Dillon v. Auto-Owners Ins. Co.
| Decision Date | 07 August 2015 |
| Docket Number | Civil Case No. 14-cv-00246-LTB-MJW |
| Parties | ROBIN DILLON, Plaintiff, v. AUTO-OWNERS INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — District of Colorado |
ORDER
This matter is before me on the parties' cross motions for summary judgment; specifically: 1) Plaintiff's Motion for Partial Summary Judgment filed by Plaintiff, Robin Dillon [Doc #38], and 2) Defendant's Motion for Summary Judgment filed by Defendant, Auto-Owners Insurance Company ("Auto-Owners") [Doc #40]. Oral arguments would not materially assist me in my determination of these motions. After consideration of the parties' briefs and attachments, and for the reason stated, I DENY the relief requested in both motions.
On July 1, 2009, Plaintiff was driving a car insured by Auto-Owners under Policy No. 47-082-704-00 (the "Policy"). Plaintiff was stopped in traffic when she was rear-ended by a vehicle driven by Carlos Navarro. Mr. Navarro claims that he hit Plaintiff after making an abrupt lane change when another driver, Alan Garcia, cut him off by pulling into his lane. Plaintiff alleges that she sustained serious injuries from the accident.
In early 2010, Auto-Owners sought reimbursement from Mr. Navarro and Mr. Garcia for the value of the damaged vehicle driven by Plaintiff. This subrogation action was resolved through arbitration, on June 24, 2010, after the referee determined that Mr. Navarro (via his insurance carrier) was liable for 100% of the property damage.
Plaintiff subsequently filed suit against both Mr. Navarro and Mr. Garcia on March 11, 2011. She ultimately settled with Mr. Navarro's insurer (Farmers Insurance Company) for $50,000, which was the coverage limits of his automobile liability insurance policy. Plaintiff also settled with Mr. Garcia's insurer (State Farm Insurance Company) for $7,500. The coverage limits of Mr. Garcia's liability policy was $50,000.
Plaintiff then made a claim for the limit of the under-insured motorists ("UIM") coverage - under the Policy here, issued on the car she was driving - in the amount of $500,000 on December 27, 2012. After evaluating the claim, Auto-Owners conveyed a compromise/ settlement offer of $10,000 on July 31, 2013. Plaintiff did not accept this offer.
Thereafter, on December 30, 2013, Plaintiff filed this action against Auto-Owners in Boulder County District Court. The case was subsequently removed to this Court, pursuant to 42 U.S.C. §1441(a), based on original jurisdiction under 28 U.S.C. § 1332(a) because the amount in controversy exceeds $75,000 and there is diversity of citizenship between the parties. The claims raised by Plaintiff against Auto-Owners are for: Breach of Insurance Contract and Statutory Bad Faith Breach in Violation of Colo. Rev. Stat. §10-3-1115 & §10-3-1116, based on "unreasonable delay and for lack of any reasonable basis for denying [Plaintiff's] claim." [Docs #1 & #46] Plaintiff has filed this motion for partial summary judgment in which she seek rulings limiting Auto-Owners' legal arguments. Auto-Owners' motion seeks summary judgment in its favor.
The purpose of a summary judgment motion under Fed.R.Civ.P. 56 is to assess whether trial is necessary. White v. York Int'l Corp., 45 F.3d 357, 360 (10th Cir. 1995). Fed.R.Civ.P. 56(c) provides that summary judgment shall be granted if the pleadings, depositions, answers to interrogatories, admissions, or affidavits show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. The non-moving party has the burden of showing that there are issues of material fact to be determined. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
A party seeking summary judgment bears the initial responsibility of informing the court of the basis for its motion, and identifying those portions of the pleadings, depositions, interrogatories, and admissions on file together with affidavits, if any, which it believes demonstrate the absence of genuine issues for trial. Id. at 323; Mares v. ConAgra Poultry Co., Inc., 971 F.2d 492, 494 (10th Cir. 1992). Once a properly supported summary judgment motion is made, the opposing party must respond with specific facts showing the existence of a genuine factual issue to be tried. Otteson v. United States, 622 F.2d 516, 519 (10th Cir. 1980); Fed.R.Civ.P. 56(e). A dispute is "genuine" if the issue could be resolved in favor of either party. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Farthing v. City of Shawnee, 39 F.3d 1131, 1135 (10th Cir. 1994). A fact is "material" if it might reasonably affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The fact that the parties have filed cross-motions for summary judgment does not necessarily indicate that summary judgment is proper. See Atlantic Richfield Co. v. Farm CreditBank of Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000); James Barlow Family Ltd. Partnership v. David M. Munson, Inc., 132 F.3d 1316, 1319 (10th Cir. 1997). Cross-motions for summary judgment are to be treated separately as the denial of one does not require the grant of another. Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th Cir. 1979).
The parties' cross-motions address two substantive issues in this case. I first address whether Plaintiff is barred from collecting UIM benefits under the Policy, pursuant to Form 79429 which requires that an insured first exhaust the tortfeasors' underlying liability limits before UIM benefits are triggered.
The applicable language in Form 79429 of the Policy provides, in relevant part, that:
With regard to an underinsured automobile, there is no coverage under this endorsement until the limits of liability of all bodily injury liability . . . insurance policies applying to the underinsured automobile and its operator have been exhausted by payment of judgments or settlements. [Doc #50-1]
Auto-Owners asserts that because she settled with Mr. Garcia for $7500, and his insurance policy liability limit was $50,000, Plaintiff failed to exhaust the underlying liability as required by the Policy. And, as such, Auto-Owners maintains that it is entitled to summary judgment on Plaintiff's claims because she is not entitled to UIM benefits.
As an initial matter, Plaintiff argues that the exhaustion requirement in Form 79429 - which provides for no UIM coverage "until the limits of liability of all bodily injury liability . . . insurance policies applying to the underinsured automobile and its operator have been exhausted" - cannot be used by Auto-Owners as a defense to coverage, or as a basis for denying Plaintiff's claim, because it was not a part of or was omitted from the Policy. Plaintiff provides the certified copy of the Policy - provided by Auto-Owners - which does not mention or contain Form 79429.Plaintiff asserts that the "contention that this form was a part of the [P]olicy covering [Plaintiff] is strenuously disputed" as the "full [P]olicy contains no From 79429." [Doc #47] Plaintiff argues that Auto-Owners is, in essence, improperly seeking to reform the contract. Plaintiff also asserts that Auto-Owners offers no evidence that the insured was aware of its omission, or that it consented to modifying the Policy to insert Form 79429.
Auto-Owners concedes that "[d]ue to an underwriting computer glitch" Form 79429 was not included as one of the "Additional Forms For this Item" as set forth on the Declarations page from the Policy. And, "[b]ecause Form 79429 was not listed on the declarations page, when [Auto-Owners] compiled the certified copy of the policy, including associated forms, Form 79429 was not included as part of the certified copy." [Doc #40] Although Form 79429 was "inadvertently omitted," Auto-Owners contends that it was included as part of the Policy when it was issued in January of 2007. Auto-Owners provides an affidavit signed by Betty Kung - the Underwriting Administrator for Auto-Owners - which avers that "[t]he applicable UM/UIM endorsement for the policy is form 79429 (7-07)" and that:
Despite the fact that the policy contains UM/UIM coverage of $500,000, due to an underwriting computer glitch, the UM/UIM endorsement form number was inadvertently omitted for the declarations page from the policy issued for the applicable policy term. Therefore, when Auto-Owners compiled the certified copy of the policy for purposes of this litigation, the applicable UM/UIM form was inadvertently omitted. . . . Notwithstanding the aforementioned computer glitch, at the time of the subject collision, form 79429 (7-07) was a part of the policy, as it was the only UM/UIM endorsement form in use in the State of Colorado during the relevant time period. [Doc #40-2]
In her second affidavit, Ms. Kung further indicates that because the insured in this case purchased UM/UIM coverage as part of its automobile insurance policy, "coverage Form 79429 was added to the policy, and appears in the Declarations section as an 'Additional Form' associatedwith the policy." Furthermore, "[i]n accordance with [Auto-Owners] policies and procedures, when an insured purchases a new policy, [Auto-Owners] sends the insured a complete copy of the policy, including associated forms and endorsements." [Doc #50-1]
Based on this record, it is clearly disputed whether Form 79429 was included with and/or part of the Policy either at the time is was issued, or at the time of the accident. Because an issue of material fact is in dispute, summary judgment in favor of Auto-Owners is precluded on this basis. See Otteson v. U.S., supra, 622 F.2d at 519.
Furthermore, a recent case from the Colorado Court of Appeals ruled that the exhaustion requirement contained in the Policy was inconsistent with Colorado Revised Statute...
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