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American National Property & Casualty v. Checketts

United States Court of Appeals, Tenth Circuit

June 26, 2013

AMERICAN NATIONAL PROPERTY & CASUALTY, Plaintiff-Appellant,
v.
CHRIS CHECKETTS; SANDRA CHECKETTS, Defendants-Appellees.

(D.C. No. 11-CV-00250-BSJ) (D. Utah)

Before KELLY, GORSUCH, and BACHARACH, Circuit Judges.

ORDER AND JUDGMENT [*]

Plaintiff-Appellant American National Property and Casualty Company (ANPAC) appeals the district court's partial grant of summary judgment in favor of Defendants-Appellees Chris and Sandra Checketts (the Checketts). Am. Nat'l Prop. & Cas. Co. v. Checketts, Civil No. 2:11-CV-250 BSJ, 2012 WL 1835866 (D. Utah May 21, 2012). The district court determined that the addition of the Checketts' teenage daughter to an insurance policy issued by ANPAC created a "new policy" under Utah's Underinsured Motorist (UIM) statute. The issue on appeal is whether the district court failed to properly consider Utah's revised UIM statute, Utah Code Ann. § 31A-22-305.3 (2012), which became effective while the parties' cross-motions for summary judgment were pending. Exercising jurisdiction under 28 U.S.C. § 1291, we reverse and remand with instructions for the district court to reconsider its decision in light of Utah's revised statute.

Background

The relevant facts are not in dispute. In 1996, the Checketts purchased car insurance from ANPAC. Aplt. App. 43. As part of their policy, they rejected all UIM coverage, checking the box "I do NOT desire to purchase [UIM coverage]." Id. at 44. Each policy renewal notice they subsequently received indicated that "[t]his policy does not provide underinsured motorist coverage." Id. at 47–72. In 2006, the Checketts added their teenage daughter, Alisha, to the policy as a vehicle operator. Id. at 73.

On June 18, 2007, Sandra Checketts and her son, Jacob, were involved in a car accident with another driver. Id. at 74. The Checketts exhausted the driver's insurance policy limits and sought $200, 000 in UIM benefits from ANPAC, despite having rejected UIM coverage. Id. at 151–52. The Checketts argued that they were entitled to coverage because ANPAC had failed to comply with certain notice requirements under Utah Code Ann. § 31A-22-305(9)(g) (2000). Id. at 144. ANPAC denied the claim, and on March 16, 2011, sought a declaratory judgment that the Checketts' rejection of UIM coverage was enforceable. Id. at 78.

Shortly thereafter, the Utah Supreme Court decided Iverson v. State Farm Mut. Ins. Co, 256 P.3d 222, 224 (Utah 2011), which held that application of consumer notification requirements in the UIM statute depended on whether the policy in question was a "new policy." The Utah Supreme Court concluded that a "new policy" may be found where "material changes to an existing policy [] alter the risk relationship between the insurer and the insured." Id. at 226. Following Iverson, the parties submitted cross-motions for summary judgment. Aplt. App. 21, 79. The Checketts argued that Iverson controlled, and that the addition of Alisha "meaningfully altered" their risk relationship with ANPAC and created a "new policy." Id. at 33–34. The court heard argument on the motions on November 9, 2011, and took the matter under advisement. Am. Nat'l Prop. & Cas. Co., 2012 WL 1835866, at *1.

Meanwhile, the Utah Legislature, in response to Iverson, amended the UIM statute with an effective date of May 8, 2012. The revised statute defined "new policy" as

(i) any policy that is issued which does not include a renewal or reinstatement of an existing policy; or
(ii) a change to an existing policy that results in:
(A)a named insured being added to or deleted from the policy; or
(B)a change in the limits of the named insured's motor vehicle liability coverage.

Utah Code Ann. § 31A-22-305.3(3)(b) (2012). The legislature made the revised statute retroactive, stating "[s]ubsection (3)(b) applies retroactively to any claim arising on or after January 1, 2001 for which, as of May 1, 2012, an insured has not made a written demand for arbitration or filed a complaint in a court of competent jurisdiction." Id. § 31A-22-305.3(3)(e)(i).

On May 21, 2012, the district court issued its opinion, granting in part and denying in part both parties' motions for summary judgment. Am. Nat'l Prop. &Cas. Co., 2012 WL 1835866, at *10. The court accepted the Checketts' reliance on Iverson, and held that the addition of Alisha "meaningfully altered" the risk relationship to create a "new policy." Id. In footnote 23, the court addressed the revised Utah statute, ultimately concluding that the statute led to the same result as Iverson because the addition of Alisha was, as set forth in the statute, "a ...


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