Brekke v. State Farm Mut. Auto. Ins. Co., No. 02CA0582.
| Decision Date | 03 July 2003 |
| Docket Number | No. 02CA0582. |
| Citation | 81 P.3d 1101 |
| Parties | Gloria J. BREKKE, Plaintiff-Appellee, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant. |
| Court | Colorado Court of Appeals |
Gradisar, Trechter, Ripperger, Roth & Croshal, James M. Croshal, Pueblo, CO, for Plaintiff-Appellee.
Faegre & Benson, LLP, Michael S. McCarthy, Ross W. Pulkrabek, Marie E. Williams, Pamela J. Traylor, Denver, CO; Cain & Hayter, LLP, Craig W. Cain, Rosalie P. Fessier, Colorado Springs, CO, for Defendant-Appellant.
Opinion by Judge GRAHAM.
Defendant, State Farm Mutual Automobile Insurance Company, appeals the trial court's judgment in favor of plaintiff, Gloria J. Brekke. We affirm.
Brekke was involved in a hit-and-run accident with an automobile owned by Garfield Gus Garcia. At the time of the accident, Brekke had insurance with State Farm that included uninsured motorist (UM) coverage.
Brekke contacted State Farm to recover UM benefits for the injuries she sustained in the accident. When an agreement on benefits could not be reached, Brekke requested that the dispute over UM coverage be submitted to arbitration, but State Farm refused.
Brekke then filed a complaint against Garcia and John Doe for negligence and against State Farm for payment of UM benefits. State Farm filed an answer, denying that the party who hit Brekke was negligent, that Brekke was injured in the accident, and that she was entitled to UM benefits. State Farm demanded a jury trial and paid the requisite jury fee.
Garcia failed to answer the complaint, and Brekke moved for judgment by default. Attached to the motion were records from Brekke's treating physicians and an affidavit from Brekke supporting her claim for damages. Based upon the affidavits, the trial court entered a default judgment against Garcia for $400,000 in actual and punitive damages.
In response to Brekke's motion, State Farm requested that the court "enter an order that default judgment either not be entered at this time or, in the alternative, only be entered against Defendant Garfield Gus Garcia with no binding effect upon this defendant." State Farm continued to deny that Brekke was injured in the accident and disputed the extent of her injuries. State Farm thus requested that the trial court deny the default judgment against Garcia until the issue of damages was litigated. State Farm also requested that, if default judgment were entered against Garcia, it not be binding on State Farm.
The trial court determined that the default judgment entered against Garcia would not preclude State Farm from defending against the amount of damages claimed by Brekke and ordered that a hearing on damages be scheduled.
Nine months later, State Farm filed a motion for reconsideration of the trial court's order and requested a jury trial on all issues. Specifically, State Farm argued that it was not bound by the default judgment against Garcia. The trial court denied the motion, stating that:
Under the circumstances of this case, Defendant Garcia has never filed an answer, much less a jury demand.... State Farm has previously stated [it is] contesting the damages portion of this matter and wish[es] a jury trial to resolve this issue. . . . State Farm's request for a "hearing" is outlined in [its] policy but does not necessarily encompass the right to trial by jury. State Farm has an absolute right to protect [its] interest in this matter, a right that this Court believes will be more than adequately protected by a hearing to the Court.
After a four-day hearing on damages, the trial court entered judgment in favor of Brekke and against Garcia and State Farm for $169,888, plus interest, for a total of $293,651.95. This appeal followed.
State Farm contends that it is not bound by the default judgment against Garcia because the judgment was not the result of an actual trial to a jury, and therefore, it is not liable for payment of UM benefits. We disagree that in this situation State Farm was entitled to a jury trial because its policy effectively waives that right, and we conclude that it was provided a trial which was fair and adequate to protect its interests.
Colorado's uninsured motorist statute, § 10-4-609, C.R.S.2002, provides in pertinent part:
(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 ... 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. [of the Motor Vehicle Insurance Responsibility Act], 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.
(Emphasis added.)
The purpose of the uninsured motorist coverage mandated by § 10-4-609 is to compensate an insured for loss, subject to the insured's policy limits, caused by negligent and financially irresponsible motorists. Kral v. Am. Hardware Mut. Ins. Co., 784 P.2d 759 (Colo.1989); State Farm Mut. Auto. Ins. Co. v. Nissen, 835 P.2d 537 (Colo.App. 1992), aff'd, 851 P.2d 165 (Colo.1993). The legislative intent is satisfied by coverage that compensates a person injured by an uninsured motorist to the same extent as one injured by a motorist insured in compliance with the law. Briggs v. Am. Family Mut. Ins. Co., 833 P.2d 859 (Colo.App.1992).
As pertinent here, the policy provides that, if the insurer and the insured are unable to agree on whether the insured is legally entitled to collect damages from the owner or driver of the uninsured motor vehicle or on the amount of damages, the insured is required to take the following steps:
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