State Farm Mutual Automobile Insurance v. Progressive Mutual Insurance

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES CO URT O F APPEALS
September 20, 2006
FO R TH E TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
STA TE FA RM M U TU A L
AUTOM OBILE INSURANCE
COM PANY, an Illinois
corporation,
No. 05-1215
Plaintiff-Counter- (D.C. No. 03-F-1275 (CBS))
Defendant-Appellant, (D . Colo.)
v.
PR OG RESSIV E M U TU A L
IN SURANCE COM PANY, an Ohio
corporation,
Defendant-Appellee,
VICK I L. LEE,
Defendant-Counter-
Claimant-Appellee.
OR D ER AND JUDGM ENT *
Before KELLY, PO RFILIO, and BROR BY, Circuit Judges.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist 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. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. The court generally disfavors the citation of orders and
judgments; nevertheless, an order and judgment may be cited under the terms and
conditions of 10th Cir. R. 36.3.
Plaintiff State Farm M utual Automobile Insurance Company (State Farm)
appeals from the district court’s denial of its motion for summary judgment and
the grant of summary judgment in favor of defendant Vicki L. Lee. At issue on
the parties’ respective motions w as the interpretation of Colo. Rev. Stat.
§ 10-4-609, and more specifically, whether the initial determination of when a
tortfeasor’s vehicle is underinsured should be made by comparing the liability
limits of the tortfeasor’s policy with the liability limits of the underinsured
portions of the injured party’s policy alone, or by comparing the liability limits of
the tortfeasor’s policy with the sum of the underinsured limits of the injured
party’s policy and the underinsured limits of any other applicable policies. This
latter procedure of applying the policy limits of multiple policies is known as
stacking.
After the district court denied the parties’ request to certify the questions of
law to the Colorado Supreme Court, it held that: (1) § 10-4-609 permitted
stacking of the injured party’s policy with the limits of other applicable policies
under these circumstances of the case; (2) the tortfeasor was underinsured; and
(3) M s. Lee was entitled to a claim of up to $200,000 in uninsured motorist
coverage from State Farm. On appeal to this court, the parties again requested
that the questions of law be certified to the state supreme court. Because the case
presented important, but undecided, questions of state law and statutory
interpretation, we certified the questions of law to the Colorado Supreme Court.
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State Farm M ut. Auto. Ins. Co. v. Progressive M ut. Ins. Co., No. 05-1215
(10th Cir. Dec. 16, 2005).
The relevant, undisputed facts presented to the Colorado Supreme Court on
the certified questions of law are that M s. Lee (the injured party) was a passenger
on Jerry M aggard’s motorcycle w hen it was struck by a vehicle driven by Sonja
M adson (the tortfeasor) in July 2002 in Loveland, Colorado. At the time of the
accident, M s. M adson was insured by Progressive under a policy that provided
$100,000 in liability coverage per person. M s. Lee was insured under a policy
from State Farm, which had a $100,000 underinsured limit. M r. M aggard, who is
not related to M s. Lee, was insured under a separate policy from State Farm, with
the same $100,000 underinsured limit contained in M s. Lee’s policy.
W ith State Farm’s permission, M s. Lee settled her claim against
M s. M adson for the Progressive policy limits. Thereafter, M s. Lee asserted that
the Progressive payment did not fully compensate her for her injuries, and she
made a claim to State Farm for underinsured benefits under her own and
M r. M aggard’s policies. State Farm denied the claim and filed a declaratory
judgment action in the district court in which it sought a determination that
M s. M adson’s vehicle was not underinsured, because § 10-4-609 did not permit
the stacking of M s. Lee’s and M r. M aggard’s policies to determine whether the
M s. M adson was underinsured.
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In answering the certified questions of law , the C olorado Supreme Court
held that under § 10-4-609, “[c]onsidered as a whole,” a tortfeasor’s vehicle “is
underinsured whenever the limits of liability against which its use is insured are
less than the sum of the underinsured motorist coverage declared in the injured
party’s policy and the underinsured motorist coverage declared in all other
applicable policies.” 1 State Farm M ut. Auto Ins. Co. v. Progressive Mut. Ins. Co.
(In re State Farm ), No. 05 SA 369, 2006 W L 2589162, at * 1 (Colo. Sept. 11,
2006). Therefore, the judgment of the district court is AFFIRMED.
Entered for the Court
W ade Brorby
Circuit Judge
1
The Colorado Supreme Court recognized that § 10-4-609(2) allows an
insurer to prohibit stacking under circumstances not present in this case.
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