2019 COA 88
Colo. Ct. App.2019Background
- Kent Ryser was injured as a permitted passenger in a single-car crash while all occupants (Ryser, driver Linda Forster, and owner Sherri Babion) were working for Walmart and acting in the course and scope of employment.
- Forster was driving Babion’s car with Babion’s permission; Babion’s auto policy (issued by Shelter) included UM/UIM coverage but excluded the “described auto” and limited UM/UIM to situations where the owner or operator is "legally obligated to pay damages."
- Ryser received workers’ compensation benefits and also obtained UM/UIM benefits under his own policy (treating Forster as an uninsured motorist due to co-employee immunity), then sought excess UM/UIM benefits from Babion’s Shelter policy.
- Shelter denied coverage; it moved for summary judgment arguing (1) co-employee immunity under the Colorado Workers’ Compensation Act (WCA) bars recovery against Forster and therefore Ryser is not “legally entitled to recover,” and (2) the policy’s described-auto exclusion applies.
- The trial court granted Shelter’s summary judgment on the basis of co-employee immunity; the court did not decide the described-auto exclusion. Ryser appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ryser is “legally entitled to recover” from the co-employee/driver so as to trigger UM/UIM coverage under Babion’s policy | Ryser: the statutory phrase requires only proof of the tortfeasor’s fault and damages (as in Borjas/Ashour); fault and damages are undisputed, so UM/UIM applies | Shelter: WCA exclusivity and co-employee immunity bar any legal right to recover against the co-employee, so the statutory precondition is unmet | Court: Held Ryser is not "legally entitled to recover" because co-employee immunity prevents judicial action/recovery against the driver, so UM/UIM under Babion’s policy does not apply |
| Whether co-employee immunity is effectively treated as making the tortfeasor an uninsured motorist for UM/UIM purposes | Ryser: immunity should not defeat UM/UIM where fault and damages are provable; he already obtained benefits under his own policy | Shelter: Immunity is an affirmative substantive defense that defeats the statutory requirement of legal entitlement to recover against the owner/operator | Court: Immunity is a substantive bar from suit; it defeats the statutory condition and precludes recovery under another co-employee’s UM/UIM policy |
| Whether policy language ("described auto" exclusion or wording "legally obligated to pay damages") alters the analysis | Ryser: disputed exclusion (trial court did not rule) and wording should not reduce statutorily mandated coverage | Shelter: alternative basis to deny coverage (preserved on appeal) | Court: Did not need to reach exclusion because summary judgment on immunity was dispositive |
| Whether precedent (Borjas, Ashour vs. Dickinson) controls this context | Ryser: relies on Borjas/Ashour (narrow meaning requiring only proof of fault/damages) | Shelter: relies on Dickinson and majority view that WCA exclusivity bars UM/UIM where the tortfeasor is immune | Court: Adopted the Dickinson/majority approach for this factual posture (employee injured by co-employee while acting in course and scope), declining to extend Borjas/Ashour to permit recovery from another co-employee’s policy |
Key Cases Cited
- Borjas v. State Farm Mut. Auto. Ins. Co., 33 P.3d 1265 (Colo. App. 2001) (interprets “legally entitled to recover” as requiring proof of fault and damages; relied upon by claimants seeking UM/UIM under their own policies)
- Continental Divide Ins. Co. v. Dickinson, 179 P.3d 202 (Colo. App. 2007) (held WCA exclusivity bars UM/UIM recovery when the tortfeasor is a co-employee and immunity would bar suit)
- McMichael v. Aetna Cas. & Sur. Co., 906 P.2d 92 (Colo. 1995) (addresses UM/UIM coverage when employer’s vehicle is involved and notes distinction where tortfeasor immunity is not at issue)
- Briggs v. Am. Family Mut. Ins. Co., 833 P.2d 859 (Colo. App. 1992) (explains insured must prove entitlement to recover from uninsured motorist, including through judicial or arbitration proceedings)
- State Farm Mut. Auto. Ins. Co. v. Brekke, 105 P.3d 177 (Colo. 2004) (confirms UM/UIM applies only if the insured is legally entitled to damages)
- Parsons v. Allstate Ins. Co., 165 P.3d 809 (Colo. App. 2006) (reiterates that UM/UIM coverage is triggered only when insured is legally entitled to recover from the operator of the uninsured automobile)
- Jaimes v. State Farm Mut. Auto. Ins. Co., 53 P.3d 743 (Colo. App. 2002) (refers to section 10-4-609 as unambiguous: coverage for those “legally entitled to recover”)