Mayo v. National Farmers Union Property and Cas. Co.

• Court: Colorado Supreme Court
• Writing for the Court: LOHR
• Citation: Mayo v. National Farmers Union Property and Cas. Co., 833 P.2d 54 (Colo. 1992)
• Decision Date: 20 July 1992
• Docket Number: 91SC233
• Parties: Clarence W. MAYO and Joyce Mayo, Petitioners, v. NATIONAL FARMERS UNION PROPERTY AND CASUALTY COMPANY, a Colorado corporation, Respondent.

Page 54

833 P.2d 54

Clarence W. MAYO and Joyce Mayo, Petitioners, v. NATIONAL FARMERS UNION PROPERTY AND CASUALTY COMPANY, a Colorado corporation, Respondent.

No. 91SC233.

Supreme Court of Colorado En Banc.

July 20, 1992.

John Gehlhausen, P.C., John Gehlhausen, Darla Scranton Specht, Lamar, for petitioners.

Makris, Hunsaker, Towey and Melonakis, P.C., William J. Hunsaker, Michael S. Keilly, Denver, for respondent.

Wilcox, Ogden & Cox, P.C., Ralph Ogden, Denver, for amicus curiae Colorado Trial Lawyers Ass'n.

Zupkus & Ayd, P.C., Stefan Kazmierski, Denver, for amicus curiae Colorado Defense Lawyers Ass'n.

Justice LOHR delivered the Opinion of the Court.

We granted certiorari to determine whether section 10-4-418(2)(b), 4A C.R.S. (1987), which authorizes household exclusion clauses in automobile liability insurance policies, violates the equal protection clauses of the United States and Colorado Constitutions. In general, a household exclusion clause excludes coverage for claims asserted by a member of a household against another member of the same household. See id. After an automobile accident, National Farmers Union Property and Casualty Company (National) brought a declaratory judgment action against its insureds, Clarence W. Mayo and Joyce Mayo, to determine whether Joyce Mayo's negligence claim against Clarence Mayo for bodily injuries sustained in the accident were covered under their policy. The Mayos' policy contained a household exclusion clause.

The district court determined that the statute authorizing household exclusion clauses is consistent with equal protection requirements and granted summary judgment for the insurer. The court rejected the Mayos' contention that the classifications created by the statute unconstitutionally impair their fundamental right to travel. The district court also rejected certain other defenses presented by the Mayos that were not based on constitutional grounds. The Colorado Court of Appeals affirmed, but declined to review the equal protection issue because it lacked jurisdiction to do so. ¹ National Farmers Union Property & Casualty Co. v. Mayo, No. 89CA1903 (February 7, 1991) (not selected for publication). We granted certiorari to address that issue and now affirm the district court's judgment for National.

I.

We derive the following facts from the record developed in the district court. Clarence and Joyce Mayo are husband and wife and are members of the same household. They insured their pickup truck under an automobile liability insurance policy issued by National. On September 6, 1987, Clarence Mayo was driving the vehicle, with Joyce Mayo as his passenger, when the pickup collided with another vehicle. Joyce Mayo sustained various injuries as a result of the accident and commenced a suit against her husband and the driver of the other vehicle.

National then brought a separate action for a declaratory judgment, naming the Mayos as defendants and seeking a determination that the Mayos' policy provided no coverage for the claims brought by Joyce Mayo against Clarence Mayo. The policy contained a household exclusion clause, by which National excluded coverage for bodily injury to any "insured person," a term that included Joyce Mayo as a named insured and as a spouse of a named insured living in the same household. ² The parties filed cross-motions for summary judgment, and the district court granted summary judgment for National on all issues. ³ The court of appeals affirmed but held that it had no jurisdiction to consider the Mayos' challenge to the constitutionality of the statute authorizing the use of household exclusion clauses in automobile liability insurance policies. We granted certiorari to address that limited issue.

The Mayos attack the constitutional sufficiency of the household exclusion clause and the statute upon which it is based. They assert that the statutory authorization for household exclusion clauses found in section 10-4-418(2)(b), 4A C.R.S. (1987), creates classes of similarly situated persons who are treated differently for the purpose of insurance coverage for liability for bodily injury, and thereby violates the equal protection guarantees of the United States and Colorado Constitutions. ⁴ In particular, they assert that the statutory authorization significantly burdens their fundamental right to travel and invokes a standard of strict scrutiny. In their brief the Mayos state their position as follows:

Any interference with an injured victim's statutory right to compensation for injuries arising out of automobile accidents, such as created by the household exclusion in Mayos' policy, is a deprivation of the basic necessities of life with sufficient "impact" to constitute a violation of the fundamental right to travel and justify application of the strict scrutiny standard of review.

II.

The statute under attack, § 10-4-418(2)(b), provides:

The commissioner [of insurance] shall not find that a policy form, certificate, or contract of insurance or rider does not comply with the applicable requirements and standards of this title [10, Insurance] on the ground that it excludes coverage of claims made by a member of a household against another member of the same household. Such exclusions are in conformity with the public policy of this state.

This legislative enactment followed our decision in Meyer v. State Farm Mutual Automobile Insurance Co., 689 P.2d 585, 589-92 (Colo.1984), in which we invalidated the household exclusion clause contained in automobile insurance policies on public policy grounds. By adoption of section 10-4-418(2)(b), the General Assembly legislatively repealed the Meyer decision. Schlessinger v. Schlessinger, 796 P.2d 1385, 1389 (Colo.1990). Thus, section 10-4-418(2)(b) represents a considered legislative expression validating household exclusion clauses.

The Mayos argue that section 10-4-418(2)(b) violates the equal protection clauses of the United States and Colorado Constitutions. U.S. Const. amend. XIV, § 1; Colo. Const. art. II, § 25. Equal protection of the laws requires the government to accord similar treatment to all persons who are similarly situated. E.g., Bloomer v. Boulder County Bd. of Comm'rs, 799 P.2d 942, 947 (Colo.1990); Firelock Inc. v. District Court, 776 P.2d 1090, 1097 (Colo.1989); People v. Garberding, 787 P.2d 154, 156 (Colo.1990). Thus, the equal protection guarantees apply only where there is state action, rather than private individual action. E.g., Jackson v. Metropolitan Edison Co., 419 U.S. 345, 349, 95 S.Ct. 449, 452-53, 42 L.Ed.2d 477 (1974); see Denver Welfare Rights v. PUC, 190 Colo. 329, 335-37, 547 P.2d 239, 243-45 (1976) (discusses requirement of state action to invoke due process protections). For the purposes of this case, we shall assume without deciding that state action exists because we believe that even if state action is present the equal protection challenge must fail.

In equal protection cases, we employ a three-tiered standard of review. Parrish v. Lamm, 758 P.2d 1356, 1370 (Colo.1988). We will subject classifications that affect a suspect class or a fundamental right to strict scrutiny. Id. To survive strict scrutiny, the government must establish that the classification is necessarily related to a compelling state interest. E.g., Tattered Cover, Inc. v. Tooley, 696 P.2d 780, 786 (Colo.1985); Parrish, 758 P.2d at 1370; Austin v. Litvak, 682 P.2d 41, 49 (Colo.1984); see Loving v. Virginia, 388 U.S. 1, 11, 87 S.Ct. 1817, 1823, 18 L.Ed.2d 1010 (1967). Classifications based on gender, illegitimacy or alienage receive an intermediate level of scrutiny. See Caban v. Mohammed, 441 U.S. 380, 388, 99 S.Ct. 1760, 1765-66, 60 L.Ed.2d 297 (1979); Parrish, 758 P.2d at 1370; Austin, 682 P.2d at 49. This standard requires the government to establish that the classification is substantially related to achievement of an important governmental objective. Craig v. Boren, 429 U.S. 190, 197, 97 S.Ct. 451, 456-57, 50 L.Ed.2d 397 (1976); Tassian v. People, 731 P.2d 672, 674-75 (Colo.1987). All other classifications are subject to a rational basis test, the most deferential standard of judicial review. E.g., Lyng v. International Union, United Auto., Aerospace, & Agric. Implement Workers, 485 U.S. 360, 370, 108 S.Ct. 1184, 1192, 99 L.Ed.2d 380 (1988); Parrish, 758 P.2d at 1370. This standard requires that the statutory classification have a rational basis in fact and that it bear a reasonable relationship to a legitimate governmental objective. E.g., Austin, 682 P.2d at 49; see Lyng, 485 U.S. at 370, 108 S.Ct. at 1192. A presumption of constitutionality attaches to a statute analyzed under the rational basis standard, and the challenging party has the burden of establishing unconstitutionality beyond a reasonable doubt. E.g., Tassian, 731 P.2d at 675.

We shall now examine the classifications created by section 10-4-418(2)(b). Section 10-4-418(2)(b), the statutory authorization for household exclusion clauses, creates two separate classifications of accident victims: those excluded from insurance benefits because they are members of the same household as the insured against whom a claim is brought, and all other accident victims who assert a claim against the insured. It is the disparate treatment of these two classes of persons for insurance benefit purposes that provides the basis for the Mayos' equal protection challenge.

Section 10-4-418(2)(b) has survived a prior attack on equal protection grounds. Allstate Ins. Co. v. Feghali, 814 P.2d 863, 867 (Colo.1991). In Feghali, we considered a challenge to section 10-4-418(2)(b) by a husband and wife who were driving separate vehicles and were involved in a collision between the two vehicles. The parties in Feghali agreed that given the absence of a fundamental right or a suspect class, the rational basis test applied to the equal protection question. 814 P.2d at 866. As noted above, a statutory classification must have...