Court Opinion

ID: 6221020
Source: CourtListenerOpinion
Date Created: 2022-02-11 17:00:33.978797+00
Date Added: 2024-06-11T08:57:20.071344
License: Public Domain

Appellate Case: 21-1258      Document: 010110644003    Date Filed: 02/11/2022    Page: 1
                                                                                 FILED
                                                                     United States Court of Appeals
                                       PUBLISH                               Tenth Circuit

                       UNITED STATES COURT OF APPEALS                      February 11, 2022

                                                                        Christopher M. Wolpert
                              FOR THE TENTH CIRCUIT                         Clerk of Court
                          _________________________________

  MELINDA ECKARD,

        Plaintiff - Appellant,
                                                             No. 21-1258
  v.

  STATE FARM MUTUAL
  AUTOMOBILE INSURANCE
  COMPANY,

        Defendant - Appellee.
                       _________________________________

                      Appeal from the United States District Court
                              for the District of Colorado
                         (D.C. No. 1:20-CV-00274-DDD-SKC)
                        _________________________________

 Submitted on the briefs:*

 Ronald L. Wilcox of Wilcox Law Firm, LLC, Denver, Colorado, for Plaintiff-Appellant.

 Karen H. Wheeler, Jami A. Maul, Nicholas J. Deaver, and Sean T. Carlson of Wheeler
 Law, P.C, Greenwood Village, Colorado, for Defendant-Appellee.
                       _________________________________

 Before HOLMES, KELLY, and CARSON, Circuit Judges.
                   _________________________________

 KELLY, Circuit Judge.

       *
         After examining the briefs and appellate record, this panel has determined
 unanimously that oral argument would not materially assist in the determination of
 this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
 ordered submitted without oral argument.
Appellate Case: 21-1258    Document: 010110644003      Date Filed: 02/11/2022      Page: 2

                          _________________________________

       This diversity case arises out of a claim for underinsured motorist (UIM)

 benefits by Plaintiff-Appellant Melinda Eckard (insured) against her insurer,

 Defendant-Appellee State Farm Mutual Automobile Insurance Company (State

 Farm). On summary judgment, the district court held that Ms. Eckard’s suit was time

 barred by Colorado Revised Statutes § 13-80-107.5(1)(b). Exercising our jurisdiction

 under 28 U.S.C. § 1291, we reverse and remand for further proceedings.

                                     Background

       On March 12, 2016, Ms. Eckard and Jonathan Grzelak were involved in an

 automobile accident. Aplt. App. 20–23. Mr. Grzelak’s policy with Permanent

 General Assurance Corporation (Permanent) had a personal injury liability coverage

 limit of $25,000 per person. This was insufficient to cover Ms. Eckard’s injuries and

 damages, which were $300,000 and counting. Aplt. App. 30–31. Ms. Eckard’s State

 Farm policy had UIM coverage for $250,000 and required State Farm’s written

 consent to settle with an underinsured motorist. Aplt. App. 30–31. The policy

 provided, “There is no coverage for any insured who, without our written consent,

 settles with any person or organization who may be liable for the bodily injury or

 property damage.” Aplt. App. 71.

       On October 11, 2017, Ms. Eckard’s attorney received settlement documents

 and a check for policy limits from Permanent. Aplt. App. 54, 57. On November 1,

 State Farm faxed to Ms. Eckard’s lawyer permission to settle. Aplt. App. 55–56.

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 Then, on November 7, Ms. Eckard and her husband signed the settlement agreement

 and endorsed the check. Aplt. App. 56.

        Ms. Eckard filed suit on October 29, 2019, claiming breach of contract by

 State Farm for failure to pay UIM benefits in connection with the accident. Aplt.

 App. 27. State Farm moved for summary judgment on limitations grounds. Aplt.

 App. 7–8. The applicable statute bars UIM claims brought more than “two years

 after the insured received payment of the settlement.” Colo. Rev. Stat. § 13-80-

 107.5(1)(b). Concluding that Ms. Eckard had “received payment of the settlement”

 on October 11 when her lawyer received the check and finding no genuine issues of

 material fact, the district court granted summary judgment to State Farm. Aplt. App.

 94–100. On appeal, Ms. Eckard argues that the district court erred in disregarding

 contrary authority from the Colorado Court of Appeals and in its construction of the

 statute.

                                      Discussion

        We review summary judgment decisions de novo, viewing the facts in the light

 most favorable to the nonmovant and drawing all reasonable inferences in her favor.

 Tabor v. Hilti, Inc., 703 F.3d 1206, 1215 (10th Cir. 2013). Summary judgment is

 warranted “if the movant shows that there is no genuine dispute as to any material

 fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).

 State Farm argues that October 11, 2017, was when Ms. Eckard “received payment of

 the settlement” because that was the day her lawyer received Permanent’s settlement

 agreement and check. Aplee. Br. at 18. Ms. Eckard contends that the operative day

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 was November 7, 2017, when she and her husband executed the settlement agreement

 and check. Aplt. Br. at 13–15. Because Ms. Eckard filed this suit on October 29,

 2019, the date when Ms. Eckard “received payment of the settlement” determines

 whether § 13-80-107.5(1)(b) bars her claim.

       Sitting in diversity, this court must follow the Erie doctrine and apply

 Colorado’s interpretation of “received payment of the settlement” in § 13-80-

 107.5(1)(b). See Sinclair Wyo. Refining Co. v. A&B Builders, Ltd., 989 F.3d 747,

 765–66 (10th Cir. 2021). Without definition from the state legislature, we look to the

 highest state court’s understanding. Id. at 766. Because the Colorado Supreme Court

 has not interpreted this provision, we must predict how that court would interpret it.

 Id. State appellate court decisions may guide us in this process, Reeves v. Enter.

 Prod. Partners, 17 F.4th 1008, 1012 (10th Cir. 2021), especially where they bind all

 lower state courts, Gooding v. Wilson, 405 U.S. 518, 525 n.3 (1972), as is the case

 here, Colo. R. App. P. 35(e). These decisions do not bind us, but we look to them

 unless we are “convinced by other persuasive data that the highest court of the state

 would decide otherwise.” Stickley v. State Farm Mut. Auto. Ins., 505 F.3d 1070,

 1077 (10th Cir. 2007) (quoting West v. Am. Tel. & Tel. Co., 311 U.S. 223, 237

 (1940)).

       The Colorado Court of Appeals has interpreted § 13-80-107.5(1)(b) in two

 cases: Stoesz v. State Farm Mutual Automobile Insurance Co., 410 P.3d 583 (Colo.

 App. 2015), and Kovac v. Farmers Insurance Exchange, 401 P.3d 112 (Colo. App.

 2017), cert. denied, 2017 WL 3593981 (Colo. Aug. 21, 2017) (en banc). In Stoesz,

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 the Colorado Court of Appeals addressed the fact that § 13-80-107.5(1)(b) includes

 the word “payment” twice. 410 P.3d at 585–86. First, “payment of either the

 liability claim settlement or judgment within the time limit specified” is one way that

 an insured person can preserve a UIM claim stemming from underlying bodily injury

 beyond the general “three years after the cause of action accrues.” Colo. Rev. Stat.

 § 13-80-107.5(1)(b). Second, the statute explains that the window for preserved

 claims is “within two years after the insured received payment of the settlement or

 judgment on the underlying bodily injury liability claim.” Id. Stoesz focused on the

 first use of “payment” in the statute, which is not the provision at issue here. 410

 P.3d at 585–88. But the Stoesz court made an important observation relevant to this

 case: that the Colorado legislature “is presumed to have intended a difference

 between the[se different uses of the word payment].” Id. at 587.

       Two years after Stoesz, the Colorado Court of Appeals in Kovac considered

 the meaning of “received payment of the settlement.” 401 P.3d at 114–17. That case

 involved a UIM claim by Ms. Kovac against Farmers Insurance Exchange (Farmers).

 Id. at 113–14. As here, the parties disputed the date that constituted “received

 payment of the settlement” and thus triggered the limitations period. Id. Ms. Kovac

 (like Ms. Eckard here) argued that she “received payment of the settlement” when

 she executed the settlement papers and endorsed the check, while Farmers (like State

 Farm here) argued that it was the day Ms. Kovac’s lawyer received settlement papers

 and a check from the UIM’s insurance company. Id. The Kovac court decided the

 operative time was when Ms. Kovac accepted the settlement agreement, which it

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 directly equated to “received payment of the settlement.” Id. at 115. The court

 explained that because Ms. Kovac was not legally entitled to any money until she

 accepted the settlement agreement, “[t]he date on which Kovac ‘received payment’

 was thus the date that she accepted the settlement agreement . . . and was legally

 entitled to the funds.” Id.1

       Finding Kovac’s reading persuasive and lacking any evidence convincing us

 that the Colorado Supreme Court would have a different understanding of the phrase

 “received payment of the settlement” in § 13-80-107.5(1)(b), we apply Kovac’s

 interpretation. Therefore, Ms. Eckard “received payment of the settlement” when she

 accepted the settlement agreement and endorsed the check on November 7, 2017.

 See id.

       But State Farm still argues that Kovac is distinguishable, contending that

 “there is no evidence that [Permanent] made the acceptance of the check conditional

 on the signing of the release or that the signing of the release was the explicitly

 authorized method of acceptance of the agreement.” Aplee. Br. at 9–13. At this

 stage, the evidence certainly suggests that the only authorized method of acceptance

 of the agreement was signing the release. Aplt. App. 81 (explaining that the Release

       1
          The Kovac court followed a federal case that interpreted § 13-80-107.5(1)(b)
 in the same way. See Westby v. State Farm Mut. Auto. Ins. Co., No. 15-CV-00076,
 2016 WL 471357 (D. Colo. Feb. 8, 2016). The Kovac court found persuasive the
 federal court’s observation that “[i]t is a matter of common sense that the insured
 cannot receive settlement funds until after the parties have completed the settlement
 because up until . . . the agreement is finalized, the insured is not legally entitled to
 any money.” 401 P.3d at 115 (quoting Westby, 2016 WL 471357, at *6).
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 is “for and in consideration of the sum of Twenty Five Thousand Dollars

 ($25,000.00)”).2 Further, if the parties dispute methods of acceptance of the

 settlement, that is a genuine dispute of material fact that would make summary

 judgment inappropriate.3

       State Farm also submits that Ms. Eckard’s situation is distinguishable from

 Ms. Kovac’s because “the terms of [Ms. Kovac’s] offer explicitly stated she could

 have the money only if she accepted the offer.” Aplee. Br. at 11. State Farm

 suggests that this is a material difference, but that argument must fail because it rests

 upon a misunderstanding of Colorado contract law. In Colorado, settlement

       2
          State Farm’s argument that “the check Ms. Eckard ‘received’ [on October 11]
 was ‘payment’ of the underlying liability settlement,” Aplt. Br. at 6–7, would mean
 that Ms. Eckard had settled with Permanent without State Farm’s permission, which
 would — conveniently for State Farm — mean that she had voided her UM/UIM
 coverage with State Farm. Aplt. App. 71. It makes no sense that a third party could
 void Ms. Eckard’s coverage with State Farm by sending her a check that she did not
 endorse or cash.
        3
          The same conclusion, that summary judgment is inappropriate, applies to the
 dispute below over the date that Ms. Eckard executed the check. See Aplt. App. 37–
 38 (the check). Compare Aplt. App. 9, 39–40, 85 (State Farm’s contention that Ms.
 Eckard executed the check on October 11 and her testimony thereto), with Aplt. App.
 54, 56, 64–689 (Ms. Eckard’s contention that she executed the check on November 7
 and evidence thereto). State Farm does not directly address this in its brief before
 this court. On the one hand, this silence suggests State Farm has abandoned its
 argument that the check was executed on October 11. State Farm still suggests that
 other methods of accepting the settlement agreement were possible, Aplee. Br. at 9–
 13, but without arguing that the check was executed on October 11 as acceptance, it
 does not offer any method of acceptance actually taken by Ms. Eckard other than the
 November 7 execution of the settlement agreement. Even if State Farm preserved the
 argument that the check was executed on October 11, because Ms. Eckard has met
 her burden in responding with evidence it was not, this would merely create a
 genuine dispute of material fact that would defeat summary judgment. Talley v.
 Time, Inc., 923 F.3d 878, 893–94 (10th Cir. 2019).
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 agreements are contracts that must be formed, construed, and enforced like other

 contracts. Kovac, 401 P.3d at 116 (citing Yaekle v. Andrews, 195 P.3d 1101, 1111

 (Colo. 2008)); cf. Restatement (Second) of Contracts § 30(2) (Am. L. Inst. 1981)

 (“Unless otherwise indicated by the language or the circumstances, an offer invites

 acceptance in any manner and by any medium reasonable in the circumstances.”).

 Here, the record does not include any reasonable medium of acceptance other than

 the execution of the settlement agreement.4 In fact, the only reasonable medium of

 acceptance would be executing the settlement agreement by its terms “for and in

 consideration of the sum of Twenty Five Thousand Dollars ($25,000.00),” clearly

 referring to the check for that amount sent with the settlement papers.

                                      Conclusion

       The district court granted summary judgment to State Farm because it

 incorrectly found as a matter of law that Ms. Eckard “received payment of the

 settlement” when her lawyer received the settlement agreement and check on October

 11, 2019. As we have explained, Ms. Eckard actually “received payment of the

 settlement” when she executed the settlement agreement and authorized the check on

 November 7, 2019. As a result, § 13-80-107.5(1)(b) does not bar Ms. Eckard’s UIM

 claim against State Farm.

       4
          This is considering that State Farm has abandoned its argument that the
 check was executed on October 11 as acceptance of the settlement agreement. Again,
 even if it preserved or raised this argument, it would only defeat summary judgment
 by creating a genuine dispute of material fact concerning the date that the check was
 executed.
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Appellate Case: 21-1258   Document: 010110644003   Date Filed: 02/11/2022   Page: 9

       REVERSED and REMANDED for further proceedings.

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