Kline v. American States Ins. Co.

• Decision Date: 07 March 1996
• Docket Number: No. 94CA1586,94CA1586
• Citation: 924 P.2d 1150
• Parties: Logan KLINE and Robin Temple, Plaintiffs-Appellees, v. AMERICAN STATES INSURANCE COMPANY, an Indiana corporation, Defendant-Appellant. Div. III
• Court: Colorado Court of Appeals

Page 1150

924 P.2d 1150

Logan KLINE and Robin Temple, Plaintiffs-Appellees, v. AMERICAN STATES INSURANCE COMPANY, an Indiana corporation,

Defendant-Appellant.

No. 94CA1586.

Colorado Court of Appeals,

Div. III.

March 7, 1996.

Rehearing Denied April 25, 1996.

Certiorari Denied Oct. 15, 1996.

Purvis, Gray, Schuetze & Gordon, John A. Purvis, Glen F. Gordon, Boulder, for Plaintiffs-Appellees.

Makris and Hunsaker, P.C., William J. Hunsaker, Michael S. Keilly, Wheatridge, for Defendant-Appellant.

Opinion by Judge RULAND.

This is a proceeding to determine the amount of underinsured motorist coverage available under two separate insurance policies. Defendant, American States Insurance Co., appeals from a summary judgment in favor of its policy holders, plaintiffs, Logan Kline and Robin Temple. We affirm.

The relevant facts are not in dispute. Plaintiffs are the divorced parents of a minor child killed when he was struck by an automobile. Prior to his death, plaintiffs shared joint custody of their son, and he spent approximately one-half of his time in each parent's home.

Prior to the fatal accident, each plaintiff had purchased an identical automobile insurance policy from defendant. Each policy provided underinsured motorist coverage of up to $100,000. Plaintiffs' son was insured under each policy as a family member.

The driver of the automobile was insured for $100,000 in liability coverage. Following the accident, the driver's insurance company paid $50,000 to each plaintiff.

Plaintiffs then filed this declaratory judgment action seeking a determination of the coverage available under their policies. On cross-motions for summary judgment, the trial court determined that each plaintiff would be entitled to recover up to $75,000. This amount, when combined with the $100,000 received from the automobile driver's insurance, equals the maximum recovery of $250,000 permitted for wrongful death by § 13-21-203, C.R.S. (1995 Cum.Supp.). However, the issue of the amount of damages actually sustained by each plaintiff has not yet been determined pursuant to the arbitration proceeding required in the policies.

I

Defendant contends that the trial court erred for various reasons in determining that there was any coverage available under the underinsured motorist provisions of plaintiffs' policies. We find no merit in any of the allegations of error.

A

Plaintiffs' policies each provide coverage of up to $100,000 for damages arising from an accident involving an "underinsured" motor vehicle. The parties agree that the somewhat confusing language of the policy was intended to track the applicable provision of § 10-4-609(4), C.R.S. (1994 Repl.Vol. 4A) which provides:

(1) [Uninsured] motorist coverage shall include coverage for ... death which an insured is legally entitled to collect from the ... driver of an underinsured motor vehicle. An underinsured motor vehicle is a ... vehicle, the ownership, maintenance or use of which is insured for ... death at the time of the accident, but the limits of liability for ... death under such insurance ... are:

(a) Less than the limits for [underinsured] motorist coverage under the insured's policy or

(b) Reduced by payments to persons other than an insured [injured] in the accident to less than the limits of the [underinsured] motorist coverage under the insured's policy.

Defendant first asserts that because plaintiffs' son was the only "insured" injured in the accident, the automobile driver's $100,000 liability payment must be deemed to equal the underinsured coverage limit of $100,000 in each of plaintiffs' policies. In support of this contention, defendant argues that the claim of each plaintiff is derivative from and based upon the death of their son. However, we agree with the trial court's analysis.

Subject to exceptions not applicable here, in construing a statute, we must apply the plain and ordinary meaning of the words used. See Fogg v. Macaluso, 892 P.2d 271 (Colo.1995). We conclude that application of this rule of construction requires a determination that coverage exists.

While there was only one insured killed in the accident, each plaintiff purchased a separate policy applicable to the accident, and thus, there are two policies of insurance. Pursuant to § 13-21-201(1)(c), C.R.S. (1995 Cum.Supp.), the automobile driver was then obligated to pay $50,000 to each parent. As a result, for purposes of each parent's policy, $50,000 was paid to a person "other than an insured injured in the accident," namely, the other parent. Hence, we conclude that the automobile driver's vehicle was underinsured under the terms of each policy.

Defendant contends that this plain meaning interpretation of the statute reaches an absurd result. It argues that if plaintiffs' son had survived, the $100,000 payment by the automobile driver to or on behalf of the son would be credited to each policy so that the driver was not underinsured under either. Defendant maintains that this same result should occur when a death occurs. We are not persuaded.

Even if we assume that defendant's analysis is correct relative to the application of each policy in the event of injury only, we must apply the statutory provision to the facts before us. Further, we perceive no absurdity in a legislative decision to authorize in effect an award of different amounts depending upon whether an insured is injured or killed in an accident.

B

In the alternative, defendant argues that each of the plaintiffs must be considered to be an insured under the other's policy and that, therefore, the automobile driver's payment satisfies any obligation under either policy. Again, we disagree.

As pertinent here, each policy provides:

B. 'Insured' as used in this part means:

1. You or any 'family member.'

....

3. Any person for damages that person is entitled to recover because of 'bodily injury,' to which this coverage applies, sustained by a person described in 1 ... above.

According to defendant, because plaintiffs' son was an insured under paragraph B.1, his parents become insureds under paragraph B.3. However, even if we assume that this is a correct interpretation of paragraph B of the policy, neither plaintiff was an "insured injured in the accident" as required by § 10-4-609(4). Hence, we agree with the trial court's ruling. Cf. Kinsella v. Farmers Insurance Exchange, 826 P.2d 433 (Colo.App.1992)(After the underinsured policy limits have been paid for the medical expenses incurred by a child, the insurance carrier is not obligated to pay additional expenses claimed by the parent on behalf of the child).

C

Defendant next contends that, pursuant to the analysis of this court in Leetz v. Amica Mutual Insurance Co., 839 P.2d 511 (Colo.App.1992), the automobile driver's liability insurance limit of $100,000 must be deemed to satisfy the $100,000 limit in each of plaintiffs' policies for underinsured coverage because the parents are heirs of their son, the applicable insured. Again, we disagree.

In Leetz, the decedent and three other passengers were injured in a collision with the driver of another automobile. The other driver was insured by a liability policy with a $50,000 limit per accident. The policy covering the automobile in which decedent was riding also provided $50,000 in coverage for underinsured vehicles. The decedent's heirs received $16,000 from the $50,000 in proceeds paid by the insurance company for the other driver, and they requested another $34,000 from the company that insured the decedent's vehicle.

A division of this court held that the driver's liability limits were equal to the underinsured limits of the decedent's policy. As a result, the Leetz court concluded that the heirs were not entitled to the payment of...