Fire Ins. Exchange v. Rael by Rael

• Decision Date: 23 March 1995
• Docket Number: No. 93CA2027,93CA2027
• Citation: 895 P.2d 1139
• Parties: FIRE INSURANCE EXCHANGE, Plaintiff-Appellant, v. Lindsey Daniel RAEL, a minor child, By her guardians and next friends, Steven D. RAEL and Tammy B. Rael, and Steven D. Rael and Tammy B. Rael, individually and as parents of Lindsey Daniel Rael, and Christine M. Medina and Anthony Medina, Jr., Defendants-Appellees. . I
• Court: Colorado Court of Appeals

Page 1139

895 P.2d 1139

FIRE INSURANCE EXCHANGE, Plaintiff-Appellant, v. Lindsey Daniel RAEL, a minor child, By her guardians and next friends, Steven D. RAEL and Tammy B. Rael, and Steven D. Rael and Tammy B. Rael, individually and as parents of Lindsey Daniel Rael, and Christine M. Medina and Anthony Medina, Jr., Defendants-Appellees.

No. 93CA2027.

Colorado Court of Appeals,

Div. I.

March 23, 1995.

Rehearing Denied April 27, 1995.

Hall & Evans, L.L.C., Malcolm S. Mead, Eugene O. Daniels, Denver, for plaintiff-appellant.

No appearance for defendants-appellees.

Opinion by Judge CASEBOLT.

In this action concerning coverage under a homeowner's insurance policy for a dog bite incident, plaintiff, Fire Insurance Exchange (FIE), appeals the declaratory judgment finding coverage in favor of its insureds, Anthony Medina (Medina) and Christine Medina, and the dog bite victim Lindsey Rael and her parents (Raels). We affirm.

The insureds purchased a homeowner's insurance policy from FIE. An investigator retained by FIE after an unrelated loss evaluated the insureds' property and determined that they had three "vicious dogs," at least one of which was believed to be a pit bull terrier. The investigator also told FIE that Medina had been arrested for failing to appear to answer misdemeanor charges of having vicious dogs.

FIE notified the insurance agent handling the insureds' policy that, in order to renew the policy, they would be required to sign a dog liability exclusion. The agent notified the insureds and mailed a restrictive endorsement to them which provided:

We agree not to cancel this policy for thirty days from the date shown above. You and we agree that this policy does not cover loss by/to:

'ANY AND ALL DOGS WITHIN THE INSURED'S HOUSEHOLD OR FOR WHICH THE INSURED IS LEGALLY RESPONSIBLE.'

The form contained a space for the insureds' signature. They did not initially sign or return this restrictive endorsement.

Approximately three months later, FIE issued a notice of cancellation of the insureds' policy. The agent explained to them that because they had failed to sign and return the restrictive endorsement, the policy would be canceled in one month's time. The agent sent a second copy of the restrictive endorsement to the insureds for their signature.

There was conflicting testimony as to discussions between the agent and the insureds concerning this endorsement. The agent testified that he told the insureds that FIE would not insure them unless the endorsement was signed and that the endorsement excluded all of the dogs. Medina, however, testified that he was led to believe that only the female pit bull terrier was of concern and that, because she had been put to sleep, the endorsement would need to be signed, but would not apply to the remaining dogs. Medina did not appear at trial, but testified via deposition that he believed he would be notified after FIE received the signed endorsement if FIE was still going to exclude the remaining dogs.

It was undisputed that the insureds signed and returned the restrictive endorsement to the agent with the following handwritten note across the top of the form: "Female pit bull was put to sleep by Northglenn Animal Control 10-31-88." Medina testified that he signed the endorsement and made the handwritten notation in the agent's office. The insurance agent testified that the insureds mailed the endorsement to his office and that he saw the handwritten note but believed it was merely written for informational purposes. The signed endorsement with the handwritten note was thereafter returned to FIE. The policy was not canceled and was renewed in subsequent years without further change or additional signatures by the insureds.

The incident at issue occurred several years later, while the renewed policy was in force, when Lindsey Rael was attacked and severely injured by one of the remaining dogs owned by the insureds. The Raels sued the insureds for personal injuries and damages. FIE notified the insureds that there would be no coverage because of the restrictive endorsement, but provided a defense under a reservation of rights.

FIE subsequently filed this declaratory judgment action against the insureds and Raels to determine coverage under the policy. Raels' claims against the insureds were joined in that action but were stayed pending the outcome of the coverage issue.

In the coverage litigation, FIE argued that the restrictive endorsement clearly and unambiguously denied coverage for the dog bite incident. The trial court disagreed, concluding in essence that: 1) the handwritten addition to the restrictive endorsement created an ambiguity in the endorsement; 2) taken as a whole, the endorsement evidenced an agreement by the parties that only the female pit bull terrier was excluded from coverage; 3) the insureds were entitled to coverage under the doctrine of reasonable expectations; and 4) FIE was equitably estopped from denying coverage because of the insured's reasonable reliance on the agent's representations. This appeal followed.

I.

FIE first contends that the restrictive endorsement, even including the handwritten statement, is clear and unambiguous and requires exclusion of coverage for any claim of loss caused by any dog owned by the insureds. Consequently, it reasons, the trial court erred in admitting extrinsic evidence and in denying its motion for summary judgment. We disagree.

We first reject FIE's contention that the trial court erred in denying its pretrial motion for summary judgment. Absent circumstances not present here, the denial of a motion for summary judgment may not be considered on appeal from a final judgment after trial on the merits. Manuel v. Fort Collins Newspapers, Inc., 631 P.2d 1114 (Colo.1981); Grogan v. Taylor, 877 P.2d 1374 (Colo.App.1993).

We further reject the contention that the trial court erred in admitting extrinsic evidence to prove the intent of the parties.

Insurance contracts are construed in accordance with the general law of contracts. Federal Deposit Insurance Corp. v. American Casualty Co., 843 P.2d 1285 (Colo.1992). When the language used in a contract is plain and its meaning clear, the agreement must be enforced as written. In re May, 756 P.2d 362 (Colo.1988).

When a provision in an insurance policy is clear and unambiguous, the intent of the parties is determined from the plain language of the instrument itself, and extrinsic evidence is not admissible to reveal that intent. Radiology Professional Corp. v. Trinidad Area Health Ass'n, 195 Colo. 253, 577 P.2d 748 (1978). However, when there is ambiguity in the terms of the agreement, extrinsic evidence is admissible. In re May, supra.

A provision in a policy is...