SC Farm Bureau Mutual Insurance Co. v. Jenkins

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR
RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2),
SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

South Carolina
Farm Bureau Mutual Insurance Company, Appellant,

v.

Ronnie D.
Jenkins and Sandra B. Jenkins, Respondents.

Appeal From York County

John C. Hayes, III, Circuit Court Judge

Unpublished Opinion No. 2011-UP-136

Submitted January 11, 2011 – Filed April
5, 2011   

AFFIRMED

John Robert Murphy, of Columbia, for
Appellant.

John S. Nichols, of Columbia; and Robert
Verner Phillips, of Rock Hill; for Respondents.

FEW, C.J.:  Sandra
and Ronnie Jenkins had three auto insurance policies with Farm Bureau that each
carried liability limits of $25,000.00 per person, $50,000.00 per accident, and
$25,000.00 for property damage.  For each policy, the Jenkins also chose to
carry equivalent UM and UIM coverage. 

On May 30, 2003, the Jenkins
went to the Farm Bureau office to increase their policy limits and met with
Agent Joe Lee.  Lee testified that another agent, Crystal Martin, made initial
changes to the Jenkins's coverage in Farm Bureau's computer system and these
changes were reflected on pre-printed forms before Agent Lee met with the
Jenkins. 

Lee filled in additional
information on the forms and presented them to Ronnie Jenkins for signature. 
Ronnie Jenkins concedes he signed the documents.  At the conclusion of the
meeting, the Jenkins modified their policies to provide $250,000.00 per person,
$500,000.00 per accident, and $100,000.00 for property damage in liability
coverage.  Ronnie Jenkins testified that neither Lee nor any other Farm Bureau
agent provided him with an explanation of UM and UIM coverage. 

After a car accident on July
15, 2006, Sandra Jenkins filed a claim with Farm Bureau for UM coverage for
bodily injuries she sustained.  At the time of the accident, the Jenkins
learned that their policy provided UM and UIM coverage only in the amounts of $25,000.00
per person, $50,000.00 per accident, and $25,000.00 for property damage. 

Farm Bureau filed a
declaratory judgment action seeking a ruling that it made a meaningful offer of
additional UM coverage to the Jenkins.  After a hearing, the trial court found
that Farm Bureau did not make a meaningful offer of UM and UIM coverage and
ordered that the policy be reformed to provide Jenkins with UM and UIM coverage
equal to their liability coverage. 

LAW/ANALYSIS

Farm Bureau contends the
trial court erred in ruling that it failed to meet its burden of proving it
made a meaningful offer of UM and UIM coverage to Ronnie and Sandra Jenkins.  See Progressive Cas. Ins. Co. v. Leachman, 362 S.C. 344, 348, 608 S.E.2d
569, 571 (2005) (holding that insurer bears the burden of establishing that it
made a meaningful offer).

The issues here involve
making a "determination of coverage under an insurance policy, and
therefore, [this] is an action at law."  Atkins v. Horace Mann Ins. Co.,
376 S.C. 625, 630, 658 S.E.2d 106, 109 (Ct. App. 2008); accord Nationwide
Mut. Ins. Co. v. Prioleau, 359 S.C. 238, 241, 597 S.E.2d 165, 167 (Ct. App.
2004).  In an action at law, tried without a jury, the trial court's factual
findings will not be disturbed on appeal unless a review of the record reveals that
there is no evidence to reasonably support the trial court's findings.  Atkins,
376 S.C. at 630, 658 S.E.2d at 109.

To meet the burden of proving
a meaningful offer was made, an insurer must demonstrate compliance either with
section 38-77-350 of the South Carolina Code or with
the Wannamaker requirements.[1] 
Farm Bureau concedes the trial court correctly ruled that it is not entitled to
the conclusive presumption of statutory compliance under section 38-77-350(B). 
Instead, Farm Bureau contends that the trial court erred in ruling that it
failed to make a meaningful offer under Wannamaker.[2]  We disagree. 

In Wannamaker, the
supreme court held that insurers must make a "meaningful offer" of UM
coverage.  291 S.C. at 522, 354 S.E.2d at 557.  To
satisfy this requirement:

(1) the insurer's notification process must be commercially
reasonable, whether oral or in writing; (2) the insurer must specify the limits
of optional coverage and not merely offer additional coverage in general terms;
(3) the insurer must intelligibly advise the insured of the nature of the
optional coverage; and (4) the insured must be told that optional coverages are
available for an additional premium.

291 S.C. at 521,
354 S.E.2d at 556. 

After the trial court ruled
that Farm Bureau was not entitled to a conclusive statutory presumption, the
judge properly turned to the factual question of whether Farm Bureau made a
meaningful under the Wannamaker criteria.[3]  See Grinnell Corp. v. Wood, 389 S.C. 350, 357, 357 S.E.2d 796,
799-800 (2010) (holding that even when an insurer is not entitled to the
statutory presumption, the insurer may prove a meaningful offer by
demonstrating compliance with Wannamaker).  The trial court reviewed the
evidence and concluded that the testimony relating to whether Farm Bureau intelligibly advised the Jenkins of the nature of the UM
and UIM coverage and whether Farm Bureau told the Jenkins that optional
coverages are available for an additional premium was "dramatically
opposed."  The trial court determined that Farm Bureau "failed to
carry its burden of proof and therefore failed to prove by a preponderance of
the evidence that it made a meaningful offer of UM and UIM coverage to the
Jenkins." 

Evidence in the record
supports the trial court's finding that no meaningful offer was made.  Agent
Lee testified that an insured who requests "maximum coverage" would
not have received what he asked for if he only had $25,000 in UIM coverage.  He
also testified about the normal procedure he follows in explaining coverage
options and forms to insureds, but conceded that his only proof is the
selections made on the form.  Mr. Jenkins testified that Agent Lee "did
not explain to him anything regarding UIM or UM coverage.  He testified that he
had never heard of uninsured or underinsured coverage until it was explained to
him by his current counsel . . . ."  The trial judge's decision turns on
this factual finding.  Because there is evidence in the record to support the
finding, we must affirm.   

Farm Bureau relies on Atkins
v. Horace Mann Insurance Co. in support of its position, but we find the
case distinguishable.  376 S.C. 625, 630, 658 S.E.2d 106, 109 (Ct. App. 2008). 
First, Atkins addressed an appeal from a ruling that a meaningful offer
was made, while here the trial court ruled that the facts supported an opposite
ruling.  376 S.C. at 629, 658 S.E.2d at 108-09.  The court concluded that the
written offer present in Atkins is commercially reasonable under Wannamaker,
376 S.C. at 631, 658 S.E.2d at 109, while the issues present here concern
different prongs of Wannamaker.  Second, Farm Bureau emphasizes that the
court affirmed solely on the form in Atkins.  However, the entire transaction
in Atkins occurred through use of the mail, whereas here, the Jenkins
initially made a phone call to Farm Bureau to discuss changing their policies
and then decided to go to Farm Bureau's office to discuss their options and
sign the forms. 

Farm Bureau also argues that
Agent Lee's testimony demonstrates that a meaningful offer was given.  As
discussed above, after hearing and weighing Agent Lee's testimony, the trial
court concluded that, in combination with the other evidence in the record,
Farm Bureau did not satisfy its burden to prove it made a meaningful offer.  See Leachman, 362 S.C. at 348, 608 S.E.2d at 571.  This was within the trial
court's discretion.  See S.C. Dep't of Transp. v. M & T Enters.
of Mt. Pleasant, LLC, 379 S.C. 645, 668, n.12, 667 S.E.2d 7, 20, n.12 (Ct.
App. 2008) (noting that the trier of fact is "free to accept or reject any
or all of a witness's testimony").

Farm Bureau argues that the
Jenkins should be bound by the documents they signed.  The trial court properly
ruled that the fact that the Jenkins signed the forms is not dispositive of the
case.  Although it seems contrary to basic contract principles, the law
requiring meaningful offers of UM and UIM coverage has developed to protect
insureds.[4] 
Without a meaningful offer, there can be no operative acceptance.  As the trial
court explained:

[O]ur
courts have carved out a rule to the effect that a detailed acknowledgment that
reflects detailed information, crucial to a fair contractual relation between
the insured and the insurer, is valueless. . . . [T]he law in this instance
diminishes the value of one's signature and places absolutely no responsibility
on one to watch out for their own interest and be held to their written
statements . . . .

AFFIRMED.

SHORT and WILLIAMS, JJ., concur.

[1] S.C. Code Ann. § 38-77-350 (2002); State Farm Mut.
Auto. Ins. Co. v. Wannamaker, 291 S.C.
518, 521, 354 S.E.2d 555, 556 (1987).

[2] Farm Bureau posits that despite not being entitled to
a conclusive presumption under subsection 38-77-350(B), it can demonstrate that
a meaningful offer was made under 38-77-350(A) by analyzing the elements of the
blank form.  While the elements included and structure of the form are
certainly a component of the meaningful offer analysis, the form must be
considered in the context of how it is executed. 

[3] 
Farm Bureau also contends that the trial court erred "in ending its
analysis" at the point it determined Farm Bureau is not entitled to a
conclusive presumption under the statute.  We do not read the order to conclude
its analysis prematurely. 

[4] The scenario this case presents would not have the same result now.  Under the
amended 38-77-350(A), the insurer is now permitted to fill out the forms on
behalf of the insured as long as the insured signs the form.