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Johnson v. First Acceptance Insurance Co., Inc.

Alabama Court of Civil Appeals

January 6, 2017

Jimmy L. Johnson, Jr.
First Acceptance Insurance Company, Inc.

         Appeal from Lowndes Circuit Court (CV-14-900044)


         On July 28, 2014, Jimmy L. Johnson, Jr., filed in the Lowndes Circuit Court ("the trial court") a complaint against First Acceptance Insurance Company, Inc. ("First Acceptance"), [1] seeking a judgment declaring that he was entitled to underinsured-motorist ("UIM") coverage under an insurance contract between Johnson and First Acceptance. In his complaint, Johnson also sought damages on claims of breach of contract and bad-faith failure to pay. First Acceptance answered and denied liability. We note that both parties moved, separately, to dismiss the bad-faith claim, and on September 2, 2014, the trial court entered an order dismissing that claim.

         Johnson moved for a partial summary judgment on his claim seeking declaratory relief. First Acceptance opposed that summary-judgment motion, and it filed a motion for a summary judgment on Johnson's claims. On March 17, 2016, the trial court entered a judgment in which it denied Johnson's summary-judgment motion, denied a motion to strike filed by Johnson, and entered a summary judgment in favor of First Acceptance. In response to a motion by Johnson, the trial court, on April 15, 2016, entered an order purporting to certify the March 17, 2016, judgment as final pursuant to Rule 54(b), Ala. R. Civ. P. We note, however, that the March 17, 2016, judgment, because it ruled on all of Johnson's claims, was a final judgment. Johnson's April 26, 2016, notice of appeal was timely with respect to both the March 17, 2016, judgment and the April 15, 2016, order purporting to certify the judgment as final. Our supreme court transferred the appeal to this court pursuant to § 12-2-7(6), Ala. Code 1975.

         The materials submitted to the trial court indicate the following pertinent facts. On October 18, 2013, Johnson was involved in a motor-vehicle accident caused by an underinsured driver. Johnson had a policy of automobile insurance with First Acceptance, and he sought to recover UIM benefits under that policy. First Acceptance denied Johnson's claim, asserting that Johnson had declined UIM coverage.

         In Alabama, UIM coverage, which is at issue in this case, is a subset of uninsured-motorist coverage, and it is governed by § 32-7-23, Ala. Code 1975. State Farm Mut. Auto. Ins. Co. v. Motley, 909 So.2d 806, 810-811 (Ala. 2005). "'[U]ninsured/underinsured motorist benefits ... are mandated by § 32-7-23, Code of Alabama (1975). The purpose of the statute is to provide "'"coverage ... for the protection of persons insured thereunder who are legally entitled to recover damages from the owners or operators of uninsured motor vehicles."'"'" State Farm Mut. Auto. Ins. Co. v. Motley, 909 So.2d at 811 (quoting Auto-Owners Ins. Co. v. Hudson, 547 So.2d 467, 468 (Ala. 1989), quoting in turn Alabama Farm Bureau Mut. Cas. Ins. Co. v. Clem, 49 Ala.App. 457, 461, 273 So.2d 218, 221 (Ala. Civ. App. 1973), quoting in turn Safeco Ins. Co. of America v. Jones, 286 Ala. 606, 609, 243 So.2d 736, 737-38 (1970)).

         Section 32-7-23(a) governs uninsured-motorist coverage and has been interpreted as requiring an applicant reject UIM coverage in writing. See Continental Cas. Co. v. Pinkston, 941 So.2d 926, 929 (Ala. 2006) (interpreting § 32-7-23(a) as "requir[ing] that every automobile-liability-insurance policy issued or delivered in Alabama provide uninsured/underinsured-motorist coverage with limits for bodily injury or death of at least $20, 000 per person, unless the coverage is specifically rejected in writing by the named insured."). "The Uninsured Motorist Statute, Code 1975, § 32-7-23, absent rejection by the named insured, mandates uninsured motorist coverage for the protection of persons insured under a motor vehicle liability policy." Holloway v. Nationwide Mut. Ins. Co., 376 So.2d 690, 694 (Ala. 1979). Any "rejection of uninsured motorist coverage will be effective only if signed in writing by the named insured." Progressive Cas. Ins. Co. v. Blythe, 350 So.2d 1062, 1065 (Ala. Civ. App. 1977). See also State Farm Mut. Auto. Ins. Co. v. Martin, 292 Ala. 103, 106, 289 So.2d 606, 609 (1974) (explaining that an insurer must offer to provide uninsured-motorists' coverage but that an insured may reject that coverage in writing).

         In this case, the parties do not dispute that Johnson did not physically sign a paper insurance application or contract, or a form pertaining to UIM coverage, by using a pen. Rather, First Acceptance contends that Johnson signed the application for insurance electronically and that his signature declining UIM coverage is his electronic signature.

         Alabama's Uniform Electronic Transactions Act ("the UETA"), § 8-1A-1 et seq., Ala. Code 1975, governs matters such as electronic signatures on contracts. Among other things, the UETA provides that, in certain contexts, "[i]f a law requires a record to be in writing, an electronic record satisfies the law, " and that, "[i]f a law requires a signature, an electronic signature satisfies the law." § 8-1A-7(c) and (d), Ala. Code 1975. Before the trial court, First Acceptance argued that an insured's electronic signature could operate to allow an insured to reject UIM coverage. The trial court, in granting the summary judgment in favor of First Acceptance, appears to have agreed with First Acceptance's argument.

         Johnson argues on appeal that the trial court erred in entering a summary judgment in favor of First Acceptance. In his brief on appeal, Johnson points out that the appellate courts of this state have not addressed whether an electronic signature under the UETA may operate as an effective "written" rejection of UIM coverage. He asserts, in one sentence of his appellate brief, that "substantive state laws requiring actual signatures, or a waiver of UIM coverage, must be in a writing signed by the insured, " and that caselaw requiring a rejection of UIM coverage to be in writing is in conflict with the UETA. However, other than that conclusory sentence, Johnson does not argue that the trial court erred in determining that an electronic signature was effective in rejecting UIM coverage. In his brief before this court, Johnson does not identify any portion of the UETA that he contends is in conflict with § 32-7-23 or Alabama caselaw interpreting § 32-7-23(a) as requiring the rejection of UIM coverage to be in writing; he does not develop any argument that a requirement of a signature cannot be satisfied by an electronic signature under § 8-1A-7. It is not the function of this court to create and develop an argument on behalf of a party or to perform that party's legal research to support such an argument. McLemore v. Fleming, 604 So.2d 353 (Ala. 1992); Spradlin v. Spradlin, 601 So.2d 76, 79 (Ala. 1992). We decline to address an issue of first impression in the absence of a properly developed argument from an interested appellant.[2] Accordingly, for the purposes of resolving this appeal, we do not address the trial court's determination that an electronic signature may suffice to waive UIM coverage, and, instead, we address the properly supported arguments set forth in Johnson's brief on appeal.

         In support of its position that Johnson had, by virtue of his electronic signature, waived UIM coverage, First Acceptance submitted a copy of the insurance application that contains Johnson's name in a different type font than that of the rest of the application. First Acceptance argued that that different font indicated that Johnson had selected a font and had electronically signed the part of the insurance application indicating that he wanted to decline UIM coverage.

         First Acceptance also submitted the July 27, 2015, affidavit of Tracy D. McCoy, its assistant vice president of underwriting. McCoy testified that on December 21, 2012, Johnson went to a First Acceptance office and, "with the assistance of the local agent, " completed an electronic application for insurance. McCoy's affidavit explains the manner in which First Acceptance agents are to assist applicants who are applying for insurance by computer. In relevant part, McCoy stated that the agent provides the applicant with a computer mouse so that the applicant can use the computer to select a font for his or her electronic signature and to sign his or her name to certain parts of the insurance application, including the form pertaining to UIM coverage.

         In addition, First Acceptance submitted the July 29, 2015, affidavit of India Thomas, in which Thomas stated that she was an agent for First Acceptance and that, on December 21, 2012, Johnson completed an application for insurance with her assistance. Thomas testified in her affidavit regarding the manner in which applicants are given access to the computer to electronically sign to accept or reject certain terms of the insurance application. Thomas stated that she had never electronically signed an insurance application on behalf of an applicant. Thomas also testified in her July 29, 2015, affidavit that, based on her "personal knowledge and review of the applicable policy application documents, " Johnson had rejected UIM coverage when applying for insurance with First Acceptance.

         In response to First Acceptance's submission in support of its summary-judgment motion, Johnson argued that Thomas's affidavit was based on hearsay, was not based on her personal knowledge, and contradicted certain portions of her deposition testimony, ...

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