### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE Septem ber 5, 2002

Session
PAUL R. PEAK, ET AL 

### . v. TRAVELERS INDEMNITY COMPANY

Appeal from the Chancery Court for Rutherford County No. 00CV-1053 Robert E. Corlew, III, Chancellor

No. M2001-03047-COA-R3-CV - Filed De cember 31, 2002

The named ins ureds in a

n automobi le liabilit

y in su ranc e policy providing $300,000 per accident liability insurance appeal a trial court grant of summary judgment that they ha

d effectively

reduced their uninsured motorist limits per accident to $60,000. We affirm the judgment of the trial cou rt.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

W ILLIA M B. C AIN , J., delivered the opinion of the court, in which P AT RICIA J. C OTT RELL , J. and E LLEN H OBBS L YLE , S P . J., joined.

Rick G. Ma nsfie ld, Mu rfre esbo ro, T enne ssee

and L arry R. McE lhan ey , I I a

nd S. A lexa Whittemore, Nashville, Tennessee, for the appellants, Paul R. Peak and Virg inia M. Peak.

Marc O. Dedman and Gayle B. Lakey , Nashville, Tennessee, for the appelle e, Trav elers I

ndemnity Company.

OPINION

On Septembe

r 27, 1999 , Paul R. Pea

k and wif e, Virg inia

M. Peak we

re serio usly injured in

an automobile

accide nt involvin g a hea

d on collis ion with

another vehicle . Mr. and M

rs. Peak were named insureds in a policy of a utomobile liability insurance i ss ued to the m by Travele rs Proper ty Casualty Insurance Company , which policy provided liability insurance to the Peaks with limits of $300,000 per accident. At all times material in the case, Tenne ssee Code Annotated section 56-7- 1201(a)(1) required that such policy provide uninsured/under insured motorist coverage equal to the bodily injury liability limits stated in the policy unless an effec tive and proper rejection of such equal limits wa s m ad e i n w ri ti ng by t he na med insureds pursuant to Tennessee Code Annotated section 56-7-120 1(a)(2 ). The po licy in effe ct at the t

ime of the September 27, 1999 accident provided for

a total premium of $744 for the policy pe riod from September

10, 1999 to March 10, 2000. The face of the polic y pr

ovided fo r $300,00 0 bodily

injury and proper

ty damag e for each accident, tog ether with $5,000 medical payment c overage for eac h accident. As to uninsured motorist coverage, the policy declar

ations provided:-2-

D1&D3- Uninsured Motorists Bodily I njury Unins ured M otori sts P ropert y Damage $60,000 each accident See Endorsement A41041

The policy

in effe ct at the t

ime of the accident was a renewa l of a polic y or

iginally issued in October 1996. At th e time the

origina l policy was issue d and at a

ll times mat

eria l in the case, Tennessee Code Annotated section 56-7-1201(a)( 1)(2) provided:

Requirements and types of coverage -- Presumptions -- Lim itations of liability. -- (a) Eve

ry automobile

li abili ty insurance policy delivered, issued for delivery or renewed in this state, covering liability arising out of the ow nership, maintenance, or use of

any motor veh

icle des igned f

or use primarily on public roads and registered or principally garaged in this state, shall include uni nsured mot orist coverage, subject to provisions filed with and approved by the commissioner, for the protection of persons insured thereunder who are le gally e ntitled to recover compensatory

damage s from own

ers or op erator s of unin su red motor vehicles because of bodily injury , sicknes s or disea se, inclu ding de ath, res ulting th erefr om.
(1) The limits of such uninsured motoris t coverage shall be equal to the bo di ly i nj ur y li ab il it y li mi ts st at ed in th e p ol ic y.
(2) However, an y named i nsured may re ject in writing such uninsured motorist coverage completely

or select lower limits of

such coverage but not less than the minimum coverage limits in § 55-12-107. Any document

signed by the

named insured or legal representative which initially rejects such cove rage or selects lower limits shall be binding upon every insure d to whom such policy applies, and shall be conclusi vely

presumed to become a part of th e policy or contr act when issued or delivered, irrespe ctive of whether phy si ca ll y attached thereto. Unless the named insured subsequently reque sts such coverage in writing, the re jected coverage need not be includ

ed in or su

pplement al to any continua ti on , renewal, reinstatement, or replacement

of such policy, or

the transfer of vehicles insured thereunde r, where the named in su re d h ad re

je ct ed th e c ov er ag e i n c on ne ct io n w it h a po li cy p reviousl y issued by the same insurer ; provided, that whenever a new application is submitted in connection with any r enewal, reinstatement or replaceme nt transaction, the provisions of this section shall apply in the same manne r as when a

new polic y is being issued.

Tenn. Code Ann. § 56-7-1201(a)(1)(2).1 A reproducti on of th e actual form use d is at

tached her eto as Appendix “A”.

-3- At the time of the October 1996 application for the policy and as a part thereof, Paul R. Peak executed and returned to Travelers the following document 1 :

UNINSURED MOTORI STS COVERAGE OPTION SEL

ECTION FORM (TENNESSEE)

Under Te nnesse e law, we must p rovid e U ninsure d M otor ists Bo dily Injury C ove rage a t a limi t equal to the B odily In jury Lia bility limit of your policy. However, you have t he rig ht t o reject

Uninsure d M otor ists Bod ily I njury Coverage entirely or to select a l imit t hat is l ower than your B odily Injury Liab ility limit.

If you ac cep t the full Un insured M otor ists Bo dily Inju ry Co verag e, we w ill also provide Unins ured M otor ists Property Damage Coverage at a limit equal t o the Pro perty D ama ge Lia bility limit of your polic y. However, you have the right to rejec t Unin sured M otor ists Pro perty D ama ge co verag e entire ly
or to se lect a limit tha t is lower th an you r Pro perty D ama ge Lia bility limit.

NOT E: You may not choose a n Un insured M otor ists Bo dily Inju ry and /or P rop erty D ama ge limit that is gr eater t

han your Liabil ity limi ts. If y our polic y has a sin gle Li abili ty l imit , you may cho ose o nly a single limit Un insured M otor ists Co verag e op tion. If you ha ve sp lit Liability l imits, you may choose only a split limit Uninsured M otorists Coverage option.

Comp lete the f

ollowing only i f you wa nt t o reject all or part of

your Unins ured Motorist s Coverage.

OPTION I I rejec t Unin sured M otor ists Co verag e entire ly.

OPTION II I do not want U ninsure d M otor ists Pro perty Da mag e Co verag e. However, I do wan t Uninsured Motorists Bodily Injury Coverage at the f ollowing limit. I un derst and t hat the li mit I choos e must

be equal to or less than the Bo dily Inju ry Liab ility limit of my po licy:

BOD ILY INJURY ONLY

SINGLE L IMIT SPLIT LIM IT

m i t eq u al t o t h e ne r s or o p e r a t or s o f uni

m i t equa l t o t h $ 25,000/ 50,0ÿÿ þ

m i t equa l t o t h $ 50,000/ 100,00ÿÿ

m i t equa l t o t h n j u r y C o v er a g e a t a

m i t equa l t o t h n j u r y C o v er a g e a t a $ 1,000, 00. n j u r y C o v er a g e a t a

OPTION III I want Uninsure d M otorists Bo dily In jury and Property Damage Coverage. However, I want

limi ts l ower than m y Bo dily Inju ry and Pro perty Damage Liability limits:-4- BODIL Y INJ URY AND PR OPERTY DA MAGE

S ING LE L IMI T SP LI T LI MITS

(Bodil y Inju ry) ( Property Damage) 60,000

m i t eq u al t o t h e $ 20,000/ 40,000 $ 10, 000

m i t equa l t o t h m it e q u a l to the

m i t equa l t o t h m i t e q ua l t o t he

m i t equa l t o t h mi t e q u a l t o t h

m i t equa l t o t h mi t e q u a l t o t h $ 1,000, 00 $300,000/ 500,000 $ 100, 00

I understand and agree that sel ection of one of the above options applies to my pres ent aut o insur ance policy and fu ture ren ewals o r repla cem ents of this p olicy. If I de cide to sel ect anoth er opt ion at some future t ime, I must l et the Company or my agent know in writi ng.
10-10-96 Paul R. Peak
Date Sig natu re (Named Insu red)

Based upon this do cument, t

he uninsur

ed motoris t limits in

the original policy

was $60,000 and the rec ord dis cl oses no re quests by the name d insured s subseque nt there to for an y in crease in uninsured/underinsured

motorist coverage and the $60,000 limits were car ried over into subsequent

renewa ls through and inclu ding the

Septembe

r 10, 1999 renewa

l in effe ct at the t

ime of the accide nt.
Appellan ts assert th at beca

use the O ption I

II box on the Un

insured M o torist

Coverage Option Select ion Form was not marked in October 1996, it is ineffective to reduce the uninsure d/ underinsured motorist coverage from $300,000 to $60,000.

Appellees assert th at the Uni nsured Mo torist Cov erage Option Selection Form was suff icient under Tennessee Code Annotated section 56-7-1201(a)( 2) to effect a re duc tion in uninsured/underinsured motorist coverage fr om $300,000 to $60,000.

The case was decided in the trial court on cross-motions for summary judgment wherein the trial court, without elaboration, overruled the motion of the named insureds and granted the motion of Trave lers.

Appellat e review of a grant of summary judgment involves only a qu estion o f law and no presumption of correctness attaches to the decision of the tria l court. Roberts

v. Rober ts , 845 S.W.2d 225 (Tenn. Ct. App. 1992). The party seeking summary

judgment mus t carry

the burden of persuading the court that no genuine and material factual issues are involved and that the moving party is entitled to judgment a s a matter of law. Byrd v. H all , 847 S.W.2d 208 (Tenn. 1993).

Under Tenn.R.Civ.P. 56.03, a summary judgment is appropriate when “there is no ge nuine issue as to any mater ial fact and . . . the moving party is entitled to a judgment as a matter of law.” Moving parties may demonstrate that they a

re entitled-5-

to a judgme

nt as a ma tter of la w in seve ral way s. First, th ey

may affirma tively negate

an essential element of the nonmoving party ’s claim. Second, t hey may conclusi vely establish an affirmative d ef

ense that defeats the nonmoving party ’s claim. Third, they may demonstr ate that the nonmoving party cannot establish an essential element of its case. Moman v. Walden , 719 S.W.2d 531, 533 (Tenn.App.1986). See 10A C. Wright, A. Miller & M. Kane, Federal Practice and Proce dure § 2727, at 130-31 (2d ed. 1983). In ruling on a motion for

summary judgmen t, both appella te and tr ial cour ts must review t he matter in the ligh

t most favo

rable to the nonmoving party

and draw all legitima

te conclusions of fact in its favor. Smith v. S ovran Ban k Cent. So uth
, 792 S. W.2 d 928 (Tenn.App.1990). If the ple adings, stipulations, depositions, and affida vits, wh en viewed in the light most favorable to the opponent of summary judgmen t, show that no genuine issue of materia l fact exis ts, and if

the rec ord reve als

no error of law, the moving party is then entitled to summary judgment. Maxwell v. Davco Corp. of Tennessee , 776 S.W.2d 528, 531 (Tenn.App.1989).

Caledonia Leasing v. Armstrong, Allen , 865 S.W.2d 10, 13 (Tenn. Ct. App. 1992).

The circumstances surrounding the execution and submission to Tr avel ers of the October 1996 application for insurance and particu larly

the “Uninsured Motorist Coverage Option Selection Form” included as a part of this application are evidence d by affida vits submitted by Ann Barnes of Miller & Loughr

y I nsurance Agency

under date of October 1, 2001 and by named insured Pa

ul R. Peak under dates of April 18, 2001 and June 18, 2001.

The affidavit of Ann Barnes, after asserting her employ

ment by Miller & L

oughry Insurance Agenc y f or twelve and a ha lf y ears sta

tes:

3. I was the agent for Paul R. Peak and Virg inia M. Peak for the t ime period involved in this litigation.

4. The “Uninsur

ed Motori st

Coverage Option

Selectio n Form” r

eflects $60,000 in uninsured motorist bodily injury and prop erty

damage covera ge bec ause those were the limits that Mr. Peak requested. The selection was marked and the
amount was handwritten in by

me at Mr. P eak’s instructions . The form was then signed, dated and returned to me by Mr. Peak. The

insuranc e cover

ages p rovided t o Mr. Peak conformed with h is select ion as re flected

on the Uni nsured Mo torist Cover age Option Selection Form (Tennessee). Mr . P ea k s pe ci fi ca ll y declin ed unin sured moto rist covera ge equaling his liabilit

y lim its and specifically

instructed tha t the unin sured motorist limits equals $60,000 . Mr. Peak also signed an accept ance of a quote f or $300,0 00 liabilit

y lim its and $60 ,000 U.M. l

imits. (emphasis added)-6-

The affidavits of

Paul R. Peak

are significant for what they do not say. At no point does he deny the asse rtio n by A

nn Barn es that the

$60,000 lim

its appea ring in t he “Unin sured Mot

orist Cover age Option Selection Form” were written thereon by Ms. Barnes “at Mr. Peak’s instructions.” He further acknowledges that he sig ned, dated and

returned the form to Ann Barnes with the penne din $60,000 uninsured/underinsured motorist coverage limit reflected ther eon at the time he signed the docum

ent.

The aff idavit of M

r. Peak o f April 18 , 2001 stat es:

1. I receiv ed an “U nins ured M otori sts C overage Option Selection Form” from Defendant

in the mail on or about October 10, 1996 in the mail. (exhi

bit A) 2. The form , in bold le tters, sta tes: “Complete

the follow ing only

if you want to reject all or part of y our Uninsured Motorists Coverage.” 3. Below the bold p rint are three separate choices desig nated as, “Option I,” “Option II ” and “Option II I.” Beside e ach of the three is a check box for the applicant to mark to select the corresponding option.

a. “Option I” states, “I reject Uninsured Motorist Coverage entirely .” b. “Option II ” states, “I do not want Uninsured M otori sts P ropert y Damage Coverage. Howev er, I do wa nt Uni nsure d Mot orist s Bodi ly Injury Cover age at the following limit. I

understa nd that tha

t the limit I

choose must be equal to or less than the Bodily I njury L iability limit of my

policy.” [sic]

c. “Option I

II ” states, “I w ant Uninsu

red Motor

ists Bodily

Injur y a nd Proper ty Damage Coverage. Howeve r I w ant limits lo wer than

my B odily

Injury and Property Dama

ge Liability

limits.” 4. I did n ot selec t any of the thr ee option s. 5. The form states at the bottom, “I understand and

agree that selection of one of the ab ove option s applies to my present auto insurance policy and future

renewa ls or rep laceme

nts of this p olicy . If I

decide t o select another option at some future time, I

must let the Company or my agent know in writing.” Below this statement are two lines, one marked “Date” a nd the other marked “Signature (Named I

nsured). 6. I sig ned and d ated the form and returne d the for

m to the De fendant

. 7. I did not select any of the

three options or mak e any other markings on the form.

The aff idavit of P aul Peak o f June 18, 20 01 provide s:

1. I received an un signed , undated “Uninsured Motorists Coverage Option Selection Form” f

rom Defe ndant in th

e mail on o

r about O cto ber 10 , 1996 (exhibit A). 2. The form had blank s p aces highlighted for the date a nd my signature

at the bottom of the page. 3. I did n ot strike t

hrough any dollar a mounts on the form.-7-

4. I did n ot write in

“$60,000 " or any

other am ount on the

form.

Construing these affidavits in the light mo st favorable to Appellants as must be done on motion for summary

judgment, the crucial undisputed fact is that Mr. Peak reque sted of Ms. Barnes $60,000 in uninsur

ed/under insured m otorist co verag e and Ms. Barnes penned-in the $60,000 figure

on the selection form, then forwarded the form to Mr. Pea k who signed

it on October 10, 1996 and returne d it to Ms. B arnes.

The policy of insurance was then issued in Octob er 1996 s electing $60,000 uninsured/underinsured

moto rist covera ge and such coverage has remaine d the same and Appe llants have enjoyed the re duced premium for such limited coverage through and inc luding the time of the Septembe r 27, 1999 accide

nt.

The entire case for Appellants hinges on a finding that the f ailure to mar k t he “ Opt io n III” block on the Uninsured Motorist Coverage Option Selectio n Form re

nders it ineffec tive as a

vehicle for the selection of the low er limits of uninsured/underinsured motorist coverage, whic h the undisputed evidence shows was, in fact, requested by Mr. Peak on October 10, 1996.

Making all allow ances f

or strict construc tion aga

inst Travele rs, rea sonable

minds could not accept the premise upon which the case f or Appellants is based.

The tr ia l c ou rt co rr ec tl y gr an te d s um ma ry judgment to Appellees an d we aff irm the jud

gment.

Costs of the ca

use are ass essed ag ainst Appe llants and the case is remanded for any

further proceedings necessary

.

___________________________________ WILL IAM B. CAI

N, JUDGE