An Electronic Signature May Be Sufficient to Reject UIM Coverage
Jimmy L. Johnson, Jr. v. First Acceptance Insurance Company, Inc.: In Alabama, UIM coverage may only be rejected by an insured in writing, but the unanswered question is whether an electronic signature is sufficient for rejecting UIM coverage. The parties in this case squandered an opportunity to have the court decide what would have been a matter of first impression on the issue.
After being involved in a motor vehicle accident, Jimmy L. Johnson, Jr. sued his insurance provider, First Acceptance Insurance Company, Inc. (“First Acceptance”) on July 28, 2014, seeking underinsured motorist (“UIM”) benefits. First Acceptance answered the suit, denying that Johnson was entitled to UIM coverage. Both Johnson and First Acceptance filed opposing motions for summary judgment. The trial court entered summary judgment in favor of First Acceptance, which was a final order because it disposed of all of Johnson’s claims. Johnson appealed. Jimmy L. Johnson, Jr. v. First Acceptance Insurance Company, Inc. [Ms. 2150629, Jan 6, 2017) — So.3d — (Ala.Civ.App. 2017).
The subject accident occurred when Johnson was involved in a wreck with an underinsured driver. Johnson had a policy of insurance with First Acceptance and sought to recovery UIM benefits under the policy. First Acceptance denied Johnson’s claim, asserting that he had declined UIM coverage.
UIM coverage in Alabama is governed by Alabama Code (1975) § 32-7-23, which mandates that an insurer must provide UIM coverage. If an applicant declines UIM coverage, he must do so in writing. A rejection of UIM coverage is ineffective unless it is in writing and signed by the named insured.
In the present case, the undisputed evidence was that Johnson did not physically sign a paper insurance application, contract, or form pertaining to UIM coverage using a pen. Rather, First Acceptance asserts that Johnson used his electronic signature in completing the application for insurance and declining UIM coverage.
This matter then is governed in part by Alabama’s Uniform Electronic Transactions Act (“the UETA”), which reads in pertinent part that if “a law requires a record to be in writing, an electronic record satisfies the law,” and if “a law requires a signature, an electronic signature satisfies the law.”
First Acceptance therefore argued that Johnson’s electronic signature was sufficient to effectively reject UIM coverage. In granting summary judgment in favor of First Acceptance, the trial court appears to have agreed. However, Johnson did not properly appeal what would have been a matter of first impression for the appellate court, by failing to identify any portion of the UETA that Johnson contended was in conflict with the UIM statute requiring the rejection of UIM coverage to be in writing and by failing to develop any argument that a requirement of a signature cannot be satisfied by an electronic signature under the UETA.
The Alabama Court of Civil Appeals ultimately decided the matter on other grounds and reversed and remanded for questions of fact.
 Ala. Code (1975) § 32-7-23(a); see also Continental Cas. Co. v. Pinkston, 941 So.2d 926. 929 (Ala. 2006).
 See 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, 289 So.2d 606, 609 (Ala. 1974).
 Ala. Code (1975) § 8-1A-1, et seq.
 Ala. Code (1975) § 8-1A-7(c), (d).
Artwork by Rob King.