Farmers Ins. Exch. v. Anderson

• Decision Date: 28 October 2010
• Docket Number: No. 09CA1860.,09CA1860.
• Citation: 260 P.3d 68
• Parties: FARMERS INSURANCE EXCHANGE, a reciprocal insurance exchange organized and existing pursuant to the laws of California, Plaintiff–Appellee,v.Jeffery ANDERSON, a Colorado individual, as natural maternal grandfather and co-conservator of Cole Naeve, a Colorado individual; Tamara Anderson, a Colorado individual, as natural aunt and co-conservator of Cole Naeve, a Colorado individual; and Brittah Klug, a Colorado individual, Defendants–Appellants.
• Court: Colorado Court of Appeals

260 P.3d 68

FARMERS INSURANCE EXCHANGE, a reciprocal insurance exchange organized and existing pursuant to the laws of California, Plaintiff–Appellee,

v.Jeffery ANDERSON, a Colorado individual, as natural maternal grandfather and co-conservator of Cole Naeve, a Colorado individual; Tamara Anderson, a Colorado individual, as natural aunt and co-conservator of Cole Naeve, a Colorado individual; and Brittah Klug, a Colorado individual, Defendants–Appellants.

No. 09CA1860.

Colorado Court of Appeals, Div. II.

Oct. 28, 2010.

Levy, Morse & Wheeler, P.C., Stuart D. Morse, Brian J. Waters, Greenwood Village, Colorado, for Plaintiff–Appellee.Terry Rodgers, Boulder, Colorado, for Defendants–Appellants Jeffery Anderson and Tamara Anderson.Law Offices of David Calvert, David Calvert, Greenwood Village, Colorado, for Defendant–Appellant Brittah Klug.Opinion by Judge CASEBOLT.

This is a declaratory judgment action concerning underinsured motorist (UIM) insurance coverage. It arises out of an auto-pedestrian accident in which Chris Naeve (Naeve), an employee of Statewide Traffic Control, Inc. (Statewide), was killed when he was struck by an underinsured vehicle while working on a state highway. Jeffrey Anderson, as natural maternal grandfather and co-conservator of Cole Naeve; Tamara Anderson, as natural aunt and co-conservator of Cole Naeve; and Brittah Klug, who are members of Naeve's surviving family (the Family), appeal the summary judgment in favor of Farmers Insurance Exchange (Farmers) determining that the Farmers policy issued to Statewide did not provide UIM coverage here. We affirm.

I. Facts

The parties stipulated to the following pertinent facts in a joint motion, which was approved and adopted by the trial court.

Farmers issued a policy of commercial automobile insurance to Statewide, which is owned by Naeve's sister, with a policy period of September 15, 2005, through September 15, 2006. The policy covered five specified vehicles. On May 2, 2006, Statewide purchased an additional pickup truck (truck), but did not contact Farmers within thirty days of its purchase to add the truck to its policy, as the policy required.

On July 8, 2006, Justine Cone (Cone), another Statewide employee, drove the truck with Naeve to a job site. Upon arriving, Cone parked the truck on the easternmost far right lanes of the roadway, with the front of the truck facing north, the direction of traffic travel, and inside a closed construction zone, which was marked by electronic signage and traffic barrels.

The closed construction zone had orange traffic barrels and cones placed at regular intervals in a line parallel to the truck's driver's side for at least 250 feet in front of the truck, and at least 25 to 30 feet behind the truck. Approximately 25 feet behind the truck, within the closed construction zone and behind the same orange traffic barrels and cones, was a large electronic sign with flashing lights and arrows directing traffic. The parked truck was not physically connected in any way to the large electronic sign, which was operating on its own battery power. The electronic sign was in place before the truck arrived on the day of the accident.

Cone shut off the truck's engine after parking. The truck was not obstructing the flow of traffic and was not being used as a barricade or traffic diversion device. Cone and Naeve physically exited the truck. Naeve walked away from the truck, northbound, within the closed construction zone, as did Cone.

As Naeve was standing in the closed construction zone approximately fifty feet ahead of the parked truck, another vehicle (tortfeasor's vehicle) that was headed northbound within a lane open to through traffic immediately adjacent to the closed construction zone physically drifted out of its lane, causing its passenger side to collide with the driver's side of the parked truck. The tortfeasor's vehicle then collided with Naeve, causing his death. The tortfeasor negligently caused the accident.

Following the accident, the Family pursued a claim against the tortfeasor and settled it for her liability policy limit of $100,000. Farmers then filed this declaratory judgment action asserting that its policy, which provided $1 million in UIM coverage, did not provide UIM coverage to Naeve under these circumstances. The parties eventually stipulated to the above facts and filed cross-motions for summary judgment.

The trial court granted summary judgment in favor of Farmers, concluding that Naeve was not insured under the policy because, even assuming he was occupying the truck at the time of the accident, the truck was not a “covered auto” under the insurance policy because Farmers had not been timely notified that Statewide had purchased the truck. In its order, the trial court noted that the truck was added by an amendment to Statewide's policy to take effect on July 24, 2006, sixteen days after the accident. The trial court did not address the Family's contention that public policy overrode the stated policy terms. This appeal ensued.

II. Insurance Coverage

The Family asserts, for various reasons, that the court's conclusion denying coverage under the language of the policy is erroneous. We first examine the policy provisions and agree with the trial court that, under the policy's clear and unambiguous terms, the parked truck was not covered under the Farmers policy because it was not listed as a “covered auto” and was not timely added to the policy as an after-acquired auto. We further conclude that Naeve was not “occupying” or “using” an auto, nor was he an “insured” under the policy.

A. Standard of Review

Under C.R.C.P. 56(a), a party seeking a declaratory judgment may move for summary judgment. Because the interpretation of an insurance contract is a question of law for the court, where neither party disputes the authenticity of the documents necessary to the court's determination or the facts underlying it, summary judgment may properly be entered in favor of the moving party. Horace Mann Ins. Co. v. Peters, 948 P.2d 80, 84 (Colo.App.1997). We review a grant of summary judgment de novo. A.C. Excavating v. Yacht Club II Homeowners Ass'n, 114 P.3d 862, 865 (Colo.2005).

B. Applicable Law

As with any contract, we construe an insurance policy to give effect to the intent of the parties. Compton v. State Farm Mut. Auto. Ins. Co., 870 P.2d 545, 547 (Colo.App.1993). Whenever possible this intent should be ascertained from the plain language of the policy alone. Id.

C. Insurance Policy Provisions

Here, the declarations section of the policy contains five “Items.” Item One designates the named insured as Statewide Traffic Control, a corporation. Item Two, the Schedule of Coverage and Covered Autos, states, “This policy provides only those coverages where a charge is shown in the premium column,” and “Each of these coverages will apply only to those ‘autos' shown as ‘covered autos.’ Autos are shown as covered ‘autos' for a particular coverage by the entry of one or more of the symbols from the COVERED AUTOS section.” The policy declarations further provide that, for liability coverage, “covered autos” are those described in symbols 7 and 9, and for uninsured motorist (UM) coverage, “covered autos” are those described in symbol 7.

Item Three lists a “schedule of covered autos you own” and describes five vehicles. It then shows a premium charge for each of the five vehicles for both liability and UM coverage. None of the five listed vehicles is the truck involved in this case.

Item Five, described as a “Schedule for Nonownership Liability,” describes the named insured's business as “Other than a Social Services Agency,” provides a rating basis for “number of employees,” and designates two unnamed employees, with a premium charge for the coverage. According to the definitions section of the policy, “nonownership liability” means that the policy provides coverage for vehicles owned by two employees of Statewide.

The policy contains a “Business Auto Coverage Form” (BACF). In section 1, it states, “Item Two of the Declarations show[s] the ‘autos' that are covered ‘autos' for each of your coverages. The following numerical symbols describe the ‘autos' that may be covered ‘autos.’ The symbols entered next to the coverage on the Declarations designate the only ‘autos' that are covered ‘autos.’ ”

Under subsection A of the BACF, which is denominated “Description of Covered Auto Designation Symbols,” symbol 7, which was entered on the declarations page for both liability and UM coverage, states that coverage exists for “specifically described ‘autos' ” and “only those autos described in item Three of the Declarations for which a premium or charge is shown.” Symbol 9, which was entered on the declarations page only for liability coverage, states that coverage exists for “nonowned ‘autos' only” and states:

Only those “autos” you do not own, lease, hire, rent or borrow that are used in connection with your business. This includes “autos” owned by your “employees[,]” partners (if you are a partnership), members (if you are a limited liability company), or members of their households but only while used in your business or your personal affairs.

Subsection B of the BACF is captioned “Owned Autos You Acquire After the Policy Begins” and states:

1. If Symbols 1, 2, 3, 4, 5, or 6 are entered next to a coverage in Item Two of the Declarations, then you have coverage for the “autos” that you acquire of the type described for the remainder of the policy period.

2. But, if Symbol 7 is entered next to a coverage in Item Two of the Declaration, an “auto” you acquire will be a covered “auto” for that coverage only if:

a. We already cover all your “autos” that you own for that coverage or it replaces an “auto” you previously owned that had coverage; and

b. You tell us within 30 days after you acquire it that you want us to cover it for that coverage.

Section II of the BACF describes “Liability Coverage” a...