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Trujillo v. State Farm Mutual Automobile Insurance Co.

United States District Court, D. Colorado

August 23, 2019

DESIREE TRUJILLO Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

          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 ...


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