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Moultrie v. Progressive Direct Insurance Co.

United States District Court, D. South Carolina, Charleston Division

October 18, 2017




         This matter is before the court on cross-motions for summary judgment filed by defendant Progressive Direct Insurance Company (“Progressive”) and plaintiff Shawn Moultrie (“Moultrie”). For the reasons set forth below, the court denies both motions.

         I. BACKGROUND

         This declaratory judgment action is before the court to clarify the rights under the underinsured motorist coverage (“UIM”) provision of an automobile insurance policy (“the Policy”) that Progressive issued to Moultrie for his 2012 Harley Davidson motorcycle. Moultrie purchased the Policy online through the Progressive website at Capital City Bikes in Columbia, South Carolina on November 21, 2015. This online purchase occurred because Moultrie had to show proof of insurance before he could lease or buy the 2012 Harley Davidson motorcycle. During the online purchase of the Policy, Capital City Bikes employee Gayle Case (“Case”) assisted Moultrie in purchasing the Policy.

         On November 27, 2015, Moultrie, who was riding the 2012 Harley Davidson motorcycle at the time, was seriously injured in a motor vehicle collision in Moncks Corner, South Carolina by an unknown driver. The Policy provided liability coverage of up to $100, 000 per person and $300, 000 per accident, but did not provide UIM coverage. Moultrie alleges that Progressive did not make a meaningful offer of UIM coverage as required under S.C. Code Ann. § 38-77-350 and other court decisions on this issue. He now asks the court to reform the Policy to include $100, 000 in UIM coverage for the 2012 Harley Davidson motorcycle.

         Progressive filed its motion for summary judgment on April 12, 2017, to which Moultrie responded on April 25, 2017. Progressive replied on May 2, 2017. Moultrie filed its motion for summary judgment on April 13, 2017, to which Progressive responded on April 27, 2017. Moultrie filed a reply on May 3, 2017, and Progressive filed a sur-reply on May 15, 2017. These motions have been fully briefed and are now ripe for the court's review.

         II. STANDARD

         Summary judgment is appropriate “if the movant shows 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). “Rule 56(c) of the Federal Rules of Civil Procedure requires that the district court enter judgment against a party who, ‘after adequate time for discovery . . . fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'” Stone v. Liberty Mut. Ins. Co., 105 F.3d 188, 190 (4th Cir. 1997) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). Any reasonable inferences are to be drawn in favor of the nonmoving party. See Webster v. U.S. Dep't of Agric., 685 F.3d 411, 421 (4th Cir. 2012). However, to defeat summary judgment, the nonmoving party must identify an error of law or a genuine issue of disputed material fact. See Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); see also Bouchat v. Balt. Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003).

         Although the court must draw all justifiable inferences in favor of the nonmoving party, the nonmoving party must rely on more than conclusory allegations, mere speculation, the building of one inference upon another, or the mere existence of a scintilla of evidence. See Anderson, 477 U.S. at 252; Stone, 105 F.3d at 191. Rather, “a party opposing a properly supported motion for summary judgment . . . must ‘set forth specific facts showing that there is a genuine issue for trial.'” Bouchat, 346 F.3d at 522 (quoting Fed.R.Civ.P. 56(e) (2002) (amended 2010)). If the adverse party fails to provide evidence establishing that the factfinder could reasonably decide in his favor, then summary judgment shall be entered “regardless of ‘[a]ny proof or evidentiary requirements imposed by the substantive law.'” Id. (quoting Anderson, 477 U.S. at 248).


         Both summary judgment motions turn on the same issue-whether Progressive made a meaningful offer of the optional UIM coverage to Moultrie such that the court is precluded from reforming the Policy. In South Carolina, there are two ways for an insurer to make a meaningful offer: (1) the § 38-77-350(B) statutory presumption and (2) the Wannamaker test. Liberty Mut. Fire Ins. Co. v. McKnight, 125 F.Supp.3d 602, 611 (D.S.C. 2015). As the court explains below, there is a genuine issue of material fact whether the UIM provision was signed. Therefore, there is no statutory presumption of a meaningful offer under § 38-77-350(B) as interpreted by the Supreme Court of South Carolina in Traynum v. Scavens, 786 S.E.2d 115 (S.C. 2016). An insurer can still prove that it made a meaningful offer under the test outlined in State Farm Mutual Automobile Insurance Co. v. Wannamaker, 354 S.E.2d 555 (S.C. 1987), but the parties have not briefed this issue sufficiently for the court to determine whether there has been a meaningful offer under this test. Accordingly, the court denies both summary judgment motions.

         A. Statutory Presumption of Meaningful Offer under S.C. Code § 38-77-350(B) and Traynum v. Scavens

         The issue before the court is narrow-whether there is a genuine issue of material fact if Moultrie electronically signed the UIM form for the Policy. As the court explains below, it finds that there is.

         As an initial matter, the parties dispute the admissibility of the computer code and the screenshots from Progressive's internal document retention system. Moultrie contends that in its Requests for Production, it specifically asked for “data, ” “electronic files, ” “recordings, ” “screenshots” and “electronic files” relating to the Policy and meaningful offer of UIM coverage. ECF No. 22 at 3. According to Moultrie, Progressive objected to these requests for production as “not relevant and not reasonably calculated to lead to the discovery of admissible evidence.” Now that Progressive is relying on these same, previously “not relevant” screenshots and metadata, and indeed has attached these documents as exhibits to its motion for summary judgment as well as its response to Moultrie's Motion for Summary Judgment, Moultrie contends that the court should not consider these documents as part of the record for summary judgment purposes. The primary purpose of the discovery rules in the Federal Rules of Civil Procedure is to avoid just this type of litigation by surprise. See Tyson v. Trigg, 50 F.3d 436, 445 (7th Cir. 1995) (noting that the “central aim” of “rules regulating discovery” is to “minimize surprise at trial”). Rule 37 sets out that the default sanction for a violation of Rule 26's disclosure requirements is barring the use of the undisclosed evidence going forward. See Fed.R.Civ.P. 37(c)(1). There is an exception where the failure to disclose was “substantially justified or is harmless.” Id. The court agrees that Moultrie suffered surprise and prejudice by Progressive's use of this evidence that was not turned over during the discovery process yet used at the summary ...

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