Beatty v. Esurance Property and Casualty Insurance Company
1:16-cv-00091
N.D.W. Va.Jul 17, 2018Background
- Dec. 24–25, 2014: Virgil and Melissa Beatty purchased an Esurance auto policy that initially listed UM/UIM limits; payment was authorized and policy effective Dec. 25, 2014.
- Esurance emailed statutorily required UM/UIM selection/rejection forms two days after purchase and instructed the Beattys to sign and return them within 30 days; plaintiffs did not return the forms.
- Because the forms were not returned, Esurance treated UIM as rejected, mailed an amended declarations page in late Jan. 2015 removing UIM and refunded the UIM premium.
- May 18, 2015: Mr. Beatty was in a collision; Esurance denied a UIM claim based on the canceled UIM coverage.
- Plaintiffs sued for declaratory relief, breach of contract, and bad faith; cross-motions for summary judgment focused on whether Esurance complied with West Virginia law in offering UIM so that UIM coverage applied.
- District court held Esurance complied with statutory requirements (including electronic delivery/consent by conduct), applied statutory presumption of effective offer and knowing rejection, granted defendant summary judgment, and dismissed remaining claims as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Esurance made a proper statutorily required offer of UIM at time of application | Beattys: offer was not properly made “at the time” or by mailing with initial premium; therefore statutory presumption does not apply | Esurance: delivery of the commissioner form by email within the initial premium period satisfied the statute; statutory presumption applies | Court: Offer complied with W. Va. Code §33-6-31d; presumption applies |
| Whether electronic delivery/consent was valid | Beattys: Esurance had no express agreement to send documents electronically; email delivery invalid | Esurance: UETA and the parties’ electronic application activity (online account, e-signature, email reference) show consent by conduct; email delivery valid | Court: Plaintiffs consented by conduct; electronic delivery was effective |
| Doctrine of reasonable expectations — whether plaintiffs reasonably expected UIM to remain despite failure to return forms | Beattys: multiple emails, confusion, and reliance on earlier declarations created reasonable expectation of UIM | Esurance: no discrepancy between pre-sale materials and issued policy; plaintiffs were told to return forms and were refunded when coverage canceled | Court: No discrepancy or misleading representation; reasonable-expectations doctrine does not apply |
| Equitable estoppel — whether Esurance is estopped from denying UIM | Beattys: Esurance representations led them to believe UIM existed so insurer should be estopped from denying coverage | Esurance: no false representation or concealment; coverage initially existed and was properly canceled after nonresponse | Court: Equitable estoppel fails (no false representation); insurer not estopped |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden rules)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standards re: genuine dispute)
- Volvo Const. Equip. N. Am. v. CLM Equip. Co., Inc., 386 F.3d 581 (Erie/Governing state law in diversity)
- Tennant v. Smallwood, 568 S.E.2d 10 (W. Va. 2002) (coverage questions of law when facts undisputed)
- Bias v. Nationwide Mut. Ins. Co., 365 S.E.2d 789 (W. Va. 1987) (commercially reasonable offer standard for UM/UIM)
- New Hampshire Ins. Co. v. RRK, Inc., 736 S.E.2d 52 (W. Va. 2012) (reasonable expectations and discrepancy between pre-sale materials and issued policy)