DeHerrera v. Sentry Ins. Co., 99SC379.

Decision Date30 April 2001
Docket NumberNo. 99SC379.,99SC379.
PartiesElizabeth DeHERRERA, as mother and next friend of Lucas DeHerrera, a minor, Petitioner, v. SENTRY INSURANCE COMPANY, Respondent.
CourtColorado Supreme Court

Graham Law Firm, David Graham, Lara L. DeCaro, Taos, NM, Attorneys for Petitioner.

Senter Goldfarb & Rice, L.L.C., Arthur J. Kutzer, Denver, CO, Attorneys for Respondent.

Justice BENDER delivered the Opinion of the Court.

I. INTRODUCTION

In this appeal we review the court of appeals' holding that it is permissible for an automobile insurance policy to exclude a person occupying a vehicle that is not a car from both personal injury protection and uninsured motorist coverage. DeHerrera v. Sentry Insurance Co., 992 P.2d 629 (Colo.App. 1999). We hold that excluding relatives of the named insured from personal injury protection coverage and uninsured motorist coverage based on their occupancy in a particular vehicle violates the mandates of Colorado statutes and contravenes public policy.

The plaintiff, Elizabeth DeHerrera, is the named insured of an automobile policy carried by Sentry Insurance Company, the respondent. DeHerrera's son was injured in an accident with a pickup truck while riding his off-road motorcycle. DeHerrera sued Sentry seeking personal injury protection and underinsured motorist coverage because the owner of the pickup possessed a limited amount of liability insurance. Sentry denied coverage, claiming that the policy excludes from coverage persons occupying a vehicle that is not a car. Thus, applying the policy definition of "car," a four-wheeled motor vehicle, Sentry claimed that this condition excluded DeHerrera's son from coverage because he was riding a motorcycle, and thus not occupying a car, when injured.

In the trial court, DeHerrera sought a declaratory judgment construing Sentry's policy to permit her to recover personal injury protection (PIP) and underinsured motorist coverage (UM), a derivative of uninsured motorist coverage (UIM) (collectively UM/UIM). Both parties filed motions for summary judgment. The trial court awarded summary judgment in favor of Sentry and DeHerrera appealed.

The court of appeals affirmed, holding that the insurance contract unambiguously denies both PIP coverage and UM/UIM coverage to an insured who is neither a pedestrian nor an occupant of a car. Thus, applying the definition section of the policy, the court of appeals held that because DeHerrera's son was riding a motorcycle at the time of injury (and thus not an occupant of a car), DeHerrera is not entitled to PIP or UM/UIM coverage. DeHerrera, 992 P.2d at 633-34. Further, that court relied on Colorado case law to hold that the pertinent Colorado statutes do not require PIP or UM/UIM coverage for a person riding a motorcycle at the time of injury. Id. Hence, the court of appeals affirmed the award of summary judgment in favor of Sentry. Id. at 635.

DeHerrera appealed. We granted certiorari to determine her eligibility for PIP and UM/UIM coverage. We hold that a policy provision restricting PIP coverage for relatives of named insureds to persons occupying a car at the time of injury places an impermissible restriction on the mandatory PIP coverage required by statute. Section 10-4-707(1)(a) of the Colorado Auto Accident Reparations Act unambiguously requires PIP coverage to apply to a relative of a named insured when "injured in an accident involving any motor vehicle" (emphasis added) irrespective of the type of vehicle driven at the time of injury. Likewise, we hold that the language and purpose of the UM/UIM statute require an insurer to provide UM/UIM benefits to a person insured under the policy when injured in an accident caused by an uninsured or underinsured motorist without regard to the vehicle occupied by the insured at the time of injury. Thus, we do not reach the issue of whether the Sentry policy unambiguously conditions PIP or UM/UIM coverage to a person occupying a car at the time of injury because, irrespective of the provisions of the policy, our statutes mandate coverage in this case.

Hence, we reverse the judgment of the court of appeals and remand this case to the court of appeals to return the case to the trial court with directions to grant DeHerrera's motion for summary judgment on her claims for PIP and UM/UIM coverage.

II. FACTS AND PROCEDURAL HISTORY

In this case DeHerrera's son was riding his off-road motorcycle when injured in an accident with a pickup truck. As a result of the accident, he suffered injuries for which the medical expenses exceeded $100,000. The driver of the pickup truck paid the limit of his liability insurance, $50,000, to DeHerrera to cover the expense.

DeHerrera holds an insurance policy from Sentry on two automobiles that provides both PIP and UM/UIM coverage to her, her spouse, and her son as a member of the family who is a resident of the household. The limit of coverage for both PIP and UM/UIM insurance in the Sentry policy is $100,000 per person and $300,000 per accident. The motorcycle involved in the accident is not a vehicle covered by the Sentry policy.

The insurance contract between Sentry and DeHerrera consists of two parts, a "Plain Talk Car Policy" and an endorsement. The plain talk portion of the policy provides a detailed description of UM/UIM insurance:

We promise to pay damages . . . the owner or operator of an uninsured motor vehicle is legally obligated to pay because of bodily injury you suffer in a car accident while occupying a car or, as a pedestrian, as a result of having been struck by an uninsured motor vehicle.

(Emphasis in original.)1 An uninsured motor vehicle is defined in the policy in part as a "motor vehicle to which a bodily injury liability bond or policy applies at the time of the accident. In this case its limit for bodily injury liability must be less than the limit of liability for this coverage." Neither party disputes that the accident involved an underinsured motorist for which uninsured motorist protection may be available.2 The plain talk section of the policy also defines Sentry's obligation to provide liability insurance: "We promise to pay damages . . . for bodily injury or property damage for which the law holds you responsible because of a car accident involving a car we insure."

The endorsement section of the insurance contract states Sentry's obligations to provide PIP coverage:

We will pay, in accordance with the Colorado Auto Accident Reparations Act, personal injury protection benefits shown as applicable in the Schedule or Declarations to or for an insured who sustains bodily injury. The bodily injury must be caused by an accident arising out of the use or operation of a motor vehicle.

The PIP schedule provides that one benefit under PIP coverage is payment of medical expenses. The plain talk portion of the car policy describes Sentry's obligation to pay medical expenses as:

We promise to pay medical expenses for your bodily injury, sickness, disease or death suffered in a car accident while occupying a car or, as a pedestrian, as a result of having been struck by a motor vehicle.

The policy also provides a definition section, which is in pertinent part:

Car; a 4 wheel motor vehicle licensed for use on public roads. It includes any motor home that isn't used for business purposes and any utility trailer.
You, your; means the person named on the declarations page and that person's husband or wife if a resident of the same household. It also means a member of the family who is a resident of the household and who doesn't own a car or whose spouse doesn't own a car.

DeHerrera filed claims for personal injury protection and underinsured motorist coverage under this policy, which Sentry denied. DeHerrera thus brought suit seeking a declaratory judgment that the language of the Sentry policy entitles her to PIP and UM/UIM coverage. The trial court granted Sentry's motion for summary judgment and DeHerrera appealed.

The court of appeals affirmed. Reading the endorsement and the policy language together, that court concluded the insurance contract unambiguously fails to provide PIP coverage in this case. DeHerrera, 992 P.2d at 633. The court of appeals noted that the endorsement states that PIP coverage applies to an accident arising out of the use or operation of a motor vehicle. If this were the only condition of payment, then PIP coverage would apply because the pickup truck is a motor vehicle within the definition of the endorsement.3 However, the court of appeals concluded that other portions of the policy provide "additional, but not conflicting, conditions to payment." DeHerrera, 992 P.2d at 633. Significantly, the endorsement states an obligation to provide PIP coverage as stated in the schedule, which in turn provides for coverage of medical expenses. As described in the plain talk car policy, medical expense insurance only covers persons occupying a car at the time of injury. The court of appeals held that this condition, found in the body of the policy, "which excludes motorcyclists from coverage for PIP benefits," describes the circumstances in which the insurer is obligated to make payment in a manner that is consistent with conditions found in the endorsement. Id. Thus, that court held that the insurance contract unambiguously denies PIP coverage to persons riding a motorcycle at the time of injury. Id.

In addition, the court of appeals held that PIP coverage is not required under the Colorado Auto Accident Reparations Act (No Fault Act), §§ 10-4-701 to -726, 3 C.R.S. (2000), since the statute requires PIP coverage only for a certain class of motor vehicles, a class which specifically excludes motorcycles and off-road vehicles. DeHerrera, 992 P.2d at 633 (citing Thompson v. Dairyland Ins. Co., 618 P.2d 736 (Colo.App.1980)). Because the injured insured was riding an off-road motorcycle, the court held that PIP coverage is not required by statute.

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