v. State Farm Mutual Automobile Insurance Company , 2021 COA 89 ( 2021 )

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
July 1, 2021
2021COA89
No. 20CA0720, Barnes v. State Farm Mutual Automobile
Insurance Company — Civil Procedure — Failure to State a
Claim Upon Which Relief Can be Granted — Motion to Strike —
Consolidation of Defenses in Motion; Insurance — Motor
Vehicles — Uninsured/Underinsured
In this declaratory judgment action, a division of the court of
appeals considers whether a district court erred by allowing a
defendant to file a C.R.C.P. 12(b)(5) motion to dismiss after it had
already filed a separate C.R.C.P. 12(f) motion to strike. The division
reasons that, although C.R.C.P. 12(g) requires consolidation of
C.R.C.P. 12 motions, any error by the district court in considering
the defendant’s successive motion was harmless under the
circumstances presented.
The division also considers plaintiff’s contention that the
district court erred by dismissing her complaint because she
asserted a plausible claim that a form prepared by the defendant
insurance company contained a false or misleading representation
regarding uninsured and underinsured motorist coverage. The
division rejects plaintiff’s contention that, by disclosing that such
coverage follows the insured person rather than the insured vehicle,
the defendant became legally obligated to further disclose
information about “stacking” coverage. The division affirms the
district court’s judgment dismissing the complaint.
COLORADO COURT OF APPEALS 2021COA89
Court of Appeals No. 20CA0720
City and County of Denver District Court No. 19CV32024
Honorable Eric M. Johnson, Judge
Julie Barnes,
Plaintiff-Appellant,
v.
State Farm Mutual Automobile Insurance Company, an Illinois Corporation,
Defendant-Appellee.
JUDGMENT AFFIRMED
Division IV
Opinion by JUDGE BROWN
Navarro and Casebolt*, JJ., concur
Announced July 1, 2021
John L. Springer, Aurora, Colorado, for Plaintiff-Appellant
Patterson Ripplinger, P.C., Franklin D. Patterson, Karl A. Chambers,
Greenwood Village, Colorado, for Defendant-Appellee
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2020.
¶1 In this declaratory judgment action, Julie Barnes appeals the
district court’s judgment dismissing her complaint against State
Farm Mutual Automobile Insurance Company (State Farm) for
failure to state a claim upon which relief can be granted.
¶2 Barnes first contends that the district court erred by allowing
State Farm to file a C.R.C.P. 12(b)(5) motion to dismiss after it had
already filed a separate C.R.C.P. 12(f) motion to strike because
C.R.C.P. 12(g) requires consolidation of C.R.C.P. 12 motions.
Although we agree that the court erred, under the circumstances
discussed below, we conclude the error was harmless.
¶3 Barnes next contends that the district court erred by
dismissing her complaint because she asserted a plausible claim
that a State Farm form contained a false or misleading
representation — a “half-truth” — regarding uninsured and
underinsured motorist (UM) coverage. Specifically, she contends
that, by disclosing that UM coverage follows the insured person
rather than the insured vehicle, see § 10-4-609(1)(a), C.R.S. 2020,
State Farm became legally obligated to further disclose that an
insured who rejects UM coverage on one of multiple policies loses
the ability to “stack” available UM coverage. We reject this
1
contention and affirm the district court’s judgment dismissing her
complaint.
I. Background
¶4 Colorado law requires that an insurer offer UM coverage for
each automobile liability policy that it issues. § 10-4-609(1)(a). An
insured may reject such coverage in writing. Id.
¶5 State Farm issued Barnes two automobile liability insurance
policies — one for a 2006 Honda and one for a 1990 Geo. After
Barnes visited her insurance agent to discuss her automobile
coverage, State Farm sent Barnes a form titled “Colorado
Automobile Coverages Acknowledgment of Coverage Selection or
Rejection” (UM Rejection Form). Barnes signed the UM Rejection
Form, rejecting UM coverage on the Geo policy.
¶6 The two policies were in effect when Barnes sustained serious
bodily injuries in a car accident caused by another driver. Because
her damages exceeded the amount she recovered from the at-fault
driver, Barnes sought the $100,000 limit of UM coverage under the
Honda policy and $70,000 (of what she believed was a $100,000
limit) of UM coverage under the Geo policy. State Farm paid Barnes
$100,000, the maximum amount of UM coverage available under
2
the Honda policy; but because she had rejected UM coverage on the
Geo policy, State Farm declined to pay her anything more. Had
Barnes not rejected UM coverage on the Geo policy, she alleges that
she would have been able to “stack” the UM coverage, meaning that
she would have been entitled to UM coverage on both policies,
resulting in a total of $200,000 in available UM coverage.
¶7 Barnes filed a declaratory judgment action against State Farm,
seeking a declaration that the UM Rejection Form was invalid or
unenforceable. After Barnes filed an amended complaint, State
Farm filed a C.R.C.P. 12(f) motion to strike certain paragraphs of
the amended complaint or, alternatively, to require Barnes to state
facts to support the statements contained in those paragraphs. The
district court denied the motion to strike.
¶8 State Farm then filed a C.R.C.P. 12(b)(5) motion to dismiss the
amended complaint for failure to state a claim upon which relief
can be granted. Approximately two weeks later, State Farm filed an
answer to Barnes’ amended complaint. Barnes opposed the motion
to dismiss. After conducting a hearing, the district court granted
the motion and dismissed the amended complaint.
3
II. Analysis
A. Successive C.R.C.P. 12 Motions
¶9 Barnes first contends that the district court erred by allowing
State Farm to file a C.R.C.P. 12(b)(5) motion to dismiss after it had
already filed a separate C.R.C.P. 12(f) motion to strike. She argues
that, pursuant to C.R.C.P. 12(g), the court should have disallowed
the motion to dismiss because it was not joined with the earlier-
filed motion to strike. We perceive no reversible error.
1. Standard of Review
¶ 10 We interpret the Colorado Rules of Civil Procedure de novo,
DCP Midstream, LP v. Anadarko Petroleum Corp., 2013 CO 36, ¶ 24,
according to their commonly understood and accepted meanings,
Antero Res. Corp. v. Strudley, 2015 CO 26, ¶ 15. We do not add
words or provisions to a rule. Id. But we construe the rules
liberally “to effectuate their objective to secure the just, speedy, and
inexpensive determination of every case and their truth-seeking
purpose.” Id. (quoting DCP Midstream, ¶ 24); see also C.R.C.P. 1.
¶ 11 Because the Colorado Rules of Civil Procedure are patterned
on the Federal Rules of Civil Procedure, “we may also look to the
4
federal rules and decisions for guidance.” Garrigan v. Bowen, 243
P.3d 231, 235 (Colo. 2010).
¶ 12 On appeal, we disregard any error or defect in the proceedings
that did not affect the substantial rights of the parties. C.R.C.P. 61.
An error affects the substantial rights of the parties if it
“substantially influenced the outcome of the case or impaired the
basic fairness of the trial itself.” Bernache v. Brown, 2020 COA
106, ¶ 26 (quoting Laura A. Newman, LLC v. Roberts, 2016 CO 9,
¶ 24).
2. Applicable Law
¶ 13 C.R.C.P. 12(b) provides that every defense to a claim shall be
asserted in the responsive pleading, except that certain defenses,
including failure to state a claim upon which relief can be granted,
“may at the option of the pleader be made by separate motion.”
C.R.C.P. 12(c) provides that, “[a]fter the pleadings are closed . . . ,
any party may move for judgment on the pleadings.” And C.R.C.P.
12(f) authorizes a party to move to strike “any redundant,
immaterial, impertinent, or scandalous matter” from any pleading.
¶ 14 C.R.C.P. 12(g) states as follows:
5
A party who makes a motion under this Rule
may join with it any other motions herein
provided for and then available to that party.
If a party makes a motion under this Rule but
omits therefrom any defense or objection then
available to that party which this Rule permits
to be raised by motion, that party shall not
thereafter make a motion based on the defense
or objection so omitted, except a motion as
provided in section (h)(2) of this Rule on any of
the grounds there stated.
C.R.C.P. 12(h)(2), in turn, states as follows:
A defense of failure to state a claim upon
which relief can be granted . . . may be made
in any pleading permitted or ordered under
Rule 7(a), or by motion for judgment on the
pleadings, or at the trial on the merits.
3. Any Error by the District Court in Considering State Farm’s
Motion to Dismiss Was Harmless
¶ 15 Although we disagree with the district court’s interpretation of
C.R.C.P. 12(g), we conclude that any error by the district court in
considering State Farm’s second C.R.C.P. 12 motion was harmless.
¶ 16 In rejecting Barnes’ contention that State Farm was not
permitted to file a separate C.R.C.P. 12(b)(5) motion after it had
already filed a C.R.C.P. 12(f) motion, the district court explained,
[I]f you’re going to bring a motion under one
subparagraph of [Rule] 12, then you need to
bring everything that fits under that one
subparagraph, but that does not mean you
6
have to bring all Rule 12 motions. You can,
but you do not have to. So, I disagree with
that interpretation of Rule 12, and I will not
disallow [State Farm’s] motion under
[Rule]12(b)(5) for failure to state a claim just
because previously there had been a . . .
motion to strike under [Rule] 12(f).
(Emphasis added.)
¶ 17 We read the rule differently. C.R.C.P. 12(g) plainly states that
a party who makes a motion “under this Rule” but omits a then-
available defense or objection allowed to be raised by motion “shall
not thereafter” make a motion based on the omitted defense or
objection. Section (g) nowhere states that only defenses and
objections allowable under “one subparagraph” must be brought in
a single motion. Instead, section (g) generally prohibits serial
C.R.C.P. 12 motions regardless of which section or subsection
permits the defense or objection being asserted; it requires
consolidation of all C.R.C.P. 12 motions. C.R.C.P. 12(g); see also
Fed. R. Civ. P. 12(g)(2); Albers v. Bd. of Cnty. Comm’rs, 771 F.3d
697, 701 (10th Cir. 2014).
¶ 18 But C.R.C.P. 12(g) contains an express exception to the
general rule for “a motion as provided in section (h)(2) of this Rule
on any of the grounds there stated.” And section (h)(2) permits a
7
party to assert the defense of failure to state a claim upon which
relief can be granted, among other ways, “by motion for judgment
on the pleadings.” C.R.C.P. 12(h)(2). Thus, even if a party made an
earlier C.R.C.P. 12 motion, section (g) does not preclude it from
making a subsequent motion for judgment on the pleadings
asserting the defense of failure to state a claim. C.R.C.P. 12(g),
(h)(2); see also BSLNI, Inc. v. Russ T. Diamonds, Inc., 2012 COA 214,
¶ 11.
¶ 19 Indeed, if a defendant files a C.R.C.P. 12(b)(5) motion to
dismiss for failure to state a claim after it has filed its answer, the
court should treat the motion as a C.R.C.P. 12(c) motion for
judgment on the pleadings. See City of Aurora v. 1405 Hotel, LLC,
2016 COA 52, ¶ 16 n.3 (“Technically, ‘a post-answer [C.R.C.P.
12(b)(5)] motion is untimely and . . . some other vehicle, such as a
motion for judgment on the pleadings or for summary judgment,
must be used to challenge the plaintiff’s failure to state a claim for
relief.’” (quoting 5B Charles Alan Wright & Arthur R. Miller, Federal
Practice and Procedure § 1357, at 408 (3d ed. 2004))); BSLNI, Inc.,
¶ 11 (“[W]hen filed after an answer, a defendant’s motion to dismiss
for failure to state a claim upon which relief can be granted is
8
properly addressed as a motion for judgment on the pleadings
under C.R.C.P. 12(c).”); Shaw v. City of Colorado Springs, 683 P.2d
385, 387 (Colo. App. 1984) (affirming trial court’s ruling on
defendant’s “motion to dismiss” although motion “more accurately
constituted a motion for judgment on the pleadings”).
¶ 20 Barnes argues, however, that the court could not have treated
State Farm’s motion as one for judgment on the pleadings because
State Farm filed the motion before it filed its answer. It is true that
C.R.C.P. 12(c) permits a motion for judgment on the pleadings only
“[a]fter the pleadings are closed.” See 1405 Hotel, LLC, ¶ 16 n.3
(noting that trial court could not have considered defendant’s
motion under C.R.C.P. 12(c) where plaintiffs had not responded to
the defendant’s counterclaims when the motion was filed). But
before Barnes even responded to the motion, State Farm filed its
answer and the pleadings closed, effectively curing any procedural
defect caused by the timing of the motion relative to the answer.
And, because the standard for resolving a motion for judgment on
the pleadings is consistent with that employed in resolving a motion
to dismiss, BSLNI, Inc., ¶ 13, requiring State Farm to file a new
motion for judgment on the pleadings after it filed its answer would
9
have served no practical purpose, see Walzer v. Muriel Siebert & Co.,
447 F. App’x 377, 384 (3d Cir. 2011). It also would have been
antithetical to the purpose of the civil rules “to secure the just,
speedy, and inexpensive determination of every action.” C.R.C.P.
1(a). See also In re Apple iPhone Antitrust Litig., 846 F.3d 313, 318
(9th Cir. 2017) (“Denying late-filed [Fed. R. Civ. P.] 12(b)(6) [the
federal counterpart to C.R.C.P. 12(b)(5)] motions and relegating
defendants to the three procedural avenues specified in Rule
12(h)(2) can produce unnecessary and costly delays, contrary to the
direction of Rule 1.”), aff’d sub nom. Apple Inc. v. Pepper, 587 U.S.
___, 138 S. Ct. 2647 (2018).
¶ 21 To be clear, there may be circumstances in which a trial
court’s erroneous consideration of serial C.R.C.P. 12 motions may
affect the substantial rights of the parties and warrant reversal.
But in the circumstances presented here, any technical error by the
district court in considering State Farm’s successive motion to
dismiss was harmless. See Albers, 771 F.3d at 704 (concluding any
error by district court in considering the defendant’s second motion
to dismiss was harmless because the same argument could have
been presented in a motion for judgment on the pleadings); Walzer,
10
447 F. App’x at 384 (any technical error in entertaining the
defendants’ successive motion to dismiss was harmless).
B. Dismissal of the Complaint
¶ 22 Barnes next contends that the district court erred by
dismissing her complaint. We disagree.
1. Standard of Review and Applicable Law
¶ 23 Whether we treat State Farm’s motion as a motion to dismiss
or as a motion for judgment on the pleadings, we review the district
court’s order de novo, employing the same standards as the district
court. See Melat, Pressman & Higbie, L.L.P. v. Hannon L. Firm,
L.L.C., 2012 CO 61, ¶¶ 16-17. The standard we use to review a
motion for judgment on the pleadings is consistent with the
standard for a motion to dismiss. BSLNI, Inc., ¶ 13.
¶ 24 In evaluating a C.R.C.P. 12(b)(5) motion to dismiss for failure
to state a claim, we accept as true the factual allegations in the
complaint and, viewing them in the light most favorable to the
plaintiff, determine whether the complaint states a plausible claim
for relief. Andres Trucking Co. v. United Fire & Cas. Co., 2018 COA
144, ¶ 14 (citing Warne v. Hall, 2016 CO 50, ¶¶ 9, 24). “A claim
has facial plausibility when the plaintiff pleads factual content that
11
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). We need not accept as true legal
conclusions masquerading as factual allegations. Id.; Warne, ¶ 9.
¶ 25 Similarly, in evaluating a C.R.C.P. 12(c) motion for judgment
on the pleadings, we construe the allegations of the pleadings
strictly against the movant, consider the factual allegations in the
complaint as true, and grant the motion only if the matter can be
determined on the pleadings. Melat, Pressman & Higbie, ¶ 17.
2. The District Court Properly Dismissed the Amended Complaint
¶ 26 The UM Rejection Form Barnes signed provides, in relevant
part, as follows:
Uninsured Motor Vehicle Coverage provides
protection for persons insured who are legally
entitled to recover damages for bodily injury,
sickness, or disease, including death, from
owners or operators of either uninsured motor
vehicles or underinsured motor vehicles. The
named insured may reject such coverage by
submitting written rejection to the insurer.
Uninsured Motor Vehicle Coverage for bodily
injury, sickness, or disease, including death,
selected on one policy insuring a motor vehicle
owned and insured by you or any family
member who resides in your household will
apply to any accident in which the selected
12
Uninsured Motor Vehicle Coverage is payable
for that bodily injury, sickness, or disease,
including death. The described vehicle on that
one policy need not be involved in the accident
for Underinsured Motor Vehicle Coverage to
apply.
¶ 27 In her amended complaint, Barnes sought a declaration that
the UM Rejection Form was invalid or unenforceable because the
information contained in the second paragraph quoted above
constituted a false or misleading representation.1 Barnes concedes
that the second paragraph is a truthful statement regarding how
UM coverage works. But she contends that, once State Farm
communicated the information in the second paragraph, it had an
affirmative duty to also disclose “the Stacking Information,” which
she defined in her amended complaint as
the opportunity that an insured has to
aggregate or combine the UM coverage limits
on two or more separate automobile or motor
vehicle liability insurance policies for the
purpose of increasing the total amount of
available UM coverage that will apply to any
accident where an insured sustains bodily
injury as the result of the fault of the driver or
operator of an uninsured or underinsured
1 Barnes also sought a declaration that the UM Rejection Form was
void as against public policy, but she did not allege any facts in
support of that requested declaration and she does not raise the
issue on appeal.
13
motor vehicle and the primary policy provides
inadequate coverage to fully compensate the
insured for his or her bodily injury.
She contends that State Farm was required to advise her that, by
rejecting UM coverage on a policy, she loses the ability to stack her
UM coverage and reduces the total amount of UM coverage available
to her. In the absence of the Stacking Information, Barnes argues,
the second paragraph creates a false or misleading impression — a
“half-truth” — that if an insured rejects UM coverage on all but one
of her multiple policies, she will be left with the same amount of UM
coverage but at a reduced cost.
¶ 28 To establish a claim for fraudulent misrepresentation, a
plaintiff must prove that (1) the defendant made a fraudulent
misrepresentation of material fact; (2) the plaintiff relied on the
misrepresentation; (3) the plaintiff had a right to rely on or was
justified in relying on the misrepresentation; and (4) the plaintiff’s
reliance resulted in damages. Rocky Mountain Expl., Inc. v. Davis
Graham & Stubbs LLP, 2018 CO 54, ¶ 53.
¶ 29 Relying on the Restatement (Second) of Torts § 529 (Am. Law
Inst. 1977), Barnes contends that the second paragraph of the UM
Rejection Form constitutes a fraudulent misrepresentation because
14
it is a “half-truth.” Section 529 of the Restatement provides: “A
representation stating the truth so far as it goes but which the
maker knows or believes to be materially misleading because of his
failure to state additional or qualifying matter is a fraudulent
misrepresentation.”
¶ 30 To establish a claim for fraudulent concealment, a plaintiff
must prove (1) concealment of a material fact that in equity and
good conscience should be disclosed; (2) knowledge on the part of
the party against whom the claim is asserted that such a fact is
being concealed; (3) ignorance of that fact on the part of the one
from whom the fact is concealed; (4) the intention that the
concealment be acted upon; and (5) action on the concealment
resulting in damages. Rocky Mountain Expl., Inc., ¶ 56.
¶ 31 To succeed on a claim for fraudulent concealment or
nondisclosure, a plaintiff must show that the defendant had a duty
to disclose the material information. Id. Whether the defendant
has a duty to disclose a particular fact is a question of law we
decide de novo. Poly Trucking, Inc. v. Concentra Health Servs., Inc.,
93 P.3d 561, 564 (Colo. App. 2004).
15
¶ 32 Generally, a defendant has a duty to disclose material facts
that in equity or good conscience should be disclosed. Id. A party
to a business transaction has a duty to exercise reasonable care to
disclose to the other party, as relevant here, “matters known to him
that he knows to be necessary to prevent his partial or ambiguous
statement of the facts from being misleading.” Restatement
(Second) of Torts § 551(2)(b); see also Poly Trucking, 93 P.3d at 564;
Berger v. Sec. Pac. Info. Sys., Inc., 795 P.2d 1380, 1383 (Colo. App.
1990) (“[A] party has a duty to disclose if he has stated facts that he
knows will create a false impression unless other facts are
disclosed.”).
¶ 33 It is unclear to us whether the claim underlying Barnes’
request for declaratory judgment is a claim for fraudulent
misrepresentation or fraudulent concealment. Either way, the
dispositive question is the same: Is the second paragraph of the UM
Rejection Form misleading in the absence of information about an
insured’s ability to stack UM coverage on multiple policies? If the
answer is no, then State Farm did not make a fraudulent
misrepresentation of material fact (resulting in Barnes’ failure to
state a claim for fraudulent misrepresentation) and did not have a
16
duty to disclose additional information (resulting in Barnes’ failure
to state a claim for fraudulent concealment). For two reasons, we
answer this question in the negative.
¶ 34 First, the second paragraph of the UM Rejection Form is a
neutral, accurate statement of the law regarding how UM coverage
applies. See § 10-4-609(1)(a) (requiring insurers to give customers
an option to purchase UM coverage “for the protection of persons”);
see also DeHerrera v. Sentry Ins. Co., 30 P.3d 167, 176 (Colo. 2001)
(“We hold that the language of the UM/UIM statute and the purpose
of that statute require that UM/UIM insurance apply to an insured
person when injured by a financially irresponsible motorist,
irrespective of the vehicle the injured insured occupies at the time
of injury.”); Mullen v. Allstate Ins. Co., 232 P.3d 168, 172 (Colo. App.
2009) (“When one vehicle is insured in a single-vehicle policy, the
UM/UIM coverage applies to the insured person who is injured
‘irrespective of the vehicle the injured insured occupies at the time
of the injury.’” (quoting DeHerrera, 30 P.3d at 176)); Briggs v. Am.
Nat’l Prop. & Cas. Co., 209 P.3d 1181, 1184 (Colo. App. 2009) (UM
coverage follows the person “in any vehicle they occupy when
injured, no matter who owns the vehicle or whether it is insured on
17
the owner’s policy.”). The second paragraph is not ambiguous or
misleading regarding its topic.
¶ 35 Second, the Stacking Information that Barnes argues State
Farm should have disclosed is unrelated to the subject covered by
the second paragraph, so the second paragraph does not amount to
a “half-truth” — either about its subject or about stacking. An
insurance policy is a contract, which should be interpreted
consistently with the well-settled principles of contractual
interpretation. Allstate Ins. Co. v. Huizar, 52 P.3d 816, 819 (Colo.
2002). Our goal is to give effect to the contracting parties’
intentions and reasonable expectations. Thompson v. Md. Cas. Co.,
84 P.3d 496, 501 (Colo. 2004). To ascertain the parties’ intent, we
look to the plain language of the policy and give the words their
plain, generally accepted meanings, unless the policy indicates that
another meaning is intended. Owners Ins. Co. v. Dakota Station II
Condo. Ass’n, 2019 CO 65, ¶ 32.
¶ 36 As noted, the second paragraph addresses the unique nature
of UM coverage following the person insured in any vehicle they
occupy when injured. This is a distinct concept from “stacking,”
which is defined by section 10-4-402(3.5), C.R.S. 2020, as
18
“aggregating, combining, multiplying, or pyramiding limits of
separate policies providing uninsured and underinsured motorist
coverage as provided in section 10-4-609.”
¶ 37 In her amended complaint, Barnes alleged that the second
paragraph,
by informing the named insured that UM
coverage on one policy will apply to any
accident and that the vehicle described in the
policy need not be involved in the accident,
without also informing the named insured
about the Stacking Information and the overall
UM coverage that would be lost to an insured
if the UM Rejection Form was signed, created
the false and/or materially misleading
impression that no benefit would be derived
from having UM coverage on more than one of
multiple policies and that by having UM
coverage on one of multiple policies any
insured would have the same total amount of
available UM coverage, which would apply to
any accident, but at a reduced cost.
¶ 38 But the second paragraph says nothing about the benefits or
detriments of selecting or rejecting UM coverage on multiple
policies. It does not suggest that, by rejecting UM coverage on one
policy, the insured would be entitled to the same total amount of
UM coverage at a reduced cost (i.e., without paying a premium).
Barnes’ interpretation of the second paragraph is not reasonable.
19
See Weaver v. State Farm Mut. Auto. Ins. Co., Civ. A. No. 17-cv-
02208-MEH, 2018 WL 1522610, *4 (D. Colo. Mar. 27, 2018)
(unpublished opinion) (reasoning that the same language at issue
here “does not disclose the positive or negative consequences of
rejecting UM coverage,” but instead “accurately describes . . . the
nature of UM insurance”); see also Huizar, 52 P.3d at 819
(“[S]trained constructions should be avoided.”).
¶ 39 The only Colorado case to address section 529 of the
Restatement (Second) of Torts, the section on which Barnes relies
most heavily, is Eckley v. Colorado Real Estate Commission, 752
P.2d 68 (Colo. 1988). In Eckley, a disbursement agreement for the
sale of a lounge authorized the real estate broker who drafted the
agreement to use funds to pay “for the whiskey, wine and beer,” but
the funds were actually used to bring the premises at issue “into
compliance.” Id. at 72. So, “the fact that payments were made . . .
that were of a different nature from those listed in the agreement
made the disbursement agreement misleading.” Id. at 77. The
subject of the representation and the subject of the omission were
the same — categories of items for which funds would be used.
20
Under such circumstances, the partial or incomplete representation
regarding disbursement of funds was misleading.
¶ 40 Similarly, in Kannavos v. Annino, 247 N.E.2d 708, 713 (Mass.
1969), the court held that a seller had made a deceptive disclosure
when it advertised to investors that houses were being rented to the
public as multi-dwelling properties without revealing that multi-
dwelling use for houses actually violated the local zoning ordinance.
Thus, the subject of the representation and the subject of the
omission were the same — use of the buildings. The court clarified
that if the seller had been silent regarding how the property could
be used, it would not have made any misrepresentation. Id. at 711.
¶ 41 Likewise, in Junius Construction Co. v. Cohen, 178 N.E. 672,
674 (N.Y. 1931), the court held that, because a seller had truthfully
informed a prospective buyer that certain streets would bisect the
tract of land for sale, the seller could not “stop halfway” by failing to
mention that another street also was projected to do the same. The
court clarified that the seller was not under a duty to mention the
projected street at all. Id. But because the seller disclosed certain
projected streets without mentioning a similar street, its
representation was misleading. Id. Again, the subject of the
21
representation and the subject of the omission were the same —
projected streets affecting the property.
¶ 42 Here, in contrast to the cases cited by Barnes, the subject of
State Farm’s representation and the subject of the alleged omission
were different. State Farm did not make any representations about
stacking. Instead, the UM Rejection Form explained that UM
coverage follows the person and not the vehicle. If State Farm had
failed to disclose something related to that subject, such as a
circumstance under which the UM coverage would not follow the
person, Barnes might have validly claimed misrepresentation. But
whether Barnes is entitled to stack UM coverage on multiple
policies in the event of an accident is a different concept from the
personal nature of UM coverage. The fact that stacking is possible
does nothing to undermine the content of the second paragraph of
the UM Rejection Form. What State Farm included in the UM
Rejection Form is qualitatively different from the Stacking
Information Barnes claimed it should have disclosed.
¶ 43 So, even assuming the truth of the allegations in the amended
complaint, Barnes has failed to state a plausible claim for relief.
She failed to allege facts that would allow us to draw the reasonable
22
inference that the second paragraph of the UM Rejection Form was
a “half-truth” amounting to a fraudulent misrepresentation,
resulting in her failure to state a claim for fraudulent
misrepresentation. And she failed to allege facts establishing that
State Farm had a legal duty to disclose additional information with
respect to the second paragraph of the UM Rejection Form,
resulting in her failure to state a claim for fraudulent concealment.
The district court did not err by dismissing her complaint.2
III. Conclusion
¶ 44 We affirm the district court’s judgment dismissing Barnes’
amended complaint.
JUDGE NAVARRO and JUDGE CASEBOLT concur.
2 Barnes made six interrelated arguments challenging the district
court’s order dismissing her complaint. Because we have affirmed
on the basis that Barnes failed to allege facts to support at least one
element of either claim underlying her request for declaratory
judgment, we need not address her remaining contentions.
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