In Newman v. Cornerstone National Insurance Company, 2014 WL 1257129 (Ariz.App. Mar. 27, 2014), the Arizona Court of Appeals held that a valid offer of underinsured motorist (“UIM”) coverage need not include premium prices after it reached the exact opposite conclusion in Melendez v. Hallmark Insurance Company only nine months earlier.
The Election Form
In Newman, the insurer denied a UIM claim because the insured rejected UM/UIM coverage in an election form. Although the Court of Appeals provided few details about the subject election form, it did note that the form omitted premium prices.
The insured filed suit and argued the UIM election form was an invalid offer of UIM coverage under A.R.S. § 20–259.01(B) because it did not include premium prices. Specifically, the insured mirrored arguments recently approved by the Court of Appeals in Melendez and asserted that the requirements in A.R.S. § 20–259.01(B) that an insurer “make available” and “offer” UIM coverage mandate “providing definite terms, such as a premium quote, in [a] blank space provided on [a] form approved by the Arizona Department of Insurance” (“ADOI”).
In contrast, the insurer argued that neither Arizona statutes nor Arizona common law require a valid offer of UIM coverage to include premium prices. Additionally, although use of a UIM election form approved by the ADOI is conclusive evidence of a valid offer, A.R.S. § 20-259.01(B) does not mandate use of an ADOI approved form.
The Holding & Rationale
Newman held the UIM election form was a valid offer of UIM coverage for three primary reasons. First, the Court of Appeals cast the case as an issue of simple statutory interpretation because the plain language of A.R.S. § 20-259.01(B) does not require an offer of UIM coverage to include a premium price. Indeed, the Court of Appeals relied on fundamental rules of statutory interpretation: “[w]here the statutory language is clear, we hold to the plain meaning of its terms”; and a court “looks first to the plain language of the statute as the most reliable indicator of its meaning” because the “goal in interpreting statutes is to fulfill the intent and purpose of the legislature.” Newman observed the “plain language of A.R.S. § 20–259.01 does not require insurers to provide a UIM premium quote as part of the offer of coverage to insureds. The statute merely requires insurers to ‘make available’ by ‘written offer’ UIM coverage in an amount not less than the liability limits for bodily injury or death.” Furthermore, the Court of Appeals noted it was “not at liberty to rewrite a statute under the guise of judicial interpretation.” Rather, Newman observed “the statute is very specific regarding what the offer must contain and we will not substitute our judgment by imposing any additional statutory requirements.”
Second, Newman noted the Arizona Supreme Court has previously resisted similar efforts to rewrite the statute and impose additional requirements for a valid offer of UIM coverage. In Talent v. National General Insurance Company, the Arizona Supreme Court refused to impose a requirement that a valid offer include an explanation of UIM coverage. In Ballasteros v. American Standard Insurance Company of Wisconsin, the Arizona Supreme Court similarly refused to impose a requirement that a valid offer to a Spanish speaker be made in Spanish.
Third, the Court of Appeals noted it has previously held A.R.S. § 20-259.01(B) does not require a valid offer of UIM coverage to include premium prices. In Garcia v. Farmers Insurance, the Court of Appeals held that an insurer’s election form was a valid offer of UIM coverage, despite the form omitting the premium price. Garcia held the offer was valid because it did “bring before” and “hold out” to the insured that UIM coverage was available. The Court of Appeals noted that, “Garcia did not require a premium quote to fill the statutory requirements, and we similarly find no basis for requiring it here.”
Accordingly, the Court of Appeals ultimately held that “a premium quote is not required for a valid offer of UIM coverage” under A.R.S. § 20-259.01(B).
Newman should dispel the brief uncertainty regarding a valid offer of UIM coverage created by the Court of Appeals’ June 2013 Melendez decision and the Supreme Court’s decision to depublish Melendez in August 2013. It now appears clear that a UIM election form need not include premium prices. Accordingly, Newman should help insurers deal with any claims for additional UIM benefits made in the wake of Melendez.
It is, however, worth noting that Newman did not mention, much less analyze, the arguments and principles relied upon by the Court of Appeals only nine months earlier in Melendez, including: (1) strict compliance with A.R.S § 20-259.01(B); (2) the binding and conclusory nature of a valid offer (if accepted); (3) the purpose of A.R.S § 20-259.01(B) as encouraging potential insureds to obtain UM/UM coverage to protect their loved ones; and (4) the ADOI’s interpretation of A.R.S § 20-259.01(B) as requiring premium prices. Furthermore, these arguments and principles have been established in Arizona law for quite some time and remain sound.
Thus, despite the recent holding in Newman that a valid offer of UIM coverage need not include premium prices, at least three reasons suggest that a prudent insurer should confirm that its current UM/UIM election form both mirrors the ADOI’s sample form, which includes premium prices, and has been approved by the ADOI: (1) the stark contrast in both the analyses performed and ultimate opinions reached by two different, three-judge panels of the Arizona Court of Appeals only nine months apart, (2) the continued vitality of the arguments and principles underlying Melendez, and (3) the safe harbor provision of A.R.S. § 20-259.01(B).
 232 Ariz. 327, 331, 305 P.3d 392, 396 (App. 2013) (depublished by order of the Arizona Supreme Court August 27, 2013) (“a valid written offer of UM/UIM coverage for purposes of A.R.S. §20-259.01 must include premium prices for the amount of coverage requested and is not binding until the premium is communicated and agreed upon.”). Unpublished memorandum decisions may not be cited. See Ariz. R. Supreme Court 111(c) (2014) (“Memorandum decisions shall not be regarded as precedent nor cited in any court,” with limited exceptions); ARCAP 28(c) (2014) (same).
 A.R.S. § 20-259.01(B) states, “Every insurer writing automobile liability or motor vehicle liability policies shall also make available to the named insured thereunder and shall by written notice offer the insured and at the request of the insured shall include within the policy underinsured motorist coverage which extends to and covers all persons insured under the policy, in limits not less than the liability limits for bodily injury or death contained within the policy…” (emphases added).
See Newman, 2014 WL 1257129 * 1, ¶ 2.
 232 Ariz. 327, 305 P.3d 392.
Id. at ¶ 4 (citingTalent v. National Gen. Ins. Co., 185 Ariz. 266, 915 P.2d 665 (1996); Ballesteros v. American Std. Ins. Co. of Wisconsin, 226 Ariz. 345, 350, 248 P.3d 193, 198 (2011); Melendez, 232 Ariz. 327, 305 P.3d 392.
 Pursuant to A.R.S. § 20-259.01(B), the ADOI periodically publishes approved UM/UIM election forms and the approved samples have included blanks for premium prices since 1994. The most recently approved sample election form can be found here: http://www.azinsurance.gov/bulletin/2003-03.pdf
 A.R.S. § 20-259.01(B) states, in part, the “selection of limits or rejection of coverage by a named insured or applicant on a form approved by the director is valid for all insureds under the policy.” (emphasis added).
See Newman, at *1, ¶ 5.
Id. at * 2, ¶ 6.
Id. (citing A.R.S. § 20–259.01(B); Talent, 185 Ariz. at 266, 915 P2.d at 666).
Newman, 2014 WL 1257128 * 2, ¶ 6.
Id. (citingTalent, 185 Ariz. 266, 268, 915 P.2d 665, 667; Ballesteros, 226 Ariz. at 346, 47, 248 P.3d at 194, 95).
 185 Ariz. 266, 915 P.2d 665.
Newman, 2014 WL 1257128 * 2, ¶ 6 (citingTalent, 185 Ariz. at 268, 915 P.2d at 667).
 226 Ariz. 345, 248 P.3d 193.
Newman, 2014 WL 1257128 * 2, ¶ 6 (citing Ballesteros, 226 Ariz. at 346, 47, 248 P.3d at 194, 95).
 191 Ariz. 410, 956 P2.d 537 (App. 1998).
Id. at 412, 956 P.2d at 539.
See Newman, 2014 WL 1257128 at * 3, ¶ 10 (citing Garcia, 191 Ariz. at 412, 956 P2.d at 539).
See Newman, 2014 WL 1257128 at * 3, ¶ 10 (citing Garcia, 191 Ariz. at 412, 956 P2.d at 539).
See Newman at * 3, ¶¶ 10, 11.
See Melendez, 232 Ariz. 327, 331, 305 P.3d 392, 396 (App. 2013) (depublished by order of the Arizona Supreme Court August 27, 2013).
Id. at 330-332, 224, 305 P.3d at 395-397, 399.
 The principle of strictly construing A.R.S. § 20-259.01(B) has been established since at least 1985. See Calvert v. Farmers Ins. Co. of Ariz., 144 Ariz. 291, 294, 697 P.2d 684, 687 (1985); Ormsbee v. Allstate Ins. Co., 176 Ariz. 109, 112, 859 P.2d 732, 735 (1993). The Arizona Supreme Court announced the requirement that a valid offer of UIM coverage must bind the offeror and conclude the transaction (if accepted) in 1996. See Tallent, 185 Ariz. at 268, 915 P.2d at 667 ( definition of an offer as “the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it”). An ADOI Bulletin suggesting that UM/UIM election forms include a range of UIM limits and corresponding premiums has been available since 1994. See ADOI Circ. Letter 94-3 (4/11/94) (withdrawn by ADOI Bulletin 2002-5 (May 20, 2002).
 A.R.S. § 20-398(A) states, in part, “no policy form applying to insurance on risks or operations covered by this article may be delivered or issued for delivery unless the form has been filed with the director and either the director has issued, within thirty days, an order affirmatively approving or disapproving the form or, the thirty day period has elapsed and the director has not disapproved the form as ambiguous, misleading or deceptive.”
 “The selection of limits or rejection of coverage by a named insured or applicant on a form approved by the director shall be valid for all insureds under the policy.” Ariz. Rev. Stat. Ann. § 20-259.01(B) (2014).