THE STATE OF SOUTH CAROLINA In The Supreme Court

Progressive Direct Insuran ce Company, Plaintiff,

v.

Bryan Reeves, Defendant.

Appellate Case No. 2018-001436

CERTIFIED QUESTION

ON CERTIFICATION FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRI CT OF SOUTH CAROLINA Cameron McGowan Currie, United States District Court Judge

Opinion No. 27909 Heard May 8, 2019 – Filed July 24, 2019

CERTIFIED QUESTION ANSWERED

J.R. Murphy and Megan Wa lker, both of Murphy & Grantland, P.A., of Colu mbia, for Plaintiff.

William R. Padget and Carl D. Hiller, both of Finkel Law Firm, LLC, of Columbia, for Defendant.

JUSTICE KITTREDGE: We are presented with a certified question from the United States District Court for the District of South Carolina, asking this Court to construe section 38-77-350(C) o f the South Carolina Code (2015) and determine whether, under the facts presente d, an insurance company is req uired to make anew offer of underinsured motoris t (UIM) coverage when an addit ional named insured is added to an existing policy. The statute provides that an insurer is not required to make a new UIM covera ge offer "on any automobile in surance policy which renews, extends, changes , supersedes, or replaces an exis ting policy." S.C. Code Ann. § 38-77-350(C). In 2012 , Wayne Reeves acquired an insurance policy from Progressive Direct Insurance Company (Progressive) coverin g his motorcycle. When the policy wa s issued, Wayne declined optiona l UIM coverage. In 2015, Wayne's wife (Jennifer) and son (Bryan) were added to the policy as "drivers and household residents, " because they also drove motorcycles. In 2017, Bryan sold his motorcycle and pur chased another motorcycle, a 2 016 Harley Davidson, which was added to the policy. At the time, Wayne ha d Bryan added as named insured to the policy. Pr ogressive did not offer Bryan a ny optional
coverages.
Later in 2017, Bryan was involved in an accident while driving his 2016 Harley Davidson. Bryan ultimately made a claim against Progressive to reform the policy to include UIM coverage based on Progressive's failure to offer him the optional coverage. Progressive contended that adding Bryan as a named i nsured was a change to an existing policy, and as a result, Progressive was not required to offer Bryan UIM coverage. Based on the undisputed facts, the parties filed cross motions for summary judgment, and the federal district court ce rtified the following questions to us:

Whether the addition of a named i nsured (Added Named Insured) t o an existing insurance policy under which the Added Named Insure d was previously a resident[-]relative insured is a "change" unde r [section 38-77-350(C) of the South Carolina Code] and, consequently, does not require an a dditional offer of opt ional coverages if a n offer that satisfies [section 38-77-3 50(A) and (B) of the South Carol ina Code] was previously made to the named insured who originally applied for the policy (O riginal Named Insured)?
If the insurer was required but f ailed to make a separate offer of optional coverage to the Added Na med Insured, whether reformati on should be limited to vehicle(s) in which the Added Named Insured has an insurable interest?
For reasons we will explain belo w, we answer the first certifie d question: Yes, the addition of Bryan Reeve s as a named insured was a change to the existing policy pursuant to section 38-77-350(C ), and Progressive was not requi red to make anadditional offer of UI M coverage to Bryan. Having answered the first certified question "yes," we do not r each the second question.

I.

In its certification order, the f ederal district court summariz ed the relevant facts as follows:
The policy for which Bryan seek s reformation was initially issu ed to his father, Wayne . . . , in June 2012. The policy was renewed five times, remaining in effect through and including July 30, 2017, on which date Bryan was injured in the motorcycle accident for whi ch he now seeks UIM coverage.
The policy was issued based on completion and execution of an o nline policy application. The applicat ion and related UIM and uninsu red motorist ("UM") coverage offer form ("Offer Form") were complet ed by Wayne or his wife, Jennifer . . . , acting as Wayne's expres s and implied agent. The Offer Form s atisfied the requirements for a n offer of optional UM and UIM coverage s under [section] 38-77-350(A), and was completed indicating UIM coverage was declined.
Initially, the only named insured was Wayne and the policy covered a single motorcycle owned by him . Jennifer and Bryan were added to the policy in February 2015 and listed as "drivers and househol d residents." [While Bryan was a re sident-relative insured, he o wned a 2007 Harley Davidson that was insured under the policy.]
Bryan was designated a named insured in M ay 2017, because he [became] the owner of a 2016 Harl ey Davidson motorcycle ("2016 Harley") that was added as a cove red vehicle at that time[, mer ely substituting the 2016 Harley for the 2007 Harley on the policy]

. 1 Progressive did not provide Bryan with on Offer Form compliant with [s]ection 38-77-350 or otherwise make an offer of optional UM o r UIM coverage to Bryan when he be came a named insured or at any other time.

1 Although she also owned covered motorcycles at various times, Jennifer was apparently never made a named insured.At the time of Bryan's acciden t on July 30, 2017, the policy co vered three motorcycles, one of wh ich was owned by Wayne, one by Jennifer, and one by Bryan. Brya n and Wayne were, at that time , both listed as named insureds, though Wayne remained the first named insured. Bryan was driving hi s 2016 Harley when the accident occurred and suffered injuries f or which he seeks damages excee ding the liability limits of the other driver's motor vehicle insura nce policy.
Order of Certification at 2–4 (s ome citations omitted); Stipula tion of Facts at 2–3.

II.

Automobile insurance carriers mu st offer, "at the option of the insured, [UIM] coverage up to the limits of the insured liability coverage." S.C. Code Ann. § 38-77-160 (2015). "If the insurer fails to . . . make a meanin gful offer [of UIM coverage] to the insured, the policy will be reformed, by opera tion of law, to include UIM coverage up to the limits of liability insurance ca rried by the insured." Butler v. Unisun Ins. Co. , 323 S.C. 402, 405, 475 S.E.2d 758, 760 (1996). However, section 38-77-350(C) 2 provides: "An automobile insurer is not required to make a new offer of coverage on any automobile insurance pol icy which renews, extends, changes, supers edes, or replaces an existing policy." S.C. Code Ann. § 38-77-350(C).

From the plain language of secti on 38-77-350(C), it is clear an insurance company need not make a new offer of UIM coverage in the case of a "cha nge" to an existing policy . We acknowledge that in the cont ext of section 38-77-350(C), the word "change" is ambiguous. Cle arly, not all "changes" are the same. The question then becomes at what poi nt a "change" rises to a level that escapes the reach of section 38-77-350(C) a nd thus triggers a duty to reoff er UIM coverage. To properly discern legislative intent, it is essential that th e word "change" (and other actions listed, such as "renews, extends, . . . supersede s, or replaces") be considered in the context of the phrase "an existing policy."
In this regard, we follow the fra mework that other states have utilized.

2 Sections 38-77-160 and 38-77-350 deal with the same subject ma tter (the offer of optional insurance cove rages for automobiles) and therefore must be construed together. See Joiner ex rel. Rivas v. Rivas , 342 S.C. 102, 109, 536 S.E.2d 372, 375 (2000) ("[S]tatutes dealing wi th the same subject matter are in pari materia and must be construed together, if possible, to produce a single, h armonious result.").Specifically, as other states hav e done in interpreting similar language in their own state statutes, we hold an insur ance company must make a new of fer of coverage when there has been a material change to the policy. See, e.g.
, Kerr v. State Farm Mut. Auto. Ins. Co. , 434 So. 2d 970, 971 (Fla. Dist. Ct. App. 1983) ("[T]he test f or whether a new rejection of UM cove rage had to be obtained is wh ether the original policy has been changed in any ma terial respect." (internal quo tation marks omitted)); Allstate Ins. Co. v. Kaneshiro , 998 P.2d 490, 497 (H aw. 2000) ("[W]hen a material change is made to an existing policy, the resulting policy is not a 'renewal or replacement policy' and a new offer of UM/UIM cover age is required."); Wilkinson v. La. Indem./Patterson Ins. , 682 So. 2d 1296, 1300 (La. Ct. App. 1996) (finding hus band's addition of wife as a named insur ed did not have the effect of altering coverage, a nd, thus was not a material chang e and no new offer of optional coverage was required).
Under the facts presented, we f ind that adding Bryan as an addi tional named insured was not a material change that would trigger the requir ement to offer UIM coverage to Bryan. Stated diffe rently, adding Bryan as an addi tional named insured was a change to an exis ting policy within the meaning o f section 38-77

- 350(C).
Bryan's reliance on McDonald v. South Carolina Fa rm Bureau Insurance. Co. , 336 S.C. 120, 518 S.E.2d 624 ( 

### Ct. App. 1999), is misplaced. The specific question in McDonald was whether the safe harbor cr eated by section 38-77-350(C) ap plied where the original named insur ed, who received a proper offer o f UIM coverage, transferred her vehicle to her son, and requested that Farm Bur eau put the policy in her son's name. Id . at 123–25, 518 S.E.2d 625–26. Bec ause the mother sold the car to her son, the mother was no longer an insured. Farm Bure au argued that the substitution of the son for the mother as the named insured was a "change" falling within section 38-77-350(C). Id

. The court of appeals rejected the insurer's position, explaining that "[r]em oving [the mother] from the pol icy and substituting [the son] as the named insured w as not a mere policy change. I t was the creation of a new insurance policy with a new named insured." Id. at 125, 518 S.E.2d at 626 (emphasis added).
Bryan nevertheless (a nd understandably) clings to the single sentence in McDonald that "the legislature intended for insurers to afford all named insured[s] the opportunity to accept or reject UIM coverage." Id . at 124, 518 S.E.2d at 626. Based on this one sentence, Bryan extrapolates a categorical ru le that the addition of a named insured can never be a change within the meaning of section 38-77

- 350(C), a position we reject. McDonald involved more than adding an additionalinsured; McDonald necessarily involved an entirely new policy, as the prior insured and policyholder was removed altogether as a result of the sale of the vehicle. McDonald represents the substitution of a new insured for the prior insured, which resulted in a mate rial change—the creation of a new policy.
In the present case, no new polic y was created. An existing po licy that covered Bryan's motorcycle was changed to add Bryan as an additional named insured. Neither did the addition of Bryan as a named insured "supersede " or "replace" his father's policy—terms also contemplated by section 38-77-350(C) as not requiring an additional offer of UIM coverage. Rather, under the circums tances presented, the addition of Bryan as a named insured is properly characteri zed as a change to an existing policy within the meaning of section 38-77-350(C). Consequently, Progressive was not required to reoffer UIM coverage.

III.
In sum, the only modifications m ade to the policy were substitu ting the 2007 Harley for the 2016 Harley 3 and reclassifying Bryan as a named insured, rather than a resident-relative insured. The coverage and policy limi ts did not change, for Bryan and his motorcycle were insured before and after the chan ge. Therefore, we hold the addition of Bryan to his parents' policy was a change contemplated by section 38-77-350(C), and Progre ssive was not required to make an offer of UIM coverage to Bryan. We answer the first certified question "yes ," and decline to answer the second question.



### CERTIFIED QUESTION ANSWERED.

BEATTY, C.J., HEARN and FEW, JJ. , and Acting Justice Thomas E. Huff, concur.

3 Smith v. S.C. Ins. Co. , 350 S.C. 82, 89, 564 S.E. 2d 358, 362 (Ct. App. 2002) ("We hold the addition of a new v ehicle is a 'change' to an exi sting policy as contemplated by [section] 38-77- 350(C) and thus a new offer of UIM coverage is not mandated.").