Ryser v. Shelter Mut. Ins. Co.

• Decision Date: 13 June 2019
• Docket Number: Court of Appeals No. 18CA0748
• Parties: Kent RYSER, Plaintiff-Appellant, v. SHELTER MUTUAL INSURANCE COMPANY, Defendant-Appellee.
• Court: Colorado Court of Appeals

486 P.3d 344

Kent RYSER, Plaintiff-Appellant,

v.SHELTER MUTUAL INSURANCE COMPANY, Defendant-Appellee.

Court of Appeals No. 18CA0748

Colorado Court of Appeals, Division III.

Announced June 13, 2019

Killian Davis Richter & Mayle, PC, Nicholas W. Mayle, Damon Davis, Grand Junction, Colorado, for Plaintiff-Appellant

Morgan Rider Riter Tsai, P.C., Sophia H. Tsai, Kelly L. Kafer, Denver, Colorado, for Defendant-Appellee

Opinion by JUDGE WEBB

¶1 In this uninsured/underinsured motorist (UM/UIM) benefits case, plaintiff, Kent Ryser, appeals the summary judgment entered in favor of defendant, Shelter Mutual Insurance Company, based on the exclusivity provision of the Workers’ Compensation Act of Colorado (WCA), section 8-41-102, C.R.S. 2018, and the related co-employee immunity rule. The case requires us to decide whether this immunity bars a person who was injured in the course and scope of employment by a co-employee's negligence in driving a car from receiving UM/UIM benefits under an insurance policy maintained by another co-employee who owned the car.¹ Because of the tortfeasor's coworker immunity, we conclude that Ryser cannot satisfy the UM/UIM statutory requirement of being "legally entitled to recover." On this basis, we affirm the summary judgment.

I. Undisputed Facts and Procedural Background

¶2 Ryser suffered serious injuries in a one-car accident. Sherri Babion owned the car. Linda Forster was driving, with Babion's permission. Ryser was a passenger, also with her permission. When the accident occurred, all three of them were Walmart employees acting in the course and scope of their employment. According to Ryser, Forster's negligence caused his injuries.

¶3 Babion maintained an auto insurance policy written by Shelter. The policy provided UM/UIM coverage. Because Forster was driving with Babion's consent and Ryser was a permitted passenger, they were both insured under the policy. But the policy's UM/UIM coverage applied only where "the owner or operator of an uninsured/underinsured motor vehicle is legally obligated to pay damages." As well, the policy excluded from the definition of uninsured/underinsured motor vehicle "[t]he described auto," i.e., Babion's car.

¶4 Ryser received workers’ compensation benefits. He also obtained UM/UIM benefits under his own auto policy on the basis that the co-employee immunity rule rendered Forster an uninsured motorist. Still, he claimed UM/UIM benefits from Shelter to the extent that Babion's UM/UIM coverage had a higher limit than his own policy.

¶5 When Shelter rejected the claim, Ryser brought this action for UM/UIM benefits. He also raised statutory bad faith and unreasonable delay and denial of benefits claims, along with a common law bad faith claim.

¶6 Shelter moved for summary judgment. It argued that Forster's co-employee immunity precluded the claim, as did the exclusion of Babion's car from UM/UIM coverage. For purposes of summary judgment, it did not contest that Ryser had been injured or that Forster's negligence had caused his injuries.

¶7 Ryser opposed Shelter's motion on the described auto exclusion and filed a cross-motion for partial summary judgment on the co-employee immunity question. He did not assert any negligence as to Babion.

¶8 Neither party opposed the other's motion based on disputed issues of material fact. Nor was the co-employee immunity of Forster disputed.

¶9 In a written order, the trial court ruled for Shelter and against Ryser based on co-employee immunity, thus ending the case. The court did not address the described auto exclusion. On appeal, Shelter concedes preservation.

II. Standard of Review

¶10 Summary judgment is reviewed de novo, applying the same standard as the trial court. City of Fort Collins v. Colo. Oil & Gas Ass'n , 2016 CO 28, ¶ 9, 369 P.3d 586. It is appropriate only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c) ; Martini v. Smith , 42 P.3d 629, 632 (Colo. 2002). The opposing party is entitled to the benefit of all favorable inferences that may reasonably be drawn from the undisputed facts, and all doubts as to the existence of a triable issue of fact must be resolved against the moving party. Martini , 42 P.3d at 632.

¶11 Statutory interpretation is a question of law that is also reviewed de novo. Cont'l Divide Ins. Co. v. Dickinson , 179 P.3d 202, 204 (Colo. App. 2007). So is the interpretation of an insurance policy. Smith v. State Farm Mut. Auto. Ins. Co. , 2017 COA 6, ¶ 5, 399 P.3d 771.

¶12 Although earlier decisions from divisions of this court are not binding on another division, "the later division should give the prior decision some deference." People v. Oliver , 2018 COA 146, ¶ 24 n.1 (quoting People v. Bondsteel , 2015 COA 165, ¶ 14 ).

III. Law

A. Statutes

¶13 In Colorado, statutes regulate UM/UIM coverage. Under section 10-4-609(1)(a), C.R.S. 2018, auto insurers must offer UM/UIM coverage with all liability policies covering the same class of persons who are included in the liability provisions. UM/UIM benefits are available only to persons who are "legally entitled to recover." Id. This phrase is not defined. Coverage extends to permissive users. § 10-4-620, C.R.S. 2018.

¶14 Nor do the statutes define "uninsured motorist" or "uninsured automobile." An "underinsured" motor vehicle is defined as "a land motor vehicle, the ownership, maintenance, or use of which is insured or bonded for bodily injury or death at the time of the accident." § 10-4-609(4). Under that section, "[u]ninsured motorist coverage shall include coverage for damage for bodily injury or death that an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle." Id. (emphasis added). But the phrase "legally entitled to collect" is also undefined.

B. Case Law

¶15 The parties primarily focus on three decisions by divisions of this court:

Borjas v. State Farm Mutual Automobile Insurance Co. , 33 P.3d 1265 (Colo. App. 2001) ; Dickinson , 179 P.3d 202 ; and American Family Mutual Insurance Co. v. Ashour , 2017 COA 67, 410 P.3d 753. To a lesser extent, they point to Aetna Casualty & Surety Co. v. McMichael , 906 P.2d 92 (Colo. 1995). Unsurprisingly, they read these cases differently. And in any event, at most these cases provide only background.

1. Borjas

¶16 The plaintiff sought UM/UIM benefits under her personal auto policy for injuries suffered in a collision with a car driven by a police officer. The officer was immune under the CGIA. After examining the policies underlying UM/UIM coverage and governmental immunity, the division allowed recovery. In doing so, it explained that "legally entitled to recover" under section 10-4-609(1)(a) "means that the insured must be able to establish that the fault of the uninsured motorist gave rise to damages and the extent of those damages." Borjas , 33 P.3d at 1269.

2. Dickinson

¶17 The plaintiff, an independent contractor, sustained an injury caused by a co-employee's negligent operation of a motor vehicle. Because he had elected not to be covered by the employer's workers’ compensation policy and had not obtained his own coverage, the WCA limited the liability of the employer and the co-employee to a total of $ 15,000. § 8-41-401(3), C.R.S. 2018. After having been paid that amount, he sought UM/UIM benefits from the employer's insurer.

¶18 The division rejected the claim. It held that "[a]llowing an independent contractor, who like Dickinson had not procured workers’ compensation insurance, to recover damages in excess of $ 15,000 through the employer's UM/UIM insurance for injuries sustained in a work-related accident would undercut the[ ] policies [of the WCA]." Dickinson , 179 P.3d at 207. In doing so, the division declined to follow Borjas and aligned with what it described as the "majority of jurisdictions that have addressed this issue," holding that "an insured is not ‘legally entitled to recover’ under the uninsured motorist provisions of an [employer's] insurance policy if the exclusivity provisions of the workers’ compensation statute would bar an action against the tortfeasor." Id. at 204 (citation omitted).

3. Ashour

¶19 The plaintiff was injured at work in a motor vehicle accident caused by a co-employee's negligence. After having received workers’ compensation benefits, he sought UM/UIM benefits under his own auto insurance policy. The division held that this claim was "not barred by the exclusivity provisions of the [WCA], or by the ‘legally entitled to recover’ language" of section 10-4-609. Ashour , ¶ 73. As to this phrase, the division followed Borjas and held that it means "the insured must be able to establish that the fault of the uninsured motorist gave rise to damages and the extent of those damages." Id. at ¶ 63 (quoting Borjas , 33 P.3d at 1269 ). So, it concluded, "allowing [the plaintiff] to claim benefits from his own insurance carrier would not in any way affect the immunity provided to his employer and co-employee by the [WCA]." Id. at ¶ 71.

4. McMichael

¶20 The plaintiff, an employee, sustained injuries while working near his employer's truck and sought UM/UIM benefits under the employer's insurance policy. The supreme court addressed whether the plaintiff was covered, although he had left the truck before being injured. Unlike Borjas , Dickinson , and Ashour , this case did not involve WCA immunity because the plaintiff was struck by a third-party tortfeasor.

¶21 The court addressed the WCA only to the extent of noting that "[t]he Workers’ Compensation statute does not bar McMichael from bringing a tort action against the driver who caused the accident." McMichael , 906 P.2d at 100 n.7. It held that "insurers must provide UM/UIM coverage for the protection of persons insured under the liability policy that the insurer is issuing. " Id. at 97. It also held that an exclusion of employer's liability for workers’ compensation benefits did not limit UM/UIM coverage.

¶22 In sum,...