2018 COA 9
Colo. Ct. App.2018Background
- Plaintiff Rickey Airth was injured by an uninsured driver while driving an employer-owned semitruck; employer Solar had a Zurich policy with $50,000 UM/UIM limits; employer’s bodily injury liability limit was $1,000,000.
- Airth sought declaratory relief to reform Solar’s policy to provide $1,000,000 UM/UIM, alleging Zurich failed to comply with statutory offer/rejection requirements in § 10-4-609, C.R.S.
- Before renewal, Zurich sent Solar a Colorado-specific "Rejection of Uninsured Motorists Coverage or Selection of Limits" form explaining UM/UIM and stating an insured may select limits equal to bodily injury limits; Solar’s representative signed an attestation that he reviewed the materials, but did not check any box to reject or select higher limits.
- Zurich did not disclose a premium or pricing formula for purchasing enhanced UM/UIM limits in the written materials Airth challenges.
- The district court granted summary judgment to Zurich, holding Zurich’s written materials adequately offered enhanced UM/UIM coverage and that a written rejection is required only to decline the statutory minimum UM/UIM coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Zurich’s written materials constituted a sufficient “offer” under § 10-4-609(2) when they did not state premiums | Airth: Without a price or premium estimate, the documents could not be an "offer" enabling an informed decision | Zurich: Parfrey totality-of-circumstances test governs; price is one factor but not dispositive; the form clearly explained rights and options | Held: Offer was sufficient under Parfrey; lack of stated premium alone does not invalidate the offer |
| Whether a written rejection is required to decline enhanced UM/UIM coverage equal to liability limits | Airth: Written rejection should be required for declining enhanced coverage | Zurich: Statute requires written rejection only for declining the minimum coverage in § 10-4-609(1); subsection (2) contains no written-rejection requirement | Held: Written rejection is required only to decline the statutory minimum under subsection (1); no written rejection required for declining additional/substitute limits under subsection (2) |
Key Cases Cited
- Allstate Ins. Co. v. Parfrey, 830 P.2d 905 (Colo. 1992) (court adopts totality-of-circumstances test for adequacy of insurer’s UM/UIM "offer")
- Melendez v. Hallmark Ins. Co., 305 P.3d 392 (Ariz. Ct. App. 2013) (contract-law definition of "offer" and requirement of premium information under that approach)
- Reid v. Geico Gen. Ins. Co., 499 F.3d 1163 (10th Cir. 2007) (Parfrey focuses on objective reasonableness of offer, not insured’s subjective understanding)
- Pacheco v. Shelter Mut. Ins. Co., 583 F.3d 735 (10th Cir. 2009) (written rejection required only when insured declines UM/UIM coverage entirely)
- Jewett v. Am. Standard Ins. Co. of Wis., 178 P.3d 1235 (Colo. App. 2007) (applying Parfrey in offer adequacy analysis)
- Gov’t Emps. Ins. Co. v. Graham-Gonzalez, 107 P.3d 279 (Alaska 2005) (insurer need not include premium quotes in offer form; insureds can request pricing)