April 19, 2018

Archives for February 5, 2018

Colorado Court of Appeals: Written Rejection of Enhanced UM/UIM Coverage Not Required

The Colorado Court of Appeals issued its opinion in Airth v. Zurich American Insurance Co. on Thursday, January 25, 2018.

Motor Vehicle Insurance—Uninsured/Underinsured—Summary Judgment.

Airth was seriously injured in an accident while operating a semi truck owned by his employer, Sole Transport LLC, d/b/a Solar Transport Company (Solar). He was struck by a negligent, uninsured driver. Solar had uninsured/underinsured motorist (UM/UIM) insurance coverage of $50,000 for its employees through a policy issued by Zurich American Insurance Co. Airth brought a claim for declaratory relief, seeking to reform Solar’s policy to provide UM/UIM coverage of $1 million. He alleged he was entitled to the higher amount because Zurich had failed, as required by C.R.S. § 10-4-609, to (1) offer Solar UM/UIM coverage in an amount equal to its bodily injury liability coverage ($1 million), and (2) produce a written rejection by Solar of such an offer. On cross-motions for summary judgment, the district court entered judgment for Zurich ruling, as a matter of law, that (1) Zurich’s documents adequately offered Solar UM/UIM coverage in an amount equal to the bodily injury liability limits of the policy, and (2) there is no requirement that the rejection of UM/UIM limits in an amount equal to liability limits be in writing.

On appeal, Airth contended that both of the district court’s rulings were incorrect and the court therefore erred in granting Zurich’s summary judgment motion and denying Airth’s cross-motion. C.R.S. § 10-4-609(1)(a) prohibits an insurer from issuing an automobile liability policy unless a minimum amount of UM/UIM coverage is included in the policy, except where the named insured rejects UM/UIM coverage in writing. C.R.S. § 10-4-609(2) requires an insurer, before a policy is issued or renewed, to offer the insured the right to obtain UM/UIM coverage in an amount equal to the insured’s bodily injury liability limits. The facts here were undisputed. Before renewing Solar’s policy, Zurich sent a package of documents pertaining to Solar’s rights related to UM/UIM coverage and Solar’s counsel affirmed that he had read all the documents. This included an opportunity to reject UM/UIM coverage or to select a higher than minimum level of UM/UIM coverage. Airth argued that none of this constituted an “offer” of the ability to obtain higher UM/UIM coverage, because the documents did not contain a premium quote or a way to estimate the premium for purchasing UM/UIM coverage commensurate with a bodily injury liability limit of $1 million. The Colorado Court of Appeals agreed that this would be the case if it were applying the meaning of the term “offer” as used in contract law. But the Colorado Supreme Court has attributed a different meaning to “offer” as it is used in C.R.S. § 10-4-609; the dispositive question is whether, under the totality of the circumstances, the insured was adequately informed that higher UM/UIM coverage was available. Here, that standard was met by the documents Zurich provided to Solar.

Airth also argued that Zurich was not entitled to summary judgment because there was no evidence that anyone from Solar read or understood the document. This argument overlooks that attestation of Solar’s counsel.

Airth further argued that reversal is required because the documents were signed and dated a month after the policy went into effect. The operative question is whether the insurer gave the insured the opportunity to purchase statutorily-compliant coverage before the insured needed it. The record reflects that Solar had received and responded to the notification and offer before the accident that injured Airth.

Airth also contended that the district court erred in determining that the statute only requires a written rejection with respect to the minimum UM/UIM coverage available and not to the additional coverage available. The court agreed with the district court’s conclusion that a written rejection is required only if the insured declines the minimum amount of UM/UIM coverage, which was not the case here.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Online Travel Companies Not Required to Remit Accommodation Tax to Town of Breckenridge

The Colorado Court of Appeals issued its opinion in Town of Breckenridge v. Egencia, LLC on Thursday, January 25, 2018.

Taxation—Municipalities—Accommodation Tax—Lessors—Renters—Online Travel Companies—Jurisdiction—Exhaustion of Administrative Remedies—Class Certification.

The Town of Breckenridge sought to collect accommodation and sales taxes from 16 online travel companies (OTCs). The OTCs maintain websites through which travelers can book hotel accommodations and travel-related services. As relevant here, under the “merchant model” the OTCs contract with a hotel to allow customers logging into the OTC’s website to book reservations for the hotel. These contracts offer rooms to OTCs at a discounted rate. OTCs coordinate information between travelers and hotels; OTCs neither purchase nor reserve rooms in advance.

Breckenridge brought this action to recover unpaid accommodation and sales taxes from the OTCs, asserting five causes of action. The district court partially granted the OTCs’ motion to dismiss but refused to dismiss the accommodation tax claim. Breckenridge then unsuccessfully sought class certification for 55 home rule cities that also levy a lodger’s or accommodation tax. The parties filed cross-motions for summary judgment, which were resolved in favor of the OTCs.

On appeal, Breckenridge contended that the district court erred in concluding that OTCs are neither “lessors” nor “renters” of hotel rooms because they sell the legal right to use hotel rooms in exchange for consideration. Breckenridge asserted that the OTCs are capable of leasing or renting even without physical possession of hotel rooms. Because the hotels maintain possession of the rooms and are the sole grantors of the right of occupancy, hotels are lessors or renters and OTCs are essentially brokers. The accommodation tax statute indicates that the accommodation tax applies only to those who have a possessory interest in the accommodation being taxed. The OTCs had no possessory interest and were not engaged in the business of owning, operating, or leasing, and could not independently grant customers access to rooms, so they are not subject to Breckenridge’s accommodation tax.

Breckenridge also contended that the court erred in granting summary judgment because issues of fact exist. Breckenridge failed to meet its burden of producing sufficient evidence to establish that a genuine issue of fact exists as to whether OTCs acquire inventory, whether the OTCs provide customer service, and the extent of the hotels’ involvement in merchant model transactions. The court properly granted the OTCs’ summary judgment motion.

Breckenridge also contended that the district court erred in concluding that it lacked subject matter jurisdiction over its sales tax claim because Breckenridge failed to exhaust administrative remedies. Breckenridge argued that it was not required to exhaust its own administrative remedies because doing so would be futile and whether OTCs are subject to sales tax was a question of law not subject to exhaustion requirements. It is evident from the Breckenridge Town Code that a party’s first step in seeking relief for unpaid sales taxes is to petition for administrative review from the finance director. Breckenridge failed to take this step. Therefore, the district court lacked subject matter jurisdiction to address Breckenridge’s unpaid sales tax claim.

Finally, Breckenridge contended that the district court abused its discretion by denying Breckenridge’s request for class certification. Breckenridge was not entitled to class certification under C.R.C.P. 23(b)(2) because Breckenridge was seeking primarily monetary damages, and it failed to meet the C.R.C.P. 23(b)(3) requirements because there was no predominance of common questions nor was class action the superior remedy.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Unpublished Opinions, 2/2/2018

On Friday, February 2, 2018, the Tenth Circuit Court of Appeals issued no published opinion and six unpublished opinions.

United States v. Ingram

United States v. Brunken

Streeter v. Berryhill

United States v. Tucker

Eldridge v. Oliver

McKinley v. McCollum

Case summaries are not provided for unpublished opinions. However, some published opinions are summarized and provided by Legal Connection.