Farmers Ins. Exchange v. Bill Boom Inc., MID-CENTURY
| Decision Date | 08 June 1998 |
| Docket Number | 97SC201,97SC506,MID-CENTURY,Nos. 97SC164,97SC182,s. 97SC164 |
| Parties | 98 CJ C.A.R. 2864 FARMERS INSURANCE EXCHANGE, Petitioner, v. BILL BOOM INCORPORATED, a Colorado corporation, Respondent.AUTO COMPANY, Petitioner, v. SAFEWAY TRUCKING, INC. and Larry Dean Lincoln, Respondents. AMERICAN FAMILY INSURANCE GROUP, Petitioner, v. FEDERAL EXPRESS CORPORATION, Respondent. SCHNEIDER NATIONAL CARRIERS, INC., a Nevada corporation, and Robert Westfall, Petitioners, v. ALLSTATE INSURANCE COMPANY, an Illinois corporation, Respondent. |
| Court | Colorado Supreme Court |
White and Steele, P.C., John M. Lebsack, Keith R. Olivera, Denver, for Petitioner, Farmers Insurance Exchange.
Godfrey & Associates, P.C., Brett Marshall Godfrey, Alison Faryl Kyles, Denver, for Respondent, Bill Boom Inc., a Colorado Corp.
Campbell, Latiolais & Ruebel, P.C., Colin C. Campbell, Denver, for Petitioner, Mid-Century Auto Company.
Godfrey & Associates, P.C., Peter Moyson, Brett Marshall Godfrey, Alison Faryl Kyles, Denver, for Respondents, Safeway Trucking, Inc. and Larry Dean Lincoln.
Mary E. Gibbons, Englewood, Colorado, for Petitioner, American Family Insurance Group.
Godfrey & Associates, P.C., Brett Marshall Godfrey, Alison Faryl Kyles, Denver, for Respondent, Federal Express Corporation.
Treece, Alfrey, Musat & Bosworth, P.C., June Baker Laird, Carol Lynn Thomson, Denver, for Petitioners, Schneider National Carriers, Inc., and Robert Westfall.
Walberg & Dagner, P.C., Randall S. Herrick-Stare, Englewood, for Respondent, Allstate Insurance Company, an Illinois corporation.
Berryhill, Cage & North, P.C., Mark W. Williams, Denver, for Amicus Curiae National Association of Independent Insurers.
Levy & Lambdin, P.C., Marc R. Levy, Scott P. Landry, Englewood, for Amicus Curiae State Farm.
Office of the City Attorney, Charles H. Richardson, Julia A. Bannon, for Amicus Curiae City of Aurora.
Colorado Municipal League, David W. Broadwell, Denver, for Amicus Curiae Colorado Municipal League.
Hale Pratt Hackstaff Laitos Green & Tymkovich, P.C., Karen E. Leather, Denver, for Amicus Curiae Colorado Compensation Insurance Authority.
Under the Colorado Auto Accident Reparations Act, sections 10-4-701 to -726, 4A C.R.S. (1994) (No-Fault Act), insurers are generally responsible for the covered benefits owed to insureds involved in an accident, without any opportunity to recover those benefits from the insurer of the other driver. However, the No-Fault Act does provide an exception to the general rule where a motor vehicle accident involves a collision between a private passenger motor vehicle or a public school vehicle and a nonprivate passenger motor vehicle. In that circumstance, the insurer of the private passenger or public school vehicle may seek reimbursement for all benefits paid from the owner, operator or person responsible for the nonprivate passenger motor vehicle.
Thus, the cases we address today raise the question of the proper scope of the phrase "nonprivate passenger motor vehicle" in section 10-4-713(2), 4A C.R.S. (1994). The four consolidated cases arise from similar factual scenarios involving collisions between large commercial vehicles and small passenger cars that caused injury to the occupants of the passenger cars. In each case, the insurers who provided coverage on the passenger cars under the No-Fault Act paid personal injury protection (PIP) benefits to their insureds and then sought reimbursement from or subrogation against the owner, user or operator of the commercial vehicle.
court of appeals disallowed the subrogation claims, relying on Filippi v. Farmers Insurance Exchange, 943 P.2d 24 (Colo.App.1996). In Allstate Insurance Co. v. Schneider National Carriers, Inc., 942 P.2d 1352 (Colo.App.1997), a different panel of the court of appeals agreed with Allstate's challenge to the trial court's dismissal of its subrogation claim. 2 We agree with the court of appeals' decision in Schneider. We therefore affirm Schneider and reverse Mid-Century and American Family and remand the latter two cases with directions to reinstate the orders of the district courts. We also reverse the court of appeals' decision in Farmers and return the case with directions to remand to the district court for reinstatement of the action.
The stated purpose of the No-Fault Act is
to avoid inadequate compensation to victims of automobile accidents; to require registrants of motor vehicles in this state to procure insurance covering legal liability arising out of the ownership and use of such vehicles and also providing benefits to persons occupying such vehicles and to persons injured in accidents involving such vehicles.
§ 10-4-702, 3 C.R.S. (1997). We have previously concluded that the General Assembly intended to allow an insured full tort recovery undiminished by the subrogation and arbitration rights of the insurer, except in those cases where such an intent would result in double recovery to the insured. See Marquez v. Prudential Property & Cas. Ins. Co., 620 P.2d 29, 33 (Colo.1980). Similarly, section 10-4-713(1), 4A C.R.S. (1994), generally prohibits insurers who pay No-Fault benefits from acquiring subrogation rights against tortfeasors. As pertinent here, the statute provides:
Neither any person eligible for direct benefits described in section 10-4-706 nor the insurer providing benefits described in section 10-4-706 shall have any right to recover against the owner, user, or operator of a motor vehicle ... in any action for damages for benefits required to be paid under section 10-4-706....
§ 10-4-713(1), 4A C.R.S. (1994).
Section 10-4-713(2)(a), 4A C.R.S. (1994), contains an exception to the general prohibition against subrogation. In pertinent part, that subsection provides:
(a) Notwithstanding the provisions of subsection (1) of this section, where a motor vehicle accident involves a private passenger motor vehicle ... and a nonprivate passenger motor vehicle, the insurer of the private passenger motor vehicle ... shall have a direct cause of action for all benefits actually paid by such insurer under section 10-4-714 against the owner, user, or operator of the nonprivate passenger motor vehicle....
§ 10-4-713(2)(a), 4A C.R.S. (1994). Thus, the exception applies when a "private passenger motor vehicle" is involved in an accident with a "nonprivate passenger motor vehicle."
The phrase "private passenger motor vehicle" is defined in section 10-4-713(2)(c):
For the purpose of this subsection (2), a "private passenger motor vehicle" means an automobile of the private passenger, station wagon, or camper type not used as a public livery conveyance ... or an automobile of the panel delivery or truck type with a rated load capacity of one thousand five hundred pounds or less.
The phrase "nonprivate passenger motor vehicle" is not defined.
The insurers in these cases argue that the prefix "non" modifies the defined phrase, "private passenger motor vehicle." Under the insurers' suggested construction, the commercial trucks involved in the accidents at issue here are "nonprivate passenger motor vehicles." Thus, the insurers of the injured parties fall within the exception of subsection (2)(a) and can subrogate their insureds' claims against the truck drivers, their companies, and their insurers. However, the other parties contend that the prefix "non" modifies only the single word "private." Under their suggested construction, the trucks are not "nonprivate passenger motor vehicles," and the injured parties' insurers fall within the general subrogation prohibition of subsection (1) such that they may not seek any reimbursement for No-Fault benefits paid to their insureds.
In Filippi, the court of appeals found the language of the "nonprivate passenger motor vehicles" provision clear and unambiguous. Thus, it declined to consider extrinsic aids to construction such as the legislative history of the No-Fault Act. The court of appeals read the prefix "non" as modifying only "private" and not the entire phrase "private passenger motor vehicles." Filippi, 943 P.2d at 25. Under that interpretation, an accident would have to involve two passenger motor vehicles, one private and one nonprivate, before the insurer could assert subrogation rights. Consequently, in Filippi, the court of appeals denied subrogation concluding that "a semi-tractor/trailer owned by a private entity is not included in the phrase 'nonprivate passenger motor vehicle.' " Id. at 26.
The court of appeals followed the same reasoning, albeit with respect to different types of vehicles, in Farmers, Mid-Century and American Family. Hence, in each of those four cases, the "nonprivate passenger motor vehicle" provision was narrowly construed to encompass only governmentally-owned passenger motor vehicles and insurers were disallowed from asserting subrogation claims against the owners, users and operators of commercial vehicles.
In Schneider, a different panel of the court of appeals determined that the interpretation of the term "nonprivate passenger motor vehicle" in Filippi conflicted with the General Assembly's intent, and therefore declined to follow that decision. See Schneider, 942 P.2d at 1355. Specifically, the court in Schneider reasoned that since "private passenger motor vehicle" is a statutorily defined phrase fully contained in the section at issue, "nonprivate passenger motor vehicle" should be construed as the group of vehicles not included within the defined phrase. See id. The court of appeals also noted that the statutory definition of "private passenger motor vehicle" was itself divergent from...
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