Opinion
No. 03CA0843.
October 7, 2004. As Corrected October 25, 2004. Rehearing Denied December 30, 2004. Certiorari Granted May 2, 2005.
Webb, J., would GRANT.
Appeal from the District Court, Jefferson County, Christopher Munch, J.
Roberts Levin Patterson, P.C., Bradley A. Levin, Jeremy A. Sitcoff, Denver, Colorado, for Plaintiffs-Appellants.
Harris, Karstaedt, Jamison Powers, P.C., A. Peter Gregory, Englewood, Colorado, for Defendants-Appellees.
In this action for declaratory relief and breach of contract, plaintiffs, Randall Roberts and Cindy Roberts, appeal a trial court dismissal of their complaint on summary judgment. We affirm.
I. Background
In August 2000, plaintiffs were involved in an accident when their motorcycle collided with a pickup truck. Both plaintiffs were seriously injured.
Plaintiffs held seven insurance policies with defendants, American Family Mutual Insurance Company and American Standard Insurance Company of Wisconsin. The American Standard policy covered the motorcycle they were riding; the remaining six policies, issued by American Family, covered their automobiles. Each of the policies provided for uninsured motorist-underinsured motorist (UM/UIM) coverage in the amount of $100,000 per person or $300,000 per accident, but contained the following "anti-stacking" provision: "Two or more cars insured. The total limit of our liability under all policies issued to you by us shall not exceed the highest limit of liability under any one policy."
According to the policies, both American Family and American Standard are members of "the American Family Insurance Group Madison, WI."
Defendants paid plaintiffs the limit of the motorcycle policy, but disputed plaintiffs' claim that they were entitled to recover additional benefits under each of their automobile policies as well.
In August 2002, plaintiffs filed a complaint. Shortly thereafter, the parties filed cross-motions for summary judgment. Plaintiffs argued that, while the anti-stacking provision prohibits the recovery of cumulative benefits under separate policies, that language should be ignored because (1) it is inconspicuous, (2) it is ambiguous, and (3) it conflicts with other policy provisions.
The trial court disagreed. It held that the bold title "Two or more cars insured" gives the insured clear notice as to the situations covered by the provision. The court also held that, while the language could have been clearer, it was not "ambiguous, conflicting or particularly confusing." It found no conflict with other contractual provisions.
II. Standard of Review
Summary judgment is appropriate only if the pleadings and supporting documents demonstrate that there is no genuine issue for trial as to any material fact and that the moving party is entitled to judgment as a matter of law. C.R.C.P. 56. The burden is on the moving party to establish that no genuine issue of fact exists, and any doubts in this regard must be resolved against the moving party. Our review is de novo. Aspen Wilderness Workshop, Inc. v. Colo. Water Conservation Bd., 901 P.2d 1251, 1256 (Colo. 1995).
III. Inconspicuousness
Plaintiffs argue that the anti-stacking provision at issue here is unenforceable because it was not conspicuous. We are not persuaded.
When an insurer seeks to restrict coverage, the limitation must be clearly expressed in the policy. Tepe v. Rocky Mountain Hosp. Med. Servs., 893 P.2d 1323, 1327 (Colo.App. 1994). If an insurer does not clearly express the limitation, or if the policy provisions are inconsistent or ambiguous, the contract must be construed in favor of coverage and against the limitation. Farmers Alliance Mut. Ins. Co. v. Ho, 68 P.3d 546, 550 (Colo.App. 2002). Moreover, the insured's objectively reasonable expectations will be honored even when a painstaking study of the policy provisions would have negated those expectations. State Farm Mut. Auto. Ins. Co. v. Nissen, 851 P.2d 165, 167-68 (Colo. 1993).
Plaintiffs argue that, by placing the anti-stacking provision in the "General Provisions" section, which is on page six of the seven-page contract, instead of the section dealing specifically with UM/UIM coverage, defendants did not clearly express this limitation, and the limitation is unenforceable as a result. Plaintiffs also argue that the anti-stacking provision defeated their reasonable expectations.
But here, the limitation was not inconspicuous. The same limitation is alluded to in other sections throughout the policy. The following limitation appears on page two in the part entitled "Liability Coverage," on page three in the part entitled "Medical Expense Coverage," and on page four in the part entitled "Uninsured Motorists Coverage": "We will pay no more than these maximums no matter how many vehicles are described in the declarations, or insured persons, claims, claimants, policies or vehicles are involved."
Plaintiffs could therefore not reasonably have expected that defendants would pay more than the policy maximum merely because two policies could potentially have applied to the same accident. When, as here, the per occurrence limit is clear and a clause precludes stacking, the insured is fully compensated under the policy when he or she receives the policy maximum. Shean v. Farmers Ins. Exch., 934 P.2d 835, 840 (Colo.App. 1996).
We also reject plaintiffs' argument that the anti-stacking provision is inconspicuous because it was placed in the "General Provisions" section of the contract rather than in the section explaining UM/UIM coverage. Even setting aside the fact that a similar provision is included in that section, because the anti-stacking provision applies not only to UM/UIM benefits, but to all benefits under the policy, we believe that it was reasonable for the insurer to place it in the General Provisions section. We also agree with the trial court that the heading "Two or more cars insured" adequately informed plaintiffs of the situations to which the provision applied.
Plaintiffs urge that we adopt a rule from other jurisdictions under which "inconspicuous" limitations of coverage are unenforceable. Assuming, without deciding, that this is a correct statement of Colorado law, plaintiffs still cannot prevail under such a theory because we do not rule that the limitation is inconspicuous.
Moreover, plaintiffs' cause of action is not aided by the doctrine of reasonable expectations. That doctrine is not a substitute for the rule that insurance policies are to be construed according to well-settled principles of contract interpretation, but merely supplements that rule. Shean v. Farmers Ins. Exch., supra, 934 P.2d at 841. A trial court may not look beyond the plain words of an insurance contract to interpret it based on the contracting parties' underlying intent unless the contract terms are ambiguous or are used in a special or technical sense not defined in the contract. TerraMatrix, Inc. v. U.S. Fire Ins. Co., 939 P.2d 483, 486 (Colo.App. 1997).
IV. Ambiguity
Plaintiffs next assert that the policy is ambiguous with regard to UM/UIM benefits and that its limitations are therefore unenforceable. Like the trial court, we see no such ambiguity.
A document is ambiguous when it is reasonably susceptible of more than one meaning. The interpretation of an insurance contract and the determination of whether that contract is ambiguous are questions of law, which we review de novo. TerraMatrix, Inc. v. U.S. Fire Ins. Co., supra. Ambiguities in insurance contracts are construed against the insurer. Dupre v. Allstate Ins. Co., 62 P.3d 1024, 1027-28 (Colo.App. 2002). But we will not force an ambiguity into the policy in order to resolve it against the insurer. Lister v. Am. United Life Ins. Co., 797 P.2d 832, 834 (Colo.App. 1990).
Here, plaintiffs assert that two of the policy provisions are independently ambiguous and unenforceable and that they conflict with each other. The first such provision is found in the UM/UIM section of the policy under the heading of "Other Insurance": "If there is other similar insurance on a loss covered by this Part, we will pay our share according to this policy's proportion of the total limits of all similar insurance."
In plaintiffs' view, it is unclear whether "similar insurance" refers only to UM/UIM coverage, and because defendants failed clearly to express this limitation, it is unenforceable. The sole fact that an insurance provision contains a possible ambiguity does not render that section unenforceable; rather, we resolve such ambiguities by adopting the meaning that is more favorable to the insured. Cotter Corp. v. Am. Empire Surplus Lines Ins. Co., 90 P.3d 814, 820 (Colo. 2004) (where terms in an insurance policy are ambiguous, we construe the terms against the drafter and in favor of providing coverage to the insured). Like the trial court, we believe this provision to be unambiguous as it relates to this case. Although, in the abstract, it may be unclear what other insurance could be regarded as "similar," the UM/UIM provisions in plaintiffs' other automobile policies are undoubtedly "similar" within the meaning of this provision. Therefore, interpreting this section against the insurer does not aid plaintiffs' case.
Plaintiffs also assert that the "Limits of Liability" provision, which is found, among other places, in the UM/UIM section of the policy, is ambiguous and unenforceable: "We will pay no more than these maximums no matter how many vehicles are described in the declarations, or insured persons, claims, claimants, policies or vehicles are involved." Plaintiffs allege that an ambiguity arises because, although "these maximums" are discussed, it is not clear to which "maximums" and "declarations" the provision refers. We see no ambiguity.
The policies clearly set forth exactly what "maximums" they refer to; immediately preceding the above quotation, those maximums are defined:
The limits of liability of this coverage as shown in the declarations apply, subject to the following:
1. The limit for "each person" is the maximum for all damages sustained by all persons as the result of bodily injury to one person in any one accident.
2. Subject to the limit for "each person" the limit for "each accident" is the maximum for bodily injury sustained by two or more persons in any one accident.
Similarly, a page headed "declarations" accompanies each policy and contains personal information identifying the insured, the number and type of vehicles insured, and the coverage and limits provided. References to "declarations" in the policies apply to these declarations. See Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294, 299 (Colo. 2003) (courts should read the provisions of the policy as a whole, rather than reading them in isolation).
Plaintiffs also argue that "`declarations' must be construed as referring to a single policy, meaning that coverage under all of the Policies, each of which has a separate declarations page, is triggered." Considering that the contract states, "We will pay no more than these maximums no matter how many vehicles are described in the declarations," we do not see how either an expansive or restrictive reading of "declarations" would aid plaintiffs' argument.
Relying on Compton v. State Farm Mutual Automobile Insurance Co., 870 P.2d 545 (Colo.App. 1993), plaintiffs also argue that the "Other Insurance" provision conflicts with the "Limits of Liability" provision. Following Shelter Mutual Insurance Co. v. Breit, 908 P.2d 1149 (Colo.App. 1995), we find Compton distinguishable.
In Compton, the court found an ambiguity where an insurance policy indicated that the insurer would only pay up to the limit of any one policy, while another clause suggested that it might pay more than that amount.
But a division of this court distinguished Compton in Breit, where the court found no ambiguity in a policy stating that (1) the total amount recoverable by the insured could not exceed the highest of any of the applicable coverages, and (2) the insurer's exposure was limited to its pro rata share of that amount. See Breit, supra, 908 P.2d at 1152. Unlike Compton, neither of these provisions suggested that the insured's recovery could exceed the maximum coverage under the policy with the highest maximum.
The provisions here are similar to those in Breit. The "limits of liability" provision limits the compensable loss to the stated maximum no matter how many policies apply. The "other insurance" provision then identifies the percentage of the total damages, not exceeding the policy limit, for which the insurer will be liable. Also, the anti-stacking provision does not conflict with either of these provisions when it also states that the insurer will pay no more than the policy maximum regardless of the number of policies.
V. Affiliate
Based on a question at oral argument concerning the definition in each policy of "we, us and our" as "the company providing this insurance," we requested supplemental briefs addressing how the policy provisions should be interpreted in light of the apparent affiliate relationship between American Family and American Standard.
Defendants' supplemental brief contends that we should not consider this issue sua sponte. It was not raised or tried in the trial court nor presented to us in the initial briefs. We agree with defendants under the doctrine established by the supreme court. See Comm. for Better Health Care for All Colo. Citizens v. Meyer, 830 P.2d 884, 888 (Colo. 1992) (citing Dempsey v. Romer, 825 P.2d 44, 57 n. 13 (Colo. 1992): "It is axiomatic that in any appellate proceeding this court may consider only issues that have actually been determined by another court or agency and have been properly presented for our consideration."); Christensen v. Hoover, 643 P.2d 525 (Colo. 1982); In re Marriage of Christen, 899 P.2d 339, 344 (Colo.App. 1995) ("Defenses and objections raised for the first time on appeal are not properly before this court and may not be considered by us, as they are deemed to have been waived.").
Moreover, we note that because this issue was not raised before the trial court, the record may not be complete concerning the relationship between American Standard and American Family.
Our de novo review may not have revealed to us other imperfections in the language of the policy. If there are any, they must also be left for decision in later cases.
The judgment is affirmed.
Justice KIRSHBAUM concurs.
Judge WEBB dissents.