Case Title: SPEARS v. GLENS FALLS INSURANCE COMPANY

Citation: 

Docket Number: 101655

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2005-05-17T00:00:00Z

Document:
SPEARS v. GLENS FALLS INSURANCE COMPANY  SPEARS v. GLENS FALLS INSURANCE COMPANY 2005 OK 35 114 P.3d 448 Case Number: 101655 Decided: 05/17/2005 THE SUPREME COURT OF THE STATE OF OKLAHOMA PAM and DENNIS SPEARS, as Guardians and Next of Kin of NATHAN SPEARS, Plaintiffs, v. GLENS FALLS INSURANCE COMPANY, Defendant. CERTIFIED QUESTION OF LAW FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA Honorable Ralph G. Thompson, Judge ¶0 Over the objection of the plaintiffs, Pam and Dennis Spears (Spears/insureds), the United States District Court for the Western District of Oklahoma certified a single question of law pursuant to the Uniform Certification of Questions of Laws Act, Is an insurer required to give its insured pre-policy notice that the subsequently issued insurance policy will limit UM/UIM coverage to a single policy limit (i.e., UM/UIM coverage will not stack) where: 1) prior to the issuance of the policy, the insured is given the statutory election form and elects coverage equal to the insured's bodily injury liability limits (the maximum amount permitted by law); 2) the insured pays a single premium for UM/UIM coverage; 3) more than one vehicle is insured under the subsequently issued policy; and 4) the language of the subsequently issued policy limits UM/UIM coverage to a single policy limit regardless of the number of vehicles insured? QUESTION ANSWERED. Silver Rex K. Travis, Oklahoma City, Oklahoma, for Plaintiffs. Richard J. Harris, Sarah J. Glick, Oklahoma City, Oklahoma, for Defendant. KAUGER, J.: ¶1 The question certified ". . . The limit of liability shown in the Coverage Summary for each person for Uninsured Motorist Coverage is our maximum limit of liability for all damages. . . . This is the most we will pay regardless of the number of: . . . Vehicles insured by this or any other policy issued by us or others . . ." Under these facts and pursuant to Silver v. Slusher, STIPULATED FACTS ¶2 In January, 1993, the Spears selected UM/UIM coverage equal to their bodily injury liability limits on a form provided by the insurer in conformance with the legislatively imposed requirements. ¶3 Although the policy indicates that there are three vehicles covered, a single premium of $252.00 was charged for UM/UIM coverage which is listed separately from all other vehicle premiums. Furthermore, all other charges under the policy are assigned on a per-vehicle basis. Finally, the inclusion of multiple vehicles under the UM/UIM coverage did not alter the premium or result in increased charges. ¶4 The insurance policy contained the following provision limiting UM/UIM coverage: ". . . LIMIT OF LIABILITY 1. The limit of liability shown in the Coverage Summary for each person for Uninsured Motorists Coverage' [sic] is our maximum limit of liability for all damages, including damages for care, loss of services or death, arising out of bodily injury sustained by any one person in any one motor vehicle accident. 'Bodily injury sustained by any one person' includes all injury and damage to others resulting from this bodily injury. Subject to this limit for each person, the limit of liability shown in the Coverage Summary for each accident for 'Uninsured Motorist' coverage is our maximum limit of liability for all damages for bodily injury resulting from any one motor vehicle accident. This [sic] most we will pay regardless of the number of: a. Covered persons . . . c. Vehicles involved in an accident or shown in the Coverage Summary . . . d. Vehicles insured by this or any other policy issued by us or others . . ." [Emphasis in original.] ¶5 The insurer did not advise the insureds, prior to policy issuance, that they were precluded from stacking their UM/UIM coverage. The insureds' son, Nathan Spears, was injured in an accident with an uninsured motorist on December 15, 2003. Arguing that the insureds were entitled to only a single recovery for UM/UIM coverage, the insurer paid the insureds $100,000. The insureds asserted their entitlement to stack the UM/UIM coverage of their three vehicles and sought a recovery of $300,000. ¶6 The Spears sued Glens Falls in Cleveland County District Court filing the petition on May 20, 2004. The insurer was successful in getting the cause removed to federal court on diversity grounds. Once the cause was in the federal system, the insurer answered on July 9, 2004, and filed a counterclaim for declaratory judgment seeking costs and a finding that it fulfilled all its obligations to the insureds through its $100,000.00 payment. On September 30, 2004, the insureds filed a motion for summary judgment which the insurers countered on October 1, 2004. ¶7 Recognizing that state law is determinative of the stacking issue and that this Court has not addressed the precise issue presented, the federal court certified the question to this Court pursuant to the Uniform Certification of Questions of Law Act, ¶8 PURSUANT TO THE TEACHINGS OF SILVER v. SLUSHER AND COFER v. MORTON AND, UNDER THE FACTS PRESENTED, AN INSURANCE COMPANY NEED NOT PROVIDE INSUREDS WITH PRE-POLICY NOTICE THAT STACKING OF UM/UIM IS PROHIBITED BY THE INSURANCE CONTRACT. ¶9 Although the insureds recognize that our jurisprudence provides that an insurer may limit UM/UIM coverage to a single recovery where only one premium is charged for multiple vehicles, the Spears argue that before issuance of the policy, Glens Falls was required to present them with all options for UM/UIM coverage -- including notice that stacking was prohibited. The insurer asserts that it was not required to provide stackable UM/UIM coverage. Furthermore, Glens Falls contends that when only one UM/UIM premium is charged for multiple vehicles and when the policy language prohibits stacking, multiple recovery is prohibited. Finally, the insurer urges that Silver v. Slusher, ¶10 The insureds find support in Scott v. Cimarron Ins. Co., Inc., ¶11 In Scott and Withrow, supra, we held that stacking was not allowed under policies when only one premium was charged for UM/UIM coverage. Nevertheless, the insureds assert these opinions support their position because, in both instances, the insured was given pre-policy notification that stacking was prohibited by language included in the application form. ¶12 We agree with the insureds that inclusion of such pre-policy information is the better practice and would ensure a determination that the contractual expectation of the parties was for singular UM/UIM coverage. However, neither of the opinions strengthens the insureds' position. ¶13 Withrow specifically determined that insurance companies were under no obligation to offer stackable UM/UIM coverage ¶14 Like Withrow, Scott does not bolster the insureds' arguments. In Scott, the Court recognized that, without exception, the issue of stackable coverage turned on whether a single or separate premiums had been charged for multiple vehicular coverage. ¶15 In Kinder v. Oklahoma Farmers Union Mutual Ins. Co. (Kinder I), ¶16 Mid-Continent Group v. Henry, ¶17 In Henry, the insurer did not present the insured with any written election form or other notice concerning uninsured motorist coverage before issuing a new policy. Here, and in Withrow and Scott, each insured executed an application form containing UM/UIM coverage options. Furthermore, the appellate court in Henry ignored the teachings of Silver v. Slusher, ¶18 In Silver, we held that an insurer had no affirmative duty, either contractually or statutorily, to provide an explanation of uninsured motorist coverage to insureds as an indispensable precondition for securing a statutorily effective rejection of uninsured motorist coverage. Although §3636 of title 36 ¶19 The insurer's duty to give detailed pre-contract information concerning UM/UIM coverage to its insureds was considered again in Cofer. The opinion recognizes that, where the sufficiency of an insurer's offer of basic uninsured motorist cover is raised, the insurer has no contractual duty to explain the terms of its tender or to list the advantages and disadvantages of providing UM/UIM coverage. CONCLUSION ¶20 The underlying rationale for allowing an insured to benefit from all of the coverage for which the party has paid premiums is to enforce the contractual expectations of the party purchasing the policies. ¶21 Both Silver v. Slusher, QUESTION ANSWERED. ALL JUSTICES CONCUR. FOOT