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Bailey v. State Farm Mutual Automobile Insurance Co.

Court of Appeals of Colorado, First Division

September 6, 2018

Bruce Bailey, Plaintiff-Appellant,
v.
State Farm Mutual Automobile Insurance Company, Defendant-Appellee.

          Boulder County District Court No. 15CV31239 Honorable Judith L. Labuda, Judge

          Fuicelli & Lee P.C., R. Keith Fuicelli, Amanda C. Francis, Denver, Colorado, for Plaintiff-Appellant

          Frank Patterson & Associates, P.C., Franklin D. Patterson, Karl A. Chambers, Denver, Colorado, for Defendant-Appellee

          OPINION

          MARTINEZ [*] JUSTICE

         ¶ 1 Plaintiff, Bruce Bailey, appeals the trial court's order granting a motion for entry of judgment in favor of defendant, State Farm Mutual Automobile Insurance Company (State Farm).

         ¶ 2 In this appeal, we are asked to determine whether an underinsured motorist (UIM) policy is triggered under Colorado's UIM statute, section 10-4-609, C.R.S. 2017, [1] if the negligent driver's insurance company agrees to pay the full extent of a jury's verdict. We answer that question "no" because (1) the legislature did not intend to allow a plaintiff to recover UIM benefits in excess of the damages awarded by a jury and (2) the language of the statute does not prevent an insurer from effectively increasing a driver's liability coverage by offering to pay any damages awarded at trial.

         ¶ 3 We therefore affirm the trial court's judgment.

          I. Background

         ¶ 4 This case arises from a car wreck involving the plaintiff and another driver. Plaintiff sued the other driver for negligence and State Farm for UIM benefits. The other driver is not a party to this appeal.

         ¶ 5 At the time of the accident, the other driver's insurance company covered him for $100, 000 in damages. Plaintiff's policy covered him up to $100, 000 for damages caused by underinsured motorists. Coincidentally, State Farm issued both policies involved in this case.[2]

         ¶ 6 Six days before trial was to commence, the other driver disclosed a letter from his insurance company. The letter stated that "[s]hould the case actually be tried, provided you comply with the conditions indicated above, you are fully protected from any compensatory damage award which may be awarded at trial, regardless of amount." None of the parties requested leave to amend or supplement their pleadings based on the new disclosure.

         ¶ 7 At trial, State Farm presented evidence that plaintiff had not cooperated with claims adjusters and had committed fraud by presenting false information to them concerning his income. Therefore, State Farm asserted plaintiff's actions had voided the insurance contract, and plaintiff was not entitled to UIM benefits.

         ¶ 8 The jury found in favor of plaintiff and awarded him damages in the amount of $300, 000. The jury also rejected State Farm's affirmative defenses of fraud and failure to cooperate.

         ¶ 9 Following trial, State Farm moved for entry of judgment, asserting that the insurance company's letter effectively provided unlimited liability insurance coverage for the other driver. Therefore, the other driver's insurance would cover the total amount of damages, and according to State Farm, because there was no difference between the coverage limit and the amount of damages, plaintiff was not entitled to UIM benefits. The other driver did not object to State Farm's motion.

          ¶ 10 The trial court granted the motion in a thorough, well-reasoned opinion. The other driver's insurance company paid the entire judgment.

         II. State Farm's Motion for Entry of Judgment

         ¶ 11 Plaintiff contends that the trial court erred in granting State Farm's motion for entry of judgment. We disagree.

         A. Standard of Review and General Legal Principles

         ¶ 12 This case requires us to interpret the UIM statute, section 10-4-609. Our review of a statute is de novo. Goodman v. ...


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