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Beatty v. Esurance Property and Casualty Insurance Co.

United States District Court, N.D. West Virginia

July 17, 2018




         The question presented by the parties' pending motions for summary judgment is whether the defendants are obligated to provide underinsured motorist coverage to the plaintiffs with regard to damages incurred during a May 2015 vehicle accident. Concluding that they are not, the Court GRANTS the defendants' motion for summary judgment (Dkt. No. 47), and DENIES the plaintiffs' motion for partial summary judgment (Dkt. No. 49).


         Many of the facts in this case are not in dispute. In late 2014, the plaintiffs, Virgil and Melissa Beatty (collectively, “the Beattys”), began searching for a new automobile insurance carrier to replace their existing policy with National General that was set to expire on December 25, 2014 (Dkt. No. 48-1 at 45-46). After obtaining quotes from several companies, on December 24, 2014, Mrs. Beatty began an online application with the defendants, Esurance Property and Casualty Insurance Company and Esurance Insurance Services, Inc. (collectively, “Esurance”). Id. at 27, 48. During the online application, Mrs. Beatty provided the Beattys' driver's license numbers, driving histories, and vehicle information. She also created an online account using her e-mail address, which she intended to use again to renew the policy. Id. at 47-50. At some point during the application process, Mrs. Beatty placed Mr. Beatty's electronic signature on a Credit Card Authorization, which authorized a charge for $522.86 and acknowledged that “Esurance will notify me via email of the dates and amount of any future and renewal payments” (Dkt. Nos. 48-1 at 54-57; 48-4).

         That same day, Mr. Beatty called an Esurance representative to discuss the quote that the Beattys had received online (Dkt. No. 48-3). After speaking with Mrs. Beatty about the additional information he received from the representative, Mr. Beatty called again to complete the application and pay for the policy by telephone (Dkt. No. 48-2 at 65). The coverage that Mr. Beatty purchased included “uninsured and underinsured motorist bodily injury limits of 100, 000 per person, 300, 000 per accident; uninsured motorist property damages limits of 50, 000 per accident with a 300 deductible; [and] underinsured motorist property damages limits of 50, 000 per accident.” Id. at 75-78.

         The Esurance representative provided Mr. Beatty with a temporary password and instructed him “to go onto [the Esurance] website, just so [he could] accept the terms and the conditions of [the] policy and also any West Virginia state required forms.” Id. at 81-82. The representative also specifically advised Mr. Beatty that he would be receiving “an e-mail from [Esurance] about [his] uninsured/underinsured motorist form that [he would] need to . . . print and sign and return to [Esurance] within 30 days.” Id. at 83-84. At the conclusion of the call, the Esurance representative confirmed that the Beattys' insurance policy would go into effect at 12:01 A.M. on December 25, 2014, and reminded Mr. Beatty to fill out the requisite forms within 30 days. Id. at 85.

         Thereafter, the Beattys received an email from Esurance that thanked them “for becoming an Esurance policyholder” and provided their “policy documents” (Dkt. No. 48-5).[1] On December 26, 2014, Esurance sent the Beattys another email that provided as follows:

West Virginia requires us to send you the attached documents regarding your underinsured and uninsured motorist coverages. Please read the forms carefully and select limits for both coverages. Then, sign and date the forms and return them to us by email, mail, or fax within the next 30 days.

(Dkt. No. 48-6 at 2; 48-7 at 9). The attached documents explained uninsured motorist (“UM”) and underinsured motorist (“UIM”) coverage, and offered the Beattys an opportunity to select optional limits for each type of coverage (“selection/rejection forms”) (Dkt. No. 48-6 at 4-5). The documents were not sent by U.S. Mail (Dkt. No. 48-7 at 9).

         The Beattys also received several emails from Esurance during the following months, advising them to log on and accept the terms of their policy in order “[t]o maintain electronic delivery of policy docs” (Dkt. Nos. 48-9; 48-10; 48-11; 48-12). Although the Beattys received these e-mails at the address they provided, they did not open or review many of the communications until after the May 2015 accident (Dkt. Nos. 48-1 at 59-60; 48-15 at 2). In fact, Mrs. Beatty testified that she “[p]retty much” disregarded e-mails from Esurance (Dkt. No. 48-1 at 63).

         “[I]f a customer does not log onto their policy and accept terms and conditions” within 30 days, Esurance updates the delivery method from electronic to paper (Dkt. No. 48-7 at 11, 14). When the Beattys did not accept the terms and conditions, on January 24, 2015, Esurance changed the Beattys' “policy document delivery method” to U.S. mail (Dkt. No. 48-19). Esurance also removed a paperless discount that had been applied to the Beattys' policy and sent an e-mail advising that it would charge their credit card an additional $7.52 on February 3, 2015 (Dkt. Nos. 48-19 at 2; 48-17). Mrs. Beatty reviewed this e-mail, but did not inquire about the charge (Dkt. No. 48-1 at 60).[2]

         The Beattys did not return the selection/rejection forms within 30 days. Id. at 72, 125. As a result, on January 26, 2015, Esurance mailed the Beattys' an amended policy declarations page, effective January 28, 2015, which reflected that Esurance had removed UIM coverage and drastically reduced UM coverage (Dkt. Nos. 48-14 at 9-10; 48-16). The Beattys did not review the amended declarations page (Dkt. No. 48-1 at 97). In fact, Mrs. Beatty testified that she does not read renewal declarations pages because she assumes that her coverage will remain the same. Id. at 95. At this time, Esurance also issued a refund for the UIM premium (Dkt. No. 48-14 at 9). Mrs. Beatty received an e-mail regarding the refund, but she did not inquire why Esurance issued it (Dkt. No. 48-1 at 114-15).

         From that point forward, Esurance was of the opinion that it did not provide UIM coverage to the Beattys. On May 18, 2015, Mr. Beatty was involved in a head-on collision with one Sharlotta Wilson (“Wilson”) while traveling on U.S. Route 50. Wilson was cited for failing to maintain control of her vehicle and driving the wrong way on a one-way road (Dkt. No. 1 at 3). Mrs. Beatty made a claim with Esurance on May 19, 2015 (Dkt. No. 48-1 at 278). Esurance denied the Beattys' claim for UIM coverage because it had been canceled when they failed to return the selection/rejection forms in January 2015. Id. at 278-302.

         In May 2016, the Beattys filed this action against Esurance, alleging three claims: 1) declaratory relief, 2) breach of contract, and 3) bad faith (Dkt. No. 1 at 3-8). Following a scheduling conference, the Court directed the parties to submit cross briefs on the threshold question of whether the policy provided coverage (Dkt. No. 14). After receiving several extensions of time in which to do so (Dkt. Nos. 30; 34; 54), the parties filed and briefed their competing motions for summary judgment, which are now ripe for review (Dkt. Nos. 47; 49).


         Summary judgment is appropriate where the “depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials” establish that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (c)(1)(A). When ruling on a motion for summary judgment, the Court reviews all the evidence “in the light most favorable” to the nonmoving party. Providence Square Assocs., L.L.C. v. G.D.F., Inc., 211 F.3d 846, 850 (4th Cir. 2000). The Court must avoid weighing the evidence or determining its truth and limit its inquiry solely to a determination of whether genuine issues of triable fact exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986).

         The moving party bears the initial burden of informing the Court of the basis for the motion and of establishing the nonexistence of genuine issues of fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has made the necessary showing, the non-moving party “must set forth specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 256 (internal quotation marks and citation omitted). The “mere existence of a scintilla of evidence” favoring the non-moving party will not prevent the entry of summary judgment; the evidence must be such that a rational trier of fact could reasonably find for the nonmoving party. Id. at 248-52.


         “A federal court exercising diversity jurisdiction is obliged to apply the substantive law of the state in which it sits.” Volvo Const. Equip. N. Am. v. CLM Equip. Co., Inc., 386 F.3d 581, 599-600 (4th Cir. 2004) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 79 (1938)). Typically, in West Virginia, “[d]etermination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law.” Syl. Pt. 1, Tennant v. Smallwood, 568 S.E.2d 10 ( W.Va. 2002). Although the policy in place at the time of the accident did not ...

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