Wilks v. Manobianco – 7/9/2015

August 12, 2015

Arizona Supreme Court holds that compliance with A.R.S. § 20-259.01 does not bar a negligence claim alleging that an insurance agent failed to procure uninsured motorist coverage requested by an insured.

Lesley Wilks obtained car insurance from State Farm through John Manobianco at Manobianco Insurance Agency.  Her policy included both underinsured (“UIM”) and uninsured (“UM”) motorist coverage.  Wilks later replaced the policy with a policy from another insurance company.  A year later, she decided to switch back to State Farm.  When doing so, Wilks asked Manobianco to obtain the exact same coverage that she had previously.  The insurance that Manobianco procured did not, however, include UIM coverage. 

Several years later, Wilks was rear-ended by an underinsured driver.  State Farm denied the UIM claim she submitted and Wilks then sued Manobianco for malpractice.  The trial court granted Manobianco summary judgment, concluding that it had satisfied its duty of care as a matter of law by complying with A.R.S. § 20-259.01, which creates a “safe harbor” if the insured signs a DOI-approved form stating that the insured rejected UM or UIM coverage.  The court of appeals reversed and the Supreme Court accepted review.

The Supreme Court affirmed the opinion of the court of appeals.  Arizona law generally requires the legislature to explicitly say that they intend to preempt a cause of action when they seek to do so.  The Supreme Court concluded that A.R.S. § 20-259.01 does not, by its terms, bar the Wilkses’ common law negligence claim against their insurance agent because the statute does not mention either insurance agents or any common law cause of action.  The Court also rejected Manobianco’s argument that the term “insurers” includes insurance companies and the companies’ agents because it is contrary to the plain reading of the statute, which imposes a duty on “[e]very insurer writing automobile liability or motor vehicle liability policies,” and agents do not write the insurance policies. 

Justice Berch authored the unanimous opinion.