Mullen v. Metro. Cas. Ins. Co.

• Decision Date: 16 December 2021
• Docket Number: Court of Appeals No. 20CA1357
• Citation: 507 P.3d 73,2021 COA 149
• Parties: Margaret MULLEN, Plaintiff-Appellant, v. METROPOLITAN CASUALTY INSURANCE COMPANY, Defendant-Appellee.
• Court: Colorado Court of Appeals

507 P.3d 73

2021 COA 149

Margaret MULLEN, Plaintiff-Appellant,

v.METROPOLITAN CASUALTY INSURANCE COMPANY, Defendant-Appellee.

Court of Appeals No. 20CA1357

Colorado Court of Appeals, Division III.

Announced December 16, 2021

Larson Larimer Schneider, P.C., Philip C. Zimmerman, Vance R. Larimer, Greenwood Village, Colorado, for Plaintiff-Appellant

Walberg Law, PLCC, Wendelyn Walberg, Katherine Smith Dedrick, Morrison, Colorado, for Defendant-Appellee

Jordan Herington & Rowley, Michael J. Rosenberg, Greenwood Village, Colorado; Law Office of Richard M. Crane, Richard M. Crane, Denver, Colorado, for Amicus Curiae Colorado Trial Lawyers Association

Opinion by JUDGE BROWN

¶ 1 In this declaratory judgment action, plaintiff, Margaret Mullen (Margaret¹ ), appeals the district court's entry of summary judgment in favor of defendant, Metropolitan Casualty Insurance Company (Metropolitan). To resolve this appeal, we must determine whether Metropolitan discharged its duty under section 10-4-609(2), C.R.S. 2021, to notify and offer the Mullens uninsured/underinsured motorist (UM/UIM) coverage. Under the standard set forth in Allstate Insurance Co. v. Parfrey , 830 P.2d 905 (Colo. 1992), the offer must have been made in a manner reasonably calculated to permit the Mullens to make an informed decision about whether and at what limits to purchase such coverage. Considering the totality of the circumstances — including that the UM/UIM selection form Metropolitan provided to the Mullens set forth an inaccurate statement of the law and was confusing — we conclude that Metropolitan did not discharge its duty. Thus, we reverse and remand to the district court to enter judgment in favor of Margaret.

I. Background

¶ 2 Margaret initiated the underlying litigation against Metropolitan to obtain a declaratory judgment that an election her late husband, Edward Mullen (Edward), made for UM/UIM coverage was legally ineffective. The parties agreed to file cross-motions for summary judgment. They also stipulated to a set of undisputed facts and to the authenticity of certain documentary exhibits. From the undisputed facts and authenticated documents, we set forth the following relevant factual background.

¶ 3 Metropolitan issued a new Colorado automobile insurance policy to "Edward J Mullen and Margaret Mullen" as the named insureds, effective May 15, 2010. On or about May 6, 2010, Metropolitan sent the Mullens a package of materials related to their new policy. Among other things, the package included the policy and a "Colorado Uninsured Motorists Coverage Selection Form" (UM/UIM Selection Form).

¶ 4 The policy carried liability limits of $100,000 per person and $300,000 per accident for bodily injury or death. As issued, the policy also carried UM/UIM coverage limits of $100,000 per person and $300,000 per accident.

¶ 5 On or about May 12, 2010, Edward completed and signed the UM/UIM Selection Form, selecting UM/UIM coverage in the amount of $25,000 per person and $50,000 per accident. Metropolitan processed the policy change effective July 15, 2010. Because the premium for UM/UIM coverage of $25,000/$50,000 was less than the premium the Mullens had paid for the original $100,000/$300,000 coverage, Metropolitan issued the Mullens a refund of the premium they overpaid.

¶ 6 Edward died on November 20, 2010. Margaret notified Metropolitan of his death and Metropolitan removed Edward as a named insured from the policy.

¶ 7 Later in 2011, Metropolitan provided Margaret with proposed 2011 policy renewal documents, which included a declarations page showing $25,000/$50,000 in UM/UIM coverage. The renewal documents encouraged her to review her coverage selections and to inform Metropolitan if the information was "different from what you asked for or currently need" or if her "insurance needs have changed." Each year between 2011 and 2018, the policy was renewed with liability limits of $100,000/$300,000 and UM/UIM coverage limits of $25,000/$50,000. Margaret never requested an increase in her UM/UIM coverage.

¶ 8 On October 17, 2018, Margaret was in a motor vehicle collision with an underinsured motorist and suffered serious injuries. On December 10, 2018, Metropolitan issued Margaret a $25,000 check as payment of the maximum UM/UIM benefits under the policy. Because Margaret's damages exceeded the $25,000 payment, she filed the underlying declaratory judgment action seeking a determination that the UM/UIM Selection Form Edward signed and returned to Metropolitan was ineffective to reduce her UM/UIM coverage.

¶ 9 In her motion for summary judgment, Margaret argued that section 10-4-609(2) required Metropolitan to offer the Mullens UM/UIM coverage before it issued the policy in 2010. According to Margaret, because Metropolitan made the UM/UIM coverage offer contemporaneously with its issuance of the policy, it failed to comply with the statute, rendering Edward's later execution of the UM/UIM Selection Form ineffective as to the 2010 policy and entitling her to UM/UIM coverage limits of $100,000/$300,000. Further, Margaret argued, because Edward died before the policy was renewed in 2011, he was not a named insured with authority to make a UM/UIM coverage selection relative to the 2011 renewal or any subsequent renewal. Finally, Margaret argued that Metropolitan failed to satisfy its duty under section 10-4-609, as articulated in Parfrey , 830 P.2d at 913-14, to offer the Mullens UM/UIM coverage in a manner reasonably calculated to permit them to make an informed decision as to the purchase of such coverage.

¶ 10 Metropolitan cross-moved for summary judgment, arguing that it satisfied its statutory obligations with a sufficient notice and offer to the Mullens to purchase UM/UIM coverage, that Edward's selection of the $25,000/$50,000 limits was effective as to the 2010 policy, and that it had no duty to reoffer UM/UIM coverage to Margaret in connection with any subsequent renewal of the policy.

¶ 11 The district court sided with Metropolitan. Following the rationale articulated by a division of this court in Airth v. Zurich American Insurance Co. , 2018 COA 9, 488 P.3d 308, the court concluded that Metropolitan had a one-time duty to offer UM/UIM coverage, which it satisfied by providing the UM/UIM Selection Form before the insured needed the UM/UIM coverage. It concluded that, as a named insured, Edward had authority to make the UM/UIM election when he made it and that the election was binding on Margaret after Edward's death. And it concluded that, under the totality of the circumstances, Metropolitan adequately notified the Mullens of the opportunity to purchase UM/UIM coverage. Accordingly, the district court denied Margaret's motion for summary judgment and granted Metropolitan's motion for summary judgment.

II. Analysis

¶ 12 Margaret contends that the district court erred by concluding that Metropolitan satisfied its statutory duties to (1) offer the Mullens UM/UIM coverage "before the policy is issued or renewed" and (2) notify the Mullens of the opportunity to purchase UM/UIM coverage in a manner reasonably calculated to permit them to make an informed decision.

¶ 13 Because we agree with Margaret's second contention, we need not resolve her first. We reverse the entry of summary judgment in favor of Metropolitan and remand to the district court to enter summary judgment in favor of Margaret.

A. Standard of Review

¶ 14 We review the entry of summary judgment de novo. Shelter Mut. Ins. Co. v. Mid-Century Ins. Co. , 246 P.3d 651, 657 (Colo. 2011). Summary judgment is appropriate where the pleadings and supporting documents clearly demonstrate that no issues of material fact exist and the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c) ; Cotter Corp. v. Am. Empire Surplus Lines Ins. Co. , 90 P.3d 814, 819 (Colo. 2004).

¶ 15 To the extent our analysis requires us to interpret the applicable statutes, we do so de novo. Airth , ¶ 25. When interpreting a statute, we must ascertain and give effect to the intent of the General Assembly. Parfrey , 830 P.2d at 911 ; Airth , ¶ 26. We do so by first looking to the words of the statute and giving effect to their common meanings. Airth , ¶ 26. If those words are clear and unambiguous, we apply the statute as written. Id.

¶ 16 We also interpret insurance policies de novo, employing "well-settled principles of contractual interpretation." Allstate Ins. Co. v. Huizar , 52 P.3d 816, 819 (Colo. 2002) ; accord Shelter Mut. Ins. Co. , 246 P.3d at 666. We construe the plain language of the policy to fulfill the intent of the parties, and we resolve ambiguities in favor of the insured. Shelter Mut. Ins. Co. , 246 P.3d at 666.

B. Applicable Law

¶ 17 Section 10-4-609(1) states that no automobile liability policy shall be issued in Colorado unless it provides coverage for bodily injury or death "for the protection of persons ... legally entitled to recover damages from owners or operators of uninsured motor vehicles" at the limits set forth in section 42-7-103(2), C.R.S. 2021. Section 42-7-103(2) requires coverage for bodily injury or death of not less than $25,000 per person and $50,000 per accident. Insurers must provide UM/UIM coverage limits of at least $25,000/$50,000 unless the insured rejects such coverage in writing. § 10-4-609(1)(a).

¶ 18 Section 10-4-609 continues,

(2) Before the [automobile liability] policy is issued or renewed, the insurer shall offer the named insured the right to obtain uninsured motorist coverage in an amount equal to the insured's bodily injury liability limits, but in no event shall the insurer be required to offer limits higher than the insured's bodily injury liability limits.

(3) Notwithstanding the provisions of subsection (2) of this section, after selection of limits by the insured or the exercise of the option not to purchase the coverages described in this section, no insurer nor any affiliated insurer shall be required to notify any policyholder in any renewal or

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