Drum v. USAA General Indemnity Company, 1:21-cv-02422

Background

Passenger Michelle Drum was injured in a January 13, 2018 rear-end collision while riding in then‑boyfriend Frank Frucci’s truck; she recovered $250,000 total from the tortfeasor and two insurers (Safeco, Geico, AFI) and sought additional UIM benefits from USAA and Infinity.
USAA issued a personal policy to Allen Drum listing 413 S. Grant Ave (the Grant Property); Infinity issued a policy to the Drum Family Living Trust listing the same address; both policies define a covered "family member" by residence in the named insured’s household.
Evidence showed Drum lived predominantly with Frucci at 1435 Wood Lane from about 2014 through early 2020; she testified she had been "staying for some time" with Frucci and visited Grant infrequently, though she paid rent/utilities and received mail at Grant.
Defendants argued Drum was not an insured because she did not reside at the Grant Property on the collision date; USAA and Infinity moved for summary judgment on that ground.
The court applied Colorado law and the Boatright factors (intent, formality of relationship, existence of another lodging, permanence) and concluded, on undisputed facts, no reasonable juror could find Drum was a resident of the Grant household.
Court granted summary judgment to USAA and Infinity on all claims (breach, statutory unreasonable delay/denial, common‑law bad faith) and denied Drum’s cross‑motion as moot.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was Drum an "insured" under the USAA/Infinity policies (i.e., did she "reside" in the Grant household at collision)?	Drum says she maintained Grant as her home, paid rent/utilities, was registered there, and intended it as her residence/retirement home; disputes that she "resided" with Frucci.	Defendants point to undisputed facts: Drum lived mostly at Frucci’s Wood Lane residence from ~2014–2020, stayed at Grant infrequently, and lacked indicia of primary residence there.	Court: Applying Boatright factors, Drum was not a resident of the Grant household as of the collision. Summary judgment for USAA and Infinity.
Does the policy language ("resides primarily") violate Colorado public policy by narrowing statutory "resident relative"?	Drum contends the policy narrows the statute and is void under public policy (citing Grippin).	Defendants say they do not seek a narrower reading; policy usage of residence is evaluated under Boatright factors; no public‑policy defect here given factual non‑residence.	Court: Grippin distinguishable; no public‑policy invalidation because the court resolved residence under Boatright factors and found non‑residence.
Does the reasonable‑expectations doctrine require coverage despite policy language?	Drum argues she reasonably expected coverage because she treated Grant as her home.	Defendants: doctrine applies only if claimant is an insured; here the threshold insured status is lacking.	Court: Doctrine inapplicable because Drum is not an insured; thus it does not rescue coverage.
Do Drum’s bad faith and statutory delay/denial claims survive if coverage is properly denied?	Drum maintains defendants handled claims improperly and investigated poorly.	Defendants: bad faith/statutory claims are derivative of coverage and fail if coverage denial was correct.	Court: Because coverage was properly denied, derivative bad faith and statutory claims fail; summary judgment for defendants.

Key Cases Cited

Grippin v. State Farm Mut. Auto. Ins. Co., 409 P.3d 529 (Colo. App. 2016) (discusses whether policy language limiting coverage to those who "reside primarily" narrows statutory class and emphasizes Boatright factors to determine residence)
Geico Cas. Co. v. Collins, 371 P.3d 729 (Colo. App. 2016) (applies Boatright factors and rejects domicile‑based arguments to find non‑residence for coverage purposes)
Iowa Nat’l Mut. Ins. Co. v. Boatright, 516 P.2d 439 (Colo. App. 1973) (establishes multi‑factor test for determining household residence)
Bailey v. Lincoln Gen. Ins. Co., 255 P.3d 1039 (Colo. 2011) (reasonable expectations doctrine requires clear notice of coverage‑limiting provisions)
Am. Fam. Mut. Ins. Co. v. Hansen, 375 P.3d 115 (Colo. 2016) (reasonable‑expectations doctrine applies only after insured status is established)
Aetna Cas. & Sur. Co. v. McMichael, 906 P.2d 92 (Colo. 1995) (UIM coverage must be coextensive with liability provision; policy provisions void if they dilute statutorily mandated coverage)
MarkWest Hydrocarbon, Inc. v. Liberty Mut. Ins. Co., 558 F.3d 1184 (10th Cir. 2009) (under Colorado law, bad faith claim fails if coverage denial was proper)