Grippin v. State Farm Mutual Automobile Insurance Co , 409 P.3d 529 ( 2016 )

COLORADO COURT OF APPEALS 2016COA127
Court of Appeals No. 15CA0932
El Paso County District Court No. 14CV33003
Honorable Thomas L. Kennedy, Judge
Shane Grippin,
Plaintiff-Appellant,
v.
State Farm Mutual Automobile Insurance Company,
Defendant-Appellee.
JUDGEMENT REVERSED AND CASE
REMANDED WITH DIRECTIONS
Division VII
Opinion by JUDGE LICHTENSTEIN
J. Jones and Dunn, JJ., concur
Announced September 8, 2016
Keating Wagner Polidori Free, P.C., Zachary C. Warzel, Denver, Colorado;
Rosenbaum & Wootton, P.C., Lee K. Rosenbaum, Richard E. Wootton, Colorado
Springs, Colorado, for Plaintiff-Appellant
Harris Karstaedt Jamison & Powers, P.C., Heather A. Salg, Tanja Heggins,
Englewood, Colorado, for Defendant-Appellee
¶1 Plaintiff Shane Grippin appeals the trial court’s order granting
summary judgment in favor of defendant State Farm Mutual
Automobile Insurance Company (State Farm) on his claims for
breach of contract, bad faith breach of insurance contract, and
unreasonable delay or denial of payment of uninsured
motorist/underinsured motorist (UM/UIM) benefits. He contends,
among other things, that State Farm’s insurance policy definition of
“resident relative,” which requires a relative to “reside primarily”
with the named insured to receive UM/UIM benefits, violates public
policy because it provides coverage to a narrower class of persons
than the UM/UIM statute, and is therefore void and unenforceable.
We agree, and therefore we reverse the district court’s order
granting summary judgment and remand the case for further
proceedings on Grippin’s claims.
I. Background
¶2 Grippin was injured when a truck hit him while he was riding
his motorcycle. He sustained serious injuries and incurred over
$400,000 in damages. At the time the accident occurred, Grippin
and his wife owned a home in Colorado Springs, where they lived
1
with their children. However, Grippin (and his wife and children)
also regularly lived with his grandparents at their house in Fort
Morgan for approximately one week per month to help care for
them. He and his wife had their own room in the Fort Morgan
house, kept personal belongings there, and Grippin did
maintenance work around the house.
¶3 Although Grippin received the $25,000 liability limit from the
GEICO policy insuring his motorcycle and the $25,000 liability limit
from the truck driver’s GEICO insurance policy, he sought
additional coverage through the UM/UIM provisions of his family
members’ policies to cover his medical bills. As pertinent here,
these policies included the following four State Farm policies:1
 Policy #065, covering a 1997 Chevrolet pickup, issued to
named insureds Lora Grippin (Grippin’s mother)2 and Patty
J. Hall (Grippin’s grandmother);
1 Grippin was also paid under the following two policies, which are
not at issue on appeal: (1) a Safeco Insurance Company policy
issued to his wife covering a 2007 Dodge Durango for the UM/UIM
policy limit of $250,000; and (2) a State Farm policy issued to him
and his mother covering a 2000 Pontiac for the UM/UIM policy limit
of $100,000.
2 Grippin’s mother resided at the Fort Morgan house at the time of
the accident.
2
 Policy #253, covering a 1991 Chevrolet pickup, issued to
named insureds James W. Hall (Grippin’s grandfather) and
Patty J. Hall;
 Policy #123, covering a 2004 Honda, issued to named
insureds James W. and Patty J. Hall; and
 Policy #658, covering a 2006 Chevrolet Trailblazer, issued to
named insureds James W. and Patty J. Hall.
¶4 Each policy defined the term “insured” as “you and resident
relatives.” The policies further defined a “resident relative” as
a person, other than you, who resides
primarily with the first person shown as a
named insured on the Declarations Page and
who is [] related to that named insured or is or
her spouse by blood, marriage, or adoption,
including an unmarried and unemancipated
child of either who is away at school and
otherwise maintains his or her primary
residence with that named insured. . . .”
(Emphasis omitted.)
¶5 The policyholders also received “Auto Renewal” forms each
year, which contained a list of “Other Household Drivers.” Grippin
was listed as an “Other Household Driver” on all four policies.
¶6 State Farm moved for summary judgment on the grounds that
Grippin was not a “resident relative” of his grandparents under the
3
policies because he did not reside “primarily” at their home in Fort
Morgan.
¶7 Grippin responded that State Farm’s definition of “resident
relative” violates public policy, and is therefore void, because the
qualifier “primarily” dilutes, conditions, or limits Colorado’s
statutory definition of “resident relative.” He alternatively argued
that the insurance contracts were ambiguous because he was listed
as an “Other Household Driver” on the Auto Renewal forms, and
that he had a reasonable expectation of coverage based on those
forms and a State Farm employee’s assurance after the accident
that he was covered by the policies. The trial court rejected
Grippin’s arguments and granted summary judgment in favor of
State Farm.
II. Standard of Review and Principles of Interpretation
¶8 We review the grant of a motion for summary judgment de
novo. Aspen Wilderness Workshop, Inc. v. Colo. Water Conservation
Bd., 901 P.2d 1251, 1256 (Colo. 1995). “Summary judgment is
proper where a case presents no genuine issue of material fact and
the law entitles one party to judgment in its favor.” Yellow Jacket
Water Conservancy Dist. v. Livingston, 2013 CO 73, ¶ 6.
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¶9 “Insurance policies are subject to contract interpretation and
are reviewed de novo, with the ultimate aim of effectuating the
contracting parties’ intentions.” GEICO Cas. Co. v. Collins, 2016
COA 30M, ¶ 18. Whether an insurance policy provision violates
public policy, and is therefore void and unenforceable, is also a
question of law that we review de novo. Bailey v. Lincoln Gen. Ins.
Co., 255 P.3d 1039, 1045 (Colo. 2011).
¶ 10 Finally, statutory interpretation is a question of law that we
review de novo. Apodaca v. Allstate Ins. Co., 255 P.3d 1099, 1102
(Colo. 2011). Our primary goal is to give full effect to the General
Assembly’s intent. Aetna Cas. & Sur. Co. v. McMichael, 906 P.2d
92, 97 (Colo. 1995). To do so, we interpret statutory terms in
accordance with their plain and ordinary meaning. Id. “[W]e strive
to interpret statutes in a manner that avoids rendering any
provision superfluous.” Colo. Ins. Guar. Ass’n v. Sunstate Equip.
Co., LLC, 2016 COA 64, ¶ 81 (quoting Qwest Corp. v. Colo. Div. of
Prop. Taxation, 2013 CO 39, ¶ 16).
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III. Whether “Resides Primarily” Violates Public Policy
A. Relevant Law
¶ 11 Colorado law requires automobile insurance policies to provide
UM/UIM coverage “for the protection of persons insured thereunder
who are legally entitled to recover damages from the owners or
operators of uninsured motor vehicles,” unless the named insured
rejects the coverage in writing. § 10-4-609(1)(a), C.R.S. 2015. The
UM/UIM coverage must be “coextensive with the class of insureds
covered under the liability provision of the policy.” Aetna, 906 P.2d
at 98.
¶ 12 An insurance policy provision violates public policy and is
therefore void and unenforceable if it attempts to “dilute, condition,
or limit statutorily mandated coverage.” Bailey, 255 P.3d at 1045
(citation omitted); see Pacheco v. Shelter Mut. Ins. Co., 583 F.3d 735,
740 (10th Cir. 2009) (finding that UM/UIM provision that diluted,
limited, or conditioned Colorado’s statutorily mandated coverage
was void and invalid as against public policy).
¶ 13 Colorado’s automobile insurance statute defines an “insured”
as “the named insured, relatives of the named insured who reside in
the same household as the named insured, and any person using
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the described motor vehicle with the permission of the named
insured.” § 10-4-601(5), C.R.S. 2015.
¶ 14 The statute further defines a “resident relative” as
a person who, at the time of the accident, is
related by blood, marriage, or adoption to the
named insured or resident spouse and who
resides in the named insured’s household,
even if temporarily living elsewhere, and any
ward or foster child who usually resides with
the named insured, even if temporarily living
elsewhere.
§ 10-4-601(13).
¶ 15 “In the context of automobile insurance exclusions, residence
is determined on a case-by-case basis using factors such as intent
and relative permanence.” Potter v. State Farm Mut. Auto. Ins. Co.,
996 P.2d 781, 783 (Colo. App. 2000). When making that
determination, courts consider factors such as the subjective or
declared intent of the individual, the formality or informality of the
relationship between the individual and members of the household,
the existence of another place of lodging, and the relative
permanence or transient nature of the individual’s residence in the
household. Iowa Nat’l Mut. Ins. Co. v. Boatright, 33 Colo. App. 124,
127, 516 P.2d 439, 440 (1973). No single factor is determinative;
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rather, they should all be considered “in light of the basic
consideration of whether the parties to the insurance contract
intended that coverage would extend to the alleged insured.” Id.
B. Discussion
¶ 16 Grippin contends that State Farm’s definition of “resident
relative” violates public policy because it restricts the class of
individuals insured to a relative who resides primarily with the first
person shown as the named insured on the declarations page;
whereas the statutory definition of a “resident relative” includes a
broader class of relatives “who reside[] in the named insured’s
household.” He argues that a person can have multiple residences
under Colorado law and that the statute’s plain language does not
restrict the definition of “resident relative” to a single, “primary”
residence. We agree.
¶ 17 The General Assembly did not expressly modify or define the
word “reside” to restrict the class of insureds only to relatives who
reside “primarily” with the named insured. See § 10-4-601(13).
¶ 18 Colorado law contemplates that a person can “reside” in more
than one place. “[R]esidence denotes a place where a person dwells.
It ‘simply requires bodily presence as an inhabitant in a given
8
place.’” Potter, 996 P.2d at 783 (quoting Carlson v. Dist. Court, 116
Colo. 330, 338, 180 P.2d 525, 530 (1947)). Indeed, the definition of
“residence” in Black’s Law Dictionary explains that a person can
have more than one residence:
Residence usu[ally] just means bodily presence
as an inhabitant in a given place; domicile
usu[ally] requires bodily presence plus an
intention to make the place one’s home. A
person thus may have more than one
residence at a time but only one domicile.
Black’s Law Dictionary 1502 (10th ed. 2014); see also Old Republic
Nat’l Title Ins. Co. v. Kornegay, 2012 COA 140, ¶ 18 (noting that
“residence is not synonymous with domicile or with ‘legal
residence’” and citing Black’s for the proposition that a person can
have more than one residence at a time); Potter, 996 P.2d at 783
(contrasting “domicile” with “residence” when interpreting the
ambiguous phrase “living with” in an insurance policy).
¶ 19 Furthermore, another division of this court has noted that a
child of divorced or separated parents “may reside in more than one
household if he or she spends substantial time in each under joint
custody or visitation arrangements.” Midwest Mut. Ins. Co. v. Titus,
849 P.2d 908, 910 (Colo. App. 1993). Accordingly, a relative can
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potentially have multiple residences so long as “all relevant
circumstances . . . reveal ‘some intended presence in the insured’s
home.’” Id. (quoting Wheeler v. Allstate Ins. Co., 814 P.2d 9, 10
(Colo. App. 1991)).
¶ 20 But State Farm argues that the phrases “at the time of the
accident” and “even if temporarily living elsewhere” in the statutory
definition imply that the General Assembly intended to limit its
application to a relative’s “primary” residence, and that to read the
statute otherwise would render the term “temporarily” superfluous.
We are not persuaded.
¶ 21 To begin, a person who has multiple residences may be
temporarily living elsewhere (other than the named insured’s
household) at the time of the accident. The phrase “at the time of
the accident,” simply limits the definition to the place (or places)
where the relative resides at a particular point in time. And the
phrase “even if temporarily living elsewhere” clarifies that at that
particular point in time, a relative who otherwise qualifies as a
“resident” of an insured’s household will not be excluded simply
because he or she was temporarily living somewhere else at the
time the accident occurred. We therefore do not perceive an intent
10
to limit the definition to a single “primary” residence from the
General Assembly’s use of these phrases.
¶ 22 Nor does our interpretation render the phrase “even if
temporarily living elsewhere” superfluous. This phrase clarifies the
phrase “at the time of the accident,” allowing a person to qualify as
a “resident relative” even if at the time the accident occurred he or
she was temporarily living somewhere else. The fact that a person
can have more than one residence does not change this meaning.
For example, the phrase “even if temporarily living elsewhere”
allows a child who resides in the separate households of divorced
parents to be covered by the statute even if he or she is temporarily
living away on a study abroad program, at an overnight summer
camp, or at a boarding school or college when the accident
happens. In this light, interpreting the statute to allow a person to
have more than one residence does not read the phrase “even if
temporarily living elsewhere” out of the statute.
¶ 23 State Farm’s definition of “resident relative” therefore narrows
the statutorily defined class of insureds because relatives who
“reside” with the named insured (as determined by the factors in
Boatright, 33 Colo. App. at 127, 516 P.2d at 440) but do not reside
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“primarily” with the named insured are included under the statute,
but not included under State Farm’s policy. Compare Titus, 849
P.2d at 910 (“[C]hild . . . may reside in more than one household if
he or she spends substantial time in each under joint custody or
visitation arrangements.”), with Lukk v. State Farm Mut. Auto. Ins.
Co., C.A. N12C–06–161 PRW, 2014 WL 1891000, at *6 (Del. Super.
Ct. Mar. 31, 2014) (unpublished opinion) (son, who had a
designated bedroom in both his mother’s and his father’s homes;
kept furniture, clothing, and personal effects at each place; and
split his time evenly between them, could reside “primarily” with
only one of them). It therefore impermissibly limits statutorily
mandated coverage and violates public policy.
¶ 24 State Farm nonetheless points to Wheeler, 814 P.2d 9, to
suggest that, because the statute does not define the words “reside”
and “resident,” it is free to adopt its own internal definition of those
terms. While it is true that the No-Fault Act, which was in place at
the time Wheeler was decided, did not define “reside” or “resident,”
it also did not define “resident relative.” The current statute,
however, defines “resident relative.” See § 10-4-601(13). And State
12
Farm’s definition of “resident relative” dilutes, conditions, or limits
that statutory definition, as discussed above.
¶ 25 State Farm’s reliance on the Delaware superior court’s
decision in Lukk, which held that the “resides primarily” provision
did not violate public policy, is similarly misplaced. Lukk is
inapposite because, unlike Colorado, Delaware does not statutorily
define “insured” or “resident relative” to determine who is entitled to
mandatory UM/UIM coverage. See Lukk, 2014 WL 1891000, at
*3-4.
¶ 26 We conclude that State Farm’s definition of “resident relative”
improperly limits statutorily mandated coverage. The provision
requiring a relative to reside “primarily” with the first person shown
as the named insured therefore violates public policy and is void
and unenforceable.
¶ 27 Accordingly, we reverse the district court’s grant of summary
judgment on those grounds and remand for further proceedings on
Grippin’s claims.3
3 We note that the issue of whether Grippin qualifies as a “resident”
of his grandparents’ household under the Boatright factors was
neither presented in State Farm’s motion for summary judgment
13
IV. Remaining Issues
¶ 28 Grippin contends that he is alternatively entitled to UM/UIM
benefits because (1) the Auto Renewal forms create an ambiguity
about the identity of the insureds covered under the policies and (2)
the forms and post-accident statements by a State Farm employee
gave him a reasonable expectation of coverage. We disagree with
his first contention and do not reach his second.
A. Whether the Auto Renewal Forms Create An Ambiguity
¶ 29 Grippin argues that listing him as an “Other Household
Driver” on the Auto Renewal forms associated with each policy
creates an ambiguity as to the identities of the insureds, and that
we should resolve any ambiguity in favor of coverage.
¶ 30 A term in an insurance policy is ambiguous “if it is susceptible
on its face to more than one reasonable interpretation.” Am. Family
Mut. Ins. Co. v. Hansen, 2016 CO 46, ¶ 24 (quoting USAA Cas. Ins.
Co. v. Anglum, 119 P.3d 1058, 1059-60 (Colo. 2005)). “[A]n
ambiguity must appear in the four corners of the document before
extrinsic evidence can be considered.” Id. at ¶ 26. As a result,
nor addressed by the district court. We therefore express no
opinion on this issue.
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“extrinsic evidence cannot create ambiguity” in a policy provision;
instead, “it is an aid to ascertaining the intent of the parties once an
ambiguity is found.” Id.
¶ 31 Our supreme court’s recent decision in Hansen is dispositive.
The Auto Renewal forms at issue here, like the lienholder
statements at issue in Hansen, are not part of the State Farm
policies. Rather, the declarations pages of each policy state
unambiguously that the named insureds are Lora Grippin, Patty J.
Hall, and James W. Hall, respectively. These names do not include
Grippin. Compare id. at ¶ 24 (“[T]here is no ambiguity with regard
to the identity of the insureds ‘DAVIS, WILLIAM & JOYCE.’ Those
names do not include Hansen.”), with D.C. Concrete Mgmt., Inc. v.
Mid-Century Ins. Co., 39 P.3d 1205, 1208 (Colo. App. 2001) (policy
listing insured as “Rafael Sanchez DC Concrete Management” was
ambiguous because it was impossible to tell if there was one named
insured or two).
¶ 32 But even if the Auto Renewal forms were part of the State
Farm policies, the list of “Other Household Drivers” does not make
the policies ambiguous. The list was prefaced by this language:
15
In addition to the Principal Driver(s) and
Assigned Drivers(s), your premium may be
influenced by the drivers shown below and
other individuals permitted to drive your
vehicle. This list does not extend or expand
coverage beyond that contained in this
automobile policy. The drivers listed below are
the drivers reported to us that most frequently
drive other vehicles in your household.
¶ 33 This language unambiguously states that the list does not
expand or extend coverage beyond that described in the policy. It
merely indicates that allowing the people listed to drive the vehicle
may influence the policy premium. We are not persuaded that the
people listed as “Other Household Drivers” can be reasonably
interpreted to be insureds covered by the policies.
¶ 34 We therefore conclude that the policies are not ambiguous,
and Grippin is not entitled to coverage on those grounds.
B. Whether Grippin Had a Reasonable Expectation of Coverage
¶ 35 Finally, Grippin contends that he is entitled to coverage based
on the doctrine of reasonable expectations. He argues that he had
a reasonable expectation of coverage because he is listed as an
“Other Household Driver” on the Auto Renewal forms and because a
State Farm employee assured him after the accident that he was
covered by the policies.
16
¶ 36 The doctrine of reasonable expectations “obligates insurers to
clearly and adequately convey coverage-limiting provisions to
insureds.” Bailey, 255 P.3d at 1048. It arises mainly in two
situations:
(1) where an ordinary, objectively reasonable
person would, based on the language of the
policy, fail to understand that he or she is not
entitled to the coverage at issue; and (2) where,
because of circumstances attributable to an
insurer, an ordinary, objectively reasonable
person would be deceived into believing that he
or she is entitled to coverage, while the insurer
would maintain otherwise.
Id. at 1048-49. In those situations, the reasonable expectations of
the insured will succeed over exclusionary policy language. Id. at
1048.
¶ 37 “[T]he doctrine of reasonable expectations applies only to ‘the
reasonable expectations of insureds,’ . . . and thus only after it is
determined that the claimant is an insured.” Hansen, ¶ 30 (quoting
Bailey, 255 P.3d at 1054).
¶ 38 Grippin argues that the Auto Renewal forms and the State
Farm employee’s statements created a reasonable expectation that
he was an insured, and therefore entitled to coverage under the
policies. But because the doctrine of reasonable expectations
17
applies “only after it is determined that a claimant is an insured,”
Grippin cannot rely on it unless he is, in fact, an insured. Id.
(emphasis added).
¶ 39 Whether Grippin is a resident relative and therefore an
insured under the State Farm policies is a question of fact that has
not yet been determined. As a result, we do not reach the question
of whether the renewal forms or employee’s statements created a
reasonable expectation of coverage.
V. Conclusion
¶ 40 The trial court’s order granting summary judgment in favor of
State Farm is reversed, and the case is remanded for further
proceedings on Grippin’s claims.
JUDGE J. JONES and JUDGE DUNN concur.
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