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Progressive Direct Insurance Co. v. Reeves

Supreme Court of South Carolina

July 24, 2019

Progressive Direct Insurance Company, Plaintiff,
v.
Bryan Reeves, Defendant. Appellate Case No. 2018-001436

          Heard May 8, 2019

          ON CERTIFICATION FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA Cameron McGowan Currie, United States District Court Judge.

          J.R. Murphy and Megan Walker, both of Murphy & Grantland, P.A., of Columbia, for Plaintiff.

          William R. Padget and Carl D. Hiller, both of Finkel Law Firm, LLC, of Columbia, for Defendant.

          KITTREDGE JUSTICE.

         We are presented with a certified question from the United States District Court for the District of South Carolina, asking this Court to construe section 38-77-350(C) of the South Carolina Code (2015) and determine whether, under the facts presented, an insurance company is required to make a new offer of underinsured motorist (UIM) coverage when an additional named insured is added to an existing policy. The statute provides that an insurer is not required to make a new UIM coverage offer "on any automobile insurance policy which renews, extends, changes, supersedes, or replaces an existing policy." S.C. Code Ann. § 38-77-350(C). In 2012, Wayne Reeves acquired an insurance policy from Progressive Direct Insurance Company (Progressive) covering his motorcycle. When the policy was issued, Wayne declined optional UIM coverage. In 2015, Wayne's wife (Jennifer) and son (Bryan) were added to the policy as "drivers and household residents," because they also drove motorcycles. In 2017, Bryan sold his motorcycle and purchased another motorcycle, a 2016 Harley Davidson, which was added to the policy. At the time, Wayne had Bryan added as named insured to the policy. Progressive did not offer Bryan any optional coverages.

         Later in 2017, Bryan was involved in an accident while driving his 2016 Harley Davidson. Bryan ultimately made a claim against Progressive to reform the policy to include UIM coverage based on Progressive's failure to offer him the optional coverage. Progressive contended that adding Bryan as a named insured was a change to an existing policy, and as a result, Progressive was not required to offer Bryan UIM coverage. Based on the undisputed facts, the parties filed cross motions for summary judgment, and the federal district court certified the following questions to us:

Whether the addition of a named insured (Added Named Insured) to an existing insurance policy under which the Added Named Insured was previously a resident[-]relative insured is a "change" under [section 38-77-350(C) of the South Carolina Code] and, consequently, does not require an additional offer of optional coverages if an offer that satisfies [section 38-77-350(A) and (B) of the South Carolina Code] was previously made to the named insured who originally applied for the policy (Original Named Insured)?
If the insurer was required but failed to make a separate offer of optional coverage to the Added Named Insured, whether reformation should be limited to vehicle(s) in which the Added Named Insured has an insurable interest?

         For reasons we will explain below, we answer the first certified question: Yes, the addition of Bryan Reeves as a named insured was a change to the existing policy pursuant to section 38-77-350(C), and Progressive was not required to make an additional offer of UIM coverage to Bryan. Having answered the first certified question "yes," we do not reach the second question.

         I.

         In its certification order, the federal district court summarized the relevant facts as follows:

The policy for which Bryan seeks reformation was initially issued to his father, Wayne . . ., in June 2012. The policy was renewed five times, remaining in effect through and including July 30, 2017, on which date Bryan was injured in the motorcycle accident for which he now seeks UIM coverage.
The policy was issued based on completion and execution of an online policy application. The application and related UIM and uninsured motorist ("UM") coverage offer form ("Offer Form") were completed by Wayne or his wife, Jennifer . . ., acting as Wayne's express and implied agent. The Offer Form satisfied the requirements for an offer of optional UM and UIM coverages under ...

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