Court Opinion

ID: 4240939
Source: CourtListenerOpinion
Date Created: 2018-01-31 18:09:33.647577+00
Date Added: 2024-06-11T14:16:42.480967
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                  SUMMARY
                                                            January 25, 2018

                                 2018COA9

No. 16CA2104, Airth v. Zurich Am. Ins. Co. — Insurance —
Motor Vehicles — Uninsured/Underinsured

     A division of the court of appeals considers whether, under

section 10-4-609, C.R.S. 2017, (1) an insurer’s statutorily

mandated offer of enhanced uninsured/underinsured motorist

(UM/UIM) coverage was, as a matter of law, sufficient; and (2) an

insured must reject in writing an offer of enhanced UM/UIM

coverage.

     The division concludes that the offer was, as a matter of law,

sufficient, even though it did not include any pricing information.

And, interpreting section 10-4-609, the division concludes that a

written rejection is only required if the insured declines the

statutory minimum amount of UM/UIM coverage; a written

rejection of enhanced UM/UIM coverage is not, then, required.
     Accordingly, the division affirms summary judgment entered

on behalf of the insurer.
COLORADO COURT OF APPEALS                                        2018COA9

Court of Appeals No. 16CA2104
City and County of Denver District Court No. 16CV30510
Honorable Jay S. Grant, Judge

Rickey Airth,

Plaintiff-Appellant,

v.

Zurich American Insurance Company, an Illinois corporation,

Defendant-Appellee.

                            JUDGMENT AFFIRMED

                                  Division II
                          Opinion by JUDGE DAILEY
                       Hawthorne and Welling, JJ., concur

                         Announced January 25, 2018

Law Firm of William Babich, LLC, William Babich, Denver, Colorado, for
Plaintiff-Appellant

Spies, Powers & Robinson, P.C., Jack D. Robinson, Ursula J. Honigman,
Denver, Colorado, for Defendant-Appellee
¶1    In this claim for uninsured/underinsured motorist (UM/UIM)

 benefits, plaintiff, Rickey Airth, appeals the district court’s entry of

 summary judgment in favor of defendant, Zurich American

 Insurance Company (Zurich). We affirm.

                            I.    Background

¶2    Airth was seriously injured in an accident while operating a

 semitruck owned by his employer, Sole Transport LLC, doing

 business as Solar Transport Company (Solar). He had been struck

 by a negligent, uninsured driver.

¶3    Solar had UM/UIM insurance coverage of $50,000 for its

 employees through a policy issued by Zurich.

¶4    Airth brought a claim for declaratory relief seeking to reform

 Solar’s policy to provide UM/UIM coverage of $1,000,000. He

 alleged in his complaint that he was entitled to the higher amount

 of coverage because Zurich had failed, as required by section 10-4-

 609, C.R.S. 2017, to (1) offer Solar UM/UIM coverage in an amount

 equal to its bodily injury liability coverage (i.e., $1,000,000) and (2)

 produce a written rejection by Solar of such an offer of UM/UIM

 coverage.

                                     1
¶5    On cross-motions for summary judgment, the district court

 entered judgment for Zurich, ruling, as a matter of law, that

          Zurich’s documents “put [Solar] on notice sufficient so

           that [it] could make an intelligent decision in opting to

           not obtain more coverage, and satisfied [Zurich’s] duty to

           offer coverage to Solar,”1 and adequately offered Solar

           UM/UIM coverage in an amount equal to the bodily

           injury liability limits of the policy; and

          “[t]here is no requirement that the rejection of UM/UIM

           limits in an amount equal to liability limits must be in

           writing.”

¶6    On appeal, Airth contends that the district court’s rulings on

 both issues were incorrect, and that the court therefore erred in

 granting Zurich’s motion for summary judgment and denying his

 cross-motion.2

 1Although the court actually stated this conclusion in terms of
 Zurich putting “Plaintiff” on notice, this was an obvious scrivener’s
 error: Solar, not Airth, had purchased the policy at issue here.

 2Although the denial of summary judgment is usually not
 appealable, Moss v. Members of Colo. Wildlife Comm’n, 250 P.3d
 739, 742 (Colo. App. 2010), it is appealable when it effectively puts
 an end to the litigation, as when cross-motions result in entry of

                                    2
                             II.   Analysis

¶7    Summary judgment is proper when there is no genuine issue

 as to any material fact and the moving party is entitled to judgment

 as a matter of law. Geiger v. Am. Standard Ins. Co. of Wis., 192 P.3d

 480, 482 (Colo. App. 2008). We review a grant or denial of

 summary judgment de novo. Id.

¶8    The “offer” and “rejection” issues presented on appeal turn on

 either an application or interpretation of subsections 10-4-609(1)(a)

 and (2), the texts of which are set forth in Appendix A to this

 opinion.

¶9    Subsection 10-4-609(1)(a) prohibits an insurer from issuing an

 automobile liability policy unless a minimum amount of UM/UIM

 coverage is included in the policy, except where the named insured

 rejects UM/UIM coverage in writing.3 Subsection 10-4-609(2)

 requires an insurer, “[b]efore the policy is issued or renewed,” to

 judgment for one party and a denial for the other, Glennon Heights,
 Inc. v. Cent. Bank & Tr., 658 P.2d 872, 875 (Colo. 1983); Mahaney v.
 City of Englewood, 226 P.3d 1214, 1217 (Colo. App. 2009).

 3Section 42-7-103(2), C.R.S. 2017, to which subsection 10-4-
 609(1)(a), C.R.S. 2017, expressly refers, defines this minimum
 amount, exclusive of interests and costs, as not less than $25,000
 per person and $50,000 per accident.

                                    3
  “offer the named insured the right to obtain uninsured motorist

  coverage in an amount equal to the insured’s bodily injury liability

  limits, but in no event shall the insurer be required to offer limits

  higher than the insured’s bodily injury liability limits.”

                                 A.    Facts

¶ 10     The facts are undisputed.

¶ 11     Prior to the renewal of Solar’s policy, Zurich sent Solar

  correspondence along with a package of documents pertaining to

  Solar’s rights related to UM/UIM coverage under the laws of all fifty

  states. A person representing himself as Solar’s counsel expressly

  affirmed that he had read all of the documents.4

¶ 12     One of the documents was titled in this manner:

          REJECTION OF UNINSURED MOTORISTS COVERAGE

                        OR SELECTION OF LIMITS

                                 (Colorado)

  4   Counsel attested with his signature to the following declaration:

               I acknowledge that I have reviewed each
               individual state’s selection/rejection form, I
               have made the elections indicated and that I
               have the authority to sign this form on behalf
               of all named Insureds on those policies listed
               above.

                                      4
¶ 13   The first three paragraphs of that document provided:

            Colorado law permits you, the insured named
            in the policy, to reject the Uninsured motorists
            Coverage for bodily injury or to select a limit
            for such coverage higher than the required
            minimum financial responsibility limit,
            $25,000 each person/$50,000 each accident
            ($50,000 each accident if written on a single
            limit basis) equal to the limit for Bodily Injury
            Coverage in the policy. Uninsured Motorists
            coverage for bodily injury provides insurance
            for the protection of persons insured under the
            policy who are legally entitled to recover
            damages from the owners or operators of
            uninsured motor vehicles because of bodily
            injury, sickness or disease, including death
            resulting therefrom.

            Bodily Injury Uninsured Motorists coverage
            includes coverage for damage or bodily injury
            that an insured is legally entitled to collect
            from the owner or driver of an underinsured
            motor vehicle. An underinsured motor vehicle
            is a vehicle which is insured or bonded for
            bodily injury or death at the time of the
            accident.

            If you reject the Uninsured Motorists Coverage
            or wish to select the limit for Bodily Injury
            Coverage in your policy to apply to Uninsured
            Motorists Coverage, such should be indicated
            below by marking the appropriate box.

¶ 14   No box was marked rejecting UM/UIM coverage or selecting a

  higher than minimum level of UM/UIM coverage.

                                    5
                            B.   Zurich’s Offer

¶ 15   Airth directs our attention to the fact that nowhere in the

  documents did Zurich provide Solar with a premium quote or even

  some way to estimate the premium that Solar would have to pay in

  the event it wished to purchase UM/UIM coverage commensurate

  with its bodily injury liability limit of $1,000,000. Zurich’s

  documents could not, he insists, constitute an “offer” of the ability

  to obtain higher UM/UIM coverage without reference to the price for

  which this higher coverage could be obtained.

¶ 16   Airth’s position would prevail if we were applying the meaning

  of the term “offer” as it is used in contract law. See Melendez v.

  Hallmark Ins. Co., 305 P.3d 392, 393 (Ariz. Ct. App. 2013) (“[T]he

  offer did not comply with the statute because it did not include any

  information about any premium for UM and UIM coverage and thus

  could not create a binding contract if Melendez had accepted such

  coverage.”); see generally Restatement (Second) of Contracts § 24

  (Am. Law Inst. 1981) (“An offer is 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.”).

                                     6
¶ 17     But the Colorado Supreme Court has attributed a somewhat

  different meaning to the term “offer” as it is used in section 10-4-

  609. In Allstate Insurance Co. v. Parfrey, 830 P.2d 905 (Colo. 1992),

  the supreme court, applying an earlier version of section 10-4-

  609(2),5 held as follows:

                  In keeping with the legislative purpose of
                  UM/UIM coverage to protect a person
                  against the risk of inadequate
                  compensation for injuries and damages
                  caused by an uninsured or underinsured
                  motorist, . . . an insurer’s duty of
                  notification and offer must be performed in

  5   Under that earlier version, the insurer was required to

               offer the named insured the right to obtain
               higher limits of uninsured motorist coverage in
               accordance with its rating plan and rules, but
               in no event shall the insurer be required to
               provide limits higher than the insured’s bodily
               injury liability limits or one hundred thousand
               dollars per person and three hundred
               thousand dollars per accident, whichever is
               less.

  § 10-4-609(2), C.R.S. 1987.

  Contrary to Airth’s assertion, the substantive effect of the earlier
  and current versions of section 10-4-609(2) are the same: to ensure
  that insureds can, if they wish, obtain more than the minimum
  required UM/UIM coverage. The only difference between the earlier
  and current versions of the statute is the formula for determining
  the maximum amount of coverage an insurer must make available
  to its insureds.

                                      7
               a manner reasonably calculated to permit
               the potential purchaser to make an
               informed decision on whether to purchase
               UM/UIM coverage higher than the
               minimum statutory liability limits of
               $25,000 per person and $50,000 per
               accident.

               In determining whether an insurer has
               fulfilled its statutory duty, a court may
               appropriately consider such factors as the
               clarity with which the purpose of UM/UIM
               coverage was explained to the insured,
               whether the explanation was made orally
               or in writing, the specificity of the options
               made known to the insured, the price at
               which the different levels of UM/UIM
               coverage could be purchased, and any
               other circumstances bearing on the
               adequacy and clarity of the notification and
               offer. . . . In the final analysis, the
               determination of the insurer’s discharge of
               its statutory duty to notify the insured of
               the availability of higher UM/UIM coverage
               and to offer such coverage to the insured
               must be resolved under the totality of
               circumstances.

Id. at 913; see also id. at 914 n.5 (“[T]he dispositive consideration is

whether, under the totality of circumstances, the insurer’s

notification and offer to the insured adequately informed the

insured that UM/UIM coverage was available” in accordance with

the requirements of the statute.).

                                     8
¶ 18   Because, under a Parfrey analysis, no one factor is dispositive,

  see Jewett v. Am. Standard Ins. Co. of Wis., 178 P.3d 1235, 1239

  (Colo. App. 2007) (applying Parfrey in analyzing offers of personal

  injury protection (PIP) benefits); Munger v. Farmers Ins. Exch., 174

  P.3d 832, 832–37 (Colo. App. 2007) (same), Zurich’s failure to

  provide Solar with a stated premium (or formula for determining the

  premium) for optional, enhanced UM/UIM coverage does not in and

  of itself render Zurich’s “offer” insufficient under the statute. See

  Gov’t Emps. Ins. Co. v. Graham-Gonzalez, 107 P.3d 279, 287 (Alaska

  2005) (“The purpose of [the “offer” statute] is to give insureds

  various options with respect to UIM coverage: to select coverage

  with limits mirroring their liability limits, or with different limits, or

  to waive coverage altogether. This purpose is not frustrated by

  interpreting the subsection as not requiring premium quotes to be

  included in application forms. Insureds can be expected to ask for

  the prices of coverage they are interested in.”); see also Johnson v.

  State Farm Mut. Auto. Ins. Co., 158 F. App’x 119, 122 (10th Cir.

  2005) (“Although the lack of a discussion of the price of enhanced

  PIP insurance is an important factor under the Parfrey analysis,

  State Farm’s failure to inform [the insured] about the specific cost

                                      9
  does not in itself render the offer commercially unreasonable. . . .

  Had [the insured] been at all interested in purchasing enhanced PIP

  coverage . . . , it would have been easy for him to determine the

  price at which he could purchase the coverage.”).6

¶ 19   Applying the other Parfrey factors here, we see that Zurich,

  through its aforementioned Colorado-specific “Rejection of

  Uninsured Motorists Coverage or Selection of Limits” document,

  explained, in writing, the purpose of UM/UIM coverage in clear and

  understandable terms; and (in the very first sentence) Zurich

  notified Solar that it was permitted to select a UM/UIM coverage

  “higher than the required minimum financial responsibility limit,

  $25,000 each person/$50,000 each accident . . . [and] equal to the

  limit for Bodily Injury Coverage in the policy.” Given the stand-

  alone nature of the document and the prominent position of the

  required information (i.e., in the document’s first sentence), we

  conclude that reasonable people would not disagree that Zurich had

  complied with its statutory obligations under subsection 10-4-

  609(2). Zurich’s notification and offer to Solar adequately informed

  6 Should the General Assembly disagree with this conclusion, it is,
  of course, free to amend subsection 10-4-609(2) as it sees fit.

                                    10
  Solar that UM/UIM coverage was available in accordance with the

  requirements of the statute. See Johnson, 158 F. App’x at 122

  (affirming summary judgment despite the lack of any discussion

  about the price of enhanced PIP coverage, where the insured was

  adequately informed of her right to purchase additional PIP

  coverage).7

¶ 20   In so concluding, we necessarily reject Airth’s arguments that

  the offer was insufficient because the form was buried within

  numerous other pages of material and that the offer of equal

  7 Airth’s reliance on Munger v. Farmers Insurance Exchange, 174
  P.3d 832 (Colo. App. 2007), for a contrary conclusion is misplaced.
  In Munger,

            [t]he written information [the insured] received
            from [the insurer] regarding the availability of
            enhanced PIP coverage consisted of the
            following: (1) a statement at the bottom of [the
            insurer’s] Renewal Premium Notice stating: “A
            change in Colorado law has revised No–Fault–
            personal injury protection. If you wish to buy
            up to $200,000 protection, please contact your
            [insurance] agent today”; and (2) a statement
            in [the insurer’s] “Auto Insurance Program
            Summary” that “Optional personal injury
            protection coverages also are available.”

  Id. at 835. The quantity and quality of the type of information
  supplied to the insured here by Zurich distinguishes this case from
  Munger.

                                   11
  coverage was in the fine print. Neither the explanation of the

  purposes of UM/UIM coverage nor the notification and offer of

  enhanced UM/UIM coverage is buried in fine print; indeed the

  notification and offer are in the very first sentence of the Colorado-

  specific document, and the purposes of UM/UIM coverage are

  explained soon thereafter.

¶ 21   We also reject Airth’s assertion that Zurich was not entitled to

  summary judgment because there is no evidence that anyone from

  Solar read or, perhaps more importantly, understood the document.

  Airth overlooks the attestation of Solar’s counsel that he had read

  all of the documents supplied by Zurich. And we agree with the

  Tenth Circuit Court of Appeals’ observation that “Parfrey . . .

  suggests that we look to the objective reasonableness of [the

  insurer’s] offer, not the potential purchaser’s subjective

  understanding. Indeed, none of the factors identified by the Parfrey

  court mention whether the insured actually understood the

  insurer’s offer of coverage.” Reid v. Geico Gen. Ins. Co., 499 F.3d

  1163, 1169 (10th Cir. 2007).

¶ 22   Finally, we reject Airth’s argument that reversal is required

  because the documents that were signed are dated a month after

                                    12
  the policy went into effect. “[T]he operative question is not whether

  [coverage was] initially offered or explained in writing before the

  initial purchase of a policy, but rather, it is whether the insurer

  provided the insured with the opportunity to purchase statutorily-

  compliant [coverage] before the insured needed [it].” Jewett, 178

  P.3d at 1237-38 (discussing analogous PIP coverage). The record

  reflects that Solar had received and responded to the notification

  and offer here before the accident that injured Airth. Airth cannot

  avoid the choices Solar made before that time. See id.; see also

  Reid, 499 F.3d at 1169 (holding that any failure to provide its

  insured with written offer of enhanced PIP coverage prior to

  issuance of the policy, as was required by section 10-4-706(4)(a),

  C.R.S. 1999 (repealed 2003), was cured “long before [the plaintiff]

  had her accident”).

                 C.     No Written Rejection of Additional
                      UM/UIM Coverage Was Required

¶ 23   In granting Zurich’s motion for summary judgment, the

  district court determined that a written rejection of coverage was

  required only with respect to the minimum UM/UIM coverage

                                     13
  available under subsection 10-4-609(1) and not to the additional

  UM/UIM coverage available under subsection 10-4-609(2).

¶ 24   The resolution of this issue requires us to interpret the

  provisions of section 10-4-609.

¶ 25   Statutory interpretation presents a question of law, which we

  review de novo. Town of Telluride v. San Miguel Valley Corp., 197

  P.3d 261, 262 (Colo. App. 2008).

¶ 26   When interpreting a statute, “a court must ascertain and give

  effect to the intent of the General Assembly and refrain from

  rendering a judgment that is inconsistent with that intent.”

  Trappers Lake Lodge & Resort, LLC v. Colo. Dep’t of Revenue, 179

  P.3d 198, 199 (Colo. App. 2007). To determine legislative intent, we

  first look to the words of the statute, id., and give effect to their

  common meanings. Bd. of Cty. Comm’rs v. Roberts, 159 P.3d 800,

  804 (Colo. App. 2006). If those words are clear and unambiguous

  in import, we apply the statute as written. Trappers Lake Lodge,

  179 P.3d at 199.

¶ 27   “The legislative choice of language may be concluded to be a

  deliberate one calculated to obtain the result dictated by the plain

  meaning of the words.” Hendricks v. People, 10 P.3d 1231, 1238

                                      14
  (Colo. 2000) (quoting City & Cty. of Denver v. Gallegos, 916 P.2d

  509, 512 (Colo. 1996)). Consequently, “[w]hen the General

  Assembly includes a provision in one section of a statute, but

  excludes the same provision from another section, we presume that

  the General Assembly did so purposefully.” Well Augmentation

  Subdistrict of Cent. Colo. Water Conservancy Dist. v. City of Aurora,

  221 P.3d 399, 419 (Colo. 2009); accord United States v. Pauler, 857

  F.3d 1073, 1076 (10th Cir. 2017) (Where the legislature “includes

  particular language in one section of a statute but omits it in

  another section of the same Act, it is generally presumed that [it]

  acts intentionally and purposely in the disparate inclusion or

  exclusion.” (quoting Russello v. United States, 464 U.S. 16, 23

  (1983))).

¶ 28   Here, the only statutory reference to a rejection in writing of

  UM/UIM coverage appears in subsection 10-4-609(1), which

  addresses only the minimum amount of UM/UIM coverage that

  must be provided by the insurer. There is no similar provision

  requiring a written rejection in subsection 10-4-609(2), which

  addresses the subject of additional UM/UIM coverage. Because

  “words omitted by the Legislature may not be supplied as a means

                                    15
  of interpreting a statute,” Miller v. City & Cty. of Denver, 2013 COA

  78, ¶ 21 (quoting McWreath v. Dep’t of Pub. Welfare, 26 A.3d 1251,

  1258 (Pa. Commw. Ct. 2011)), we, like the district court, conclude

  that a written rejection is required only if the insured declines the

  minimum amount of UM/UIM coverage, which was not the case

  here. See Pacheco v. Shelter Mut. Ins. Co., 583 F.3d 735, 741 (10th

  Cir. 2009) (concluding, after applying Colorado law, that “written

  rejection of coverage is only required if the insured declines

  UM/UIM coverage entirely, which is not the case here”).8

¶ 29   Therefore we determine that, as matter of law, Airth was not

  entitled to summary judgment and that, as a matter of law, Zurich

  was entitled to summary judgment.

                             III.   Conclusion

¶ 30   The judgment is affirmed.

  8We reject Airth’s assertion that Pacheco is inapposite because it
  dealt with a predecessor version of section 10-4-609. As with the
  current statute, the predecessor version had a “written rejection” of
  coverage requirement only in subsection (1), which dealt with
  minimum UM/UIM coverage. And, as noted in footnote five, the
  predecessor version of subsection (2) differed from the present one
  only in formulating the amount of additional UM/UIM coverage that
  an insurer had to offer its insured. For purposes of determining the
  applicability of a “written rejection” requirement, the difference
  between the predecessor and current versions of subsection (2) is
  immaterial.

                                     16
JUDGE HAWTHORNE and JUDGE WELLING concur.

                     17
                         APPENDIX A

As pertinent here, section 10-4-609, C.R.S. 2017 provides:

        (1)(a) No automobile liability or motor
        vehicle liability policy insuring against loss
        resulting from liability imposed by law for
        bodily injury or death suffered by any
        person arising out of the ownership,
        maintenance, or use of a motor vehicle
        shall be delivered or issued for delivery in
        this state with respect to any motor vehicle
        licensed for highway use in this state
        unless coverage is provided therein or
        supplemental thereto, in limits for bodily
        injury or death set forth in section 42-7-
        103(2), C.R.S., under provisions approved
        by the commissioner, for the protection of
        persons insured thereunder who are legally
        entitled to recover damages from owners or
        operators of uninsured motor vehicles
        because of bodily injury, sickness, or
        disease, including death, resulting
        therefrom; except that the named insured
        may reject such coverage in writing.

        ....

        (2) Before the policy is issued or renewed,
        the insurer shall offer the named insured
        the right to obtain uninsured motorist
        coverage in an amount equal to the
        insured’s bodily injury liability limits, but
        in no event shall the insurer be required to
        offer limits higher than the insured’s bodily
        injury liability limits.

        ....

                            18
(4) Uninsured motorist coverage shall
include coverage for damage for bodily
injury or death that an insured is legally
entitled to collect from the owner or driver
of an underinsured motor vehicle. An
underinsured motor vehicle is a land motor
vehicle, the ownership, maintenance, or
use of which is insured or bonded for
bodily injury or death at the time of the
accident.

                   19