Jordan v. Safeco Insurance Co. of America
2013 COA 47
Colo. Ct. App.2013Background
- In 2009, Jordans were injured in an auto accident with a minor driver J.F.; J.F.'s policy capped damages at $100,000 per person and $300,000 per accident.
- Jordans settled with J.F. for $60,000 (Philip) and $38,500 (Roberta).
- Jordans sought underinsured motorist (UIM) benefits from Safeco, arguing UIM covers all damages unpaid under settlements up to policy limits.
- Safeco denied coverage, asserting UIM triggers only if damages exceed J.F.'s $100,000 liability limit.
- District court granted Safeco summary judgment, relying on amended § 10-4-609 and lack of damages above $100,000 due to Jordans' stipulation.
- On appeal, Jordans challenge only the UIM denial, conceding no damages exceed $100,000.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does amended § 10-4-609(1)(c)/(l)(e) require exhaustion of tortfeasor limits for UIM coverage to apply? | Jordans contend exhaustion of tortfeasor limits should trigger UIM. | Safeco and court view UIM as excess over tortfeasor's limit, not contingent on actual exhaustion via settlement. | UIM is excess over tortfeasor's limit; exhaustion not merely by settlement. |
| Does Safeco's policy language require payment of the difference between settlements and J.F.'s limit as UIM? | Policy should cover the gap between settlements and tortfeasor limit. | Policy requires exhaustion of tortfeasor's liability limit before UIM payment; no gap unless damages exceed that limit. | Policy unambiguously payment only for damages above tortfeasor limit; no gap recovery. |
| Do Freeman, Tye, and Bencomo control under amended § 10-4-609? | Old case law requires coverage beyond payments by tortfeasor. | Amendments changed framework; those cases do not control. | No; amended statute governs; those cases do not apply. |
Key Cases Cited
- Birchfield v. Nationwide Ins. Co., 875 S.W.2d 502 (Ark. 1994) (exhaustion of tortfeasor’s policy limit required before UIM.)
- Hill v. American Family Mut. Ins. Co., 249 P.3d 812 (Idaho 2011) (identical policy language; exhaustion principle for UIM.)
- Apodaca v. Allstate Ins. Co., 255 P.3d 1099 (Colo.2011) (discusses excess insurance and related UIM concepts.)
- Curran v. Progressive Northwestern Ins. Co., 29 P.3d 829 (Alaska 2001) (excess vs. reduction approaches in UIM context.)
- Schmidt v. Clothier, 338 N.W.2d 256 (Minn.1983) (public policy considerations in UIM gaps.)
- D’Adamo v. Erie Ins. Exch., 4 A.3d 1090 (Pa. Super. Ct. 2010) (gap treatment under UIM statutes; stacking and excess concepts.)