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Jarrell v. Viking Insurance Company of Wisconsin

United States District Court, D. Colorado

March 28, 2017

VIKING INSURANCE COMPANY OF WISCONSIN, a foreign entity doing business in the State of Colorado, a Division of Sentry Insurance a Mutual Company; and FEDERATED MUTUAL INSURANCE COMPANY, a Minnesota Insurance Company doing business in the State of Colorado, Defendants.


          R. Brooke Jackson United States District Judge

         This matter is before the Court on defendant Federated Mutual Insurance Company's (“Federated”) motion for summary judgment. ECF No. 45. For the reasons below, the Court GRANTS that motion.[1]

         I. FACTS

         The facts of this case are largely undisputed. On December 9, 2013 plaintiffs James and Diane Jarrell were involved in a car accident with Mr. Brian Ness. Amended Complaint, ECF No. 42, at ¶¶7, 15-16. At the time of the accident, plaintiffs were driving a vehicle owned by Grand Auto, Inc. (“Grand Auto”)-a car dealership that provided Mr. and Mrs. Jarrell with a “loaner” car while it serviced plaintiffs' vehicle in its garage. Id. at ¶7; see Dep. of Nicholas Kern, ECF No. 47-1, at 14:16-23. Defendant Federated issued Grand Auto the automobile insurance policy covering these loaner cars. See Decl. of Cynthia Carlheim, ECF No. 45-1, at ¶2.

         Prior to issuing Grand Auto this “garage operations” automobile insurance policy, Federated gave the company the option to purchase coverage for damages caused by uninsured/underinsured motorists (“UM/UIM” coverage). See id. On February 13, 2013 Grand Auto elected to obtain $500, 000.00 of coverage for “directors, officers, partners or owners of Grand Auto” and their family members. Id. at ¶3; see also Id. at 4 (UM/UIM coverage election form). For “any other person who qualifies as an insured” under the policy, Grand Auto explicitly rejected UM/UIM coverage. Id.

         After “maxing out” Mr. Ness' automobile insurance policy for damages they allegedly suffered from the accident, plaintiffs each sought UM/UIM benefits under Grand Auto's policy with Federated. See Mr. Jarrell's Notice of Claim, ECF No. 42-3, at 1; Mrs. Jarrell's Notice of Claim, ECF No. 42-4, at 1. Federated rejected their claims. See ECF No. 42 at ¶45.

         In this action, plaintiffs again seek those benefits. They admit that they were not then and are not now “directors, officers, partners or owners” of Grand Auto or family members of those persons. ECF No. 47 at 13. Nevertheless, they argue that Grand Auto's partial waiver of these benefits for all other insureds is void as against public policy, and that Federated's subsequent refusal to provide them with UM/UIM benefits is unlawful. Id. at 12-16.[2] Alternatively, they contend that Grand Auto's waiver of these benefits was ineffective, and that plaintiffs are subsequently entitled to UM/UIM benefits. Id. at 16-18.

         Procedural History

         Plaintiffs filed suit against Federated in Colorado state court on November 18, 2015. ECF No. 4. In their amended complaint, which plaintiffs filed after defendants removed the case to this Court, see ECF Nos. 1, 4, 42, plaintiffs assert five claims for relief against Federated.[3]Those claims include: two claims for declaratory relief that argue that Federated's rejection of UM/UIM benefits was improper and invalid (Counts III and IV), a claim to recover those UM/UIM benefits (Count V), and two claims for loss of consortium by each plaintiff (Counts VI and VII). ECF No. 42 at ¶¶42-80.

         In its answer to plaintiffs' amended complaint, Federated asserts two counterclaims: a claim for declaratory relief asserting that plaintiffs were not covered under the UM/UIM provision of Grand Auto's policy, as well as an alternative claim that, should this Court find that Grand Auto's partial waiver was void or ineffective, that plaintiffs are only entitled to the minimum amount of UM/UIM coverage Federated is required to offer under Colorado law ($25, 000.00 per person/$50, 000.00 per accident). ECF No. 5 at ¶¶80-86. After filing its answer, Federated filed a motion for summary judgment on February 17, 2017. ECF No. 45. That motion has been fully briefed and is ripe for review. See ECF Nos. 45, 47, 50.


         Under Rule 56, the Court may grant summary judgment if “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). The moving party has the burden to show that there is an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The nonmoving party must “designate specific facts showing that there is a genuine issue for trial.” Id. at 324. A fact is material “if under the substantive law it is essential to the proper disposition of the claim.” Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). A material fact is genuine if “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court will examine the factual record and make reasonable inferences in the light most favorable to the party opposing summary judgment. Concrete Works of Colo., Inc. v. City & Cnty. of Denver, 36 F.3d 1513, 1517 (10th Cir. 1994).

         III. ANALYSIS

         Federated argues that Grand Auto's waiver of UM/UIM benefits for individuals like Mr. and Mrs. Jarrell who were not “directors, officers, partners or owners” of Grand Auto or their family members, see ECF No. 15 at ¶6, was clear and unequivocal, ECF No. 45 at 7-9. They go on to contend that there is no “public policy” rationale preventing Grand Auto from doing exactly that-electing to obtain UM/UIM coverage for certain individuals while declining to pay to obtain coverage for others. Id. at 12-18. Therefore, they argue, because Grand Auto's waiver of UM/UIM coverage for individuals like ...

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