Daniel W. Thomas v. William Ray McDermitt and State Farm Mutual Insurance
232 W. Va. 159
| W. Va. | 2013Background
- Angela Thomas purchased a State Farm auto policy (liability limits $100,000/$300,000) in 2007 and signed a form purportedly rejecting underinsured motorist (UIM) coverage.
- In 2009 Thomas and family were severely injured by an underinsured driver; State Farm denied UIM benefits asserting Thomas had validly rejected coverage.
- Thomas sued State Farm (and tortfeasor), alleging no "knowing and intelligent" waiver because State Farm’s selection/rejection form deviated from the Insurance Commissioner’s prescribed form.
- The Mason County circuit court certified the question whether failure to use the prescribed form adds UIM coverage as a matter of law or merely eliminates the statutory presumption and reverts to Bias standards.
- The West Virginia Supreme Court held that failure to use the Commissioner’s form results only in loss of the statutory presumption and a reversion to the common-law Bias test (insurer must prove a commercially reasonable offer and a knowing, intelligent rejection).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Effect of insurer's failure to use Insurance Commissioner’s prescribed form under W. Va. Code § 33-6-31d | Failure to use the exact form means UIM coverage is added to the policy as a matter of law | Failure to use the exact form only forfeits the statutory presumption; insurer then must prove offer was commercially reasonable under Bias | Loss of the statutory presumption; revert to Bias standards—insurer must prove commercially reasonable offer and knowing, intelligent rejection |
Key Cases Cited
- Bias v. Nationwide Mut. Ins. Co., 179 W. Va. 125, 365 S.E.2d 789 (W. Va. 1987) (insurer must prove effective, commercially reasonable offer and knowing, informed rejection; failure leads to coverage by operation of law)
- Riffle v. State Farm Mut. Auto. Ins. Co., 186 W. Va. 54, 410 S.E.2d 413 (W. Va. 1991) (affirms remedy when insurer fails to prove effective offer and waiver)
- Westfield Ins. Co. v. Bell, 203 W. Va. 305, 507 S.E.2d 406 (W. Va. 1998) (discusses insurer obligations to offer optional coverage; not dispositive on form-consequence question)
- Van Nguyen v. Berger, 199 W. Va. 71, 483 S.E.2d 71 (W. Va. 1996) (common law remains unless clearly altered by legislature)
- Jewell v. Ford, 214 W. Va. 511, 590 S.E.2d 704 (W. Va. 2003) (when insurer fails to prove effective offer and waiver, minimum UIM/UIM coverage is included by operation of law)