July 15, 2019

Colorado Court of Appeals: Excluding Coverage for a Family Member’s Use of a Car that Another Family Member Owns and Is Separately Insured Is Not Uncommon or Against Policy

The Colorado Court of Appeals issued its opinion in Mid-Century Ins. Co. v. Robles on December 8, 2011.

Summary Declaratory Judgment—Automobile Insurance Policy.

Claimant appealed from the trial court’s summary declaratory judgment determining that there was no coverage for an accident under an automobile insurance policy issued by plaintiff Mid-Century Insurance Company (Mid-Century). The judgment was affirmed.

On January 21, 2008, an automobile accident occurred between claimant and the tortfeasor. At the time, the tortfeasor was living with his parents and driving his father’s Oldsmobile, which was insured by Farmers Insurance Exchange (Farmers). The tortfeasor’s parents were the named insureds. The tortfeasor owned a Ford Explorer insured by Mid-Century.

Claimant sustained injuries in the accident and filed a lawsuit against the tortfeasor. The parties reached a partial settlement and claimant received $100,000 from Farmers pursuant to the policy limits.

Mid-Century instituted this action for a declaration regarding coverage. Both parties filed motions for summary judgment. The trial court granted Mid-Century’s motion, concluding that the Oldsmobile was not an “insured car” under the policy and that the “regular use” or “drive other car” exclusion did not violate public policy. It also excluded coverage under the anti-stacking provision of the Mid-Century policy.

On appeal, claimant argued that the trial court misinterpreted the policy exclusion. He contended that the exclusion did not apply because the tortfeasor did not regularly use the Oldsmobile. The Court of Appeals disagreed, finding this to be a misinterpretation of the insurance contract language, which clearly barred coverage by Mid-Century of the tortfeasor’s use of his father’s vehicle. The Court noted that excluding coverage for a family member’s use of a car that another family member owns and is separately insured is not uncommon.

The Court then considered whether the Oldsmobile qualified as an “insured car” under the Mid-Century policy. The only way it could so qualify was if it were a replacement vehicle. Because this term was not defined in the Mid-Century policy, the Court looked to the common meaning of “replacement” to determine whether the Oldsmobile was a replacement vehicle for claimant’s Explorer. The Court held that it was not a replacement vehicle under this definition and, therefore, the Oldsmobile was not insured by Mid-Century.

This summary is published here courtesy of The Colorado Lawyer. Other summaries for the Colorado Court of Appeals on December 8, 2011, can be found here.

Colorado Court of Appeals: Once Established, the Presumption of Paternity Founded on the Weightier Considerations of Policy and Logic Controls

The Colorado Court of Appeals issued its opinion in People in the Interest of C.L.S., and Concerning T.V. on November 23, 2011.

Paternity—Presumption—Standard of Proof—Preponderance Standard—Clear and Convincing Standard.

Husband appealed the magistrate’s order declaring T.R.S. the presumptive father of C.L.S. The order was affirmed.

Mother and husband were married when C.L.S. was conceived in early 2006. During this time, mother also had a brief, intimate relationship with T.R.S. Mother filed for dissolution of marriage later in 2006, before C.L.S. was born. Mother and T.R.S. began dating in the spring of 2007, about three months after C.L.S. was born. Genetic testing was performed a short time later. It excluded T.R.S. as C.L.S.’s biological father. However, T.R.S. acted as C.L.S.’s father, signed an acknowledgement of paternity, and added his name to the son’s birth certificate as his father.

Husband and T.R.S. each established presumptions of paternity that were not rebutted. The magistrate, after applying the relevant statutes, named T.R.S. the child’s legal father. Reviewing the magistrate’s order based on the preponderance standard, the district court upheld the magistrate’s decision.

On appeal, husband contended that the district court committed reversible error by rejecting the clear and convincing standard in favor of the preponderance standard. Husband established the presumption of paternity by way of marriage during C.L.S.’s birth and a genetic test establishing paternity. T.R.S. established the presumption of paternity by way of receiving C.L.S. into his home and holding him out as his own child and acknowledging paternity in writing.

Once presumptions are established, they may be rebutted by clear and convincing evidence. Husband successfully rebutted T.R.S.’s second presumption by showing husband did not provide written consent for T.R.S. to acknowledge the son as his child. The second step in the process occurs after the presumptions are established and have not been rebutted. According to CRS § 19-4-105(2)(a), when two or more conflicting presumptions arise, the presumption founded on the “weightier considerations of policy and logic” controls. The proper standard of proof to determine this second step is the preponderance of evidence standard. Therefore, the district court used the proper standard. The order was affirmed.

This summary is published here courtesy of The Colorado Lawyer. Other summaries for the Colorado Court of Appeals on November 23, 2011, can be found here.

Colorado Supreme Court: Criminal-Acts Exclusion Prohibiting Use of Rental Car in Commission of Felonious Crimes Does Not Violate Public Policy

The Colorado Supreme Court issued its opinion in Bailey v. Lincoln Gen. Ins. Co. on May 16, 2011.

Criminal-Acts ExclusionPublic PolicyDoctrine of Reasonable ExpectationsAmbiguous Policy LanguageDeceptive Practices

The supreme court affirms the court of appeals determination to uphold the enforceability of a criminal-acts exclusion in a $1 million excess-insurance policy issued to an insured who rented a vehicle he later drove under the influence of methamphetamines, colliding into another vehicle, critically injuring one person and killing another.

The supreme court holds that the criminal-acts exclusion prohibiting use of a rental car “in the commission of a crime that could be charged as a felony” does not violate public policy as applied to this case, where the insured pled guilty to five felonies involving the use of the car, including second degree murder. Further, the insurer’s use of the criminal-acts exclusion was a proper exercise of the insurer’s freedom to contract and provide coverage for damages caused by fortuitous events instead of for damages caused by intentionally criminal acts.

The supreme court also holds that, in this case, insertion of the criminal-acts exclusion does not violate the doctrine of reasonable expectations. In Colorado, this doctrine manifests itself in two ways: (1) where an ordinary, objectively reasonable person would, based on the language of the insurance 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 insured would be deceived into believing that he or she is entitled to coverage, while the insurer would maintain he or she is not. In this case, from the perspective of an ordinary insured, the policy language is clear that using the rental car to commit a felonious criminal act may void coverage. Further, no circumstances attributable to the insurer can be said to have fostered objectively reasonable coverage expectations for intentional criminal acts.

Summary and full case available here.

Colorado Court of Appeals: Summary Judgment Appropriate on Negligence and Gross Negligence Cliams When Parents Validly Limited Liability for Horseback-Riding Injury

The Colorado Court of Appeals issued its opinion in Hamill v. Cheley Colorado Camps, Inc. on March 31, 2011.

Negligence—Exculpatory Clause—Informed Consent—Public Policy—Gross Negligence.

Plaintiff Chelsea Hamill appealed the district court’s grant of summary judgment in favor of defendant Cheley Colorado Camps, Inc. (Cheley). The judgment was affirmed.

Hamill attended summer camp at Cheley in 2002, 2003, and 2004. Before attending camp each summer, Hamill and her parents signed a Liability/Risk Form (the agreement). In July 2004, when Hamill was 15 years old, she fell off a Cheley horse and broke her arm. Hamill sued Cheley for negligence and gross negligence, arguing that a Cheley wrangler had inappropriately saddled the horse she rode. The district court granted Cheley’s motion for summary judgment on the two negligence claims.

Hamill argued that the exculpatory clauses in the agreement do not bar her negligence claims. The Court of Appeals disagreed, finding the agreement valid for the following reasons: (1) the agreement did not implicate a public duty and did not involve an essential service; (2) Hamill’s mother voluntarily chose to sign the agreement, expressly giving permission for Hamill to participate in horseback riding activities; (3) the agreement was fairly entered into; and (4) the agreement plainly expressed the intent to release prospective negligence claims.

Hamill contended that her mother’s consent to release prospective negligence claims was not “informed,” as required by CRS § 13-22-107, because she did not understand the scope of the agreement. Although Hamill’s mother may not have contemplated the precise mechanics of her daughter’s fall, this does not invalidate the release and does not create a genuine issue of material fact. She knew her daughter would be riding horses and she was advised that there were risks, known and unknown, associated with the activity. Therefore, the district court did not err in granting summary judgment for Cheley.

Hamill further argued that public policy considerations render the agreement invalid. The governing statute promotes children’s involvement in horseback riding and approves the informed release of prospective negligence claims. Thus, Hamill’s public policy argument failed.

Finally, Hamill contended that genuine issues of material fact existed regarding her gross negligence claim. There is no evidence that Cheley’s wrangler was “willfully” incompetent, purposefully caused the saddle to slip, or recklessly disregarded the appropriate way to tack the horse. Thus, the district court was correct in dismissing the gross negligence claim on summary judgment.

This summary is published here courtesy of The Colorado Lawyer. Other summaries by the Colorado Court of Appeals on March 31, 2011, can be found here.