to the Colorado Court of Appeals Court of Appeals Case No.
Attorneys for Petitioner: Patterson & Salg, P.C. Franklin
D. Patterson Brian D. Kennedy Greenwood Village, Colorado,
Hall & Evans, LLC Alan Epstein Denver, Colorado
Attorneys for Respondent: The Kofoed Law Firm, LLC David L.
Kofoed Centennial, Colorado
Attorneys for Amicus Curiae The Colorado Trial Lawyers
Association: Taussig & Taussig, P.C. John G. Taussig, III
Attorneys for Amici Curiae Property Casualty Insurers
Association of America and the National Association of Mutual
Insurance Companies: Ruebel & Quillen, LLC Casey A.
Quillen Jeffrey C. Ruebel Westminster, Colorado
¶1 Consistent with his prior practices, the respondent,
Brian K. Johnson, tasked a friend with purchasing automobile
insurance for the new car that he and the friend had
purchased together. The friend did so, and in the course of
that transaction, she chose to reject uninsured/underinsured
motorist (UM/UIM) coverage on the new car. After an accident
in that car with an underinsured motorist, Johnson contended
that his friend's rejection of UM/UIM coverage was not
binding on him. A division of the court of appeals ultimately
agreed with him, see Johnson v. State Farm Mut. Auto.
Ins. Co., 2014 COA 135, __ P.3d__, and this case now
presents two questions for our consideration. First, does the
UM/UIM statute, section 10-4-609, C.R.S. (2016), require each
named insured to reject such coverage, or is one named
insured's rejection binding on all? And second, did the
legislature, by enacting section 10-4-609, abrogate the
common law agency principles of implied authority and
¶2 We start with the second issue presented and conclude
that nothing in the language of section 10-4-609 precludes an
agent from exercising either apparent or implied authority to
reject UM/UIM coverage on behalf of a principal. Turning to
the facts of this case, we conclude that the record amply
demonstrates that Johnson delegated to his friend the task of
purchasing insurance for their jointly owned car and that, in
undertaking this task, the friend had implied authority to
reject, and did in fact reject, UM/UIM coverage on
Johnson's behalf. Based on this conclusion, we reverse
the division's judgment and need not reach the first
Facts and Procedural History
Johnson was living with his friend when the two decided to
buy a car together. Although Johnson was to be the primary
driver, the car was purchased, financed, and titled in both
his and the friend's names. The financing was primarily
based on the friend's good credit.
For about six months, an insurance policy owned by Johnson
and his estranged wife covered the new car. After that policy
lapsed, Johnson sought a new policy on his own but found the
options to be more expensive than his lapsed policy. His
friend then suggested that she insure the car through the
petitioner, State Farm Mutual Automobile Insurance Company,
from whom she had purchased insurance for her primary car and
with whom she had had a long and good business relationship.
Consistent with his prior practice of deferring insurance
matters to his estranged wife, Johnson agreed to defer to his
friend concerning the present insurance matter.
Johnson's friend then contacted State Farm and explained
that she wanted the same coverage on the new car as she had
on her primary car. A State Farm employee responded that the
friend's current policy included $100, 000 in UM/UIM
coverage, which extended to everyone who lived in her
household (including, at the time, Johnson), regardless of
which car he or she was driving. The employee thus explained
that the friend could add UM/UIM coverage for the new car,
which would result in double coverage in the amount of $200,
000, but that the friend would have to pay a separate premium
for the additional coverage. The friend ultimately signed a
form rejecting UM/UIM coverage on the new car and received
from State Farm a policy that did not include such coverage.
Approximately one month later, Johnson was driving the new
car when he was hit by an underinsured driver and sustained
serious injuries. Johnson was not at fault, and he made a
demand on State Farm for the $100, 000 in UM/UIM benefits.
For reasons that are unclear from the record before us, State
Farm denied this claim. Johnson subsequently sued State Farm,
among others, and sought the additional UM/UIM benefits.
State Farm moved for summary judgment, arguing that
Johnson's friend was authorized to reject-and did, in
fact, reject-UM/UIM coverage on the new car. In ruling on
this motion, the district court considered whether, pursuant
to section 10-4-609, Johnson's friend could reject such
coverage on behalf of both of them or whether, as Johnson