Martin v. State Farm Mutual Automobile Insurance
2011 U.S. Dist. LEXIS 124238
| S.D.W. Va | 2011Background
- This SD WV class action concerns underinsured motorist (UIM) coverage brought by Martin, Fleming (Executrix of Arch Fleming), and Gandee against State Farm and agent Cazad.
- Plaintiffs were injured in crashes in 2005, 2009, and 2007, with damages exceeding the at-fault party's liability limits and none of their policies carried UIM coverage.
- Plaintiffs allege State Farm failed to make commercially reasonable UIM offers and seeks reform to match their policy limits with liability limits, also claiming agent misconduct during claims processing.
- Statutory framework centers on WV Code § 33-6-31(b) requiring commercially reasonable offers and § 33-6-31d, plus Insurance Commissioner forms and Informational Letters 88 and 121 guiding compliance.
- The court held State Farm not entitled to the § 33-6-31d statutory presumption due to deviations from the Commissioner forms, finding the forms too crowded and not compliant.
- Without the presumption, Bias governs, but the court nonetheless found that State Farm made commercially reasonable offers to Fleming and Martin; Gandee’s claim remains unresolved on summary judgment, and class certification was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 33-6-31d creates a presumption of an effective offer. | Plaintiff argues the presumption applies if forms comply or substantially comply. | _state farm asserts presumption requires exact Commissioner form replication or substantial compliance with them. | Presumption not applicable due to State Farm form deviations. |
| Whether Bias controls after § 33-6-31d when presumption fails. | Bias remains controlling for determining a commercially reasonable offer. | § 33-6-31d supersedes Bias entirely. | Bias controls absent the statutory presumption. |
| Whether State Farm made commercially reasonable offers to Fleming and Martin. | Offers contained inaccuracies and unnecessary complexity, undermining knowing rejection. | Rejection language and agent explanations show knowledge and reasonableness. | State Farm made commercially reasonable offers to Fleming and Martin; summary judgment in favor for those two. |
| Whether the proposed class can be certified under Rule 23. | A class is warranted to resolve common issues of compliance and presumptions. | Individual fact-finding is needed; commonality lacks due to Bias-based issues. | Class certification denied; issues require individualized determinations. |
Key Cases Cited
- Bias v. Nationwide Mut. Ins. Co., 365 S.E.2d 789 (W. Va. 1987) (established the 'commercially reasonable offer' standard and burden-shifting of proof)
- Bell v. State Farm Mut. Auto. Ins. Co., 507 S.E.2d 406 (W. Va. 1998) (discussed form compliance timing and scope of requirements)
- Burrows v. Nationwide Ins. Co., 600 S.E.2d 565 (W. Va. 2004) (endorsed informing customers about UIM opportunities; references Ammons)
- Luikart v. Valley Brook Concrete & Supply, Inc., 613 S.E.2d 896 (W. Va. 2005) (cited Ammons regarding supersession and Bias guidance)
- Ammons v. Transportation Insurance Co., 219 F. Supp. 2d 885 (S.D. Ohio 2002) (discussed supersession effects and required form content under § 33-6-31d)
- Webb v. Shaffer, 694 F. Supp. 2d 497 (S.D. W. Va. 2010) (held affidavit contradictions cannot create triable issue where signatures acknowledge coverage rejection)