Airth v. Zurich American Insurance Co

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