SUMMARY
December 16, 2021
2021COA149
No. 20CA1357, Mullen v. Metropolitan Casualty — Insurance —
Motor Vehicles — Automobile Insurance Policies —
Uninsured/Underinsured
In this declaratory judgment action, a division of the court of
appeals determines whether, under the standard set forth in
Allstate Insurance Co. v. Parfrey, 830 P.2d 905 (Colo. 1992), an
insurance company discharged its duty under section 10-4-609(2),
C.R.S. 2021, to notify and offer its insureds
uninsured/underinsured motorist (UM/UIM) coverage in a manner
reasonably calculated to permit them to make an informed decision
about whether and at what limits to purchase such coverage. The
division concludes that the form the insurance company provided to
its insured to select UM/UIM coverage sets forth an inaccurate
statement of the law and that the information in the selection form
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.
regarding available levels of coverage and related premiums is
confusing. Under these circumstances, the division concludes that
the insurance company did not discharge its statutory duty.
Accordingly, the division reverses the district court’s summary
judgment order in favor of the insurance company and remands the
case with directions to enter summary judgment in favor of the
insured.
COLORADO COURT OF APPEALS 2021COA149
Court of Appeals No. 20CA1357
Arapahoe County District Court No. 19CV31995
Honorable John L. Wheeler, Judge
Margaret Mullen,
Plaintiff-Appellant,
v.
Metropolitan Casualty Insurance Company,
Defendant-Appellee.
JUDGMENT REVERSED AND CASE
REMANDED WITH DIRECTIONS
Division III
Opinion by JUDGE BROWN
Furman and Lipinsky, JJ., concur
Announced December 16, 2021
Larson Larimer Schneider, P.C., Philip C. Zimmerman, Vance R. Larimer,
Greenwood Village, Colorado, for Plaintiff-Appellant
Walberg Law, PLCC, Wendelyn Walberg, Katherine Smith Dedrick, Morrison,
Colorado, for Defendant-Appellee
Jordan Herington & Rowley, Michael J. Rosenberg, Greenwood Village,
Colorado; Law Office of Richard M. Crane, Richard M. Crane, Denver, Colorado,
for Amicus Curiae Colorado Trial Lawyers Association
1
¶ 1
In this declaratory judgment action, plaintiff, Margaret Mullen
(Margaret1), appeals the district court’s entry of summary judgment
in favor of defendant, Metropolitan Casualty Insurance Company
(Metropolitan). To resolve this appeal, we must determine whether
Metropolitan discharged its duty under section 10-4-609(2), C.R.S.
2021, to notify and offer the Mullens uninsured/underinsured
motorist (UM/UIM) coverage. Under the standard set forth in
Allstate Insurance Co. v. Parfrey, 830 P.2d 905 (Colo. 1992), the
offer must have been made in a manner reasonably calculated to
permit the Mullens to make an informed decision about whether
and at what limits to purchase such coverage. Considering the
totality of the circumstances — including that the UM/UIM
selection form Metropolitan provided to the Mullens set forth an
inaccurate statement of the law and was confusing — we conclude
that Metropolitan did not discharge its duty. Thus, we reverse and
remand to the district court to enter judgment in favor of Margaret.
1 Because Margaret Mullen shares a last name with her late
husband, Edward Mullen, we adopt the practice used by her
appellate counsel and refer to Margaret and Edward by their first
names. We mean no disrespect by this informality.
2
I. Background
¶ 2
Margaret initiated the underlying litigation against
Metropolitan to obtain a declaratory judgment that an election her
late husband, Edward Mullen (Edward), made for UM/UIM coverage
was legally ineffective. The parties agreed to file cross-motions for
summary judgment. They also stipulated to a set of undisputed
facts and to the authenticity of certain documentary exhibits. From
the undisputed facts and authenticated documents, we set forth the
following relevant factual background.
¶ 3
Metropolitan issued a new Colorado automobile insurance
policy to “Edward J Mullen and Margaret Mullen” as the named
insureds, effective May 15, 2010. On or about May 6, 2010,
Metropolitan sent the Mullens a package of materials related to
their new policy. Among other things, the package included the
policy and a “Colorado Uninsured Motorists Coverage Selection
Form” (UM/UIM Selection Form).
¶ 4
The policy carried liability limits of $100,000 per person and
$300,000 per accident for bodily injury or death. As issued, the
policy also carried UM/UIM coverage limits of $100,000 per person
and $300,000 per accident.
3
¶ 5
On or about May 12, 2010, Edward completed and signed the
UM/UIM Selection Form, selecting UM/UIM coverage in the amount
of $25,000 per person and $50,000 per accident. Metropolitan
processed the policy change effective July 15, 2010. Because the
premium for UM/UIM coverage of $25,000/$50,000 was less than
the premium the Mullens had paid for the original
$100,000/$300,000 coverage, Metropolitan issued the Mullens a
refund of the premium they overpaid.
¶ 6
Edward died on November 20, 2010. Margaret notified
Metropolitan of his death and Metropolitan removed Edward as a
named insured from the policy.
¶ 7
Later in 2011, Metropolitan provided Margaret with proposed
2011 policy renewal documents, which included a declarations page
showing $25,000/$50,000 in UM/UIM coverage. The renewal
documents encouraged her to review her coverage selections and to
inform Metropolitan if the information was “different from what you
asked for or currently need” or if her “insurance needs have
changed.” Each year between 2011 and 2018, the policy was
renewed with liability limits of $100,000/$300,000 and UM/UIM
4
coverage limits of $25,000/$50,000. Margaret never requested an
increase in her UM/UIM coverage.
¶ 8
On October 17, 2018, Margaret was in a motor vehicle
collision with an underinsured motorist and suffered serious
injuries. On December 10, 2018, Metropolitan issued Margaret a
$25,000 check as payment of the maximum UM/UIM benefits
under the policy. Because Margaret’s damages exceeded the
$25,000 payment, she filed the underlying declaratory judgment
action seeking a determination that the UM/UIM Selection Form
Edward signed and returned to Metropolitan was ineffective to
reduce her UM/UIM coverage.
¶ 9
In her motion for summary judgment, Margaret argued that
section 10-4-609(2) required Metropolitan to offer the Mullens
UM/UIM coverage before it issued the policy in 2010. According to
Margaret, because Metropolitan made the UM/UIM coverage offer
contemporaneously with its issuance of the policy, it failed to
comply with the statute, rendering Edward’s later execution of the
UM/UIM Selection Form ineffective as to the 2010 policy and
entitling her to UM/UIM coverage limits of $100,000/$300,000.
Further, Margaret argued, because Edward died before the policy
5
was renewed in 2011, he was not a named insured with authority to
make a UM/UIM coverage selection relative to the 2011 renewal or
any subsequent renewal. Finally, Margaret argued that
Metropolitan failed to satisfy its duty under section 10-4-609, as
articulated in Parfrey, 830 P.2d at 913-14, to offer the Mullens
UM/UIM coverage in a manner reasonably calculated to permit
them to make an informed decision as to the purchase of such
coverage.
¶ 10
Metropolitan cross-moved for summary judgment, arguing
that it satisfied its statutory obligations with a sufficient notice and
offer to the Mullens to purchase UM/UIM coverage, that Edward’s
selection of the $25,000/$50,000 limits was effective as to the 2010
policy, and that it had no duty to reoffer UM/UIM coverage to
Margaret in connection with any subsequent renewal of the policy.
¶ 11
The district court sided with Metropolitan. Following the
rationale articulated by a division of this court in Airth v. Zurich
American Insurance Co., 2018 COA 9, the court concluded that
Metropolitan had a one-time duty to offer UM/UIM coverage, which
it satisfied by providing the UM/UIM Selection Form before the
insured needed the UM/UIM coverage. It concluded that, as a
6
named insured, Edward had authority to make the UM/UIM
election when he made it and that the election was binding on
Margaret after Edward’s death. And it concluded that, under the
totality of the circumstances, Metropolitan adequately notified the
Mullens of the opportunity to purchase UM/UIM coverage.
Accordingly, the district court denied Margaret’s motion for
summary judgment and granted Metropolitan’s motion for
summary judgment.
II. Analysis
¶ 12
Margaret contends that the district court erred by concluding
that Metropolitan satisfied its statutory duties to (1) offer the
Mullens UM/UIM coverage “before the policy is issued or renewed”
and (2) notify the Mullens of the opportunity to purchase UM/UIM
coverage in a manner reasonably calculated to permit them to make
an informed decision.
¶ 13
Because we agree with Margaret’s second contention, we need
not resolve her first. We reverse the entry of summary judgment in
favor of Metropolitan and remand to the district court to enter
summary judgment in favor of Margaret.
7
A. Standard of Review
¶ 14
We review the entry of summary judgment de novo. Shelter
Mut. Ins. Co. v. Mid-Century Ins. Co., 246 P.3d 651, 657 (Colo.
2011). Summary judgment is appropriate where the pleadings and
supporting documents clearly demonstrate that no issues of
material fact exist and the moving party is entitled to judgment as a
matter of law. C.R.C.P. 56(c); Cotter Corp. v. Am. Empire Surplus
Lines Ins. Co., 90 P.3d 814, 819 (Colo. 2004).
¶ 15
To the extent our analysis requires us to interpret the
applicable statutes, we do so de novo. Airth, ¶ 25. When
interpreting a statute, we must ascertain and give effect to the
intent of the General Assembly. Parfrey, 830 P.2d at 911; Airth,
¶ 26. We do so by first looking to the words of the statute and
giving effect to their common meanings. Airth, ¶ 26. If those words
are clear and unambiguous, we apply the statute as written. Id.
¶ 16
We also interpret insurance policies de novo, employing “well-
settled principles of contractual interpretation.” Allstate Ins. Co. v.
Huizar, 52 P.3d 816, 819 (Colo. 2002); accord Shelter Mut. Ins. Co.,
246 P.3d at 666. We construe the plain language of the policy to
8
fulfill the intent of the parties, and we resolve ambiguities in favor of
the insured. Shelter Mut. Ins. Co., 246 P.3d at 666.
B. Applicable Law
¶ 17
Section 10-4-609(1) states that no automobile liability policy
shall be issued in Colorado unless it provides coverage for bodily
injury or death “for the protection of persons . . . legally entitled to
recover damages from owners or operators of uninsured motor
vehicles” at the limits set forth in section 42-7-103(2), C.R.S. 2021.
Section 42-7-103(2) requires coverage for bodily injury or death of
not less than $25,000 per person and $50,000 per accident.
Insurers must provide UM/UIM coverage limits of at least
$25,000/$50,000 unless the insured rejects such coverage in
writing. § 10-4-609(1)(a).
¶ 18
Section 10-4-609 continues,
(2) Before the [automobile liability] 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.
(3) Notwithstanding the provisions of
subsection (2) of this section, after selection of
9
limits by the insured or the exercise of the
option not to purchase the coverages described
in this section, no insurer nor any affiliated
insurer shall be required to notify any
policyholder in any renewal or replacement
policy, as to the availability of such coverage or
optional limits. However, the insured may,
subject to the limitations expressed in this
section, make a written request for additional
coverage or coverage more extensive than that
provided on a prior policy.
(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
Under section 10-4-623(3)(c), C.R.S. 2021, an insurer “shall be
deemed to have complied with section 10-4-609(1) and the
insured’s uninsured motorist coverage shall be deemed valid if the
insurer has offered coverage at available levels and the insured has
selected coverage of a certain value.” The insurer does not have an
obligation to offer changes in uninsured motorist coverage when the
insured renews a policy unless “there is an increase in bodily injury
liability limits and the limits of the uninsured motorist coverage
would be less than such limits,” under which circumstances the
10
insurer “shall offer new uninsured motorist coverage to the insured
pursuant to section 10-4-609(2).” § 10-4-623(3)(c)(II).
¶ 20
The legislative purpose of section 10-4-609 “is to provide a
member of the driving public with an opportunity to make an
informed decision on an appropriate level of UM/UIM coverage.”
Parfrey, 830 P.2d at 912. In keeping with that purpose — and with
the presumption that the General Assembly intended the statute to
be effective, have a just and reasonable result, and be feasible of
execution, see id. — the Colorado Supreme Court has interpreted
section 10-4-609(2) as creating a “one-time duty upon an insurer to
notify an insured of the nature and purpose of UM/UIM coverage
and to offer the insured the opportunity to purchase such
coverage.” Parfrey, 830 P.2d at 912. The supreme court’s
conclusion that the insurer’s obligation to offer UM/UIM coverage
consistent with the statute is a “one-time duty” is supported by
section 10-4-609(3), which “relieves the insurer of the duty of
notification, prior to the issuance of any renewal or replacement
policy, once the insured has either selected UM/UIM limits or has
exercised the option not to purchase such coverage.” Parfrey, 830
P.2d at 912. “If the insurer fails to discharge its duty prior to the
11
issuance of the policy, the duty continues and can be discharged
only by an adequate notification and offer on some future occasion.”
Id.2
¶ 21
When an insurer fails to offer an insured optional coverage it
is statutorily required to offer, “additional coverage in conformity
with the required offer is incorporated into the agreement by
operation of law.” Jewett v. Am. Standard Ins. Co. of Wis., 178 P.3d
1235, 1238 (Colo. App. 2007) (quoting Thompson v. Budget Rent-A-
Car Sys., Inc., 940 P.2d 987, 990 (Colo. App. 1996)) (analyzing the
question in the context of statutorily required additional personal
injury protection coverage); accord Brennan v. Farmers All. Mut. Ins.
Co., 961 P.2d 550, 554 (Colo. App. 1998). Because an insured is
entitled to the coverage absent a statutorily required offer, the
operative question is not whether coverage was initially offered
before the initial purchase of a policy, but rather whether the
insurer provided the insured with the opportunity to purchase
2 The version of the statute the Parfrey court applied provided, in
relevant part, that “[p]rior to the time the policy is issued or renewed,
the insurer shall offer the named insured the right to obtain higher
limits of uninsured motorist coverage . . . .” § 10-4-609(2), C.R.S.
1987 (emphasis added).
12
coverage before the insured needed it. Airth, ¶ 22; see also Jewett,
178 P.3d at 1238.
¶ 22
But the supreme court has made clear that section 10-4-
609(2) requires that an insurer do more than simply make
statutorily required UM/UIM coverage available: “[A]n insurer’s duty
of notification and offer must be performed in 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.” Parfrey, 830 P.2d at 913.
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.
Id.
¶ 23
A court should look to the objective reasonableness of the
insurer’s offer rather than the potential purchaser’s subjective
13
understanding of the offer. See Airth, ¶ 21; Reid v. Geico Gen. Ins.
Co., 499 F.3d 1163, 1169 (10th Cir. 2007) (“Parfrey . . . suggests
that we look to the objective reasonableness of [the insurer’s] offer,
not the potential purchaser’s subjective understanding.”). And no
one Parfrey factor is dispositive. Airth, ¶ 18. Ultimately, whether
the insurer discharged 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 the
circumstances.” Parfrey, 830 P.2d at 914; see also id. at 914 n.5
(“[W]e believe that the dispositive consideration is whether, under
the totality of the circumstances, the insurer’s notification and offer
to the insured adequately informed the insured that UM/UIM
coverage was available” in accordance with the statute.).
¶ 24
Against this backdrop, we evaluate the reasonableness of the
offer Metropolitan made to the Mullens to purchase UM/UIM
coverage.
C. Metropolitan’s Offer Did Not Fulfill Its Statutory Duty
¶ 25
Margaret contends that the district court erred by concluding
that Metropolitan satisfied its statutory duty to offer the Mullens
UM/UIM coverage in a manner reasonably calculated to enable
14
them to make an informed decision regarding the purchase of
UM/UIM coverage. We agree.
¶ 26
On or about May 6, 2010, Metropolitan provided the Mullens
with approximately seventy pages of written materials related to
their new insurance policy. As relevant here, the package included
these documents:
the policy;
the UM/UIM Selection Form;
a “Colorado Private Passenger Automobile Insurance
Summary Disclosure Form” (Summary Disclosure); and
a policy declarations page.
Because determining whether an insurer has discharged its
statutory duty to reasonably notify and offer UM/UIM coverage
must be resolved under the totality of the circumstances, see
Parfrey, 830 P.2d at 914, we consider these materials together.
¶ 27
For two reasons we conclude that Metropolitan did not
discharge its statutory duty. First, the UM/UIM Selection Form
sets forth an inaccurate statement of the law that incorrectly
suggests that UM/UIM coverage would not be available if an
underinsured motorist’s liability limits were the same as or greater
15
than the insured’s UM/UIM limits. Second, the information in the
UM/UIM Selection Form regarding available levels of coverage and
related premiums is confusing.
1. Inaccurate Statement of the Law
¶ 28
The UM/UIM Selection Form, page 6 of the packet of
materials, explains first that UM/UIM coverage is an important part
of the policy and that “this form is used to select the limits of
[UM/UIM coverage] that are best suited to your needs.” It further
explains that UM/UIM coverage provides protection for damages
caused by an “Underinsured Motorist,” which the form defines as
“an at-fault driver whose liability coverage limits are less than your
[UM/UIM] Coverage limits.” (Emphasis added.) This was an
incorrect statement of law at the time the policy was issued.
¶ 29
Before the 2008 amendments to section 10-4-609, an
underinsured motor vehicle was defined, as relevant here, as
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, but the limits of liability for
bodily injury or death under such insurance or
bonds are . . . [l]ess than the limits for
uninsured motorist coverage under the
insured’s policy.
16
§ 10-4-609(4)(a), C.R.S. 2007 (version effective until Jan. 1, 2008);
see also Jordan v. Safeco Ins. Co. of Am., Inc., 2013 COA 47, ¶ 25.
Senate Bill 07-256 redefined underinsured motor vehicle as “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,” eliminating the references to the underinsured motorist’s
limits of liability and the insured’s UM/UIM limits. Ch. 413, sec. 2,
§ 10-4-609(4), 2007 Colo. Sess. Laws 1922.
¶ 30
This change is significant because, before the 2008
amendments, the statute fixed the “maximum liability of the insurer
under the uninsured motorist coverage” at the lesser of “[t]he
difference between the limit of uninsured motorist coverage and the
amount paid to the insured” by the underinsured motorist or “[t]he
amount of damages sustained, but not recovered.” § 10-4-609(5),
C.R.S. 2007; see also Jordan, ¶ 24. The 2008 amendment
eliminated those liability limitations and instead clarified that
UM/UIM coverage “shall be in addition to any legal liability coverage
and shall cover the difference, if any, between the amount of the
limits of any legal liability coverage and the amount of the damages
sustained . . . up to the maximum amount of the coverage obtained
17
pursuant to this section.” § 10-4-609(1)(c), C.R.S. 2021; see Ch.
413, sec. 1, § 10-4-609(1)(c), 2007 Colo. Sess. Laws 1921.
¶ 31
The 2008 amendments clarify that UM/UIM coverage covers
the difference between a tortfeasor’s insurance liability limit and the
amount of damages sustained by the insured, up to the amount of
the UM/UIM coverage purchased. Under the pre-2008 version of
the statute, if the insured recovered $50,000 as the liability limit
from the tortfeasor but had only $50,000 in UM/UIM coverage, the
insured’s maximum recovery would be $50,000, even if they
sustained $100,000 in damages. See Jordan, ¶ 37 (first citing
Vaccaro v. Am. Fam. Ins. Grp., 2012 COA 9M, ¶ 59; then citing
Carlisle v. Farmers Ins. Exch., 946 P.2d 555, 558 (Colo. App. 1997));
see also Parfrey, 830 P.2d at 913 (explaining, relative to the pre-
2008 statute that, “because Colorado’s statutory scheme requires
minimum liability coverage of $25,000 per person and $50,000 per
accident, a person purchasing minimum UM/UIM coverage would
have no real protection against a motorist whose liability coverage
was at the same minimum level”). Under the current version of the
statute, however, assuming the same policy limits, the insured may
recover up to $100,000. Jordan, ¶ 37. Thus, as a division of this
18
court explained in Jordan, the amendments effectively changed
Colorado’s UM/UIM statutory scheme “from a ‘reduction’ approach
— where [UM/UIM] coverage was reduced by any payment received
or judgment against the tortfeasor — to an ‘excess’ approach —
where [UM/UIM] coverage is payable for damages exceeding the
tortfeasor’s liability policy limit, subject only to the [UM/UIM]
coverage limit in the insured’s policy.” Id. at ¶ 30.
¶ 32
Here, the district court recognized that the language of the
UM/UIM Selection Form was problematic, but it concluded that
while the language was not “a complete statutory definition of the
scope of [UM/UIM] coverage under § 10-4-609(1)(c) following the
2008 amendment, the language . . . is not totally incorrect; it is
simply not complete.” On this point, we disagree.
¶ 33
The language of the UM/UIM Selection Form invokes the old
statutory scheme by setting forth the outdated definition of
underinsured motorist. The form thus incorrectly suggests to the
insured that the UM/UIM coverage under the policy does not cover
damages caused by a tortfeasor whose liability limits match or
exceed the UM/UIM coverage selected by the insured, regardless of
the amount of damages the insured sustained. That is not an
19
accurate statement of the law as it exists now or as it existed in
2010, when Metropolitan issued the policy to the Mullens. Even if
the tortfeasor’s liability limits exceed the UM/UIM coverage under
the policy, the insured would be entitled to UM/UIM coverage for
any damages that exceed the tortfeasor’s liability limits, up to the
limits of UM/UIM coverage under the policy.
¶ 34
Metropolitan contends that, to the extent the information in
the UM/UIM Selection Form was “incomplete,” it should have
encouraged the Mullens to purchase more UM/UIM coverage, not
less, as Edward elected. This is so, it argues, because under the
pre-2008 law, the more UM/UIM coverage the insured had, the less
likely it would be that the tortfeasor would have the same or more
liability coverage. And if the tortfeasor had the same or more
liability coverage, the insured would not recover any UM/UIM
benefits. See § 10-4-609(5), C.R.S. 2007; Parfrey, 830 P.2d at 913;
Jordan, ¶ 37.
¶ 35
Regardless of whether the inaccurate statement of the law
should have encouraged the potential purchaser to buy more or less
coverage, we fail to see how such an inaccuracy would enable that
potential purchaser to make an informed decision about whether
20
and at what limit to purchase UM/UIM coverage. Cf. Briggs v. Am.
Nat’l Prop. & Cas. Co., 209 P.3d 1181, 1187-88 (Colo. App. 2009)
(holding that “if an insurance company has offered its customers
the option to purchase UM/UIM coverage on all their vehicles with
sufficient accurate information, it has satisfied its obligation under”
section 10-4-609(2), but concluding that an insurer’s continued use
of a UM/UIM-limiting exclusion invalidated by Colorado case law
did not satisfy that statutory obligation because it “could have been
materially misleading” such that the insured “might not have had
the opportunity to make an informed decision about whether and
how to purchase [UM/UIM] coverage”).
¶ 36
The district court concluded, however, that “[t]he complete and
accurate definition of ‘Underinsured Motorist,’ and of [UM/UIM]
coverage in general” is set forth in the Summary Disclosure
provided contemporaneously with the UM/UIM Selection Form. It
reasoned that the Mullens received complete and accurate
information about the scope of UM/UIM coverage “when the
information in all documents received is considered,” and that the
incomplete definition in the UM/UIM Selection Form “does not
21
compromise the complete and accurate information” in the
Summary Disclosure.3
¶ 37
Relative to UM/UIM coverage, the Summary Disclosure, found
at page 19 of the packet of materials Metropolitan provided to the
Mullens, explains as follows:
You must be offered [UM/UIM] coverage, and it
will be included in your policy unless you
reject it in writing.
. . . .
[UIM] coverage pays for bodily injury that you
are entitled to collect from an underinsured
owner or driver who is at fault for the accident
and when the damages exceed the driver’s
liability coverage.
Generally, an underinsured automobile is an
automobile whose liability coverage is not
enough to pay the full amount you are legally
entitled to recover as damages.
¶ 38
Although the Summary Disclosure gives a definition of
“underinsured automobile” that differs from the definition of
3 Metropolitan contends that we must defer to the district court’s
“factual determinations” about the information Metropolitan
provided the Mullens unless they are “clearly erroneous.” But when
the controlling facts are undisputed, as they are here, the legal
effect of those facts constitutes a question of law that we review de
novo. See Hicks v. Londre, 125 P.3d 452, 455 (Colo. 2005); Camp
Bird Colo., Inc. v. Bd. of Cnty. Comm’rs, 215 P.3d 1277, 1281 (Colo.
App. 2009).
22
“underinsured motor vehicle” under section 10-4-609(4), we
acknowledge that it generally sets forth an accurate description of
how UM/UIM coverage operates under the current version of
section 10-4-609(1)(c) — that is, UM/UIM coverage is available
when the insured’s damages exceed the tortfeasor’s liability
coverage. But the first page of the Summary Disclosure explains
that it is “only a general description and not a statement of contract
or a policy of any kind” and clarifies that “[a]ll coverage is subject to
the terms, conditions, and exclusions of your policy . . . .” Then, in
bold capital letters, it warns, “THIS SUMMARY DISCLOSURE FORM
SHALL NOT BE CONSTRUED TO REPLACE ANY PROVISION OF
THE POLICY ITSELF.”
¶ 39
The policy, in turn, at page 47 of the packet of materials,
defines “underinsured motor vehicle” as “a motor vehicle which has
a bodily injury liability bond or insurance policy in effect at the time
of the accident, in at least the minimum amount required . . . but
less than the limits of this coverage provided by this policy as stated
in the Declarations.” (Emphasis added.) The policy’s definition of
underinsured motor vehicle shares the same flaws as the UM/UIM
Selection Form’s definition of underinsured motorist. Both rely on
23
a statutory definition that the General Assembly eliminated two
years before Metropolitan issued the original policy to the Mullens.
And both result in the misimpression that the availability of
UM/UIM benefits depends on a comparison of the tortfeasor’s
liability limits and the insured’s UM/UIM limits.
¶ 40
It would have been reasonable for the Mullens to place the
most emphasis on the UM/UIM Selection Form, as it was the
standalone form purporting to require the selection or waiver of
such coverage. Cf. Airth, ¶ 19 (concluding that “reasonable people
would not disagree” that the insurer had complied with its statutory
notification and offer obligations under section 10-4-609(2) when
the standalone coverage selection document “explained, in writing,
the purpose of UM/UIM coverage in clear and understandable
terms” in the first sentence of the document). But even if the
Mullens had looked to the policy, as the Summary Disclosure
directed them to do, they would not have been given a clear,
adequate, or accurate description of the purpose or operation of
UM/UIM coverage under then-existing law.
24
2. Confusing Coverage Options
¶ 41
The UM/UIM Selection Form advises that Metropolitan must
give the insured UM/UIM coverage “for at least the minimum limits
required by law, unless you reject the coverage in writing.” It does
not explain what the “minimum limits required by law” are. The
UM/UIM Selection Form continues, “For a relatively modest
increase in premium, you may purchase [UM/UIM] Coverage in
greater amounts.” But, it clarifies in bold font, “your [UM/UIM]
limits cannot be greater than your Bodily Injury Liability Coverage
Limits.”
¶ 42
The UM/UIM Selection Form then sets forth four levels of
coverage, and an option to waive coverage entirely. It does not
provide the specific premiums associated with each level of
coverage.
25
¶ 43
Margaret contends that the absence of premium information
for each level of UM/UIM coverage, combined with the fact that the
UM/UIM Selection Form appears to offer a level of coverage
unavailable to the Mullens (the $250,000/$500,000 level exceeds
the policy’s bodily injury liability limits of $100,000/$300,000),
demonstrates that the offer was confusing and unreasonable. She
also contends that the language in the UM/UIM Selection Form
indicating that the insured’s UM/UIM benefits cannot be greater
than the insured’s bodily injury liability limits is not correct
because section 10-4-609(2) states only that an insurer is not
required to offer UM/UIM coverage with limits higher than the
insured’s liability coverage, not that an insurer cannot offer higher
limits.
¶ 44
We reject Margaret’s contention that the language “your
[UM/UIM] limits cannot be greater than your Bodily Injury Liability
Coverage Limits” is misleading. True, section 10-4-609(2) does not
prohibit an insurer from offering higher UM/UIM limits, but we
agree with the district court that this language in the UM/UIM
Selection Form is fairly read as reflecting Metropolitan’s position as
26
an insurance company not to offer UM/UIM limits greater than
those required by law.
¶ 45
We also conclude that Metropolitan’s failure to provide specific
premium amounts does not, by itself, render Metropolitan’s offer
insufficient under the statute. See Airth, ¶ 18 (reasoning that
failure to provide insured with stated premium “does not in and of
itself” render the insured’s UM/UIM offer insufficient under the
statute); cf. 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 [personal injury protection] insurance is an
important factor under the Parfrey analysis, State Farm’s failure to
inform [the insured] about the specific cost does not in itself render
the offer commercially unreasonable.”). It would be easy for an
insured interested in purchasing additional coverage to ask for the
premium price. See Johnson, 158 F. App’x at 122. Indeed, the
UM/UIM Selection Form encourages the insured to contact a
customer service representative with any questions. And the policy
declarations, found at page 33 of the packet of materials
Metropolitan provided to the Mullens, reflected an annual premium
of $120 for the $100,000/$300,000 limits included in the original
27
policy, which at least informed the Mullens of the cost of that level
of coverage.4
¶ 46
But we agree with Margaret that the absence of premium
information is not the only problem with the part of the UM/UIM
Selection Form setting forth coverage levels. When the Mullens
received the UM/UIM Selection Form, their policy already included
UM/UIM coverage limits of $100,000/$300,000. Thus, there would
have been no increase in premium — let alone any “relatively
modest increase in premium” — if the Mullens selected the
$25,000/$50,000, $50,000/$100,000, or $100,000/$300,000
coverage levels. In fact, selection of the $25,000/$50,000 and
$50,000/$100,000 levels would have resulted in (and did result in)
a decrease in premium from what the Mullens were already paying,
and selection of the $100,000/$300,000 level would have resulted
4 In rejecting Margaret’s argument that Metropolitan’s offer provided
insufficient premium information, the district court noted that, at
least as of August 19, 2010, the Mullens were aware that ten
months of coverage at the $25,000/$50,000 level cost $58 less than
coverage at the $100,000/$300,000 level for the same period,
because they received a refund in that amount when Edward
elected the lower coverage. But this information came long after
Metropolitan’s offer and Edward’s selection of UM/UIM coverage, so
we do not see how it is a relevant consideration to the
reasonableness of the offer when it was made.
28
in no change in premium. Because the UM/UIM Selection Form
was delivered to the Mullens simultaneously with a policy that
already included the maximum amount of UM/UIM coverage they
could purchase, the information Metropolitan provided about
increased premiums was inaccurate.5 Given that the policy
included bodily injury liability limits of $100,000/$300,000, the
Mullens could not have selected the $250,000/$500,000 coverage
level, even though it appeared to be an available option on the
UM/UIM Selection Form.
¶ 47
So, the UM/UIM Selection Form failed to inform the Mullens of
the minimum UM/UIM limits Metropolitan must legally provide or
what limits their policy already included, erroneously informed
them that selection of coverage greater than the unidentified
minimums would result in an increase in premium, failed to set
forth the premiums associated with each level of coverage, and
5 Had Metropolitan offered UM/UIM coverage through the UM/UIM
Selection Form before the policy was issued, as it is required to do
by section 10-4-609(2), C.R.S. 2021, the offer may not have been so
confusing. But we must consider the totality of the circumstances
when determining whether Metropolitan satisfied its statutory
obligation, see Allstate Ins. Co. v. Parfrey, 830 P.2d 905, 914 (Colo.
1992), and the timing of the offer relative to the issuance of the
policy is one such factor.
29
offered them coverage limits they were not allowed to select. Under
these circumstances, we conclude that the UM/UIM Selection Form
is confusing.
¶ 48
Considering the totality of the circumstances, see Parfrey, 830
P.2d at 914, we conclude that Metropolitan did not discharge its
statutory obligation to notify and offer the Mullens UM/UIM
coverage in a manner reasonably calculated to permit them to make
an informed decision about whether and at what limits to purchase
such coverage. Accordingly, we also conclude that the district court
erred by granting Metropolitan’s motion for summary judgment and
by denying Margaret’s motion for summary judgment.
III. Conclusion
¶ 49
We reverse the district court’s entry of summary judgment in
favor of Metropolitan and remand the case with directions to enter
summary judgment in favor of Margaret.
JUDGE FURMAN and JUDGE LIPINSKY concur.