Court Opinion

ID: 9792324
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:27:06.558379+00
Date Added: 2024-06-11T07:37:42.055871
License: Public Domain

Justice VOLLACK
dissenting:
The majority holds that the endorsement 6896S included within petitioner’s policy reduced the coverage for injuries to household members — from $100,000 to $25,000 — and required the approval of the State Insurance Commissioner (Commissioner) in order to become effective. Maj. op. at 278, 281. I disagree with this interpretation.
I believe that the majority errs in construing this case to be one of determining whether the General Assembly intended section 10-4-418(2)(b), 4A C.R.S. (1994), to apply retroactively. In my judgment, it is anomalous to interpret the endorsement as creating reduced uninsured motorist coverage when, under the household exclusion provision, coverage had previously been excluded altogether.
I dissent because I believe that endorsement 6896S imposing a $25,000 limit represents an increase in coverage from the total household exclusion provision. I would therefore affirm the court of appeal’s ruling that endorsement 6896S increased the coverage from zero dollars to $25,000 for claims made by one household member against another and was therefore not a “reduction” in coverage requiring the approval of the Commissioner.
I.
In September 1984, in our decision in Meyer v. State Farm Mutual Automobile Insurance Co., 689 P.2d 585 (Colo.1984), we invalidated a household exclusion provision in an automobile insurance policy as violative of the public policy embodied in the Colorado Automobile Reparations Act, §§ 10-4-701 to -723, 4 C.R.S. (1973).
In December 1984, the petitioner, Bonnie L. Coffman (Coffman), and her husband, Gary E. Coffman, (the Coffmans) purchased an automobile insurance policy, No. 270-1782-E29-06, from the respondent, State Farm Mutual Automobile Insurance Co. (State Farm).1 The policy covered their 1979 Pontiac and was renewable every six months.2
The Declarations Page for State Farm Policy Form 9806.2 specifying Coffman’s coverage listed Coffman as the “named insured.” The Declarations Page also stated that Coff-man had a “REPLACED POLICY” between the policy period of December 1, 1984, and May 29, 1985, and stated:
YOUR POLICY CONSISTS OF THIS PAGE, ANY ENDORSEMENTS, AND THE POLICY BOOKLET, FORM 9806.2[.] PLEASE KEEP TOGETHER.
The policy provided bodily injury coverage limits of $100,000 for each person and $300,-000 for each accident. The policy that State Farm issued contained a household exclusion provision which excluded from liability coverage “ANY INSURED OR ANY MEMBER OF AN INSURED’S FAMILY RESIDING IN THE INSURED’S HOUSEHOLD.”
In light of Meyer, in March 1985, State Farm submitted proposed endorsement 6896S to the Commissioner for filing and approval pursuant to section 10-4-720(1), 4A C.R.S. (1994).3 The proposed endorsement extended minimum statutory liability coverage per person for bodily injury to any household member and thus modified the Coffmans’ original policy, which provided no coverage to household members.4
*283In June 1985, State Farm amended all its policies issued in Colorado to include endorsement 6896S. According to the affidavit of State Farm’s underwriting supervisor, the endorsement, along with their renewal policy, was mailed to the Coffmans on October 25, 1985. Under the Coffmans’ policy, the endorsement, pursuant to its term, became effective on November 29, 1985, the policy renewal date.
In December 1985, the Coffmans renewed their automobile insurance policy from State Farm and insured a 1986 “GMC JIMMY” four-wheel drive vehicle (the insured vehicle).5 This policy, No. 270-1782-E29-06A, stated that the coverage period for this vehicle extended from December 27, 1985, to May 29, 1986, and contained the same limits on bodily injury liability coverage and terms of family exclusion as the December 1984 policy. The endorsement, entitled “6896S AMENDMENT OF LIABILITY COVERAGE,” was identified on the Declarations Page and attached as an amendment to the renewal policy. The endorsement described the basic coverage as follows:
THERE IS NO COVERAGE:
2. FOR ANY BODILY INJURY TO:
c. ANY INSURED OR ANY MEMBER OF AN INSURED’S FAMILY RESIDING IN THE INSURED’S HOUSEHOLD TO THE EXTENT THE LIMITS OF LIABILITY OF THIS POLICY EXCEED THE LIMITS OF LIABILITY REQUIRED BY LAW.
Additional endorsements were also attached. The Coffmans renewed this policy in May 1986, for an additional six-month period.
On July 1, 1986, the legislature enacted section 10-4-418(2)(b), 4A C.R.S. (1994),6 which contains a legislative declaration that household exclusions are not contrary to the public policy of this state. Section 10-4-418(2)(b) provides as follows:
The commissioner [of insurance] shall not find that a policy form, certificate, or contract of insurance or rider does not comply with the applicable requirements and standards of this title [10, Insurance,] on the ground that it excludes coverage of claims made by a member of a household against another member of the same household. Such exclusions are in conformity with the public policy of this state.
In August 1986, the petitioner, operating the insured vehicle, was involved in an automobile accident in which her husband was a passenger and was seriously injured. On the date of the accident, the May 1986 renewal *284policy was in effect.7 The petitioner’s husband initiated a civil action against the petitioner for his personal injuries, seeking damages for loss of income, permanent disability, pain and suffering, and present and future disability with loss or diminution of earning power. Pursuant to endorsement 6896S in the Coffmans’ policy, State Farm paid the petitioner’s husband the $25,000 liability limit. The $25,000 liability limit reflected the amount awarded to a household member for bodily injuries under section l(M-706(l)(a), 4A C.R.S. (1994).
The petitioner thereafter filed a third-party complaint against State Farm, seeking a determination that endorsement 6896S was ineffective for lack of approval by the Commissioner, and a declaration that at the time of the accident the policy provided liability coverage at $100,000 per person for bodily injury. The petitioner subsequently filed a motion of partial summary judgment against State Farm on the ground that the endorsement limiting coverage to $25,000 for household members constituted the type of reduction in coverage that requires approval by the Commissioner as required by section 10-4-720, 4A C.R.S. (1994). State Farm filed a cross-motion for summary judgment, seeking a determination that the effective policy limit was $25,000 as provided by endorsement 6896S.
The trial court denied both motions and ruled:
Whether or not the coverage of the renewal policy is different from the coverage provided in the first policy [issued in December 1984] is the central factual issue in this ease_ Ms. Coffman would have the court rule that Endorsement 6896S is ineffectual for failure to obtain approval required by CRS 10-4-720. Ms. Coffman has presented a great deal of factual material in support of this argument. On the other hand, State Farm seeks a ruling that the endorsement was approved and therefore summary judgment should be entered in its favor. State Farm’s motion is also supported by fact affidavits.
The only thing which the cross motions and supporting materials make certain is that there are genuine issues of material facts which go to the central disputes in this case. Therefore, the cross motions for summary judgment are each denied.
State Farm filed a motion for reconsideration of the denial of its motion for partial summary judgment, claiming that this court’s decisions in Schlessinger v. Schlessinger, 796 P.2d 1385 (Colo.1990), and Allstate Insurance Co. v. Feghali, 814 P.2d 863 (Colo.1991), “indicate that the Supreme Court decision in Meyer ... was, in fact, wrong, based upon a mistaken premise, and should not be given any force or effect at all.”
On December 27, 1991, a different judge than the judge who had entered the initial order denying the motions for summary judgment issued a second order granting summary judgment in favor of State Farm. Relying upon Schlessinger v. Schlessinger, 796 P.2d 1385 (Colo.1990), and Allstate Insurance Co. v. Feghali 814 P.2d 863 (Colo.1991), the trial court concluded that the household exclusion clause in the insurance policy was not void and that, therefore, the endorsement, providing liability coverage of $25,000, is not a decrease in coverage requiring approval by the Commissioner.
The petitioner thereafter appealed this ruling to the court of appeals, arguing that the endorsement was invalid since section 10-4-418(2)(b) had prospective effect only and did not nullify Meyer’s impact on coverage under the automobile insurance policy issued to the petitioner after the Meyer decision was rendered and before July 1, 1986, the effective date of section 10-4-418(2)(b). The court of appeals considered this argument to lack merit. A majority of the court of appeals concluded that the trial court, on reconsideration, had correctly found that the “household exclusion was not void and that, therefore, the endorsement issued by State Farm was not a decrease in coverage requiring approval by the insurance commissioner.” Coffman, 865 P.2d at 858. After reviewing the history of the legislature’s declaration and this court’s subsequent decisions in Schlessinger and Feghali the majority concluded that the endorsement imposing the *285$25,000 limit was enforceable against the petitioner.
In a special concurrence, Judge Briggs wrote:
State Farm issued a policy to Coffman that excluded any bodily injury liability coverage for household members. After the decision of our supreme court in Meyer v. State Farm Mutual Automobile Insurance Co., 689 P.2d 585 (Colo.1984), State Farm issued an endorsement to the policy which provided liability coverage for household members to $25,000 per person. The policy was renewed with this endorsement on more than one occasion.
Section 10-44720(1) C.R.S. (1987 Repl. Vol. 4A) requires approval by the State Insurance Commissioner for a reduction in coverage. In my view, the endorsement changing the policy from no coverage to $25,000, even if necessitated by the Meyer decision, is not a “reduction” in coverage under § 10-4-720(1) which requires the commissioner’s approval. For this reason, I would affirm the decision of the trial court finding the endorsement valid.
Id. at 858-59.
II.
I disagree with the majority’s conclusion that endorsement 6896S included within petitioner’s policy reduced the coverage for injuries to household members — from $100,000 to $25,000 — and required the approval of the Commissioner in order to become effective. Maj. op. at 278, 281. The effect of the majority opinion violates both the spirit and intent of creating the endorsement to the household exclusion provision.
In my judgment, it would be anomalous to interpret the endorsement as creating reduced uninsured motorist coverage when, under the household exclusion provision, coverage had previously been excluded altogether. Accordingly, I believe that endorsement 6896S, extending statutory liability per person to $25,000, represents an 'increase in coverage from the total household exclusion provision.8
Further, under the facts of this case, I do not perceive the situation presented here to be a retroactive question. In my judgment, we need not reach the question whether the General Assembly intended section 10-4-418(2)(b) to have retroactive application.
State Farm claims that, because Coffman’s insurance policy contained a “household exclusion”, endorsement 6896S did not reduce Coffman’s coverage, but in fact, increased it from $0 to $25,000. I agree.
In March 1985, State Farm submitted proposed endorsement 6896S to the Commissioner for filing and approval pursuant to section 10-44720(1), 4A C.R.S. (1994). The proposed endorsement extended $25,000 per person liability coverage for bodily injury to any household member, pursuant to section 10-44706(l)(a), 4A C.R.S. (1994). In June 1985, State Farm amended all its policies issued in Colorado to include endorsement 6896S. According to the affidavit of State Farm’s underwriting supervisor, the endorsement, along with their renewal policy, was mailed to the Coffmans on October 25, 1985. The endorsement, entitled “6896S AMENDMENT OF LIABILITY COVERAGE,” was identified on the Declarations Page and attached as an amendment to the renewal policy. The endorsement described the basic coverage as follows:
THERE IS NO COVERAGE:
2. FOR ANY BODILY INJURY TO:
c. ANY INSURED OR ANY MEMBER OF AN INSURED’S FAMILY RESIDING IN THE INSURED’S HOUSEHOLD TO THE EXTENT THE LIMITS OF LIABILITY OF THIS POLICY EXCEED THE LIMITS OF LIABILITY REQUIRED BY LAW.
Additional endorsements were also attached. Under the ' Coffmans’ policy, the endorsement, pursuant to its term, became effective on November 29, 1985, the policy renewal date.
*286The petitioner, having been placed on statutory notice of the endorsement, renewed her policy several times during the course of two years without objecting to the terms of the policy or requesting a modification of the endorsement. Had the petitioner wanted greater coverage than the minimum specified in the endorsement, she could have requested an increase in coverage.
Insurance policies are contracts, and the intent of the parties must be ascertained from the plain language of the policy where there is a written instrument. Federal Deposit Ins. Corp. v. American Casualty Co. of Reading, Pa., 843 P.2d 1285, 1289-90 (Colo.1992); May v. United States, 756 P.2d 362, 369 (Colo.1988). In construing a policy provision which clearly and unambiguously details coverage, the language should be construed according to the plain meaning of the words, and strained constructions should be avoided. American Casualty Co. of Reading, Pa., 843 P.2d at 1290; Wota v. Blue Cross and Blue Shield, 831 P.2d 1307, 1309 (Colo.1992).
When the endorsement is considered as a whole, the language of the provision specifies the limits of liability coverage to a household member for bodily injury.
Additionally, pursuant to section 10-4-720, 4A C.R.S. (1994), approval by the Commissioner is required only if the endorsement or policy provision reduces coverage as part of a “general reduction in coverage approved by the commissioner or to satisfy the requirements of other sections of this part 7.” An increase in coverage, however, does not require the approval of the Commissioner. Because I do not consider endorsement 6896S to reduce coverage, as prior to this endorsement the policy had a general household exclusion, section 10-4-720 is not applicable.
A majority of jurisdictions hold household exclusions invalid only as to the amount of the minimum liability coverage required by the compulsory insurance law. Where the policy limit exceeds the statutory minimum, the insurer’s liability is limited to the coverage required by statute. Stepho v. Allstate Ins. Co., 259 Ga. 475, 383 S.E.2d 887 (1989); Dewitt v. Young, 229 Kan. 474, 625 P.2d 478 (1981); State Farm Mut. Auto. Ins. Co. v. Nationwide Mut. Ins. Co., 307 Md. 631, 516 A.2d 586 (1986); State Farm Mut. Auto. Ins. Co. v. Shelly, 394 Mich. 448, 231 N.W.2d 641 (1975); Cimarron Ins. Co. v. Croyle, 479 N.W.2d 881 (S.D.1992); State Farm Mut. Auto. Ins. Co. v. Mastbaum, 748 P.2d 1042 (Utah 1987); Allstate Ins. Co. v. Wyoming Ins. Dep’t, 672 P.2d 810 (Wyo.1983).
In light of the above, I would therefore affirm the court of appeals’ ruling that State Farm’s endorsement 6896S increased the coverage from zero dollars to $25,000 for claims made by one household member against another and was therefore not a “reduction” in coverage requiring the approval of the Commissioner.
Accordingly, I respectfully dissent.
I am authorized to say that Chief Justice ROVIRA and Justice ERICKSON join in this dissent.

. Prior to this policy, the Coffmans had an Iowa State Farm auto insurance policy which contained a household exclusion provision identical to the one in their December 1984 policy.

. The first policy contained an agreement for renewal which provided in part:
Unless within 59 days of the policy effective date, we mail or deliver a notice of cancellation to you, we agree:
b. to renew the policy for the next policy period at the rates then in effect unless we mail to you written notice of our intention not to renew. The notice will be mailed to your last known address at least 30 days before the end of the current policy period.

. The parties dispute whether the Commissioner approved the proposed endorsement.

. Section 10-4 — 706(l)(a), 4 C.R.S. (1973), mandates compulsory liability coverage and sets forth *283the minimum coverage for automobile liability insurance as follows:
Legal liability coverage for bodily injury or death arising out of the use of the motor vehicle to a limit, exclusive of interest and costs, of fifteen thousand dollars to any one person in any one accident and thirty thousand dollars to all persons in any one accident, and for property damage arising out of the use of the motor vehicle to a limit, exclusive of interest and costs, of five thousand dollars in any one accident!.]
The minimum coverage limits were changed to $25,000, $50,000 and $15,000, respectively, effective July 1, 1983. Act approved May 23, 1983, ch. 93, sec. 1, 1983 Colo.Sess.Laws 456; § 10-4-705(1)(1), 4A C.R.S. (1994). The minimum liability coverage for bodily injuries to the petitioner's husband at the time the endorsement became effective and at the date of the accident was therefore $25,000.

. The parties dispute whether the policy issued on December 27, 1985, constituted a new policy or was a renewal of the policy originally issued in December 1984.
Contrary to the petitioner’s assertion, the evidence overwhelmingly indicates that the petitioner renewed her automobile liability policy on several occasions. The case law additionally establishes that policies issued to petitioner subsequent to the issuance of her original policy were renewals of the original rather than new policies. For example, in Government Employees Insurance Co. v. United States, 400 F.2d 172 (1968), the Tenth Circuit held that a liability insurer's transmittal of a cover letter, with a renewal policy which contained an additional endorsement excluding the United States as an omnibus insured, advising the insured to carefully read the policy as submitted, coupled with the fact that the additional endorsement was attached separately thereto, was sufficient to call the insured’s attention to the change in coverage, and the modification was properly incorporated into the renewed policy.

. Act approved May 30, 1986, ch. 83, sec. 5, 1986 Colo.Sess.Laws 581.

. Section 10-4-418(2)(b), 4A C.R.S. (1994), was also in effect prior to the date of the accident.

. Based upon my interpretation of the issue to be resolved, I conclude that endorsement 6896S does not require approval under § 1CM1-720, 4A C.R.S. (1994), thus rendering summary judgment appropriate.