Wagner v. Travel. Prop. Cas. Co. of America

• Court: Colorado Court of Appeals
• Writing for the Court: Roy
• Citation: Wagner v. Travel. Prop. Cas. Co. of America, 209 P.3d 1119, 2008 WL 4878387 (Colo. App. 2008)
• Decision Date: 13 November 2008
• Docket Number: 07CA2112
• Parties: Douglas WAGNER, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, f/k/a Travelers Indemnity Company of Illinois, Defendant-Appellee, and Colorado Trial Lawyers Association, Amicus Curiae.

209 P.3d 1119

Douglas WAGNER, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, f/k/a Travelers Indemnity Company of Illinois, Defendant-Appellee, and Colorado Trial Lawyers Association, Amicus Curiae.

No. 07CA2112.

Colorado Court of Appeals, Div. IV.

November 13, 2008.

Rehearing Denied December 31, 2008.

Certiorari Denied June 22, 2009.

Hill & Robbins, P.C., Robert F. Hill, John H. Evans, Jr., Nathan P. Flynn, Denver, Colorado; Evans & McFarland, LLC, J.

Luke McFarland, M. Gabriel McFarland, Golden, Colorado; McFarland Law Offices, Zachary C. McFarland, Thomas D. McFarland, Golden, Colorado, for Plaintiff-Appellant.

Montgomery, Kolodny, Amatuzio & Dusbabek, L.L.P., C. Michael Montgomery, Erik R. Neusch, Denver, Colorado, for Defendant-Appellee.

Roberts Levin Rosenberg, PC, Bradley A. Levin, Denver, Colorado, for Amicus Curiae Colorado Trial Lawyers Association.

Opinion by Judge ROY.

Plaintiff, Douglas Wagner (Wagner), individually and on behalf of all others similarly situated, appeals the trial court's summary judgment in favor of Travelers Property Casualty Company of America (Travelers) on all of his claims. We vacate the judgment and remand the case for further proceedings consistent with this opinion.

I. Summary

The issue presented for review, as framed by Wagner, is as follows:

Whether Travelers is exempt from the duty to disclose to its customers truthful information about the scope of [UM/UIM] insurance coverage and to deal fairly with them, solely because [Travelers] requires its customers to purchase UM/UIM insurance on all of their insured vehicles or on none of those vehicles.

Wagner contends that the trial court erred in granting summary judgment on his claim that Travelers had an obligation to advise him upon the renewal of his multi-vehicle policy of the implications of DeHerrera v. Sentry Insurance Co., 30 P.3d 167 (Colo. 2001) and Jaimes v. State Farm Mutual Automobile Insurance Co., 53 P.3d 743 (Colo. App.2002). DeHerrera held that uninsured and underinsured (UM/UIM) coverages insure and, therefore, follow the insured and not the vehicle; Jaimes held that the "owned but not insured" (OBNI) exclusion was void. Following DeHerrera and Jaimes, Travelers continued to charge, or to indicate that it charged, premiums for UM/UIM coverage by the vehicle, and its policy continued to include an OBNI exclusion. However, according to Wagner, under DeHerrera insuring one vehicle provided him and his resident family with UM/UIM coverage in any vehicle, owned or nonowned, insured or not insured.

The trial court granted summary judgment to Travelers on its argument that, because it issued only multi-vehicle polices and did not offer the customers the option to insure less than all of their vehicles with UM/UIM coverage, no additional disclosure was required. The court addressed only a duty to disclose under section 10-4-609, C.R.S.2008.

We conclude that section 10-4-609 does not require Travelers to advise Wagner of the implications of either DeHerrera or Jaimes. However, we further conclude that there is a genuine question of material fact as to whether a reasonable consumer could believe that Travelers sold UM/UIM coverage on a vehicle basis rather than a policy basis, as it contends, and thus, purchasing UM/UIM coverage on all vehicles was necessary to protect the named insured(s) and residential family members. Finally, we conclude that any further proceedings must address all of Wagner's claims separately, and summary judgment on those claims predicated on sources of duty other than section 10-4-609 is not appropriate on the present record.

II. The Facts

Wagner purchased motor vehicle insurance including liability and UM/UIM coverage on two vehicles in one multi-vehicle policy from Travelers. Only the UM/UIM coverage is at issue here.

The policy listed Wagner as the named insured and also insured two classes of unnamed insureds. The policy charged a separate and identified premium for each coverage (liability, comprehensive, collision, uninsured motorist, and personal injury protection). The pertinent part of the declaration page appeared as follows:

4. Coverages, Limits of Liability and Premiums Insurance is provided only where a premium is shown for the coverage.

                                     1            2
                                                  95 PLYM     97 FORD
                                                   GRAND     EXPLORER
                                                   VOYA          A
                  A - Bodily Injury
                  $100,000 each person
                  $300,000 each accident            $66        $103
                  B - Property Damage
                  $50,000 each accident              36          57
                  D1 - Uninsured Motorists
                  $100,000 each person
                  $300,000 each accident
                  See Endorsement
                  AOS015                             30          31
                  E - Collision Actual
                  Cash Value less $200
                  deductible                         72          47
                  F - Comprehensive
                  (Other than Collision)
                  Actual Cash Value less
                  $100 deductible                    67         144
                  I - Towing and Labor
                  Costs $25 per
                  disablement                         2           2
                  Q - Personal Injury Protection
                  $50,000 per person
                  per accident See
                  Endorsement A05026                 40          89
                

(Emphasis added.)

The policy also contained an OBNI exclusion applicable to the UM/UIM coverage which provided:

A. We do not provide Uninsured Motorists Coverage for "bodily injury" sustained by any person:

1. While "occupying," or when struck by, any motor vehicle owned by you or any "family member" which is not insured for this coverage under this policy. This includes a trailer of any type used with that vehicle.

(Emphasis added.)

The policy insured two classes of insureds—Class one included the named insured and any other person related to the named insured by blood, marriage, or adoption, including a ward or foster child, who was a resident of the named insured's household, or temporarily living elsewhere; Class two included any other person occupying a covered vehicle with the consent of the named insured or a pedestrian if the accident involved the covered auto. If a customer purchased UM/UIM coverage on one vehicle, only Class one was insured. However, upon insuring the second vehicle both classes were insured.

This litigation commenced in 2003 as a class action with twenty-seven plaintiffs against twenty-five insurance companies. The case was, however, subsequently broken up into twenty-seven very similar individual class actions in 2006. The class has not yet been certified pursuant to C.R.C.P. 23.

Wagner asserted claims for (1) fraudulent concealment; (2) negligent misrepresentation by omission; (3) unjust enrichment; (4) bad faith; (5) violation of the Colorado Consumer Protection Act; and (6) declaratory judgment. The relief sought was compensatory damages together with punitive damages, treble damages, and attorney fees permitted by law, depending on the claim.

The central allegation to each claim, with minor variations appropriate to each claim, is that Travelers had a duty to, but did not, advise Wagner on the implications of DeHerrera and Jaimes when renewing the UM/UIM coverage. In addition, Travelers continued to include the OBNI exclusion in its policies although it was invalid after Jaimes.

III. The Legal Environment

UM/UIM coverage in Colorado is controlled by section 10-4-609, C.R.S.2008. While the statute has been amended during the pertinent period, it has substantively remained the same for our limited purpose. It currently provides:

§ 10-4-609. Insurance protection against uninsured motorists—applicability.

(1)(a) No automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle licensed for highway use in this state unless coverage is provided ... for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom; except that the named insured may reject such coverage in writing.

. . . .

(2) Before the 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 replacement policy, as to the availability of such coverage or optional limits....

This litigation was commenced after, and in large part because of, our supreme court's decision in DeHerrera and, to a lesser extent, the decision of a division of this court in Jaimes.

In DeHerrera, the plaintiff's son, while riding an uninsured off-road motorcycle, was injured after being struck by an at-fault driver of an underinsured truck. The plaintiff owned a multi-vehicle insurance policy insuring two automobiles with, as pertinent here, UM/UIM coverage. The named insureds on the policies were the plaintiff and her husband; the son was an insured as a member of the family residing in the household. Nevertheless, the insurance company denied liability because, as relevant here, the UM/UIM coverage was limited to injuries sustained while an insured was "occupying a car" covered by the policy.

Our supreme court, based primarily on the purpose of ...