Free Reply to Response to Motion - District Court of Colorado - Colorado

Case 1:00-cv-02098-REB-MJW

Document 199-2

Filed 06/26/2006

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DISTRICT COURT, CITY AND COUNTY OF DENVER, COLORADO Court Address: City & County Building 1437 Bannock Street Denver, Colorado 80202 Plaintiff(s): DREXEL HUDGINS v. Defendant(s): FINANCIAL INDEMNITY COMPANY Case Number: 03CV1295
COURT USE ONLY

Ctrm.: 7

ORDER (Re: Plaintiff's Motion for Partial Summary Judgment- Declaratory Relief)

THIS MATTER is before the Court pursuant to Plaintiff Drexel Hudgin's Motion for Partial Summary Judgment, filed on January 6, 2006. The Court has reviewed the motion, the response filed thereto and the reply, as well as the Court's file and applicable authorities. Upon consideration thereof, the Court enters the following findings and order. STANDARD OF REVIEW "The purpose of summary judgment is to permit the parties to pierce the formal allegations of the pleadings and save the time and expense connected with trial, when as a matter of law, based on undisputed facts, one party could not prevail." Curragh Queensland Min. Ltd. v. Dresser Industries, 55 P.3d 235, 239 (Colo. App. 2002) (quoting Peterson v. Halsted, 829 P.2d 373,375 (Colo. 1992). A motion for summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that that the moving party is entitled to judgment as a matter of law." C.R.C.P. 56(c); Casey v. Christie Lodge Owners Ass'n., Inc., 923 P.2d 365, 366 (Colo. App. 1996). Once the party moving for summary judgment has made a convincing showing that genuine issues of fact are lacking, the opposing party cannot rest upon the mere allegations or denials in his or her pleadings, but must demonstrate by specific facts that a controversy exists. U.S.A. Leasing, Inc. LLC v. Montelongo, M.D., 25 P.3d 1277, 1278 (Colo. App. 2001); Cedar Lane Inv. v. St. Paul Fire & Marine Ins. Co., 883 P.2d

Case 1:00-cv-02098-REB-MJW

Document 199-2

Filed 06/26/2006

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600,602 (Colo. App. 1994). Summary judgment is appropriate if no genuine issues of material fact exist, and only questions of law remain. M & J Leasing Co. v. Executive Director of Dep't of Revenue of the State of Colorado, 796 P.2d 28, 30 (Colo. App. 1990). STATEMENT OF FACTS A car accident occurred on December 8, 2000 in which the plaintiff was a passenger in a vehicle operated by Mr. Oliver. The Defendant, Financial Indemnity Corporation (hereinafter "FIC"), insured Mr. Oliver. The Plaintiff claims that the Defendant never made a legally adequate offer of extended PIP coverage for the benefit of pedestrians struck by defendantinsured vehicles or non-relative occupants of a defendant-insured vehicle. It is undisputed that the defendant's enhanced PIP options cover only named insureds and resident relatives. FIC's enhanced coverage options A and B limit coverage to only "you" or a "relative."

FINDINGS AND CONCLUSIONS Although the Honorable Martin Egelhoff denied a broader motion for summary judgment on April 28, 2005, the Court will analyze the instant Motion for Partial Summary Judgment because this motion is narrower in scope and is based on new authority. The Tenth Circuit United States Court of Appeals recently decided Clark v. State Farm Mutual Automobile Insurance Co., Nos. 04-1022 and 04-1023, 2005 WL 3560879 (2005). In the instant motion the Plaintiff requests that the Court "grant a limited summary judgment declaring that FIC's policy is reformed as required by law, because there is no dispute that FIC's policy did not comply with the requirements of the No Fault Act as to APIP coverage provided for persons such as Plaintiff, a guest occupant of a vehicle insured by FIC." (Plaintiff's Motion, 2). The Colorado Auto Accident Reparation Act requires that a policy include a minimum level of PIP benefits. C.R.S. Section 10-4-707 defines the categories of people who receive coverage as "1) the named insured, 2) resident relatives of the named insured, 3) passengers occupying the insured's vehicle with the consent of the insured, and 4) pedestrians who are injured by the covered vehicle." Under C.R.S. § 10-4-710(2)(a) of the No-fault Act, insurers were required to offer, in addition to the minimum statutorily required PIP coverage, optional supplemental coverage in exchange for a higher premium. In Brennan v. Farmers Alliance Mutual Insurance Co., 961 P.2d 550 (Colo.Ct.App.1998), the Court stated that "an insurer must offer extended coverages listed in § 10-4-710 which apply to all categories of persons specified in § 10-4-707." When an insurer failed to offer the statutorily mandated optional coverage, such coverage was deemed incorporated into the policy by operation of law, and the policy was to be reformed. See Brennan. As stated above, the Defendant's policy provides for enhanced PIP coverage for only named insureds and resident relatives. Therefore, the Court finds that the Defendant failed to

Case 1:00-cv-02098-REB-MJW

Document 199-2

Filed 06/26/2006

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afford Oliver the opportunity to purchase an APIP or enhanced benefits package consonant with C.R.S. § 10-4-710. The Defendant urges the Court to apply a totality of the circumstances test. However, the Court declines to adopt this test because the test is only useful once it is shown that the policy is compliant with the statute. Clearly, the policy at issue in this case is not compliant with CAARA. Thus, the Court grants a limited summary judgment declaring that FIC's policy is reformed as required by law, because there is no dispute that FIC's policy fails to comply with CARRA. In Brennan, the Colorado Court of Appeals stated that "when an insurer fails to offer the insured optional coverage that satisfied [CARRA], additional coverage in conformity with the offer mandated by statute will be incorporated into the policy." 961 P.2d at 554. Therefore, the Court determines that the Plaintiff is entitled as a matter of law to reformation of the insurance policy to include extended PIP benefits. It is therefore ordered that Plaintiff's Motion for Partial Summary JudgmentDeclaratory Relief is GRANTED.

SO ORDERED this 11th day of April, 2006. BY THE COURT

Sheila A. Rappaport District Court Judge