Justia.com Opinion Summary: Miriam Salazar purchased an insurance policy from United Automobile Insurance Company and El Sol Insurance Agency (collectively, United), rejecting underinsured motorist (UIM) coverage by signing United's waiver. After Salazar was involved in an accident, Lopez sued United, arguing that United must provide her with UIM coverage because the waiver did not provide the required reasonable explanation of UIM coverage. The district court granted summary judgment in favor of United. The court of appeals reversed, holding that the waiver did not contain a reasonable explanation, and Lopez was therefore entitled to UIM coverage of $25,000 under the UIM statute. The court then remanded the case with instructions for the district court to enter judgment in favor of Lopez in the amount of $25,000. The Supreme Court held that the court of appeals (1) did not err in finding that United failed to provide a reasonable explanation of the purpose of UIM coverage and when it would be applicable; but (2) erred in instructing the district court to enter judgment for Lopez in the amount of $25,000. Remanded with instructions to determine the amount of damages Lopez actually sustained.
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This opinion is subject to revision before final
publication in the Pacific Reporter
2012 UT 10
IN THE
SUPREME COURT OF THE STATE OF UTAH
MARIA LOPEZ,
Plaintiff and Respondent,
v.
UNITED AUTOMOBILE INSURANCE COMPANY and EL SOL INSURANCE
AGENCY, LLC,
Defendants and Petitioners.
No. 20100054
Filed February 24, 2012
On Certiorari to the Utah Court of Appeals
Third District, West Jordan
No. 070422402
Attorneys:
Daniel F. Bertch, Kevin R. Robson, Salt Lake City, for respondent
Tim D. Dunn, Michael J. Collins, Salt Lake City, for petitioner
James W. McConkie, Kenneth D. Lougee, W. Alexander Evans,
Salt Lake City, for amici United Automobile Insurance
Company’s customers
ASSOCIATE CHIEF JUSTICE DURRANT authored the opinion of the
Court, in which CHIEF JUSTICE DURHAM, JUSTICE PARRISH, JUSTICE
NEHRING, and JUSTICE LEE joined.
ASSOCIATE CHIEF JUSTICE DURRANT, opinion of the Court:
INTRODUCTION
¶1
We are asked to determine what constitutes a “reasonable
explanation” of underinsured motorist (UIM) coverage under
section 31A-22-305.3 of the Utah Code (UIM Statute). The UIM
Statute provides that an insured “may reject [UIM] coverage by an
express writing to the insurer . . . . on a form provided by the insurer
that includes a reasonable explanation of the purpose of [UIM]
LOPEZ v. UNITED AUTO. INS. CO.
Opinion of the Court
coverage and when it would be applicable.”1 In a lawsuit against
United Automobile Insurance Company and El Sol Insurance
Agency, LLC (collectively, United), Maria Lopez alleges that
United’s waiver form for rejecting UIM coverage (Waiver) did not
provide the required reasonable explanation of UIM coverage. She
contends that, because United’s Waiver did not contain a reasonable
explanation, it was invalid and she was therefore entitled to UIM
coverage. The district court concluded that United’s Waiver
contained a reasonable explanation of UIM coverage, but the Utah
Court of Appeals reversed that decision, holding that the waiver did
not contain a reasonable explanation, and Ms. Lopez was therefore
entitled to UIM coverage of $25,000 under the UIM Statute. The
court of appeals then remanded the case to the district court with
instructions that it enter judgment in favor of Ms. Lopez in the
amount of $25,000.
¶2
We granted certiorari to resolve two issues: (1) whether the
court of appeals erred in its construction and application of the
meaning of the phrase “reasonable explanation,” as required by the
UIM Statute; and (2) whether the court of appeals erred in failing to
remand the case for ascertainment of the amount of damages.2 We
hold that the court of appeals did not err in its construction and
application of the meaning of the phrase “reasonable explanation.”
But the court of appeals did err in instructing the district court to
enter judgment for Ms. Lopez in the amount of $25,000. We therefore
remand the case to the district court with instructions to determine
the amount of damages Ms. Lopez actually sustained.
BACKGROUND
¶3
On February 1, 2007, Miriam Salazar purchased an
insurance policy from United, selecting uninsured motorist coverage
equal to her bodily injury liability limits of $25,000, but rejecting
underinsured motorist coverage by signing United’s Waiver. Under
1
UTAH CODE § 31A-22-305.3(2)(g)(i)–(ii) (emphasis added). No
substantive changes have been made to the provisions at issue in this
opinion; thus, we cite to the most recent version of the Utah Code for
convenience.
2
Ms. Lopez also asks us to instruct the district court to consider
her breach of contract claim as a class action on remand. But the
district court granted summary judgment against Ms. Lopez on her
class action claim and she did not appeal that decision. Thus, the
matter is not properly before us and we do not address it.
2
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Opinion of the Court
the heading “Agreement Deleting Uninsured/Underinsured
Motorists Bodily Injury Coverage,” United’s Waiver read as follows:
Utah Insurance Code Section 31A-22-305 requires that
every automobile policy include Uninsured/Underinsured Motorists Bodily Injury Coverage with limits
equal to the Bodily Injury limit, unless you select a
different limit than your Bodily Injury Coverage or
reject the Uninsured/Underinsured Motorists Bodily
Injury Coverage entirely. Uninsured/Underinsured
Motorists Bodily Injury Coverage provides payment of
certain benefits for damages caused by the owner or
operator of uninsured/underinsured motor vehicles
because of bodily injury, sickness, disease or death.
¶4
A few days after her purchase, Ms. Salazar was driving the
vehicle covered by the insurance policy when another automobile
struck her vehicle from behind. Ms. Lopez, a passenger in Ms.
Salazar’s vehicle, was injured in the accident. The other driver’s
insurer tendered its limit of $25,000 to Ms. Lopez to pay for the
injuries she sustained. Claiming that this amount was insufficient to
cover her damages, Ms. Lopez sued United, arguing that United
must provide her with UIM coverage because its Waiver did not
provide the reasonable explanation of UIM coverage required by the
UIM Statute.3
¶5
The parties filed cross-motions for summary judgment. The
district court determined that United’s Waiver contained a
reasonable explanation of UIM coverage and, accordingly, granted
summary judgment in favor of United. But on appeal, the court of
appeals concluded that United’s Waiver did not contain a reasonable
explanation.4 Specifically, the court of appeals concluded that,
because the explanation in United’s Waiver was not sufficient to
“enable [the insured] to make an intelligent, informed decision
regarding the selection of UIM coverage[,] . . . [the] waiver of UIM
3
Although the district court ruled that Ms. Lopez lacked standing
to challenge the reasonableness of the Waiver because she was not
a party to the contract, the court of appeals concluded that United
had conceded at oral argument that Ms. Lopez did have standing to
challenge the Waiver. Lopez v. United Auto. Ins. Co., 2009 UT App
389, ¶ 11 n.7, 222 P.3d 1192. Because the parties do not appeal this
conclusion, we do not address the issue.
4
Id. ¶ 20.
3
LOPEZ v. UNITED AUTO. INS. CO.
Opinion of the Court
coverage was invalid.”5 The court of appeals remanded the case and
instructed the district court to enter judgment in favor of Ms. Lopez
in the amount of $25,000.6
¶6
On appeal to this court, Ms. Lopez contends that United’s
Waiver failed to provide a reasonable explanation of UIM coverage,
primarily because it did not define UIM coverage or explain its
purpose or benefits.7 As a result, Ms. Lopez claims that she is
entitled to $25,000 of UIM coverage under the UIM Statute. United
chiefly argues that the explanation in the Waiver was reasonable
because its language mirrors a provision of the UIM Statute, and that
an ordinary person would understand the explanation without
further information. Although United does not dispute that Ms.
Lopez is entitled to the statutorily mandated amount of UIM coverage
if we find that its Waiver did not contain a reasonable explanation,
it contends that, rather than instructing the district court to enter
judgment for Ms. Lopez in the amount of $25,000, the court of
appeals should have instructed the district court to ascertain the
amount of damages that Ms. Lopez actually incurred.
¶7
We have jurisdiction to hear this matter pursuant to section
78A-3-102(3)(a) of the Utah Code.
STANDARD OF REVIEW
¶8
“On certiorari, we review a decision of the court of appeals
for correctness. The correctness of the court of appeals’ decision
turns on whether that court accurately reviewed the district court’s
decision under the appropriate standard of review.”8
5
Id. (citations omitted) (internal quotation marks omitted).
6
Id. ¶ 21.
7
Amici curiae claim that because United targets Spanish-speaking
consumers, its Waiver must be provided in Spanish in order for the
explanation to be considered reasonable. Because we conclude that
the Waiver failed to provide a reasonable explanation in English, it
is unnecessary for us to reach this issue.
8
State v. Harding, 2011 UT 78, ¶ 7, __ P.3d __ (alteration omitted)
(citation omitted) (internal quotation marks omitted).
4
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Opinion of the Court
ANALYSIS
I. THE COURT OF APPEALS CORRECTLY HELD THAT
UNITED’S WAIVER FAILED TO PROVIDE THE REASONABLE
EXPLANATION REQUIRED BY STATUTE
¶9
We first consider whether the court of appeals erred in its
construction and application of the “reasonable explanation”
required by the UIM Statute. For a waiver of UIM coverage to be
valid, the UIM Statute requires that the written rejection must “be on
a form provided by the insurer that includes a reasonable
explanation of the purpose of [UIM] coverage and when it would be
applicable.”9 Because neither party disputes that the rejection was
written on a form provided by United, we consider only whether
United’s Waiver included the required reasonable explanation. To
resolve this question, we must determine (A) whether the court of
appeals correctly construed the meaning of the phrase “reasonable
explanation” and (B) whether United’s Waiver provided the
reasonable explanation of UIM coverage required by statute.
A. Under the UIM Statute, a “Reasonable Explanation” Requires
Insurers to Provide Information Sufficient to Allow a Consumer to Make
an Informed Decision Regarding the Selection of the Coverage
¶10 Because the UIM Statute does not define the phrase
“reasonable explanation,” we must use our rules of statutory
interpretation to determine its meaning. When interpreting a statute,
“our primary goal is to evince the true intent and purpose of the
Legislature.”10 To accomplish this goal, “we first look to the plain
language of the statute.”11 “[W]e read the language of the statute as
a whole and also in its relation to other statutes.”12 We also “read
each term according to its ordinary and accepted meaning.”13
9
UTAH CODE § 31A-22-305.3(2)(g)(ii).
10
State v. Parduhn, 2011 UT 57, ¶ 21, 266 P.3d 765 (internal
quotation marks omitted).
11
Id.
12
Id. (internal quotation marks omitted).
13
Id. (internal quotation marks omitted).
5
LOPEZ v. UNITED AUTO. INS. CO.
Opinion of the Court
Additionally, we “assume that each term included in the statute was
used advisedly, and we seek to give effect to every word, clause[,]
and sentence[,] . . . if such can be reasonably done.”14
¶11 Both the language and the purpose of the UIM Statute
make clear that the “reasonable explanation” requirement is meant
to ensure that consumers have sufficient information to allow them
to make informed decisions regarding the selection of UIM coverage.
The term “reasonable” is defined as “[f]air, proper, or moderate
under the circumstances.”15 And the term “explain” is defined as “to
make known” or “to make plain or understandable.”16 An ordinary
person reading the phrase “reasonable explanation” would
understand it to mean the provision of a proper amount of
information to allow one to understand a concept.
¶12 Further, we recently recognized that the UIM Statute “was
passed in response to an urgent concern that citizens of the state did
not understand the consequences of not carrying . . . [UIM]
coverage,”17 and that it “was designed to affirmatively inform
consumers about . . . UIM coverage.”18 Accordingly, we held that the
UIM Statute requires insurers to present consumers “with the
information they need to make an informed decision about . . . UIM
coverage.”19 Thus, based on the language and purpose of the UIM
Statute, the phrase “reasonable explanation” requires insurers to
provide sufficient information to allow consumers to make informed
decisions regarding the selection of UIM coverage.
¶13 United asserts that its Waiver necessarily provided a
reasonable explanation because it contained language that mirrored
the statutory definition of UIM coverage. We reject United’s
argument for the following two reasons. First, although it provides
helpful information about UIM coverage, the statutory definition
alone is insufficient to adequately inform consumers of the purpose
14
Id. (first and third alterations in original) (internal quotation
marks omitted).
15
BLACK’S LAW DICTIONARY 1379 (9th ed. 2009).
16
WEBSTER’S NEW COLLEGIATE DICTIONARY 437 (9th ed. 1988).
17
Iverson v. State Farm Mut. Ins. Co., 2011 UT 34, ¶ 16, 256 P.3d 222
(emphasis added).
18
Id. ¶ 17.
19
Id.
6
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Opinion of the Court
and applicability of UIM coverage. The statutory definition reads as
follows: “[UIM] coverage . . . provides coverage for a covered person
who is legally entitled to recover damages from an owner or
operator of an underinsured motor vehicle because of bodily injury,
sickness, disease, or death.”20 This subsection is not meant to be read
and understood in isolation from the rest of the UIM Statute because
this statutory definition is incomplete without information found in
other provisions.
¶14 To illustrate, an understanding of the definition of UIM
coverage requires an individual to know the meaning of “underinsured motor vehicle”—a term that has its own statutory definition.
Specifically, the UIM Statute defines “underinsured motor vehicle”
to mean “a motor vehicle, the operation, maintenance, or use of
which is covered under a liability policy at the time of an
injury-causing occurrence, but which has insufficient liability
coverage to compensate fully the injured party for all special and
general damages.”21 This definition of “underinsured motor vehicle”
provides an essential foundation for the statutory definition of UIM
coverage. Without this additional information, the statutory
definition of UIM coverage does not constitute a reasonable
explanation.
¶15 Second, there is nothing in the language or purpose of the
UIM Statute indicating that the Legislature intended the statutory
definition of UIM coverage to constitute the required reasonable
explanation. If it were important only that consumers read the
statutory definition, the Legislature could have required insurers to
include that language on waiver forms. But instead, the UIM Statute
mandates that insurers provide “a reasonable explanation of the
purpose of [UIM] coverage and when it would be applicable.”22
Further, construing the statutory definition of UIM coverage to
constitute the required reasonable explanation would be contrary to
the UIM Statute’s purpose, because the statutory definition alone
does not provide sufficient information to allow consumers to make
20
UTAH CODE § 31A-22-305.3(2)(a)(i). Similarly, in relevant part,
United’s Waiver reads: “Uninsured/Underinsured Motorists Bodily
Injury Coverage provides payment of certain benefits for damages
caused by the owner or operator of uninsured/underinsured motor
vehicles because of bodily injury, sickness, disease or death.”
21
Id. § 31A-22-305.3(1)(b)(i).
22
Id. § 31A-22-305.3(2)(g)(ii).
7
LOPEZ v. UNITED AUTO. INS. CO.
Opinion of the Court
an educated decision regarding the selection of UIM coverage. Thus,
there is no indication that the Legislature intended the statutory
definition of UIM coverage to constitute the required reasonable
explanation.
¶16 The court of appeals’ interpretation of a “reasonable
explanation” as requiring the insurer to provide information
“sufficient to permit the insured to make an intelligent, informed
decision on desired or desirable coverages”23 is appropriate given
the language and purpose of the UIM Statute. Thus, the court of
appeals did not err in its construction of the phrase “reasonable
explanation.”24
B. United’s Waiver Did Not Provide a Reasonable Explanation of UIM
Coverage Because It Did Not Define “Underinsured,” Conflated UIM
with Uninsured Motorist Coverage, and Failed to Explain the Respective
Benefits of Each Type of Coverage
¶17 Having interpreted the phrase “reasonable explanation,”
we next address whether United’s Waiver provided enough
information about the purpose of UIM coverage and when such
coverage would be applicable to allow consumers to make an
informed decision. As an initial matter, we note that “[w]e construe
insurance contracts by considering their meaning to a person of
ordinary intelligence and understanding, . . . in accordance with the
usual and natural meaning of the words, and in the light of existing
23
Lopez v. United Auto. Ins. Co., 2009 UT App 389, ¶ 17, 222 P.3d
1192 (internal quotation marks omitted).
24
In determining the meaning of the phrase “reasonable
explanation,” we do not attempt to dictate what language a waiver
form should contain to meet this requirement under the UIM
Statute. But in the interest of providing guidance to insurers and
ensuring that consumers receive sufficient information regarding
UIM coverage, we encourage the Insurance Commission to consider
drafting model language that satisfies the standard set forth in this
opinion.
8
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Opinion of the Court
circumstances, including the purpose of the policy.”25 Additionally,
“any ambiguity or uncertainty in the language of an insurance policy
must be resolved in favor of coverage.”26
¶18 With this standard in mind, we turn to the language of
United’s Waiver:
Utah Insurance Code Section 31A-22-305 requires that
every automobile policy include Uninsured/Underinsured Motorists Bodily Injury Coverage with limits
equal to the Bodily Injury limit, unless you select a
different limit than your Bodily Injury Coverage or
reject the Uninsured/Underinsured Motorists Bodily
Injury Coverage entirely. Uninsured/Underinsured
Motorists Bodily Injury Coverage provides payment of
certain benefits for damages caused by the owner or
operator of uninsured/underinsured motor vehicles
because of bodily injury, sickness, disease or death.
We conclude that United’s Waiver fails to provide the statutorily
required reasonable explanation of the purpose of UIM coverage and
when such coverage would be applicable because (1) it does not
define the term “underinsured,” (2) it fails to differentiate between
“underinsured” and “uninsured,” and (3) it does not adequately
explain the benefits of UIM coverage or when they apply.
¶19 First, United’s Waiver does not define or explain the
meaning of “underinsured.” It is not enough that a waiver use the
term “underinsured” without providing further information because
the waiver is then merely restating the term the Legislature has
required to be explained. Further, “underinsured” is not a selfexplanatory term. Under the UIM Statute, an “underinsured motor
vehicle” is a term of art defined by statute to mean a motor vehicle
that is covered under a liability policy at the time of the accident, but
25
Doctors’ Co. v. Drezga, 2009 UT 60, ¶ 12, 218 P.3d 598 (internal
quotation marks omitted).
26
Id. (internal quotation marks omitted). A provision is
ambiguous if it is “capable of more than one reasonable
interpretation because of uncertain meanings of terms, missing
terms, or other facial deficiencies.” Id. (internal quotation marks
omitted). We resolve ambiguities in favor of coverage because of
“the need to afford the insured the protection he or she endeavored
to secure.” Id. (internal quotation marks omitted).
9
LOPEZ v. UNITED AUTO. INS. CO.
Opinion of the Court
has insufficient coverage to fully compensate the injured party.27 But
colloquially, the term “underinsured” could encompass motor
vehicles that are not covered by any liability insurance at all. Indeed,
such cases present the most extreme example of underinsurance. The
UIM Statute, however, provides that vehicles with no insurance
coverage are “uninsured,” while vehicles covered under a liability
policy with insufficient coverage are “underinsured.” Because the
statutory meaning of “underinsured” is not intuitive, to be
reasonable, a waiver must explain the meaning of the term.
¶20 Second, by using the term “uninsured/underinsured”
throughout its explanation, United’s Waiver fails to differentiate
between the purpose of each type of coverage and to clarify under
what circumstances each type of coverage applies. Indeed, it is
unclear whether the term “uninsured/underinsured” refers to either
type of insurance, both types of insurance, or one single type of
insurance that covers both uninsured and underinsured motorists.
This ambiguity makes it difficult for consumers to appreciate the
purpose of UIM coverage, understand when it would be applicable,
or ascertain how the explanation in United’s Waiver applies
specifically to UIM coverage. Indeed, without an explanation that
differentiates between underinsured and uninsured coverage, a
consumer might not understand why both forms of insurance are
necessary, and could assume that protection against underinsured
motorists is included in their uninsured motorist coverage, or vice
versa. Thus, an explanation that fails to differentiate between UIM
coverage and uninsured motorist coverage does not assist
consumers in making informed decisions regarding the selection of
coverage.
¶21 Finally, United’s Waiver does not provide an adequate
description of the benefits of UIM coverage and when those benefits
apply. United’s Waiver states that “Uninsured/Underinsured
Motorists Bodily Injury Coverage provides for payment of certain
benefits for damages caused by the owner or operator of
uninsured/underinsured motor vehicles.” (emphasis added) But it
does not elaborate on what these “certain benefits” entail. Instead,
it lumps the benefits of UIM coverage and uninsured motorist
coverage together, making it difficult to understand when the
respective benefits of each coverage apply. Although the UIM
Statute does not require that benefits be laid out in a waiver as
27
UTAH CODE § 31A-22-305.3(1)(b)(i).
10
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Opinion of the Court
thoroughly as they would be in complete insurance policy
documents, a reasonable explanation should nonetheless provide
sufficient information about the benefits of coverage to allow
consumers to make an informed decision. United’s Waiver fails to
do so.
¶22 Because United’s Waiver does not define the term
“underinsured,” fails to differentiate between “underinsured” and
“uninsured,” and does not adequately explain the benefits of UIM
coverage and when they apply, it does not provide sufficient
information to enable consumers to make an informed decision
regarding the selection of UIM coverage. As discussed, we resolve
such ambiguities and uncertainties in favor of providing coverage to
the insured.28 We therefore uphold the court of appeals’ conclusion
that United’s Waiver failed to provide a reasonable explanation.
II. ALTHOUGH MS. LOPEZ IS ENTITLED TO UIM COVERAGE
OF $25,000, THE COURT OF APPEALS ERRED IN
INSTRUCTING THE DISTRICT COURT TO ENTER JUDGMENT
IN THAT AMOUNT BECAUSE THE DAMAGES SHE
ACTUALLY SUSTAINED HAVE NOT YET BEEN
ASCERTAINED
¶23 Having determined that United’s Waiver did not provide
a reasonable explanation of UIM coverage, we next consider whether
the court of appeals erred in instructing the district court to enter
judgment for Ms. Lopez in the amount of $25,000. The court of
appeals held that “[the] waiver of UIM coverage was invalid” and
Ms. Lopez was therefore “entitled to UIM benefits . . . ‘equal to the
lesser of the limits of the insured’s motor vehicle liability coverage
or the maximum UIM coverage limits available by the insurer under
the insured’s motor vehicle policy,’” which “the parties agree . . . is
$25,000.”29 The court of appeals then reversed the district court’s
order and remanded the case with instructions to enter judgment for
Ms. Lopez in the amount of $25,000.30
¶24 On appeal, United does not dispute that it is required to
provide $25,000 of UIM coverage to Ms. Lopez if we determine that
its Waiver does not contain the required reasonable explanation.
28
Doctors’ Co. v. Drezga, 2009 UT 60, ¶ 12.
29
Lopez v. United Auto. Ins. Co., 2009 UT App 389, ¶ 20, 222 P.3d
1192 (quoting UTAH CODE § 31A-22-305.3(b)).
30
Id. ¶ 21.
11
LOPEZ v. UNITED AUTO. INS. CO.
Opinion of the Court
Instead, it contends that, if the Waiver’s explanation is not deemed
reasonable, the case should be remanded to the district court to
ascertain what damages Ms. Lopez actually suffered. Although the
parties do not dispute that United is required to provide UIM
coverage if we find that the explanation in the Waiver was not
reasonable, because the UIM Statute does not specify the
consequences of failing to provide a reasonable explanation, we first
analyze whether Ms. Lopez is entitled to UIM coverage before
considering whether she is entitled to judgment.
¶25 First, we conclude that Ms. Lopez is entitled to UIM
coverage. Although no subsection of the UIM Statute explicitly states
that a consumer is entitled to UIM coverage in the absence of a
reasonable explanation, when read together, the relevant provisions
provide that, in the absence of a reasonable explanation, consumers
are entitled to a statutorily determined amount of UIM coverage.31
The UIM statute states that “the limits of [UIM] coverage shall be
equal to the lesser of the limits of the insured’s motor vehicle liability
coverage or the maximum [UIM] coverage limits available by the
insurer under the insured’s motor vehicle policy, unless the insured
purchases coverage in a lesser amount.”32 And to validly purchase
a lesser amount of UIM coverage, the consumer must “sign[] an
acknowledgment form that . . . reasonably explains the purpose of
[UIM] coverage.”33 Similarly, to validly reject UIM coverage, the
consumer must do so “by an express writing . . . . on a form
provided by the insurer that includes a reasonable explanation of the
purpose of [UIM] coverage and when it would be applicable.”34
¶26 Together, these provisions dictate that insurers must
provide a prescribed level of UIM coverage to consumers unless
consumers validly waive the statutorily prescribed amount of UIM
coverage by executing a waiver that contains a reasonable
explanation. Indeed, we have previously held that “an insurer can
provide UIM coverage in lower amounts than liability coverage so
long as the insurer has complied with the UIM Statute’s consumer
31
See UTAH CODE § 31A-22-305.3(2)(b)(iv), (g)(i)–(ii).
32
Id. § 31A-22-305.3(2)(b) (emphases added).
33
Id. § 31A-22-305.3(2)(b)(iv) (emphasis added).
34
Id. § 31A-22-305.3(2)(g)(i)–(ii) (emphasis added).
12
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Opinion of the Court
notification requirements.”35 But “[w]ithout the waiver, the UIM
Statute mandates that the UIM coverage limits . . . shall be equal to the
lesser of either the policy’s liability limits or the maximum limit the
insurer provides under that policy.”36
¶27 Thus, where a waiver does not contain a reasonable
explanation of UIM coverage, the waiver is invalid, and the
consumer is entitled to the statutorily prescribed level of UIM
coverage. In this case, the court of appeals determined that the
amount of coverage prescribed by the UIM Statute is $25,000.37 This
was the amount of Ms. Salazar’s liability coverage and neither party
contended that the maximum amount of UIM coverage available
under the type of policy Ms. Salazar held was less than $25,000.
¶28 Second, we conclude that, although Ms. Lopez is entitled
to UIM coverage of $25,000, the court of appeals erred in instructing
the district court to enter judgment for Ms. Lopez in that amount. To
receive a monetary award for damages, Ms. Lopez must present
evidence demonstrating the amount of damages she actually
suffered. “[D]amages are a question of fact,” and as such, “are
distinctly within the jury’s province.”38 The plaintiff has the
responsibility of producing sufficient evidence both “to establish the
fact of damages” and “provide[] a reasonable, even though not
necessarily precise, estimate of damages.”39
¶29 In this case, after determining that Ms. Lopez was entitled
to $25,000 of UIM coverage under the UIM Statute, the court of
appeals simply remanded the case to the district court with
instructions to enter judgment in favor of Ms. Lopez in the amount
of $25,000.40 But even though Ms. Lopez is entitled to $25,000 of UIM
coverage, before monetary damages can be awarded, she must fulfill
35
Iverson v. State Farm Mut. Ins. Co., 2011 UT 34, ¶ 23, 256 P.3d 222
(emphasis added).
36
Id. ¶ 12 (first and second emphases added) (internal quotation
marks omitted).
37
Lopez, 2009 UT App 389, ¶ 20.
38
Judd v. Drezga, 2004 UT 91, ¶ 34, 103 P.3d 135.
39
TruGreen Cos. v. Mower Bros., 2008 UT 81, ¶ 15, 199 P.3d 929
(internal quotation marks omitted).
40
Lopez, 2009 UT App 389, ¶ 21.
13
LOPEZ v. UNITED AUTO. INS. CO.
Opinion of the Court
her burden of proving the amount of damages she actually
sustained.
¶30 Ms. Lopez has not yet fulfilled this burden. As the district
court dismissed Ms. Lopez’s claims on summary judgment, it made
no factual determination regarding whether she had actually
suffered damages, and if so, the amount of damages she had
incurred. Thus, the record does not contain any evidence of the
amount of damages allegedly suffered by Ms. Lopez as the result of
the accident. Further, on appeal, Ms. Lopez does not assert that she
suffered a certain amount of damages; she only argues that she is
entitled to UIM coverage of $25,000. Thus, the district court must
determine the amount of damages that she actually sustained before
judgment can be entered.
¶31 We also note that Ms. Lopez is entitled to be compensated
by United only for damages in excess of those for which she was
compensated by the other motorist’s insurer.41 Ms. Lopez
acknowledges that she has already received the $25,000 available
under the other driver’s insurance policy; thus, whatever damages
she may have incurred have already been covered to that extent. To
prevent her from receiving a double recovery, United should be
required to pay only those damages for which Ms. Lopez has not
been otherwise compensated. Therefore, the district court should
determine to what extent Ms. Lopez’s damages exceed the amount
already paid to her by the other motorist’s insurer.
¶32 In sum, Ms. Lopez is entitled to $25,000 of UIM coverage,
but the court of appeals erred in remanding the case with
instructions to enter judgment for Ms. Lopez in that amount. The
case should be remanded to the district court to determine the
amount of damages Ms. Lopez actually sustained that have not
already been covered by the other driver’s insurance.
CONCLUSION
¶33 We hold that the court of appeals was correct in construing
the phrase “reasonable explanation” to require the insurer to
provide sufficient information for the consumer to make an
informed decision about whether to accept or reject UIM coverage.
In addition, we conclude that the court of appeals correctly applied
41
See UTAH CODE § 31A-22-305.3(2)(f)(i) (“The named insured’s
[UIM] coverage . . . is secondary to the liability coverage of an owner
or operator of an underinsured motor vehicle . . . .”).
14
Cite as: 2012 UT 10
Opinion of the Court
this standard in finding that United failed to provide a reasonable
explanation of the purpose of UIM coverage and when it would be
applicable. Finally, while Ms. Lopez is entitled to $25,000 of UIM
coverage under the UIM Statute, the court of appeals erred in
remanding the case to the district court with instructions to enter
judgment for Ms. Lopez in that amount. Instead, the district court
should determine the amount of damages that Ms. Lopez actually
sustained beyond those for which she was already compensated.
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