Spivey v. USAA Casualty Insurance Co.
N15C-10-200 VLM
| Del. Super. Ct. | Aug 15, 2017Background
- Plaintiffs Richard and Jerry Brooks-Spivey were injured in a 2013 automobile accident; tortfeasor paid policy limits and had no other available coverage.
- Plaintiffs’ vehicle was insured by USAA; in July 2009 Mr. Spivey returned USAA Form 999DE(18) selecting lower UM/UIM limits ($20,000/$40,000) than their bodily injury limits ($100,000/$300,000).
- Form 999DE(18) is an eight-page Delaware "Offer of Insurance Coverage" that lists UM/UIM tiered limits with adjacent semi‑annual premium amounts and contains an acknowledgement that UM limits are initially issued equal to bodily injury limits but may be reduced by the insured.
- Plaintiffs claim the form did not make a "meaningful offer" under 18 Del. C. § 3902(b) and earlier Delaware decisions (Mason, Knapp, Shukitt); they seek reformation to restore UM/UIM to bodily injury limits.
- USAA argues the 999DE(18) form complies with § 3902(b) because it clearly (a) shows cost per UM tier, (b) communicates the offer, and (c) presents UM options with the same emphasis as other coverages.
- The Superior Court held cross-motions for summary judgment and concluded USAA satisfied the three-prong "meaningful offer" test; Plaintiffs’ motion denied, USAA’s granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether USAA made a "meaningful offer" of additional UM/UIM coverage under 18 Del. C. § 3902(b) | Form 999DE(18) is ambiguous/substantially similar to prior defective USAA forms; did not reasonably inform insureds of available bodily‑injury‑equivalent UM limits | Form 999DE(18) lists UM tiers with adjacent costs, expressly states UM is initially equal to BI limits and warns limits cannot exceed BI; offer is clear, prominently captioned, and not buried | Court held USAA made a meaningful offer; insurer met its burden; no reformation warranted |
| Whether insurer satisfied the three elements of § 3902(b): cost disclosure, clear communication of offer, equal manner/emphasis as other coverages | Plaintiffs assert failure on clarity and notice — form should have displayed insureds’ current BI limits in the UM selection area | USAA contends form discloses cost, clearly offers UM options, and presents UM selection similarly to other coverages; Declaration Page and other language reference BI limits | Court found all three prongs satisfied: costs shown, offer clearly communicated, and UM presented with same emphasis as other coverages |
| Relevance of insureds’ claimed lack of attention/understanding to the meaningful‑offer analysis | Plaintiffs emphasize their lack of review/understanding and that they were unaware UM limits were reduced | USAA argues insureds have a duty to read, and Plaintiffs had multiple renewals and other selections (e.g., increased PIP) demonstrating awareness | Court found factual history (17 subsequent packets, selection of additional PIP, modest premium savings) undermined Plaintiffs’ inadvertence claim |
| Remedy: whether policy must be reformed to restore UM/UIM to BI limits | Plaintiffs seek reformation due to alleged defective offer | USAA opposes reformation because statutory offer requirement was met | Court denied reformation and granted summary judgment for USAA |
Key Cases Cited
- Mason v. United Servs. Auto. Ass'n, 697 A.2d 388 (Del. 1997) (Delaware Supreme Court establishing the insurer's burden to make a "meaningful offer" under § 3902(b) and finding prior USAA form inadequate)