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Tubbs v. Farmers Ins. Exch.

Court of Appeals of Colorado, Fifth Division

May 21, 2015

Steffan Tubbs, Plaintiff-Appellant,
v.
Farmers Insurance Exchange, Defendant-Appellee

Boulder County District Court No. 12CV30342. Honorable Andrew Hartman, Judge.

Bachus & Schanker, LLC, J. Kyle Bachus, Denver, Colorado, for Plaintiff-Appellant.

Hunter & Associates, Lisa M. Hungerford, Denver, Colorado, for Defendant-Appellee.

Román and Márquez[*], JJ., concur.

OPINION

ASHBY, JUDGE

Page 925

[¶1] Plaintiff, Steffan Tubbs, appeals the district court's summary judgment in favor of defendant, Farmers Insurance Exchange (Farmers). We conclude that the plain language of Colorado's uninsured/underinsured motorist (UIM) statute, section 10-4-609(1)(c), C.R.S. 2014, prevents a UIM policy from requiring that the insured party actually collect the maximum amount possible from the tortfeasor's liability policy before triggering the insured's own UIM coverage. Therefore, we reverse and remand.

I. Background

[¶2] Tubbs was involved in a car accident in California with another driver. The accident was the other driver's fault and Tubbs suffered damages. The other driver's auto insurance had a $100,000 liability limit. Tubbs was insured by Farmers, and his policy included UIM coverage with a limit of $500,000. The UIM provision contains an exhaustion clause that provides, " [Farmers] will pay under [the UIM] coverage only after the limits of all [the liable party's] liability bonds or policies have been exhausted by the payment of settlements or judgments."

[¶3] Tubbs accepted a $30,000 settlement from the other driver. He then sought to recover under his Farmers policy's UIM provision, claiming that his total damages exceeded $100,000. Farmers refused to pay benefits because Tubbs did not meet the requirements of the UIM exhaustion clause.[1] Tubbs then filed this action.

[¶4] As relevant here, Farmers moved for summary judgment, arguing that pursuant to Jordan v. Safeco Insurance Company of America, Inc., 348 P.3d 443, 2013 COA 47, the exhaustion clause is enforceable, and Tubbs was therefore required to collect the full amount possible under the other driver's liability limit ($100,000) before Farmers was required to pay under the UIM provision. According to Farmers, because Tubbs settled for only $30,000, the UIM benefits were not triggered. The district court agreed and entered summary judgment for Farmers.

II. Preservation

[¶5] On appeal, Tubbs argues that the exhaustion clause in the UIM policy is void and unenforceable because it (1) violates section 10-4-609(1)(c) or, alternatively, (2) it dilutes, limits, or conditions insurance coverage mandated by section 10-4-609(1)(c). Farmers responds that although Tubbs preserved the ...


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