Grippin v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 08 September 2016
• Docket Number: Court of Appeals No. 15CA0932
• Citation: 409 P.3d 529
• Parties: Shane GRIPPIN, Plaintiff–Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant–Appellee.
• Court: Colorado Court of Appeals

409 P.3d 529

Shane GRIPPIN, Plaintiff–Appellant,

v.STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant–Appellee.

Court of Appeals No. 15CA0932

Colorado Court of Appeals, Div. VII.

Announced September 8, 2016

Keating Wagner Polidori Free, P.C., Zachary C. Warzel, Denver, Colorado; Rosenbaum & Wootton, P.C., Lee K. Rosenbaum, Richard E. Wootton, Colorado Springs, Colorado, for Plaintiff–Appellant

Harris Karstaedt Jamison & Powers, P.C., Heather A. Salg, Tanja Heggins, Englewood, Colorado, for Defendant–Appellee

Opinion by JUDGE LICHTENSTEIN

¶ 1 Plaintiff Shane Grippin appeals the trial court's order granting summary judgment in favor of defendant State Farm Mutual Automobile Insurance Company (State Farm) on his claims for breach of contract, bad faith breach of insurance contract, and unreasonable delay or denial of payment of uninsured motorist/underinsured motorist (UM/UIM) benefits. He contends, among other things, that State Farm's insurance policy definition of "resident relative," which requires a relative to "reside primarily" with the named insured to receive UM/UIM benefits, violates public policy because it provides coverage to a narrower class of persons than the UM/UIM statute, and is therefore void and unenforceable. We agree, and therefore we reverse the district court's order granting summary judgment and remand the case for further proceedings on Grippin's claims.

I. Background

¶ 2 Grippin was injured when a truck hit him while he was riding his motorcycle. He sustained serious injuries and incurred over $400,000 in damages. At the time the accident occurred, Grippin and his wife owned a home in Colorado Springs, where they lived with their children. However, Grippin (and his wife and children) also regularly lived with his grandparents at their house in Fort Morgan for approximately one week per month to help care for them. He and his wife had their own room in the Fort Morgan house, kept personal belongings there, and Grippin did maintenance work around the house.

¶ 3 Although Grippin received the $25,000 liability limit from the GEICO policy insuring his motorcycle and the $25,000 liability limit from the truck driver's GEICO insurance policy, he sought additional coverage through the UM/UIM provisions of his family members' policies to cover his medical bills. As pertinent here, these policies included the following four State Farm policies:¹

• Policy #065, covering a 1997 Chevrolet pickup, issued to named insureds Lora Grippin (Grippin's mother)² and Patty J. Hall (Grippin's grandmother);

• Policy #253, covering a 1991 Chevrolet pickup, issued to named insureds James W. Hall (Grippin's grandfather) and Patty J. Hall;

• Policy #123, covering a 2004 Honda, issued to named insureds James W. and Patty J. Hall; and

• Policy #658, covering a 2006 Chevrolet Trailblazer, issued to named insureds James W. and Patty J. Hall.

¶ 4 Each policy defined the term "insured" as "you and resident relatives." The policies further defined a "resident relative" as

a person, other than you, who resides primarily with the first person shown as a named insured on the Declarations Page and who is [ ] related to that named insured or is or her spouse by blood, marriage, or adoption, including an unmarried and unemancipated child of either who is away at school and otherwise maintains his or her primary residence with that named insured...."

(Emphasis omitted.)

¶ 5 The policyholders also received "Auto Renewal" forms each year, which contained a list of "Other Household Drivers." Grippin was listed as an "Other Household Driver" on all four policies.

¶ 6 State Farm moved for summary judgment on the grounds that Grippin was not a "resident relative" of his grandparents under the policies because he did not reside "primarily" at their home in Fort Morgan.

¶ 7 Grippin responded that State Farm's definition of "resident relative" violates public policy, and is therefore void, because the qualifier "primarily" dilutes, conditions, or limits Colorado's statutory definition of "resident relative." He alternatively argued that the insurance contracts were ambiguous because he was listed as an "Other Household Driver" on the Auto Renewal forms, and that he had a reasonable expectation of coverage based on those forms and a State Farm employee's assurance after the accident that he was covered by the policies. The trial court rejected Grippin's arguments and granted summary judgment in favor of State Farm.

II. Standard of Review and Principles of Interpretation

¶ 8 We review the grant of a motion for summary judgment de novo. Aspen Wilderness Workshop, Inc. v. Colo. Water Conservation Bd. , 901 P.2d 1251, 1256 (Colo. 1995). "Summary judgment is proper where a case presents no genuine issue of material fact and the law entitles one party to judgment in its favor." Yellow Jacket Water Conservancy Dist. v. Livingston , 2013 CO 73, ¶ 6, 318 P.3d 454.

¶ 9 "Insurance policies are subject to contract interpretation and are reviewed de novo, with the ultimate aim of effectuating the contracting parties' intentions." GEICO Cas. Co. v. Collins , 2016 COA 30M, ¶ 18, 371 P.3d 729. Whether an insurance policy provision violates public policy, and is therefore void and unenforceable, is also a question of law that we review de novo.

Bailey v. Lincoln Gen. Ins. Co. , 255 P.3d 1039, 1045 (Colo. 2011).

¶ 10 Finally, statutory interpretation is a question of law that we review de novo. Apodaca v. Allstate Ins. Co. , 255 P.3d 1099, 1102 (Colo. 2011). Our primary goal is to give full effect to the General Assembly's intent. Aetna Cas. & Sur. Co. v. McMichael , 906 P.2d 92, 97 (Colo. 1995). To do so, we interpret statutory terms in accordance with their plain and ordinary meaning. Id. "[W]e strive to interpret statutes in a manner that avoids rendering any provision superfluous." Colo. Ins. Guar. Ass'n v. Sunstate Equip. Co., LLC , 2016 COA 64, ¶ 81, 405 P.3d 320 (quoting Qwest Corp. v. Colo. Div. of Prop. Taxation , 2013 CO 39, ¶ 16, 304 P.3d 217 ).

III. Whether "Resides Primarily" Violates Public Policy

A. Relevant Law

¶ 11 Colorado law requires automobile insurance policies to provide UM/UIM coverage "for the protection of persons insured thereunder who are legally entitled to recover damages from the owners or operators of uninsured motor vehicles," unless the named insured rejects the coverage in writing. § 10–4–609(1)(a), C.R.S. 2015. The UM/UIM coverage must be "coextensive with the class of insureds covered under the liability provision of the policy." Aetna , 906 P.2d at 98.

¶ 12 An insurance policy provision violates public policy and is therefore void and unenforceable if it attempts to "dilute, condition, or limit statutorily mandated coverage." Bailey , 255 P.3d at 1045 (citation omitted); see Pacheco v. Shelter Mut. Ins. Co. , 583 F.3d 735, 740 (10th Cir. 2009) (finding that UM/UIM provision that diluted, limited, or conditioned Colorado's statutorily mandated coverage was void and invalid as against public policy).

¶ 13 Colorado's automobile insurance statute defines an "insured" as "the named insured, relatives of the named insured who reside in the same household as the named insured, and any person using the described motor vehicle with the permission of the named insured." § 10–4–601(5), C.R.S. 2015.

¶ 14 The statute further defines a "resident relative" as

a person who, at the time of the accident, is related by blood, marriage, or adoption to the named insured or resident spouse and who resides in the named insured's household, even if temporarily living elsewhere, and any ward or foster child who usually resides with the named insured, even if temporarily living elsewhere.

§ 10–4–601(13).

¶ 15 "In the context of automobile insurance exclusions, residence is determined on a case-by-case basis using factors such as intent and relative permanence." Potter v. State Farm Mut. Auto. Ins. Co. , 996 P.2d 781, 783 (Colo. App. 2000). When making that determination, courts consider factors such as the subjective or declared intent of the individual, the formality or informality of the relationship between the individual and members of the household, the existence of another place of lodging, and the relative permanence or transient nature of the individual's residence in the household. Iowa Nat'l Mut. Ins. Co. v. Boatright , 33 Colo.App. 124, 127, 516 P.2d 439, 440 (1973). No single factor is determinative; rather, they should all be considered "in light of the basic consideration of whether the parties to the insurance contract intended that coverage would extend to the alleged insured." Id.

B. Discussion

¶ 16 Grippin contends that State Farm's definition of "resident relative" violates public policy because it restricts the class of individuals insured to a relative who resides primarily with the first person shown as the named insured on the declarations page; whereas the statutory definition of a "resident relative" includes a broader class of relatives "who reside[ ] in the named insured's household." He argues that a person can have multiple residences under Colorado law and that the statute's plain language does not restrict the definition of "resident relative" to a single, "primary" residence. We agree.

¶ 17 The General Assembly did not expressly modify or define the word "reside" to restrict the class of insureds only to relatives who reside "primarily" with the named insured. See § 10–4–601(13).

¶ 18 Colorado law contemplates that a person can "reside" in more than one place. "[R]esidence denotes a place where a person dwells. It ‘simply requires bodily presence as an inhabitant in a given place.’ " Potter , 996 P.2d at 783 (quoting Carlson v. Dist. Court , 116 Colo. 330, 338, 180 P.2d 525, 530 (1947) ). Indeed, the definition of "residence" in Black's Law Dictionary explains that a person can have more than one residence:

Residence usu[ally] just means bodily presence as an inhabitant in a given place; domicile usu[ally] requires bodily

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