United States District Court, W.D. Arkansas, Texarkana Division
JIMMY L. BROWN PLAINTIFF
v.
MARKEL AMERICAN INSURANCE COMPANY DEFENDANT
MEMORANDUM OPINION AND ORDER
Susan
O. Hickey, United States District Judge.
Before
the Court is Defendant's Motion for Summary Judgment. ECF
No. 17. Plaintiff has filed a response. ECF No. 20. Defendant
has filed a reply. ECF No. 26. The Court finds this matter
ripe for consideration.
BACKGROUND
In his
Complaint, Plaintiff alleges a breach of contract claim
related to a motorcycle insurance policy (the
“policy”) issued by Defendant to
Plaintiff.[1] On or about September 22, 2014, Plaintiff
was involved in a motorcycle accident. The policy was in
effect at the time of the accident. Plaintiff submitted to
Defendant a claim for underinsured motorist benefits after
the accident. ECF No. 19, ¶ 8; ECF No. 22, ¶ 2.
However, Defendant disclaimed coverage, asserting that
Plaintiff rejected both personal injury coverage and
uninsured motorist coverage and, therefore, underinsured
motorist coverage was not, and could not have been, included
in the policy under Arkansas statutory law. ECF No. 19,
¶¶ 11, 12; ECF No. 22, ¶ 2.
Defendant
bases its position that Plaintiff rejected underinsured
motorist coverage on the receipt of the following two forms
signed by Plaintiff: (1) a “REJECTION OF PERSONAL
INJURY PROTECTION COVERAGE ARKANSAS” form (the
“PIP Form”) in which Plaintiff marked an
“X” in the box indicating that he
“Reject[ed] all Personal Injury Protection
coverages” and (2) an “UNINSURED MOTORISTS
COVERAGE ARKANSAS SELECTION/REJECTION FORM” (the
“UM Form”) in which Plaintiff marked an
“X” in the box indicating that he
“Reject[ed] Uninsured Motorists Bodily Injury and
Property Damage Coverage in their entirety.”
See ECF Nos. 11-2, 11-3.
Likewise,
Defendant bases its position that underinsured coverage was
not-and could not have been-included in the policy on
Arkansas Code Annotated §§ 23-89-209 and 23-89-403.
Section 23-89-209 states, in relevant part, that:
Underinsured motorist coverage as described in this section
shall not be available to insureds nor shall insurers be
mandated to offer that coverage unless the insured has
elected uninsured motorist coverage as provided by §
23-89-403. . . . Underinsured motorist coverage shall not be
issued without uninsured motorist coverage being issued in
coordination therewith.
Ark.
Code Ann. § 23-89-209(b)(1) & (2). Section 23-89-403
requires that uninsured motorist coverage be included in
automobile liability insurance policies but provides that
uninsured motorist coverage “shall not be applicable
when any insured named in the policy has rejected the
coverage in writing, and this rejection shall continue until
withdrawn in writing by the insured.” Ark. Code Ann.
§ 23-89-403(a)(2). Accordingly, Defendant contends that
Plaintiff rejected uninsured motorist coverage in writing and
that “Arkansas law prohibited [Defendant] from
providing [Plaintiff] underinsured motorists coverage once he
rejected uninsured motorist coverage.” ECF No. 17,
¶ 7. It is undisputed that the policy declarations page
does not reflect that the policy included uninsured or
underinsured motorist coverage. ECF No. 19, ¶ 11; ECF
No. 22, ¶ 1(c). Defendant further asserts that Plaintiff
was not charged a premium for uninsured or underinsured
motorist coverage. ECF No. 26, p. 3. Thus, Defendant argues
that the Court is barred from finding that Plaintiff is
entitled to underinsured motorist coverage.
In
contrast, Plaintiff contends that the denial of coverage was
erroneous. In support of this position, Plaintiff cites
language included in the UM Form-which Plaintiff argues is a
part of the policy. That language, found at the bottom of the
form in bolded font, states as follows:
WARNING: If you: a) check more than one box; b) do
not check any box; or c) fail to return this form, your
policy will be endorsed with Uninsured Motorists coverage and
Underinsured Motorists coverage with limits equal to your
state's Financial Responsibility limits, for the
additional premium charged.
You MUST also complete the separate
selection/rejection form for Underinsured Motorists coverage.
If you fail to return the selection/rejection form for either
Uninsured Motorists coverage or Underinsured Motorists
coverage, your policy will be endorsed as stated in the above
paragraph.
See ECF No. 11-3. Plaintiff does not contest that he
indicated on the UM Form that he rejected “Uninsured
Motorists Bodily Injury and Property Damage Coverage in their
entirety.” However, Plaintiff asserts that-pursuant to
the above-quoted language-in order to effectuate rejection he
was required to send in both a form rejecting uninsured
motorists coverage as well as a separate form concerning
underinsured motorists coverage. There is no indication that
Plaintiff submitted a form covering underinsured motorist
benefits.[2] Accordingly, Plaintiff argues that because
he failed to submit “the two rejection forms, [he] did
not reject [uninsured motorist and underinsured motorist
coverage] in the manner required by the policy, and he
believed his policy would be endorsed with such
coverage.” ECF No. 20, ¶¶ 17, 20.
Furthermore, Plaintiff takes the position that Arkansas law
did and does not bar Defendant from providing underinsured
motorist coverage.
Accordingly,
in the present action, Plaintiff seeks to recover the
underinsured motorist benefits Defendant denied as well as
statutorily authorized penalties and fees.
LEGAL
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