Lopez v. United Automobile Insurance Co.
2012 UT 10
| Utah | 2012Background
- Salazar bought a policy from United with UIM coverage equal to Bodily Injury limits ($25,000) but rejected UIM by signing United's Waiver.
- The Waiver stated that UIM was required by Utah Code and described UIM generally, but did not define terms or explain purposes/benefits.
- Salazar was involved in a rear-end collision; Lopez (a passenger) sought UIM benefits after the other driver's insurer paid $25,000.
- The other driver's insurer tendered $25,000, which Salazar/Lopez argued was insufficient, prompting a UIM dispute.
- The district court granted summary judgment for United, the Utah Court of Appeals reversed, and this Court granted certiorari to resolve the meaning of “reasonable explanation” and damages remand.
- The Court holds: (a) United’s Waiver failed the statutory “reasonable explanation” standard; (b) Lopez is entitled to $25,000 UIM coverage, but damages must be determined on remand to reflect amounts not already compensated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of reasonable explanation | Lopez: Waiver lacks sufficient information to inform a decision | United: Waiver mirrors statutory definition and is adequate | Reasonable explanation requires informative, consumer-focused content |
| Damages amount after entitlement to UIM | Lopez: entitled to $25,000 and damages should be set accordingly | United: damages should be calculated after remedies; statutory amount not automatic | Remand to determine actual damages beyond amounts already compensated; not automatic $25,000 judgment |
Key Cases Cited
- Iverson v. State Farm Mut. Ins. Co., 256 P.3d 222 (Utah 2011) (statutory interpretation and coverage considerations)
- Lopez v. United Auto. Ins. Co., 222 P.3d 1192 (Utah Ct. App. 2009) (waiver sufficiency and reasonable explanation context)
- Doctors' Co. v. Drezga, 218 P.3d 598 (Utah 2009) (ambiguity and interpretation in insurance contracts)
- State v. Parduhn, 266 P.3d 765 (Utah 2011) (statutory interpretation principles)
- TruGreen Cos. v. Mower Bros., 199 P.3d 929 (Utah 2008) (ambiguity resolution and coverage presumption)