Melendez v. Hallmark Insurance
305 P.3d 392
| Ariz. Ct. App. | 2013Background
- Melendez sued Hallmark after Hallmark denied her UIM claim, arguing she rejected UM/UIM via a form lacking premium information.
- Hallmark’s form stated UM/UIM would be equal to the policy’s liability limit, allowed rejection or reduction, and advised contacting Hallmark for premium details.
- Melendez argued the form was not a valid offer under ARS 20-259.01 because it did not disclose any premium for UM/UIM coverage.
- ADOI later informed Hallmark that the form did not conform to Regulatory Bulletin 2003-03 and lacked a premium price space.
- Garcia, Ballesteros, and Tallent guide the analysis of what constitutes a binding offer under the statute; the trial court granted Hallmark summary judgment, which Melendez appealed.
- The majority reversed, holding Hallmark’s form did not comply with the statute for failing to include a premium, and remanded for entry of summary judgment in Melendez’s favor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Hallmark form constitutes a binding offer under ARS 20-259.01 | Melendez: no offer without a premium | Hallmark: form constitutes offer despite no premium | Yes; the form did not comply, so no binding offer |
| Whether the remedy is to award UIM coverage by operation of law | Melendez entitled to coverage | Hallmark not entitled to summary judgment | Remand for entry of summary judgment in Melendez’s favor (coverage by operation of law) |
| Role of ADOI interpretation in statutory construction | ADOI interpretation supports invalid form | Statute should be read liberally; form can be valid | A.R.S. § 20-259.01 requires a premium to be communicated for a binding offer; ADOI interpretation aligns with that view |
Key Cases Cited
- Tallent v. National General Insurance Co., 185 Ariz. 266, 915 P.2d 665 (Arizona Supreme Court 1996) (defined offer using contract principles; required premium in form (not statutory))
- Ballesteros v. American Standard Ins. Co. of Wis., 226 Ariz. 345, 248 P.3d 193 (Arizona Supreme Court 2011) (held offer must be capable of binding if accepted; language re Spanish language not required; emphasizes objective offer terms)
- Garcia v. Farmers Ins. Co. of Ariz., 191 Ariz. 410, 956 P.2d 537 (Arizona Court of Appeals 1998) (early view that premium need not be included in offer; distinguishable from current rule, later limited by Tallent/Ballesteros)