading to a finding of coverage.
Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.