Shelter Mut. Ins. Co. v. Selley

• Decision Date: 10 July 1997
• Docket Number: No. 96CA0160,96CA0160
• Citation: 942 P.2d 1370
• Parties: 21 Colorado Journal 979 SHELTER MUTUAL INSURANCE COMPANY and Farmers Insurance Exchange, Plaintiffs-Appellees, v. Gordon B. SELLEY, D.C. and Beverly Rogacki, Defendants-Appellants. . V
• Court: Colorado Court of Appeals

Page 1370

942 P.2d 1370

21 Colorado Journal 979

SHELTER MUTUAL INSURANCE COMPANY and Farmers Insurance Exchange, Plaintiffs-Appellees, v. Gordon B. SELLEY, D.C. and Beverly Rogacki, Defendants-Appellants.

No. 96CA0160.

Colorado Court of Appeals,

Div. V.

July 10, 1997.

Kane, Donley & Johnson, P.C., Jack E. Donley, Colorado Springs, for Plaintiff-Appellee Shelter Mutual Insurance Company.

Hall & Evans, L.L.C., Alan Epstein, Denver, for Plaintiff-Appellee Farmers Insurance Exchange.

Pribila & Sokolow, P.C., Anthony L. Sokolow, Colorado Springs, for Defendants-Appellants.

Opinion by Judge METZGER.

In this action for declaratory relief, defendants, Gordon B. Selley and Beverly Rogacki, appeal the summary judgment entered in favor of plaintiffs, Shelter Mutual Insurance Company (Shelter) and Farmers Insurance Exchange (Farmers) (collectively insurers). We affirm.

Alleging that they had been injured in a hit-and-run automobile accident on August 31, 1993, Selley, who had uninsured motorist coverage from Shelter, and Rogacki, who had uninsured motorist coverage from Farmers, filed claims with their respective carriers in November 1993.

In response, insurers brought this declaratory judgment action, and each moved for summary judgment, alleging that, since defendants had failed to report the accident to the police within 24 hours of its occurrence, their failure to comply with this condition precedent vitiated uninsured motorist coverage under both policies.

The trial court granted both motions, finding that notice was not given and that "there was no legal excuse or delay for non-notice and none is claimed .... [w]here there is no excuse, prejudice is not an issue ... and there was no waiver by [insurers] nor detrimental reliance by defendants."

I.

Defendants first contend the trial court erred in determining that they were required to notify the police within 24 hours after the hit-and-run accident as a condition precedent to coverage, and that their failure to comply with the notice provisions in their insurance policies excused insurers from providing coverage. We disagree.

Summary judgment is proper under C.R.C.P. 56(c) if the pleadings, affidavits, depositions, or admissions establish that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. The burden of establishing that there is no genuine issue of fact is on the moving party. Continental Air Lines, Inc. v. Keenan, 731 P.2d 708 (Colo.1987).

An insurance contract is evaluated as any other written agreement and must be construed to carry out the intent of the parties. Allstate Insurance Co. v. Starke, 797 P.2d 14 (Colo.1990).

When contractual words and phrases are unambiguous, we must apply them according to their commonly accepted and understood meaning. Farmers Insurance Exchange v. Dotson, 913 P.2d 27 (Colo.1996).

Policy provisions requiring an insured to provide timely notification to the insurer of an accident as a condition precedent to coverage are generally enforceable. See Hansen v. Barmore, 779 P.2d 1360 (Colo.App.1989). However, Colorado courts have not yet addressed the question whether an automobile policy provision requiring insureds to notify police within 24 hours after a hit-and-run or "phantom" automobile accident is enforceable as a condition precedent to coverage.

Here, Shelter's policy provided:

A person claiming Uninsured Motorist coverage, if a hit and run driver is involved, must also notify the police within 24 hours of the accident.

This language was located on the first page of text in the policy, in the section titled "WHAT TO DO IN CASE OF AN AUTO ACCIDENT OR LOSS."

Similarly, Farmers' policy provided:

A person claiming any coverage of this policy must also....

Notify police within 24 hours and us within 30 days if a hit-and-run motorist is involved and an uninsured motorist claim is to be filed.

This language was also located on the first page of text and was part of the section titled "WHAT TO DO IN CASE OF ACCIDENT."

Both of these notice provisions are unambiguous. In both policies, the notice provisions are printed in the same type size as all other provisions. Further, each policy contains language informing insureds that they must strictly comply with all duties listed in the contract and that failure to comply will exempt the insurer from liability arising under the policy.

Colorado courts have strictly enforced analogous policy provisions which require an insured promptly to notify an insurer of a potential claim. These decisions have reasoned that strict enforcement of such provisions allows the insurer to make a timely and adequate investigation of the accident or claim, and allows the insurer to protect itself against invalid or fraudulent claims. Under these decisions, an insured who fails to comply with the notice requirements of the policy is denied coverage unless he or she demonstrates justifiable excuse or extenuating circumstances. See Certified Indemnity Co. v. Thun, 165 Colo. 354, 439 P.2d 28 (1968); see also State Farm Fire & Casualty Co. v. Nikitow, 924 P.2d 1084 (Colo.App.1995). In our view, the same rationale applies here.

Motorists who are involved in any traffic accident resulting in "injury to, serious bodily injury to, or death of any person or any property damage ..." are required to report the accident to the police immediately. Section 42-4-1606(1), C.R.S. (1996 Cum.Supp.).

Additionally, while Colorado courts have not previously construed a policy provision similar to those at issue here, courts in other jurisdictions have strictly enforced such provisions based on principles similar to those discussed in Certified Indemnity Co. v. Thun, supra; Hansen v. Barmore, supra; and State Farm Fire & Casualty Co. v. Nikitow, supra.

For example, in enforcing such a provision, the Missouri Court of Appeals noted that:

Strong public policy interests are protected through the use of notice provisions. For, the insured public will incur additional and unnecessary costs if insurers are forced to pay stale claims, as to which the insurer has not been accorded the opportunity to conduct an investigation while the facts are still fresh. This consideration is particularly acute in a situation .... where an unidentified 'hit and run' or 'phantom' vehicle is involved.

Billings v. State Farm Mutual Automobile Insurance Co., 741 S.W.2d 886, 888 (Mo.App.1987); see also Alabama Farm Bureau Mutual Casualty Insurance Co. v. Cain, 421 So.2d 1281 (Ala.Civ.App.1982) (unambiguous insurance policy provision requiring notice to police within 24 hours after accident is enforceable as condition precedent to coverage); State Farm Automobile Insurance Co. v. Sternberg, --- So.2d ---- (Fla.Dist.Ct.App. No. 95-2217, February 14, 1997) (1997 WL 63676) (automobile insurance policy requirement that notice of hit-and-run accident be given within 24 hours to police is condition precedent to coverage); Royal-Globe Insurance Co. v. Craven, 411 Mass. 629, 585 N.E.2d 315 (1992) (insurance policy required compliance with 24-hour notice provision as condition precedent to coverage; however, prompt notice was excused because of extenuating circumstances); Tresner v. State Farm Insurance Co., 913 S.W.2d 7 (Mo.1995) (insured who fails to comply with policy notice provision is precluded from obtaining coverage unless insured shows incapacity or substantial compliance); Shamrock Casualty Co. v. Mack, 61 Misc.2d 240, 305 N.Y.S.2d 525 (Sup.Ct.1969) (insurance policy provision requiring notice to police within 24 hours after accident, or as soon as possible, is valid under New York law); State Farm County Mutual Insurance Co. v. Landers, 520 S.W.2d 604 (Tex.Civ.App.1975) (giving notice to police within 24 hours after accident, as required by insurance policy, constituted condition precedent to recovery under uninsured motorist provision). See generally 2 No Fault & Uninsured Motorist Automobile Insurance §§ 25.40, 26.30 (Matthew Bender ed.1997); A. Widiss, A Guide to Uninsured Motorist Coverage § 4.7 (1970). Cf. Price v. Doe, 638 A.2d 1147 (D.C.App.1994) (notice provision not enforced because of ambiguous wording; since motorists involved in accident exchanged information, it was not a traditional "hit-and-run" within meaning of policy); Alexander v. Allstate Insurance Co., 388 So.2d 592 (Fla.App.1980) (notice provision requiring that accident be "reported within twenty-four hours to the proper authorities" not enforced because of ambiguity and because there was no proof that insured ever received copy of policy); Powell v. Automotive...