Opinion
C.A. No. 07C-06-014 (JTV).
Submitted: June 5, 2008.
Decided: August 29, 2008.
Upon Consideration of Plaintiffs' Motion For Summary Judgment DENIED.
Defendant's Motion For Summary Judgment GRANTED.
Scott E. Chambers, Esq., Schmittinger Rodriguez, Dover, Delaware. Attorney for Plaintiffs.
Albert H. Manwaring, IV, Esq., and Matthew A. Kaplan, Pepper Hamilton, LLP, Wilmington, Delaware. Attorneys for Defendant.
OPINION
The plaintiffs, J. Claude and Anna J. Hodges, seek (1) reformation of the uninsured/underinsured motorists coverage in an insurance policy issued to them by the defendant Hartford Underwriters Insurance Company, (2) compensatory damages, and (3) and bad faith damages. The parties have filed cross-motions for summary judgment. The plaintiffs seek summary judgment only as to their claim for reformation. The defendant seeks summary judgment on all counts. The central issue is whether Hartford made a meaningful offer of uninsured/underinsured motorists coverage to the plaintiffs as required by 18 Del. C. § 3902(b).
STANDARD OF REVIEW
Summary judgment should be granted when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. The moving party bears the burden of establishing the nonexistence of material issues of fact. If a motion is properly supported, the burden shifts to the non-moving party to establish the existence of material issues of fact. In considering the motion, the facts must be viewed in the light most favorable to the non-moving party. Summary judgment is inappropriate "when the record reasonably indicates that a material fact is in dispute or if it seems desirable to inquire more thoroughly into the facts in order to clarify the application of law to the circumstances." The existence of cross motions for summary judgment does not act per se as a concession that there is an absence of factual issues. However, "[w]hen the facts permit a reasonable person to draw but one inference the question becomes one for decision as a matter of law."
Super. Ct. Civ. R. 56(c).
Gray v. Allstate Ins. Co., 2007 Del. Super. LEXIS 124, at *3. Id.
Id.
Pierce v. Int'l Ins. Co. of Ill., 671 A.2d 1361, 1363 (Del. 1996).
Mason v. United Servs. Auto. Ass'n, 697 A.2d 388, 392 (Del. 1997).
City of Dover v. Hunter, 880 A.2d 239, 244 (Del.Super. 2004).
FACTS
On June 2, 2005, plaintiff J. Claude Hodges was injured in a motor vehicle accident when the vehicle he was driving and another driver's vehicle collided. The plaintiffs settled their liability claims with the other driver and his insurance company for the policy limits of $15,000. They now assert a claim against their insurance company, Hartford, for underinsured motorists coverage. The coverage limits as stated in the policy, however, are $15,000. They seek to reform their policy to the same limit as their per person bodily injury liability coverage, $100,000.The facts begin on December 17, 1993. On that date, the plaintiffs signed an application for insurance with Hartford on Hartford's preprinted application form for AARP members. The form shows an election of $100,000 per person, $300,000 per accident for bodily injury liability limits. The form contains a section concerning uninsured/underinsured coverage with boxes to check and a space to fill in a specific amount of coverage, but the boxes and spaces are blank. Immediately below the boxes and spaces is a sentence which informs the insured that if the insured does not make a selection for uninsured/underinsured motorists coverage, Hartford will include this coverage at limits equal to those for bodily injury liability limits. The application does not appear to contain any information on premium costs for uninsured/underinsured motorists coverage (or, it appears, any other coverage). The form is time stamped as received by Hartford on December 23.
The next day, December 18, the plaintiffs signed a second application. This one contained a premium quote with a breakdown of the premium among coverages and has all the appearance of a significantly more complete form. In the section dealing with uninsured/underinsured motorists coverage, the form states that it explains what the insured selected for uninsured/underinsured motorists coverage and asks the insured to confirm the selection. The form also states that:
[t]he coverage you selected by phone is indicated below. To approve your selection or to make a change, please `x' the appropriate box. If you do not indicate your selection and sign Section 3 for Uninsured/Underinsured Motorists Coverage, it will be included in your policy at limits equal to your Bodily Injury Liability limits.
Immediately below that, a box is checked which indicates that the plaintiffs selected $15,000/$30,000. Below that is their signatures. At the end of the application, the plaintiffs signed again and dated their signatures December 18. This application is time stamped as received by Hartford on December 22.
Hartford characterizes the December 17 application as a quotation application and the December 18 application as the application.
The plaintiffs were issued a policy, effective 12/23/1993, with $100,000/300,000 limits for bodily injury coverage and the minimum $15,000/30,000 limits for uninsured/underinsured motorists coverage.
In 1999, Hartford implemented an Information Technology Specification in its computer system designed to automatically generate annual renewal packages to be mailed to Hartford's customers. The annual renewal package is issued every year and consists of about 48 pages. It includes, at the end, Form DRA-849-0. Form DRA-849-0 is a Hartford form which it uses to offer uninsured/underinsured motorists coverage. The form was drafted pursuant to an agreement between Hartford and AARP.
The system was also designed to generate material change packets to its Delaware AARP automobile insurance customers when a change was made in a policy. The material change packet includes a revised declaration page reflecting the change and any associated documents, such as a new insurance card. It also includes Form DRA-849-0. The material change packet consists of only a few pages.
Hartford does not keep any paper copies of its mailings of renewal packages or material change documents, or paper copies of any transmittal letters of the sending of the documents.
On June 21, 2004, the plaintiffs' policy was amended to add a 2003 Ford Taurus. Hartford contends that a material change packet was sent to the plaintiffs when the 2003 Ford was added and that it included Form DRA-849-0. The plaintiffs deny receiving any such material change packet. The accident followed next on June 2, 2005.
Hartford has a relationship with AARP called its AARP program under which it solicits AARP members for auto and home insurance. Hartford does not have field agents for this program. Business is conducted through the telephone or through the mail.
Other pertinent facts are set forth in the following discussion.
DISCUSSION
Delaware law requires that whenever an automobile policy is issued or amended, such as by the addition of a new vehicle to the policy, the insurer must make a timely offer to the insured of the option to purchase uninsured/underinsured motorists coverage up to a limit of $100,000 per person and $300,000 per accident, but not to exceed the limits of the liability coverage.
Shukitt v. United Servs. Auto. Ass'n, 2003 Del. Super. LEXIS 303, at *10 (The affirmative duty to make an offer arises "when a new policy, other than a renewal is offered, and a new policy is issued when there is a material change in the policy." (internal citation omitted)).
18 Del. C. § 3902(b); Mason v. U.S. Auto. Assoc., 697 A.2d 388, 394 (Del. 1997).
Hartford contends that it did so, and that in particular it did so when the Taurus was added in 2004. It contends that Form DRA-849-0 included with the material change packet contained a sufficient offer of uninsured/underinsured motorists coverage.
The plaintiffs contend that Form DRA-849-0 does not satisfy the defendant's obligation to offer uninsured/underinsured motorists coverage. I recently had the occasion to address this same issue in the case of Cooper v. The Hartford Insurance Company. At issue there was the adequacy of the same Form DRA-849-0 as the one involved in this case, the same annual renewal package, and a material change packet of the same nature as the one involved here. I concluded there that Form DRA-849-0 was sufficient to meet Hartford's statutory obligation to offer uninsured/underinsured motorists coverage. I concluded that the annual renewal package, however, did not satisfy the statutory obligation to offer uninsured/underinsured motorists coverage because of the nature of that package. I further concluded, however, that the material change package, with Form DRA-849-0 therein, was sufficient to meet Hartford's statutory obligation to offer uninsured/underinsured motorists coverage. For the sake of brevity, I do not set forth the reasoning of that decision herein, but I incorporate that reasoning into this case fully by this reference. Therefore, I conclude that the material change packet sent when the Taurus was added constituted a sufficient offer of uninsured/underinsured motorists coverage.
Del. Super., C.A. No. 07C-06-050, Vaughn, P.J. (Mar. 31, 2008) (Mem. Op.).
I turn next to the December 17, 1993 application. When the December 17 and December 18 applications are considered in context and the attendant facts and circumstances, I find that the December 17 application must give way to the December 18 application. The December 18 application clearly contains an election by the plaintiffs to select uninsured/underinsured motorists coverage at limits of $15,000/$30,000. While it can be argued that there is at least a dispute of fact as to which document governs, I conclude that there is no genuine issue of fact on this point and that a trier of fact must conclude that the plaintiffs selected limits of $15,000/$30,000 when the policy was issued.
This leaves the issue as to whether there is a genuine issue of material fact regarding whether the material change package was sent. On this point, Hartford has offered the affidavit of its agent, William E. Patton. According to the affidavit and documents associated with it, Hartford searched its archives and was able to retrieve back-up tapes of electronically stored information from in and around June 21, 2004 when the plaintiffs added their 2003 Taurus to their automobile policy. From its search of these back-up tapes, Hartford was able to locate contemporaneous evidence of the transmittal letter, amended declaration page, uninsured/underinsured motorists coverage DRA-849-0 offer form, and a revised insurance card generated by Hartford's computer system when the Taurus was added. From the back-up tapes of electronically stored information, Hartford was able to reprint the transmittal letter, amended declaration pages, uninsured/underinsured motorists coverage offer form DRA-849-0, and a revised insurance card ("output documents"). The only difference between these reprinted output documents and the actual documents generated in 2004 are two variable dates on the bottom of the pages that Hartford's computer system automatically appends to the archived documents to reflect the date that the documents were generated and printed from Hartford's computer system, and the use of current uninsured/underinsured motorists coverage rates on the DRA-849-0 offer form. Hartford's computer system would have generated an error message had any output documents required by the Information Technology Specification not been generated or were otherwise missing. In 2004, such an error message would have alerted Hartford's employees to any problem with the creation and mailing of the output documents to the plaintiffs. There is no record of any such error message. After the system would have generated the output documents, they would have been verified against a list of all customer policy changes processed by Hartford that day. Automated equipment then would have placed the output documents in an envelope addressed to the plaintiffs at their policy address, transported them to Hartford's mail room, and applied postage. These stamped and addressed mailings then would have been delivered to the post office where they would have been mailed to the plaintiffs. The contents of the material change mailing, copies of which were filed in the record with Mr. Patton's affidavit, show the addition of the Taurus and consists of 6 pages, two of which are the DRA-849-0. Based upon the evidence presented by the defendant, I find that the evidence establishes that the material change packet was properly mailed.
The issue then becomes whether the plaintiffs' denial of receipt of the material change packet when the Taurus was added is sufficient to create an issue of fact requiring a trial.
There is a presumption that mailed matter, correctly addressed, stamped and mailed, was received by the party to whom it was addressed. Merely denying receipt does not rebut the presumption, but it may create an issue of fact to be determined by the jury. However, a mere denial of receipt, standing alone, is insufficient to rebut the presumption. I am satisfied in this case that the evidence presented by Hartford establishes the presumption of mailing. The plaintiffs' denial of receipt appears to be denial standing alone, unsupported by any attendant facts or circumstances. For this reason, and under the facts and circumstances present, I conclude that the plaintiffs' denial is insufficient to overcome the presumption of mailing. Therefore, while it may be argued that there is a genuine issue of material fact as to the plaintiffs' receipt of the material change packet, I find that their denial of receipt does not create a genuine issue of fact to be determined by the jury because their denial cannot overcome the presumption of mailing in this case.
Windom v. Ungerer, 903 A.2d 276, 282 (Del. 2006).
Id.
29 Am. Jur. 2d Evidence § 277 (2008).
For the foregoing reasons, the defendant's motion for summary judgment is granted . The plaintiffs' motion for summary judgment is denied .
IT IS SO ORDERED.