Court Opinion

ID: 4577630
Source: CourtListenerOpinion
Date Created: 2020-10-15 22:02:25.134616+00
Date Added: 2024-06-11T13:36:25.015232
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
                                                            October 15, 2020

                               2020COA147

No. 20CA0965, Trudgian v. LM General Insurance Company —
Insurance — Motor Vehicles — Claims Practices for Property
Damage; Regulation of Vehicles and Traffic — Registration
Upon Transfer

     In this C.A.R. 4.2 interlocutory appeal, the division analyzes

the intersection of section 10-4-639(1), C.R.S. 2019, which states

that insurers must pay an insured registration fees “associated with

the total loss of a motor vehicle,” with section 42-3-115(1), C.R.S.

2018, which states that a vehicle’s owner may receive credit for

registration fees from the Division of Motor Vehicles for a cancelled

registration. The insurer asserts that, when read together, the two

statutes authorize it to wait to see if the owner will receive a credit

before it is required to pay the insured the registration fees. The

division disagrees and concludes that the insurer is required to pay

the registration fees.
COLORADO COURT OF APPEALS                                         2020COA147

Court of Appeals No. 20CA965
City and County of Denver District Court No. 19CV30732
Honorable Martin F. Egelhoff, Judge

Barbara Trudgian,

Plaintiff-Appellee,

v.

LM General Insurance Company,

Defendant-Appellant.

                         ORDER AFFIRMED AND CASE
                        REMANDED WITH DIRECTIONS

                                  Division A
                      Opinion by CHIEF JUDGE BERNARD
                       Tow and Hawthorne*, JJ., concur

                         Announced October 15, 2020

Franklin D. Azar & Associates, P.C., Michael D. Murphy, Alexander Beale,
Aurora, Colorado, for Plaintiff-Appellee

Lewis Roca Rothgerber Christie LLP, Holly C. White, Lindsey C. Herzog, Denver,
Colorado, for Defendant-Appellant

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2019.
¶1    As is pertinent to this C.A.R. 4.2 interlocutory appeal, section

 10-4-639(1), C.R.S. 2019, states that an insurer “shall” pay

 registration fees when they are “associated with the total loss of a

 motor vehicle.” To resolve this appeal, we must decide whether an

 insurer is required to pay an insured such registration fees even

 though the insured might get a credit from the Department of Motor

 Vehicles, which we shall call “the department,” for the same fees

 when the insured registers a replacement vehicle. We conclude that

 the insurer is required to pay the registration fees.

                             I. Background

¶2    The named plaintiff in this putative class action, Barbara

 Trudgian, whom we shall call “the insured,” bought auto insurance

 from defendant, LM General Insurance Company, which we will call

 “the insurer.” She paid registration fees for the vehicle, which was

 later damaged in an accident.

¶3    The insurer decided that the vehicle was a total loss, so it gave

 the insured an itemized settlement statement. But the insured

 thinks that the insurer violated section 10-4-639(1) because (1) the

 settlement statement did not include reimbursement for any

 registration fees that she had paid for the vehicle for the period

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 following the accident; and (2) the insurer has never reimbursed her

 for those fees.

¶4    So the insured filed this lawsuit, which includes claims for

 statutory bad faith, common law bad faith, breach of contract, and

 a request for a declaratory judgment. Relying on C.R.C.P. 56(h), the

 insurer filed a motion asking the trial court to decide, as a matter of

 law, that section 10-4-639(1) does not require it to reimburse the

 insured for any credit that the department gave or would give the

 insured for registration fees that the insured had paid on the

 vehicle during the period after the time of the accident.

¶5    The court disagreed with the insurer, concluding that section

 10-4-639(1) “[u]nambiguously states that an insurer ‘shall’ pay

 registration fees” associated with the total loss of a vehicle and that

 this statute does not contain any “exception [to] or limitation on the

 insurer’s statutory duty.” The court explained that the insured’s

 contention that its duty to pay is “conditioned upon whether or not

 a discretionary credit is applied or ‘will be applied’ at some point in

 the future” is both “inconsistent with the mandatory duty”

 established by section 10-4-639(1) and “in conflict with” the

                                    2
 insurer’s “overarching obligation to pay claims in a reasonable

 time.”

¶6      The court later certified its order for interlocutory appeal

 under C.A.R. 4.2. We granted the petition because we concluded

 that it meets the requirements for an interlocutory appeal. We now

 affirm the court’s order.

     II. Standard of Review and Principles of Statutory Interpretation

¶7      This appeal requires us to interpret statutes. We review such

 issues de novo. People v. Ortiz, 2016 COA 58, ¶ 15.

¶8      When we interpret a statute, we must ascertain and give effect

 to the legislature’s intent. Colo. Dep’t of Revenue v. Creager

 Mercantile Co., 2017 CO 41M, ¶ 16. In doing so, “[w]e give effect to

 words and phrases according to their plain and ordinary

 meaning[s].” Denver Post Corp. v. Ritter, 255 P.3d 1083, 1089 (Colo.

 2011).

¶9      If a statute’s language is clear, we apply it as the legislature

 wrote it. Id. “[W]e will not interpret a statute to mean that which it

 does not express.” Carruthers v. Carrier Access Corp., 251 P.3d

 1199, 1204 (Colo. App. 2010).

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                                 III. Analysis

¶ 10   There are two statutes at the core of this case. The first is

  section 10-4-639(1), which states that “[a]n insurer shall pay . . .

  any . . . registration fee associated with the total loss of a motor

  vehicle.” The second is section 42-3-115(1), C.R.S. 2018, which, at

  the time of the accident, specified that

          • a vehicle’s owner, when “applying for registration in such

             owner’s name during the same registration period of

             another motor vehicle”;

          • “may receive credit upon fees due for such new

             registration for such portion of the fees paid for the

             cancelled registration” (emphasis added);

          • “as the department may determine to be proper and

             proportionate to the unexpired part of the original term of

             registration.”

¶ 11   According to the insurer, section 10-4-639(1) does not require

  it to reimburse the insured for registration fees that the department

  has or will credit to her under section 42-3-115(1), C.R.S. 2018. As

  a result, the insurer continues, it cannot “calculate what amount of

  money, if any, it owes to an insured for the loss . . . of . . . [the]

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  registration fees” until the insured tells the insurer one of two

  things: (1) she will not be registering a replacement vehicle,

  meaning that she will not receive a credit from the department; or

  (2) she has received a credit from the department and tells the

  insurer how much it was. But, whether we read these two statutes

  separately or together, we conclude that they do not say what the

  insurer contends that they say.

¶ 12   Beginning with the plain language of section 10-4-639(1), the

  use of the word “shall” requires the insurer to reimburse the

  insured for the registration fee associated with the total loss of a

  vehicle. See People v. Dist. Court, 713 P.2d 918, 921 (Colo.

  1986)(“[T]he use of the word ‘shall’ in a statute is usually deemed to

  involve a mandatory connotation.”). “[A]ssociated” means “related,

  connected, or combined together.” Merriam-Webster Dictionary,

  https://perma.cc/99DL-X4LB. Giving these terms their ordinary

  meanings, section 10-4-639(1) requires an insurer to reimburse an

  insured for the registration fee if it is connected to the total loss of a

  vehicle. In other words, just like a totaled vehicle is a loss to the

  insured, the associated registration fee is likewise a loss.

                                      5
¶ 13   Contrary to the insurer’s contention, nothing in section

  10-4-639(1) creates an exception to this obligation. The statute

  does not contain an exception, and we eschew creating one out of

  thin air because “an exception not expressly made by the legislature

  should not be read into a statute by the courts.” Dikeou v. Dikeou,

  928 P.2d 1286, 1293 n.4 (Colo. 1996); see In re Marriage of Chalat,

  112 P.3d 47, 57 (Colo. 2005)(“Straining the statute to read

  otherwise would ignore its plain language . . . and read in a

  judicially created exception that the General Assembly did not

  include.”). And section 42-3-115(1), C.R.S. 2018, does not refer to

  any such exception for insurers, either.

¶ 14   Even so, the insurer submits that, by not creating an

  exception to its obligation to pay the insured’s registration fee under

  section 10-4-639(1), the insured, and any other similarly situated

  insureds, might receive a windfall allowing them to collect twice:

  once from the insurer under section 10-4-639(1), and once in the

  form of a credit from the department under section 42-3-115(1),

  C.R.S. 2018. We disagree for five reasons.

¶ 15   First, unlike an insurer’s obligation to pay registration fees in

  section 10-4-639(1), the credit provided in section 42-3-115(1),

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  C.R.S. 2018, is not mandatory. “The owner . . . may receive credit

  upon the fees due for such new registration for such portion of the

  fees paid for the cancelled registration as the department may

  determine to be proper and proportionate to the unexpired part of

  the original term of registration.” § 42-3-115(1), C.R.S. 2018

  (emphasis added). See Larry H. Miller Corp. Denver v. Urban

  Drainage & Flood Control Dist., 64 P.3d 941, 946 (Colo. App.

  2003)(“[T]he General Assembly’s use of the term ‘may’ is indicative

  of a discretionary power to choose among alternatives.”); see also

  People v. Kilgore, 992 P.2d 661, 663 (Colo. App. 1999)(“While [the

  term ‘may’] can, in some instances, bear a mandatory meaning . . .

  it is generally deemed to carry a permissive connotation, absent

  evidence of a contrary legislative intent.”). Providing an exception to

  an insurer’s mandatory obligation based on a discretionary credit

  would be contrary to the ordinary meaning of these statutes.

¶ 16   Second, in construing a statute’s ordinary meaning, we read

  the statutory scheme as a whole to “give consistent, harmonious,

  and sensible effect to all parts of [the] statute.” Jefferson Cty. Bd. of

  Equalization v. Gerganoff, 241 P.3d 932, 935 (Colo. 2010). Title 10

  applies to all types of insurance. Section 10-4-639(1) is part of

                                      7
  Article 4, which deals with “Property and Casualty Insurance.” By

  enacting Article 4, the General Assembly declared “that the health,

  welfare, and safety of the people of the state of Colorado would be

  enhanced by the expeditious handling of liability claims.”

  § 10-4-101, C.R.S. 2019; see § 10-3-1115(1)(a), C.R.S. 2019 (An

  insurer “shall not unreasonably delay or deny payment of a claim

  for benefits owed to or on behalf of any first-party claimant.”).

  Interpreting section 10-4-639(1) as the insurer suggests we should

  interpret it is contrary to this statutory scheme because it puts the

  burden on the insured to provide information based on an

  uncertain event — buying and registering a new vehicle — before

  she can be compensated for the total loss of her covered vehicle.

¶ 17   Third, and relatedly, forcing the insured to wait to receive the

  reimbursement for the registration fees until she has either decided

  against registering a replacement vehicle or decided to register one

  and the department has given her a credit would unnecessarily

  delay the payment of her claim, undercutting the legislature’s

  direction that such claims be resolved expeditiously. See § 10-3-

  1115(1)(a); § 10-4-101.

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¶ 18   Fourth, the insured is only seeking registration fees for the

  period when she was unable to use her vehicle after the accident

  because of the total loss. She would not be in the position of

  needing a replacement vehicle — and paying additional registration

  fees — if her insured vehicle had not been a total loss. See State,

  Dep’t of Health v. The Mill, 887 P.2d 993, 1005 (Colo. 1994)(“A

  ‘windfall’ is commonly understood to mean ‘an unexpected or

  sudden gain or advantage.’” (quoting Webster’s Third New

  International Dictionary 2619-20 (1986))).

¶ 19   Fifth, “[i]t is not within the purview of this court to question

  the legislature’s choice of policy,” even if that policy results in a

  windfall to insureds. City of Montrose v. Pub. Utils. Comm’n, 732

  P.2d 1181, 1193 (Colo. 1987); see Volunteers of Am. Colo. Branch v.

  Gardenswartz, 242 P.3d 1080, 1088 (Colo. 2010)(The legislature

  “chose to allow a plaintiff to obtain the benefit of his contract, even

  if the award resulted in a double recovery.”); see also Colo. Ins.

  Guar. Ass’n v. Menor, 166 P.3d 205, 217 (Colo. App. 2007)(“[T]he

  General Assembly has not amended § 8-41-203 to preclude such

  windfalls.”).

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¶ 20   The insurer points to the legislature’s recent repeal of section

  42-3-115(1), C.R.S. 2018, and to its related enactment of section

  42-3-107(25), C.R.S. 2019 (effective January 1, 2020), to buttress

  its contention. See Ch. 231, sec. 2, § 42-3-115, 2019 Colo. Sess.

  Laws 2319. Section 42-3-107(25) now provides that the

  “department shall allow a credit for . . . registration fees . . . if the

  owner disposes of the vehicle during the registration period . . . .”

  (Emphasis added.) The insurer asserts that, because the legislature

  did not modify section 10-4-639(1) when enacting section

  42-3-107(25), section 10-4-639(1) cannot be interpreted to require

  insurers to pay registration fees that the department now must

  credit to insureds.

¶ 21   But that is not what the 2019 statutory changes say. They did

  not expressly create an exception to the insurer’s duty to reimburse

  the insured for registration fees under section 10-4-639(1), and we

  cannot create one out of whole cloth. See Dikeou, 928 P.2d at 1293

  n.4. And, as our supreme court has explained, the legislature “that

  amended the statute is not the same [legislature] that enacted the

  statute that we construe here.” State v. Nieto, 993 P.2d 493, 504

  n.6 (Colo. 2000). We cannot infer the intent of the predecessor

                                      10
  legislature that enacted section 10-4-639(1) from the act of the

  successor legislature that enacted section 42-3-107(25). Id.

¶ 22   Finally, the insurer submits that the United States District

  Court’s decision in Monson v. Country Preferred Insurance Company,

  No. 17-CV-02130-RBJ, 2018 WL 11016704 (D. Colo. Sept. 28,

  2018), supports its interpretation. In Monson, as in this case, the

  plaintiff claimed that an insurance company did not reimburse its

  insured for registration fees under section 10-4-639(1). Id. at *2.

  The insurer relies on the district court’s statement that a credit

  from the department “may be relevant in determining the amount of

  fees owed” by the insurer. Id. at *4. But this statement was made

  in the context of discussing all the fees that the plaintiff sought

  from the insurance company: “the total amount of fees related to

  the replacement vehicle, minus a . . . credit” from the department.

  Id. at *3. The insured in this case did not seek such additional fees.

¶ 23   More to the point, Monson held that section 10-4-639(1)

  “mandates the insurance provider to pay . . . registration fee[s]

  associated with a total loss.” Id. at *4. It decided, like we do, that

  “a discretionary credit from the [department] does not relieve

  insurance providers of their statutory duties as a matter of law.” Id.

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¶ 24   In the end, we conclude that section 10-4-639(1) means

  exactly what it says: the insurer must pay registration fees

  associated with the total loss of the insured’s vehicle.

¶ 25   The trial court’s order is affirmed, and we remand the case for

  further proceedings.

       JUDGE TOW and JUDGE HAWTHORNE concur.

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