Grippin v. State Farm Mutual Automobile Insurance Co.

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

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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.

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 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

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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

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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

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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

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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

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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:

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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.

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¶ 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

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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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