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Kipling v. State Farm Mutual Automobile Insurance Co.

United States District Court, D. Colorado

February 3, 2016

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, doing business as, Minnesota Division of State Farm Mutual Automobile Insurance Company, Defendant.


Nina Y. Wang United States Magistrate Judge

This civil action is before the court on the following motions:

1. Defendant State Farm Mutual Automobile Insurance Company’s (“State Farm” or “Defendant”) Motion for Summary Judgment on Remand [#146, filed May 20, 2015];
2. Plaintiff Kathryn Kipling’s (“Ms. Kipling” or “Plaintiff”) Motion for Summary Judgment [#149, filed May 22, 2015]; and
3. Plaintiff’s Motion to Strike Portions of Defendant’s Motion for Summary Judgment (“Motion to Strike”) [#150, filed May 29, 2015].

These Motions are before me pursuant to 28 U.S.C. § 636(c), the Order of Reference dated January 26, 2012 [#19], the Order of Reassignment dated February 10, 2015 [#137], and D.C.COLO.LCivR 72.2. This court has carefully considered the Motions and related briefing, the comments offered by counsel at the July 10, 2015 and August 20, 2015 Motions Hearings, the entire case file, and the applicable case law, and is sufficiently advised in the premises. Based on that review, this court GRANTS Defendant’s Motion for Summary Judgment, DENIES Plaintiff’s Motion for Summary Judgment, and GRANTS IN PART and DENIES IN PART Plaintiff’s Motion to Strike.


The following facts are undisputed unless otherwise noted. This civil action arises out of a fatal car collision that occurred on July 27, 2009 on Colorado Highway 285 when Jose Sanchez (“Mr. Sanchez”), driving a Ford F350 owned by Pedro Cabral-Martinez, crashed into the side of the vehicle in which Ms. Kipling, her husband, Christopher Kipling, and her mother, Maureen Hamilton, were traveling. [#1 at ¶¶ 1-4; #26-2]. The impact of the crash forced the Kiplings’ vehicle off the highway into an embankment causing it to roll onto its passenger side where it ultimately rested. [Id. at ¶ 5; #26-2]. Mr. Kipling was fatally injured in the collision and Ms. Kipling was severely injured, and as a result, suffered a variety of non-economic and economic damages. [Id. at ¶¶ 7-9].

Mr. Sanchez was insured through the Cabral-Martinez vehicle by an American Family Insurance policy that provided for $100, 000/300, 000 bodily injury liability limits. The Kipling household maintained two auto insurance policies with State Farm. The Suburban was insured under policy number 0298-670-06F, which provided for $500, 000/500, 000 in uninsured motorist (“UIM”) coverage. The second policy was issued in Colorado by State Farm to Quicksilver Express Courier on a 2005 Ford pickup and provided for $250, 000/500, 000 in UIM coverage (collectively, “Colorado Policies”). [#44-5]. Plaintiff settled her bodily injury liability claim against Mr. Sanchez and submitted a UIM claim with State Farm under the Colorado Policies. State Farm paid the limits of the UIM coverage under both policies, with a portion paid to Mrs. Hamilton.

At the time of his death, Mr. Kipling worked as an Office Manager for Quicksilver Express Courier of Colorado, Inc. [#26-1 at ¶ 7]. Quicksilver Express Courier, Inc. (“Quicksilver”) originated as a Minnesota corporation in 1982. [Id. at ¶ 1; #44-2]. Quicksilver operates as a holding company and, since its origination, has opened operating subsidiaries in Minnesota, Colorado, Wisconsin, Missouri, and Arizona. [#47-2 at 7:14-17; #26-1 at ¶ 4].[2]Quicksilver originally conducted business only in Minnesota. [#26-1 at ¶ 5]. In 1986, Quicksilver organized Quicksilver Express Courier of Colorado, Inc. (“Quicksilver Colorado”) as a wholly owned subsidiary. [#26-1 at ¶ 5; compare #44-3 with #44-6]. Quicksilver purchases and titles the vehicles used by its employees according to state. [#26-1 at ¶ 12]. Quicksilver pays for the insurance of each vehicle and those vehicles are titled in the state in which they are used; vehicles of one corporation are never used by another corporation. [Id. at ¶¶ 12, 13]. The individual employee is responsible for obtaining insurance for the vehicle from an agent in the state in which the vehicle is used. [Id. at ¶ 15]. Quicksilver then approves the coverage and pays for the business use portion of the premium. [Id.] The individual employees are taxed the corresponding percentage for their personal use of the vehicles, including insurance and fuel and all other expenses. [Id. at ¶ 13]. Each vehicle is parked at the office or home of the employee who uses it. [Id. at ¶ 14].

On the day of the accident, Mr. Kipling was driving a 2005 Chevy Suburban (the “Suburban”) that Quicksilver had provided him for his personal and business use. [#26-1 at ¶¶ 21, 40, 41; #26-2]. The Suburban was insured by State Farm in Colorado, titled to Quicksilver Colorado, and Quicksilver was the named insured. [#26-1 at ¶ 21; #26-12; #149 at ¶ 12]. As Mr. Kipling’s vehicle was covered by a State Farm policy in Colorado, employees of Quicksilver and the Quicksilver corporation in Minnesota were similarly covered by State Farm policies. Relevant here are four policies that pertained to four vehicles registered in the State of Minnesota and titled to Quicksilver in Minnesota: no. 0539-563-23E; no. 71 6391-A08-23G; no. 327 4806-A01-23H; and no. 330-0729-A03-3C (“Minnesota Policies”). [#26-1 at ¶¶ 25-39]. The vehicle described in policy number 0539-563-23E is a 2006 Toyota Tacoma pickup truck. [#26-3]. The vehicle described in policy number 71 6391-A08-23G is a 2008 Toyota Sequoia. [#26-6]. The vehicle described in policy number 327 4806-A01-23H is a 2007 Toyota Camry. [#26-10]. The vehicle described in policy number 330-0729-A03-3C is a 2008 Toyota Corolla. [#26-8]. Michael Crary, Curt Sloan, Tony Gardner, and Dean Herbst are the four Quicksilver employees designated as the principal drivers of the four vehicles covered by the Minnesota Policies. [#26-1 at ¶¶ 11, 25, 29, 33, 37]. Quicksilver was listed as a named insured under the Minnesota Policies “so as to receive the proper notification of coverage limits and time frames.” [#26-1 at ¶ 27]. Mr. Crary drove the 2008 Toyota Sequoia; Mr. Sloan drove the 2008 Toyota Corolla; Mr. Gardner drove the 2008 Toyota Camry; and Mr. Herbst drove the 2006 Toyota Tacoma.

Mr. Crary is the company’s founder and chief executive officer. [#26-1 at ¶ 1]. Mr. Sloan has served as the corporate financial officer of Quicksilver since 1982 and owns 11 percent of the company’s stock. [Id. at ¶ 9]. Mr. Herbst and Mr. Gardner have ownership interests of less than 6 percent each in Quicksilver stock. [Id. at ¶ 8]. Mr. Kipling had an ownership interest of 3 percent in the company stock. [Id. at ¶ 7]. The Minnesota Policies were obtained from a Minnesota State Farm agent, Tim Meyer, in Shoreview, Minnesota. See, e.g., [id. at ¶ 16; #26-3; #26-6; #26-8; #26-10]. The Minnesota addresses of Mr. Crary, Mr. Sloan, Mr. Gardner, and Mr. Herbst were used in determining the rates charged under the policies. [#26-5; #26-7; #26-9; #26-11]. State Farm is incorporated in Illinois [#149 at 22, ¶ 5], and the Minnesota Policies were executed by State Farm in Illinois. [#149-1 at 71, ¶ 10]. The State Farm agent who obtained the applications for and bound the Minnesota Policies, and the underwriters who reviewed and approved the applications, were located in Minnesota. [#149 at 30, ¶ 3].

The four Minnesota vehicles were driven only in Minnesota, and the Minnesota Policies were maintained in the individuals’ names as the principal drivers. [#26-1 at ¶¶ 20, 24]. Neither Plaintiff nor her husband was the principal driver of any of the vehicles covered by the Minnesota policies; and those vehicles were never driven in Colorado. [Id. at ¶ 17]. On July 27, 2011, Ms. Kipling filed this lawsuit asserting one claim for breach of contract on the basis that State Farm has failed to pay benefits for uninsured/underinsured motorist coverage to which Ms. Kipling was entitled under the four Minnesota Policies, and seeking general and special damages plus interest. [#1 at 4, ¶¶ 19-23].


State Farm filed an Answer on November 14, 2011. [#10]. On December 14, 2011, the Honorable Boyd N. Boland presided over a Scheduling Conference and entered a Scheduling Order. [#14, #15]. On April 17, 2012, State Farm filed a Motion for Summary Judgment, arguing that the Complaint presented a question of contract interpretation; the court should apply Minnesota law; and, under Minnesota law, Plaintiff cannot stack the UIM benefits of the Minnesota Policies. [#26]. Defendant first asserted that the contract governing the Minnesota policies contains a choice of law provision providing for Minnesota law, even under general conflict of law rules Minnesota law would apply, and Minnesota law does not permit the stacking of UIM policies. Defendant then argued that even if Minnesota law did not apply, Plaintiff is not entitled to the UIM benefits in the Minnesota Policies because the Suburban is not a covered vehicle pursuant to those policies and neither Plaintiff nor Mr. Kipling qualified as an insured as defined under the UIM vehicle coverage contained in the Minnesota Policies.

Following multiple requests for extensions of time that the court granted, Plaintiff filed a Response on September 11, 2012. [#44]. Ms. Kipling countered that the sole claim for relief asserted in the Complaint sounds in tort; that in multi-tort controversies, Colorado courts apply the rule of law of the state with the most significant relationship to both the occurrence and the parties; and that Colorado law should govern her claim. [Id.]. Plaintiff next argued that under Colorado law, which invalidates any insurance policy provision that seeks to tie the payment of UIM benefits to the occupancy of a particular vehicle, she is entitled to the limits of UIM coverage under the Minnesota Policies. Finally, she contested Defendant’s assertion that Mr. Kipling does not qualify as an insured under the policies.

Defendant filed a Reply on September 25, 2012. [#47]. Plaintiff sought and was granted leave to file a Sur-reply, which she submitted on October 17, 2012. [#52]. On November 29, 2012, the court heard oral argument on the Motion for Summary Judgment, at which the Parties agreed that Plaintiff does not qualify as an insured under the language of the Minnesota Policies. [#54 at 5]. The court then took the matter under advisement.

On November 6, 2012, Magistrate Judge Boland denied State Farm’s Motion for Summary Judgment. [#54]. Judge Boland first found that Plaintiff “is not entitled to benefits under the plain language of the Minnesota Policies.” [Id. at 5]. However, he then found that the Colorado conflict of laws rule applicable to tort claims should apply, and for support relied on Ranger v. Fortune Ins. Co., 881 P.2d 394 (Colo.App. 1994)). [Id. at 9-10]. In so finding, and in considering which state had the most significant relationship to the occurrence and the Parties, Magistrate Judge Boland determined that Colorado law controlled the resolution of the lawsuit, and under Colorado law, Ms. Kipling was entitled to proceed to trial to determine damages.

On February 21, 2013, State Farm filed a Motion for Reconsideration of the Order denying its Motion for Summary Judgment or, in the alternative, Motion for Determination of Question of Law, arguing that two consolidated Colorado Supreme Court cases, State Farm Mutual Automobile Insurance Co. v. Brekke and State Farm Mutual Automobile Insurance Co. v. Shaffer, 105 P.3d 177 (Colo. 2004) and State Farm Mutual Automobile Insurance Co. v. Shaffer, 105 P.3d 177 (Colo. 2004), draw the distinction between a plaintiff’s negligence claims against the UM motorist and the plaintiff’s contract claims for uninsured motorist (“UM”) benefits against the plaintiff’s UM insurer, and instruct that the conflict of laws rule applicable to contracts should govern Plaintiff’s claim. [#66]. Ms. Kipling filed a Response on March 25, 2013 [#75], and State Farm filed a Reply on April 1, 2013. [#76]. Magistrate Judge Boland denied the Motion for Reconsideration on April 3, 2013. [#81]. The court subsequently held a three-day jury trial, which commenced May 13, 2013. [#91-#94]. The jury ultimately returned a verdict in favor of Plaintiff, and the court entered a final judgment of $4, 444, 750.75 on May 28, 2013. [#99].

On June 14, 2013, State Farm filed a Motion to Alter or Amend the Judgment Pursuant to Fed.R.Civ.P. 59(e), arguing for the first time that in applying Colorado law to reform the Minnesota Policies, Plaintiff and Mr. Kipling did not qualify as insureds under those policies. [#103]. Defendant asserted that “[i]t is neither contrary to the Colorado UM/UIM statute, nor against public policy, to define who is an ‘insured’ in terms of vehicle occupancy when dealing with persons other than an individual named insured and his or her resident relatives, ” and “when the named insured is a business or corporation, UM/UIM coverage arises only when such persons are using or occupying a covered vehicle.” [#103 at 2]. State Farm then filed a Motion to Stay Execution of the Judgment Pending Resolution of Appeal [#104], to which Plaintiff responded on June 21, 2013 [#107]. On July 16, 2013, Plaintiff filed a Response to the Motion to Alter or Amend [#113]. State Farm filed a Reply on July 16, 2013. [#114]. On September 3, 2013, the court denied the Motion to Alter or Amend, primarily on the basis that the Motion was “an improper attempt to advance a new argument which could and should have been raised prior to trial and entry of judgment, ” finding that Defendant’s argument implicated and sought to limit and define several state court cases that had not previously been cited to or discussed. [#118 at 3]. On September 6, 2013, the court granted the stay for execution of the judgment. [#119].

II. Tenth Circuit Appeal

On September 17, 2013, State Farm filed a Notice of Appeal to the United States Court of Appeals for the Tenth Circuit (“Tenth Circuit” or “Circuit Court”). [#120]. Defendant thereafter raised the following two arguments: “(1) even under Colorado law the Minnesota Policies would not provide UIM benefits to Plaintiff because Colorado law does not prohibit tying UIM coverage to occupancy of the insured vehicle; and (2) the district court erred in applying tort conflict-of-laws principles in resolving which state's substantive law governed Plaintiff's claim.” Kipling v. State Farm Mutual Automobile Ins. Co., 774 F.3d 1306, 1307, 1312 (10th Cir. 2014).

On December 29, 2014, the Tenth Circuit issued a published opinion, in which it rejected State Farm’s first argument for failure to have timely raised it before the district court, but agreed with State Farm’s second argument. Id. at 1308. The Tenth Circuit then held that the district court erred by not applying contract conflict-of-laws principles, and reversed and remanded the decision for further proceedings, “including reconsideration of what state’s substantive law governs this dispute.” Id. at 1312. In addition, the court noted in the section of the opinion describing the background of the case that each of the Minnesota Policies describes the covered vehicle on the declaration page as “YOUR CAR, ” and the UIM coverage provision defines “insured” to mean “any person while occupying: (a) your car; (b) a newly acquired car; or (c) a temporary substitute car, ” and therefore “the Kiplings would not be eligible for UIM coverage under any of the Minnesota Policies because they were not occupying any of the insured vehicles when they were injured.” Kipling, 774 F.3d at 1308. The Circuit Court also noted that the Parties did not dispute that Plaintiff is not entitled to coverage if Minnesota law applies. Id. On January 20, 2015, the Tenth Circuit issued the mandate consistent with its order, which State Farm filed with the District Court the same day. [#133].

III. Remand to District Court

On February 10, 2015, this matter was reassigned to the undersigned Magistrate Judge. [#137]. On March 5, 2015, this court held a Status Conference at which the undersigned set deadlines by which the Parties would complete limited written discovery and file motions for summary judgment limited to the conflicts of law issue. [#138].

On May 20, 2015, State Farm submitted its Motion for Summary Judgment on Remand, along with fourteen pages of exhibits. [#146, #146-1, #146-2, #146-3]. On May 29, 2015, Plaintiff submitted her Motion for Summary Judgment along with 182 pages of exhibits. [#149, #149-1, #149-2]. The same day, Plaintiff filed the Motion to Strike. [#150]. Defendant filed a Response to the Motion to Strike on June 8, 2015 [#153], and Plaintiff filed a Reply on July 1, 2015. [#158]. On July 10, 2015, this court heard oral argument on, and took under advisement, the Motion to Strike, and set further oral argument to be heard on the Motions for Summary Judgment. [#159]. On July 30, 2015, Plaintiff filed a Response to Defendant’s Motion for Summary Judgment on Remand. [#160]. The following day, Defendant filed a Response to Plaintiff’s Motion for Summary Judgment. [#161]. Also on July 31, 2015, Plaintiff filed an Amended Response in Opposition to Defendant’s Motion for Summary Judgment on Remand. [#162]. The court considers that filing as the operative response to the Motion. The Parties completed oral argument at a hearing held on August 20, 2015, at which the undersigned took the Motions under advisement. [#163].


The purpose of a summary judgment motion is to assess whether trial is necessary. White v. York Int'l Corp., 45 F.3d 357, 360 (10th Cir. 1995). Summary judgment is appropriate only if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). “A ‘judge’s function’ at summary judgment is not ‘to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.’” Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 249 (1986)).

Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or conversely, is so one-sided that one party must prevail as a matter of law. Anderson, 477 U.S. at 248-49;Stone v. Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000);Carey v. U.S. Postal Service, 812 F.2d 621, 623 (10th Cir. 1987). A fact is “material” if it pertains to an element of a claim or defense; a factual dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a reasonable juror could return a verdict for either party. Anderson, 477 U.S. at 248. “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ...

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