United States District Court, D. Colorado
ORDER GRANTING IN PART DEFENDANT'S MOTION FOR
SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR
SUMMARY JUDGMENT
William J. Martinez, United States District Judge.
This
action arises out of an automobile accident in which
Plaintiff Desiree Trujillo (“Trujillo”) was
injured by a third party. (ECF No. 4 ¶¶ 1-2, 10.)
Trujillo made underinsured motorist (“UIM”)
claims and medical payments coverage (“MPC”)
claims to Defendant State Farm Mutual Automobile Insurance
Company (“State Farm”). (ECF No. 33 at 5, ¶
4; ECF No. 37 at 2, ¶ 4.) Trujillo sues State Farm for
breach of contract, common law bad faith breach of an
insurance contract, and statutory bad faith breach of an
insurance contract, Colo. Rev. Stat. §§ 10-3-1115
& -1116. (ECF No. 4 ¶¶ 45-64.)
Now
before the Court are the parties' motions for summary
judgment. State Farm seeks judgment in its favor, first
arguing that Trujillo was not covered by any UIM provision,
and therefore State Farm has no obligation to pay her UIM
claim. (ECF No. 33 at 7-10.) State Farm also seeks summary
judgment on Trujillo's MPC claims, arguing that State
Farm is not in breach of any contract and did not
unreasonably delay payment. (Id. at 10-14.) Trujillo
seeks summary judgment in her favor on “State
Farm's Third Affirmative Defense of failure to cooperate,
as well as liability on Plaintiff's claim for breach of
contract, statutory unreasonable delay or denial, and common
law bad faith.” (ECF No. 32 at 1.)
For the
reasons discussed below, the Court grants in part and denies
in part State Farm's Motion for Summary Judgment (ECF No.
33), and denies Trujillo's Motion for Summary Judgment
(ECF No. 32).
I.
BACKGROUND
The
following facts are undisputed unless attributed to a party,
or otherwise noted.[1]
A.
The Accident
On
October 31, 2016, Trujillo was involved in an automobile
accident while driving her 2015 Ford Fusion. (ECF No. 33 at
3, ¶¶ 1-2; ECF No. 32 at 2, ¶¶
1-2.)[2] As a result of the collision, Trujillo
sustained injuries requiring medical treatment, and incurred
medical expenses and wage losses. (ECF No. 32 at 2,
¶¶ 4-5; ECF No. 35 at 3, ¶¶ 4-5.) William
Young, the at-fault driver, was insured by Allstate Insurance
for up to $25, 000 per person. (ECF No. 32 at 3, ¶ 6.)
State Farm gave its consent for Trujillo to settle her bodily
injury claim against Young, and Allstate paid the policy
limit of $25, 000 to Trujillo. (Id. ¶¶
6-7.)
At the
time of the accident, Trujillo lived with her friend and
roommate, Alyssa Rios, in an apartment in Thornton, Colorado.
(ECF No. 33 at 6, ¶ 18; ECF No. 37 at 4, ¶ 18.)
There is no indication in the record that the women were
related by blood or adoption, or in a marriage or civil
union. (ECF No. 33 at 6, ¶¶ 19-20; ECF No. 37 at 5,
¶¶ 19-20.)
B.
Insurance Policies
Together,
Trujillo and Rios were the named insureds on State Farm
automobile insurance policy No. 411-1204-F01-06A for the 2015
Ford Fusion (“Fusion Policy”). (ECF No. 33 at 4,
¶ 5; ECF No. 35-11 at 2.) The Fusion Policy's
declaration page shows that it did not include UIM or MPC
coverage. (ECF No. 33-5.) Trujillo signed a form rejecting
UIM coverage on the Fusion Policy. (ECF No. 33-6.)
Rios
was also the sole named insured on State Farm automobile
insurance policy No. 218-7119-B01-06C for a 2009 Toyota
Matrix (“Matrix Policy”). (ECF No. 41-1 at 2.) On
February 8, 2016, Rios rejected MPC on the Matrix Policy.
(ECF No. 33 at 4, ¶ 13; ECF No. 37 at 3, ¶ 13; ECF
No. 33-8.) The Matrix Policy had UIM coverage with bodily
injury limits of $50, 000 per person and $100, 000 per
accident. (ECF No. 41-1 at 2.)
The UIM
portion of the Matrix Policy provides that State Farm
“will pay compensatory damages for bodily
injury an insured is
legally entitled to recover from the owner or driver of an
uninsured motor vehicle”
provided that the bodily injury is caused by an uninsured or
underinsured motor vehicle. (ECF No. 41-1 at 6-7 (emphasis in
original indicating defined terms).) The UIM portion of the
Matrix Policy further defines “insured” as:
1. you;
2. resident relatives;
3. any other person, while occupying a vehicle that is owned
by you or owned by any resident relative, and who is provided
Liability Coverage through a policy issued by us . . .; and
4. any person entitled to recovery compensatory damages as a
result of bodily injury to an insured as defined in 1., 2.,
or 3. above.
(Id. at 6 (emphasis omitted).)[3]
The
Matrix Policy defines “you” as “the named
insured or named insureds shown on the Declarations Page. If
a named insured shown on the Declarations Page is a person,
then ‘you' . . . includes the spouse of the first
person shown as a named insured if the spouse resides
primarily with that named insured.” (Id. at 14
(emphasis omitted).) “Resident relative” is
defined as:
a person, other than you, who resides primarily with the
first person shown as a named insured on the Declarations
Page and who is:
1. related to that named insured or his or her spouse by
blood, marriage, or adoption, including an unmarried and
unemancipated child of either who is away at school and
otherwise maintains his or her primary residence with that
named insured; or
2. a ward or a foster child of that named insured, his or her
spouse, or a person described in 1. above.
(Id. at 13 (emphasis omitted).)
C.
Request for Benefits under Insurance Policies
Trujillo
notified State Farm of the accident in early June 2017. (ECF
No. 32 at 2, ¶ 3; ECF No. 35 at 3, ¶ 3;
compare ECF No. 35-3 at 1 (claim reported June 7,
2017) with Id. at 7 (new claim filed on June 8,
2017).) Thereafter, Trujillo made claims to State Farm for
UIM and MPC benefits. (ECF No. 33 at 3, ¶ 4.)
1.
UIM Benefits
Trujillo
states that “[o]n August 22, 2017, State Farm completed
its coverage investigation and found that Ms. Trujillo was
entitled to underinsured motorist benefits under [the Matrix
Policy.]” (ECF No. 37 at 7-8, ¶ 10.) State Farm
denies that it has “completed its ‘coverage
investigation' and found Ms. Trujillo was entitled to UIM
benefits under the [Matrix Policy].” (ECF No. 41 at 9,
¶ 10.) Rather, State Farm's August 22, 2017 notes on
Trujillo's claim state “rec'd [received] new
claim assignment” and “claim filed for [UIM]
coverage.” (ECF No. 41-6 at 2.) State Farm claims that,
at the time, it did not have all relevant information to
evaluate Trujillo's entitlement to UIM benefits under the
Matrix Policy. (ECF No. 41 at 9-10, ¶ 10.) Indeed, State
Farm claims that it was unaware that Trujillo and Rios were
not legally related until Trujillo's deposition on
October 26, 2018. (ECF No. 35 at 15; see ECF No.
33-4.)
On
September 6, 2017, State Farm offered Trujillo $19, 021.51 to
settle her UIM claim. (ECF No. 32 at 3, ¶ 8.)
Negotiations between Trujillo and State Farm continued for
over a year, with Trujillo supplementing her UIM demand with
additional medical records and expenses, and State Farm
adjusting its settlement offer. (See ECF No. 32 at
3-7, ¶¶ 10-34; ECF No. 35 at 4-7, ¶¶
10-34.) Ultimately, by September 18, 2018, State Farm had
made three payments to Trujillo totaling $31, 541.51,
comprising of $10, 021.51 on October 3, 2017, $5, 500 on
December 21, 2017, and $16, 020 on September 18, 2018. (ECF
No. 32 at 7, ¶ 34; ECF No. 35 at 7, ¶ 34; ECF No.
32-10.)
2.
MPC Benefits
As for
Trujillo's MPC claim, State Farm's underwriting team
provided the claim handlers available selection/rejection
forms relevant to the Fusion Policy and Matrix Policy as of
June 15, 2017. (ECF No. 37 at 6, ¶ 3.) At that time,
State Farm had not found an MPC rejection form for the Fusion
Policy. (ECF No. 41 at 8, ¶ 3.) On October 3, 2017,
State Farm sent Trujillo a letter enclosing the confirmation
of coverages for the Fusion and Matrix Policies, the MPC
rejection form for the ...