Nationwide Mut. Fire Ins. Co. v. Clementi

• Decision Date: 01 April 1999
• Docket Number: No. 98CA0230.,98CA0230.
• Citation: 989 P.2d 192
• Parties: NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Plaintiff-Appellee, v. James CLEMENTI and Mary Ann Clementi, Defendants-Appellants.
• Court: Colorado Court of Appeals

989 P.2d 192

NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Plaintiff-Appellee, v. James CLEMENTI and Mary Ann Clementi, Defendants-Appellants.

No. 98CA0230.

Colorado Court of Appeals, Div. I.

April 1, 1999.

Rehearing Denied June 10, 1999.

Certiorari Granted December 6, 1999.

Patterson & Nuss, P.C., Franklin D. Patterson, Englewood, Colorado, for Plaintiff-Appellee.

Gradisar, Trechter, Ripperger, Croshal, Nicholas A. Gradisar, Pueblo, Colorado, for Defendants-Appellants.

Opinion by Judge METZGER.

In this declaratory judgment action, defendants, James and Mary Ann Clementi, appeal the summary judgment entered in favor of plaintiff, Nationwide Mutual Fire Insurance Company (Nationwide). We affirm.

In March 1994, James Clementi was injured in an automobile accident while in the course and scope of his employment as a trooper with the Colorado State Patrol. The driver of the other vehicle had liability insurance of $50,000 per accident. The Clementis learned of the other driver's limits in August 1994.

James Clementi entered into a final settlement with his workers' compensation carrier in March 1995 and received a permanent disability rating of 17%. He was awarded $7,289.97 in PIP-equivalent benefits and $38,210.90 in non-PIP-equivalent workers' compensation benefits.

The Clementis had an insurance policy with Nationwide providing uninsured/underinsured (UM/UIM) benefits of $100,000 per accident. The Clementis did not notify Nationwide of a UIM claim until August 1995. Contending that this notice was untimely, Nationwide sent the Clementis' counsel a reservation of rights letter. The Clementis settled with the other driver, with Nationwide's consent, in April 1996 for policy limits of $50,000.

Nationwide then brought this declaratory judgment action seeking a determination that the Clementis had forfeited their UIM coverage by failing to provide timely notice of claim as required by the policy. The trial court held as a matter of law that the notice to Nationwide was not timely and that Nationwide was not required to demonstrate prejudice before it could forfeit the UIM benefits. Accordingly, the court entered summary judgment in favor of Nationwide.

I.

The Clementis first contend the trial court erred in finding that, even though the notice provision in Nationwide's policy did not specify a triggering date, it was unambiguous and in concluding that the notice provision does not violate public policy. We disagree.

A.

Terms in an insurance contract should be construed as a person of ordinary intelligence would understand them. Simon v. Shelter General Insurance Co., 842 P.2d 236 (Colo.1992). Courts may neither rewrite an unambiguous policy nor force a strained construction in order to resolve it against the insurer. All of the provisions in the policy must be read as a whole, with the language construed in harmony with the plain and generally accepted meaning of the words employed. Mid-Century Insurance Co. v. Liljestrand, 620 P.2d 1064 (Colo.1980). In the absence of any ambiguity, an insurance policy must be given effect according to the plain and ordinary meaning of its terms. Farmers Insurance Exchange v. Dotson, 913 P.2d 27 (Colo.1996).

The "Insured Person's Duties" section of the UIM section of the Nationwide policy states "the insured must submit written proof of the claim to us as soon as practicable."

In general, this language has been held to call for notice within a reasonable length of time under all the facts and circumstances of each particular case. Certified Indemnity Co. v. Thun, 165 Colo. 354, 439 P.2d 28 (1968). Such a fact-intensive requirement does not render the phrase itself ambiguous. This phrase uses no arcane terms of art, does not employ a complex or convoluted sentence structure, nor does it use terms that are susceptible to more than one meaning. See Cheyenne Mountain School District No. 12 v. Thompson, 861 P.2d 711 (Colo.1993)

; Prudential Property & Casualty Insurance Co. v. LaRose, 919 P.2d 915 (Colo.App.1996). And, in light of the necessarily fact-based nature of UIM claims, the absence of specification of a triggering event does not render the provision ambiguous.

Thus, we agree with the trial court that no ambiguity exists.

B.

We also conclude that this provision does not violate public policy.

A policy term is not void as against public policy simply because it narrows the circumstances under which coverage applies. Farmers Insurance Exchange v. Chacon, 939 P.2d 517 (Colo.App.1997). However, an unambiguous clause may be void and unenforceable if it violates public policy by attempting to dilute, condition, or limit statutorily mandated coverage. Farmers Insurance Exchange v. Dotson, supra.

Policy provisions which require that, as a condition precedent to coverage, an insured must provide timely notification to the insurer of an accident, are generally enforceable. Shelter Mutual Insurance Co. v. Selley, 942 P.2d 1370 (Colo.App.1997). However, because of its unique nature, the duty to give notice for UIM claims does not arise until the insured, with reasonable diligence, can ascertain that the alleged tortfeasor is underinsured.

Since the notice provision here does not require notice until the insured can reasonably ascertain that the tortfeasor is underinsured, it does not improperly dilute, condition, or limit coverage. Thus, we perceive no public policy violation.

II.

The Clementis argue a disputed issue of material fact remains whether they provided notice of the claim "as soon as practicable." Thus, they contend, the trial court erred in entering summary judgment in favor of Nationwide. We disagree.

Summary judgment is a drastic remedy and should be granted only upon a clear showing that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Dominguez Reservoir Corp. v. Feil, 854 P.2d 791 (Colo.1993). We review summary judgments de novo. Aspen Wilderness Workshop, Inc. v. Colorado Water Conservation Board, 901 P.2d 1251 (Colo.1995)

.

Whether an insured has given timely notice as required by an insurance policy must be measured by all the circumstances of the case; the issue of the reasonableness of the notice is ordinarily one of fact to be determined by the trier of fact. Only when the facts are undisputed and only one inference can be drawn therefrom is it a question of law for the court. Certified Indemnity Co. v. Thun, supra.

Here, the trial court determined:

[T]he [insured] could have reasonably ascertained that the tortfeasor was underinsured as early as August of 1994

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