BALLESTEROSet al v. AMERICAN STANDARD INSURANCE COMPANY OF WISCONSIN

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SUPREME COURT OF ARIZONA En Banc LUIS BALLESTEROS and ALMA BALLESTEROS, husband and wife; GUADALUPE PORTILLO; GERARDO PORTILLO; RICARDO PORTILLO; MANUEL PORTILLO; RUBEN PORTILLO; GUADALUPE PORTILLO JR.; and PATRICIA YERENA, ) ) ) ) ) ) ) ) Plaintiffs/Appellees, ) ) v. ) ) AMERICAN STANDARD INSURANCE ) COMPANY OF WISCONSIN, a foreign ) corporation doing business in ) the state of Arizona as AMERICAN ) FAMILY INSURANCE COMPANY; ) AMERICAN FAMILY MUTUAL INSURANCE ) COMPANY, a foreign corporation ) doing business in the state of ) Arizona; SHIRLEE KOPIN; and ) SHAWN D. MORRIS, ) ) Defendants/Appellants. ) _________________________________ ) Arizona Supreme Court No. CV-10-0026-PR Court of Appeals Division Two No. 2 CA-CV 09-0123 Pima County Superior Court No. C20050987 O P I N I O N Appeal from the Superior Court in Pima County The Honorable John E. Davis, III, Judge The Honorable Stephen C. Villarreal, Judge REVERSED AND REMANDED ________________________________________________________________ Opinion of the Court of Appeals, Division Two 223 Ariz. 269, 222 P.3d 292 (2009) VACATED ________________________________________________________________ LAW OFFICE OF ELLIOT GLICKSMAN, P.L.L.C. By Elliot A. Glicksman And Tucson GABROY, ROLLMAN, & BOSSE, P.C. By John Gabroy Richard A. Brown Attorneys for Luis Ballesteros, Alma Ballesteros, Guadalupe Portillo, Gerardo Portillo, Ricardo Portillo, Manuel Portillo, Ruben Portillo, Guadalupe Portillo Jr., and Patricia Yerena LEWIS AND ROCA, L.L.P. By Steven J. Hulsman Brenden J. Griffin Lawrence A. Kasten Attorneys for American Standard Insurance Company of Wisconsin, American Family Insurance Company, American Family Mutual Insurance Company, Shirlee Kopin, and Shawn D. Morris Tucson Phoenix MODRALL, SPERLING, ROEHL, HARRIS, & SISK, P.A. By Brian K. Nichols Attorney for Amicus Curiae Progressive Casualty Insurance Company Albuquerque, NM EHMANN DECIANCIO, P.L.L.C. By Joel DeCiancio Christopher Robbins Attorneys for Amici Curiae National Association of Mutual Insurance Companies and Property Casualty Insurers Tempe THE HASSETT LAW FIRM, P.L.C. By Myles P. Hassett Lucas N. Frank Attorneys for Amicus Curiae Independent Insurance Agents and Brokers of Arizona Phoenix TERRY GODDARD, ARIZONA ATTORNEY GENERAL By Lynette J. Evans, Assistant Attorney General Attorneys for Amicus Curiae Christina Urias, Director, State of Arizona Department of Insurance Phoenix LAW OFFICES OF DAVID L. ABNEY By David L. Abney Attorneys for Amici Curiae Arizona Trial Lawyers Association and Arizona Association for Justice Phoenix - 2 - BROENING, OBERG, WOODS, & WILSON, P.C. Phoenix By James R. Broening Robert T. Sullivan Brian W. Purcell Attorneys for Amicus Curiae Farmers Insurance Company of Arizona ________________________________________________________________ B E R C H, Chief Justice ¶1 Arizona Revised Statutes (A.R.S.) section 20-259.01 (Supp. 2009)1 requires insurers to offer uninsured motorist (UM) and underinsured motorist (UIM) coverage to their insureds by giving them a written notice. The issue in this case is whether the insurer may satisfy this statutory requirement by providing an Insurance Department-approved English-language form to a Spanish-speaking insured. I. ¶2 Luis FACTUAL AND PROCEDURAL BACKGROUND2 Ballesteros purchased an automobile insurance policy from American Standard Insurance Company of Wisconsin. Because Ballesteros s primary language is Spanish, a Spanishspeaking member Ballesteros of complete the the insurance application. agent s The staff agent helped then gave Ballesteros an English-language form, approved by the Arizona 1 Ballesteros purchased his policy in 2001. Because the version of § 20-259.01 at that time did not materially differ from the current statute, we cite the current version. 2 We view the facts in the light most favorable to American Standard, the party against whom partial summary judgment was entered. Tarron v. Bowen Mach. & Fabricating, Inc., 225 Ariz. 147, 151 ¶ 16, 235 P.3d 1030, 1034 (2010). - 3 - Department of Insurance (DOI), on which to select or reject UM/UIM coverage. Ballesteros signed the form, indicating on it that he declined such coverage. ¶3 Several months later, Ballesteros s mother-in-law, an insured under the policy, died in a collision with an uninsured driver. Ballesteros made a claim for UM coverage, which was denied. He sued for breach of contract, claiming that because American Standard failed to comply with A.R.S. § 20-259.01, UM coverage should be included in his policy by operation of law.3 See Ins. Co. of N. Am. v. Superior Court (Villagrana), 166 Ariz. 82, 85-86, appropriate 800 P.2d remedy 585, for 588-89 failure (1990) to (holding make the that the statutorily required offer of UM coverage is to make such coverage part of the contract by operation of law ). ¶4 The trial court granted partial summary judgment to Ballesteros, concluding that American Standard violated § 20259.01 by not offering him UM/UIM coverage on a Spanish-language form. The court reasoned that the English DOI-approved UM/UIM selection form [Ballesteros s] that, to was not attention satisfy § reasonably that 20-259.01, which the 3 calculated to was offered being written offer bring of to and UM/UIM Ballesteros also alleged several non-contractual claims such as bad faith, consumer fraud, breach of fiduciary duty, negligence, and negligent misrepresentation, which have not been resolved and are not at issue in this appeal. - 4 - coverage to a Spanish-speaking insured must be in Spanish. ¶5 The court of appeals reversed judgment in favor of Ballesteros, the but partial summary that American held Standard was not entitled to judgment on its cross-motion for summary judgment on the contract claim. Ballesteros v. Am. Standard Ins. Co., 223 Ariz. 269, 271-72 ¶ 2, 222 P.3d 292, 29495 (App. 2009). The court concluded that the use of a DOI- approved UM/UIM selection form did not allow American Standard to sail into a safe harbor that automatically satisfied § 20259.01. Id. at 277-78 ¶ 26, 222 P.3d at 300-01. It determined that although American Standard was not statutorily required to provide Ballesteros a Spanish-language form, factual questions remained as to whether American Standard made Ballesteros sufficiently aware of the offer of UM/UIM coverage through other communications. ¶6 determine We Id. at 278-79 ¶¶ 28-31, 222 P.3d at 301-02. granted whether an review of insurer must Ballesteros s provide a petition Spanish-language form to a Spanish speaker to comply with § 20-259.01. granted determine review of whether, American by using Standard s a DOI-approved to We also cross-petition UM/UIM form, American Standard complied with the statute. to selection See A.R.S. § 12-120.24 (2003); see also Ariz. Const. art. 6, § 5, cl. 3 (conferring jurisdiction). - 5 - II. ¶7 DISCUSSION Section 20-259.01(A) requires insurance companies to offer UM coverage. It provides, in relevant part, as follows: Every insurer writing automobile liability or motor vehicle liability policies shall make available to the named insured thereunder and by written notice offer the insured and at the request of the insured shall include within the policy uninsured motorist coverage which extends to and covers all persons insured under the policy, in limits not less than the liability limits for bodily injury or death contained within the policy. The selection of limits or rejection of coverage by a named insured or applicant on a form approved by the director is valid for all insureds under the policy. Section (B) imposes the A.R.S. § 20-259.01(B). same requirements for UIM coverage. We interpret statutes de novo, Steven H. v. Ariz. Dep t of Econ. Sec., 218 Ariz. 566, 570 ¶ 14, 190 P.3d 180, 184 (2008), attempting to give effect to the intent of the legislature, In re Estate of Winn, 214 Ariz. 149, 151 ¶ 8, 150 P.3d 236, 238 (2007). de novo. We also review summary judgment rulings Espinoza v. Schulenberg, 212 Ariz. 215, 216-17 ¶ 6, 129 P.3d 937, 938-39 (2006). ¶8 In automobile coverage. 1965, the insurance legislature policies first include required minimum that levels all of UM 1965 Ariz. Sess. Laws, ch. 34, § 1 (1st Reg. Sess.). Several years later, the legislature added the requirement that insurers make available higher amounts of UM coverage. Ariz. Sess. Laws, ch. 157, § 1 (2d Reg. Sess.). - 6 - 1972 In 1981, the legislature amended the statute to require insurers to include minimum levels of UIM coverage and to both make available and by written notice offer UM/UIM coverage in amounts equal to the liability policy. limits for bodily injury or death under the 1981 Ariz. Sess. Laws, ch. 224, § 1 (1st Reg. Sess.). Just one year later, the legislature removed the requirement of mandatory minimum UIM coverage, 1982 Ariz. Sess. Laws, ch. 298, § 1 (2d Reg. Sess.), and it eliminated mandatory minimum UM coverage in 1993, 1993 Ariz. Sess. Laws, ch. 1, § 3 (5th Spec. Sess.). coverage, Although the legislature eliminated mandatory UM/UIM it nonetheless maintained the requirement that insurers make available and by written notice offer both types of coverage. ¶9 In 1992, the legislature also amended the statute to provide that [t]he selection of limits or rejection of [UM/UIM] coverage by a named insured or applicant on a form approved by the director [of the Department of Insurance] shall be valid for all insureds under the policy. 1992 Ariz. Sess. Laws, ch. 147, § 1 (1st Reg. Sess.); 1994 Ariz. Sess. Laws, ch. 304, § 1 (2d Reg. Sess.). A. ¶10 Interpreting make available and by written notice offer This case requires us to determine what A.R.S. § 20- 259.01 means by requiring insurers to make available UM/UIM - 7 - coverage and to offer such coverage by written notice. ¶11 In McCloe v. Utah Home Fire Insurance Co., 121 Ariz. 402, 404, 590 P.2d 941, 943 (App. 1978), the court of appeals held that the 1972 version of the statute, which required insurers to make [UM coverage] available to their insureds, did not impose an affirmative obligation upon insurers to give their insureds actual personal knowledge of such an option. Thus, the only requirement imposed by the make available language was that insurers be willing to provide such coverage. In 1981, the legislature amended the statute to require that insurers by written notice offer UM coverage, for the first time imposing a requirement that insurers bring the availability of such coverage to the insured s attention. 1981 Ariz. Sess. Laws, ch. 224, § 1 (1st Reg. Sess.). ¶12 The court of appeals interpreted the amended statute in Giley v. Liberty Mutual Fire Insurance Co., 168 Ariz. 306, 812 P.2d 1124 (App. 1991). There, an insurer s agent handed a UIM offer form to the insured stating that the insured must sign it to obtain coverage. Id. The unknowingly rejecting UIM coverage. customer Id. signed the form, Although the make available provision was not directly at issue in light of the agent s misleading conduct, and without citing any supporting authority or the seemingly conflicting holding in McCloe, the court held that the phrase make available obligates an insurer - 8 - to offer such coverage in a way reasonably calculated to bring to the insured s attention that which is being offered and found that a question of fact existed on that issue. Id. at 306-07, 812 P.2d at 1124-25. ¶13 Ballesteros cites Giley for the proposition that an English form is not reasonably calculated to bring to a Spanish speaker s After attention Giley, that however, UM/UIM this coverage Court is addressed being the offered. obligations imposed by § 20-259.01 in Tallent v. National General Insurance Co., 185 Ariz. 266, 915 P.2d 665 (1996). We held there that the requirement to offer UM/UIM coverage under § 20-259.01 was guided by general principles of contract law. 915 P.2d Restatement at of 666-67. We Contracts cited with definition of Id. at 267-68, approval an the offer Second as the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. Id. at 268, 915 P.2d at 667 (quoting Restatement (Second) of Contracts § 24). Thus, whether an offer has been made does not depend on the offeree s understanding of the terms of the offer, but instead on whether a reasonable person would understand that an offer has been made and that, upon acceptance, the offeror would be bound. (Ct. Lopez v. Charles Schwab Co., 13 Cal. Rptr. 3d 544, 548 App. 2004) ( [T]he pertinent - 9 - inquiry is whether the individual to whom the communication was made had reason to believe that it was intended as an offer. (quoting Donovan v. RRL Corp., 27 P.3d 702, 709 (Cal. 2001))); Anderson v. Douglas & Lomason Co., 540 N.W.2d 277, 286 (Iowa 1995) ( The test for an offer is whether it induces a reasonable belief in the recipient that he can, by accepting, bind the sender. (quoting Architectural Metal Sys., Inc. v. Consol. Sys., Inc., 58 F.3d 1227, 1229 (7th Cir. 1995))). As a result, we held that § 20- 259.01 does not require the offer to contain an explanation of UM/UIM coverage. ¶14 Tallent, 185 Ariz. at 267, 915 P.2d at 666. The parties do not dispute that Ballesteros was offered UM/UIM coverage on a form approved by the DOI. claims only that he did not understand the form. principles, however, the test is objective: was made turns understand that only a on whether proposal a of Under contract Whether an offer reasonable terms Ballesteros was person made, would not on Ballesteros s subjective understanding of the offer form. The offeree need not understand the content of an offer in order to bind the offeror. § 20-259.01 does Therefore, the written notice provision of not require translation of the offer into Spanish so that a Spanish speaker understands the offer s terms; it requires accepted, only would that bind the the insurer make insurer to coverage. - 10 - an offer provide the that, if offered ¶15 This conclusion comports with the language of § 20- 259.01, which does not require a Spanish form. supported by the fact that the It is further legislature has required a Spanish translation in other statutes. explicitly See A.R.S. §§ 6-631(B), 6-1257, 6-1411, 12-1596, 12-2406(C), 23-906(D), 25504(C), 31-229(B), 36-504(A), 44-1362(B), 49-542.03 (imposing a Spanish requirement). That the legislature included this requirement in some statutes, but not in § 20-259.01, indicates that the omission of any such requirement in § 20-259.01 was intentional. See Estate of McGill ex rel. McGill v. Albrecht, 203 Ariz. 525, 530-31, 57 P.3d 384, 389-90 (2002) (refusing to read gross negligence legislature surely knows negligence, having used into how that a to statute require term in because a showing a great of [t]he gross number of statutes ). ¶16 Our conclusion is strengthened by the fact that § 20- 259.01 once briefly required forms in both Spanish and English. 1997 Ariz. Sess. Laws, ch. 125, § 1 (1st Reg. Sess.). That requirement was removed just a year after it was enacted. 1998 Ariz. Sess. Laws, ch. 288, § 2 (2d Reg. Sess.). confirms that the legislature Spanish-translation requirement did in not the intend current This history to impose statute. a See State v. Garza Rodriguez, 164 Ariz. 107, 111, 791 P.2d 633, 637 - 11 - (1990) (noting presumption that by amending a statute, the legislature intends to change the existing law ). ¶17 In sum, § 20-259.01 does not require that the UM/UIM offer form be provided in Spanish. If the legislature desires to add such a requirement, it may do so, see Tallent, 185 Ariz. at 268, 915 P.2d at 667, but it is not our place to rewrite the statute. ¶18 Ballesteros nonetheless argues that for an insurer to truly make available UM/UIM coverage to a Spanish-speaking insured, it must provide a form in Spanish that is reasonably calculated to bring [the offer] to the insured s attention. Giley, 168 Ariz. at 306, 812 P.2d at 1124. Although we express no opinion whether tort law may impose such a requirement in certain circumstances, we conclude, as did the court of appeals, that § 20-259.01 imposes no such obligation. B. ¶19 in Use of a DOI-approved form American Standard argues that, in amending § 20-259.01 1992 to legislature permit the intended to use of provide a a DOI-approved method the insurers for form, to demonstrate compliance with the statutory requirement to make a written offer of UM/UIM coverage. It asserts that it complied with § 20-259.01 by providing Ballesteros with a DOI-approved selection form. ¶20 As noted, the legislature, - 12 - through a series of amendments, modified § 20-259.01 to provide that [t]he selection of limits or rejection of [UM/UIM] coverage by a named insured or applicant on a form approved by the [DOI] director shall be valid for all insureds under the policy. 1992 Ariz. Sess. Laws, ch. 147, § 1 (2d Reg. Sess.); 1994 Ariz. Sess. Laws ch. 304, § 1 (2d Reg. Sess.). The legislature adopted these amendments to remedy the fact-intensive inquiry Giley engendered regarding whether the insurer had offered UM/UIM coverage. See Arizona State Senate, Minutes of Committee on Commerce and Labor 9, 40th Leg., 2d Reg. Sess. (Apr. 22, 1992) [hereinafter Senate Committee Minutes ] (noting that insurers are required to make available UM/UIM coverage, but that [t]he law does not specify exactly how this should be made available ); Arizona State Senate, Fact Sheet for H.B. 2062, 40th Leg., 2d Reg. Sess. (May 14, 1992) [hereinafter Fact Sheet ] (to similar effect); see also Hayes v. Cont l Ins. Co., 178 Ariz. 264, 269-70, 872 P.2d 668, 673-74 statements in (1994) (permitting circumstances reliance providing on non-legislators sufficient that the statements reflect legislators views ). guarantees The remedy chosen was to create a method by which insurers may demonstrate compliance with § 20-259.01. Senate Committee Minutes 13-14 (observing that under the amendment the signing of [the] paper [is] ipso facto the end of the inquiry as to whether [UM/UIM coverage] was meaningfully offered ); Fact Sheet (noting that - 13 - the amendment provides an acceptable procedure for the offering of [UM/UIM] insurance ). ¶21 After passage of the 1992 amendment, if an insurer provides and the insured signs a DOI-approved UM/UIM selection form, the insurer has satisfied the statutory requirement to make available and by written notice offer UM/UIM coverage. Senate Committee Minutes 9 ( [T]he insurance agent can use a form approved by the Director of the Department of Insurance to satisfy [§ 20-259.01]. ); Fact Sheet (noting that § 20-259.01 is satisfied Department if of the insured Insurance signs stating a form the approved amount of by the coverage desired ). ¶22 While the 1992 amendment was designed to diminish fact questions, Ballesteros s reading of the statute would replace one fact-intensive factual inquiry determination sufficiently offered. for concerned another. whether Ballesteros s Under UM/UIM approach Giley, the coverage was would require consideration of whether the language proficiency of the insured is such that a Spanish form is required and whether the terms of the offer were understood. not necessarily equipped Agents in the field, however, are to determine proficiency or degree of understanding. a client s language Such a requirement may lead in future cases to questions about an offeree s general understanding of the contract terms regardless of the language - 14 - in which they are provided in a form. Although § 20-259.01 is remedial in nature, Calvert v. Farmers Ins. Co. of Ariz., 144 Ariz. 291, 294, 697 P.2d 684, 687 (1985), we nonetheless conclude, as we did in Tallent, that imposing a comprehension requirement is both unwarranted by the statute and unwise, 185 Ariz. at 268, 915 P.2d at 667. We further recognize that the legislature passed the 1992 amendments to protect insurers from after-the-fact inquiries regarding the offer of coverage. To read a language requirement into the statute under the guise of effectuating the remedial purpose would thwart this legislative goal. ¶23 Finally, Ballesteros s approach offers no principled distinction between Spanish speakers proficiency in English may be limited. and others whose Ballesteros proposes that DOI approval of a Spanish form demonstrates that use of that form for Spanish-speaking customers is mandatory, while the DOI s failure to create forms in other languages means that translation into those languages is not required. such import in the DOI sample Spanish form. provides the Spanish form as a matter The DOI Director of insurers, rather than as a mandate for use. Director of the Arizona Department Curiae, at 6. - 15 - of We find no convenience for Brief of the Insurance as Amicus ¶24 In sum, because American Standard provided Ballesteros a DOI-approved form, it satisfied § 20-259.01. C. ¶25 Attorney Fees American Standard requested attorneys fees pursuant to A.R.S. § 12-341.01(A). In the exercise of our discretion, we deny that request. III. ¶26 CONCLUSION For the reasons set forth, we vacate the opinion of the court of appeals and remand this case to the superior court with instructions to enter partial summary judgment in favor of American Standard on Ballesteros s contract claim. __________________________________ Rebecca White Berch, Chief Justice CONCURRING: _____________________________________ Andrew D. Hurwitz, Vice Chief Justice _____________________________________ W. Scott Bales, Justice _____________________________________ A. John Pelander, Justice _____________________________________ Peter B. Swann, Judge* *Pursuant to Article 6, Section 3 of the Arizona Constitution, the Honorable Peter B. Swann, Judge of the Arizona Court of Appeals, Division One, was designated to sit on this matter. - 16 -

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