Mullen v. Metropolitan Casualty

• Court: Colorado Court of Appeals
• Decided: December 16, 2021
• Docket: 20CA1357
• Status: Unknown

Opinion

SUMMARY

December 16, 2021

2021COA149

No. 20CA1357, Mullen v. Metropolitan Casualty — Insurance —

Motor Vehicles — Automobile Insurance Policies —

Uninsured/Underinsured

In this declaratory judgment action, a division of the court of

appeals determines whether, under the standard set forth in

Allstate Insurance Co. v. Parfrey, 830 P.2d 905 (Colo. 1992), an

insurance company discharged its duty under section 10-4-609(2),

C.R.S. 2021, to notify and offer its insureds

uninsured/underinsured motorist (UM/UIM) coverage in a manner

reasonably calculated to permit them to make an informed decision

about whether and at what limits to purchase such coverage. The

division concludes that the form the insurance company provided to

its insured to select UM/UIM coverage sets forth an inaccurate

statement of the law and that the information in the selection form

The summaries of the Colorado Court of Appeals published opinions

constitute no part of the opinion of the division but have been prepared by

the division for the convenience of the reader. The summaries may not be

cited or relied upon as they are not the official language of the division.

Any discrepancy between the language in the summary and in the opinion

should be resolved in favor of the language in the opinion.

regarding available levels of coverage and related premiums is

confusing. Under these circumstances, the division concludes that

the insurance company did not discharge its statutory duty.

Accordingly, the division reverses the district court’s summary

judgment order in favor of the insurance company and remands the

case with directions to enter summary judgment in favor of the

insured.

COLORADO COURT OF APPEALS 2021COA149

Court of Appeals No. 20CA1357

Arapahoe County District Court No. 19CV31995

Honorable John L. Wheeler, Judge

Margaret Mullen,

Plaintiff-Appellant,

v.

Metropolitan Casualty Insurance Company,

Defendant-Appellee.

JUDGMENT REVERSED AND CASE

REMANDED WITH DIRECTIONS

Division III

Opinion by JUDGE BROWN

Furman and Lipinsky, JJ., concur

Announced December 16, 2021

Larson Larimer Schneider, P.C., Philip C. Zimmerman, Vance R. Larimer,

Greenwood Village, Colorado, for Plaintiff-Appellant

Walberg Law, PLCC, Wendelyn Walberg, Katherine Smith Dedrick, Morrison,

Colorado, for Defendant-Appellee

Jordan Herington & Rowley, Michael J. Rosenberg, Greenwood Village,

Colorado; Law Office of Richard M. Crane, Richard M. Crane, Denver, Colorado,

for Amicus Curiae Colorado Trial Lawyers Association

1

¶ 1

In this declaratory judgment action, plaintiff, Margaret Mullen

(Margaret1), appeals the district court’s entry of summary judgment

in favor of defendant, Metropolitan Casualty Insurance Company

(Metropolitan). To resolve this appeal, we must determine whether

Metropolitan discharged its duty under section 10-4-609(2), C.R.S.

2021, to notify and offer the Mullens uninsured/underinsured

motorist (UM/UIM) coverage. Under the standard set forth in

Allstate Insurance Co. v. Parfrey, 830 P.2d 905 (Colo. 1992), the

offer must have been made in a manner reasonably calculated to

permit the Mullens to make an informed decision about whether

and at what limits to purchase such coverage. Considering the

totality of the circumstances — including that the UM/UIM

selection form Metropolitan provided to the Mullens set forth an

inaccurate statement of the law and was confusing — we conclude

that Metropolitan did not discharge its duty. Thus, we reverse and

remand to the district court to enter judgment in favor of Margaret.

1 Because Margaret Mullen shares a last name with her late

husband, Edward Mullen, we adopt the practice used by her

appellate counsel and refer to Margaret and Edward by their first

names. We mean no disrespect by this informality.

2

I. Background

¶ 2

Margaret initiated the underlying litigation against

Metropolitan to obtain a declaratory judgment that an election her

late husband, Edward Mullen (Edward), made for UM/UIM coverage

was legally ineffective. The parties agreed to file cross-motions for

summary judgment. They also stipulated to a set of undisputed

facts and to the authenticity of certain documentary exhibits. From

the undisputed facts and authenticated documents, we set forth the

following relevant factual background.

¶ 3

Metropolitan issued a new Colorado automobile insurance

policy to “Edward J Mullen and Margaret Mullen” as the named

insureds, effective May 15, 2010. On or about May 6, 2010,

Metropolitan sent the Mullens a package of materials related to

their new policy. Among other things, the package included the

policy and a “Colorado Uninsured Motorists Coverage Selection

Form” (UM/UIM Selection Form).

¶ 4

The policy carried liability limits of $100,000 per person and

$300,000 per accident for bodily injury or death. As issued, the

policy also carried UM/UIM coverage limits of $100,000 per person

and $300,000 per accident.

3

¶ 5

On or about May 12, 2010, Edward completed and signed the

UM/UIM Selection Form, selecting UM/UIM coverage in the amount

of $25,000 per person and $50,000 per accident. Metropolitan

processed the policy change effective July 15, 2010. Because the

premium for UM/UIM coverage of $25,000/$50,000 was less than

the premium the Mullens had paid for the original

$100,000/$300,000 coverage, Metropolitan issued the Mullens a

refund of the premium they overpaid.

¶ 6

Edward died on November 20, 2010. Margaret notified

Metropolitan of his death and Metropolitan removed Edward as a

named insured from the policy.

¶ 7

Later in 2011, Metropolitan provided Margaret with proposed

2011 policy renewal documents, which included a declarations page

showing $25,000/$50,000 in UM/UIM coverage. The renewal

documents encouraged her to review her coverage selections and to

inform Metropolitan if the information was “different from what you

asked for or currently need” or if her “insurance needs have

changed.” Each year between 2011 and 2018, the policy was

renewed with liability limits of $100,000/$300,000 and UM/UIM

4

coverage limits of $25,000/$50,000. Margaret never requested an

increase in her UM/UIM coverage.

¶ 8

On October 17, 2018, Margaret was in a motor vehicle

collision with an underinsured motorist and suffered serious

injuries. On December 10, 2018, Metropolitan issued Margaret a

$25,000 check as payment of the maximum UM/UIM benefits

under the policy. Because Margaret’s damages exceeded the

$25,000 payment, she filed the underlying declaratory judgment

action seeking a determination that the UM/UIM Selection Form

Edward signed and returned to Metropolitan was ineffective to

reduce her UM/UIM coverage.

¶ 9

In her motion for summary judgment, Margaret argued that

section 10-4-609(2) required Metropolitan to offer the Mullens

UM/UIM coverage before it issued the policy in 2010. According to

Margaret, because Metropolitan made the UM/UIM coverage offer

contemporaneously with its issuance of the policy, it failed to

comply with the statute, rendering Edward’s later execution of the

UM/UIM Selection Form ineffective as to the 2010 policy and

entitling her to UM/UIM coverage limits of $100,000/$300,000.

Further, Margaret argued, because Edward died before the policy

5

was renewed in 2011, he was not a named insured with authority to

make a UM/UIM coverage selection relative to the 2011 renewal or

any subsequent renewal. Finally, Margaret argued that

Metropolitan failed to satisfy its duty under section 10-4-609, as

articulated in Parfrey, 830 P.2d at 913-14, to offer the Mullens

UM/UIM coverage in a manner reasonably calculated to permit

them to make an informed decision as to the purchase of such

coverage.

¶ 10

Metropolitan cross-moved for summary judgment, arguing

that it satisfied its statutory obligations with a sufficient notice and

offer to the Mullens to purchase UM/UIM coverage, that Edward’s

selection of the $25,000/$50,000 limits was effective as to the 2010

policy, and that it had no duty to reoffer UM/UIM coverage to

Margaret in connection with any subsequent renewal of the policy.

¶ 11

The district court sided with Metropolitan. Following the

rationale articulated by a division of this court in Airth v. Zurich

American Insurance Co., 2018 COA 9, the court concluded that

Metropolitan had a one-time duty to offer UM/UIM coverage, which

it satisfied by providing the UM/UIM Selection Form before the

insured needed the UM/UIM coverage. It concluded that, as a

6

named insured, Edward had authority to make the UM/UIM

election when he made it and that the election was binding on

Margaret after Edward’s death. And it concluded that, under the

totality of the circumstances, Metropolitan adequately notified the

Mullens of the opportunity to purchase UM/UIM coverage.

Accordingly, the district court denied Margaret’s motion for

summary judgment and granted Metropolitan’s motion for

summary judgment.

II. Analysis

¶ 12

Margaret contends that the district court erred by concluding

that Metropolitan satisfied its statutory duties to (1) offer the

Mullens UM/UIM coverage “before the policy is issued or renewed”

and (2) notify the Mullens of the opportunity to purchase UM/UIM

coverage in a manner reasonably calculated to permit them to make

an informed decision.

¶ 13

Because we agree with Margaret’s second contention, we need

not resolve her first. We reverse the entry of summary judgment in

favor of Metropolitan and remand to the district court to enter

summary judgment in favor of Margaret.

7

A. Standard of Review

¶ 14

We review the entry of summary judgment de novo. Shelter

Mut. Ins. Co. v. Mid-Century Ins. Co., 246 P.3d 651, 657 (Colo.

2011). Summary judgment is appropriate where the pleadings and

supporting documents clearly demonstrate that no issues of

material fact exist and the moving party is entitled to judgment as a

matter of law. C.R.C.P. 56(c); Cotter Corp. v. Am. Empire Surplus

Lines Ins. Co., 90 P.3d 814, 819 (Colo. 2004).

¶ 15

To the extent our analysis requires us to interpret the

applicable statutes, we do so de novo. Airth, ¶ 25. When

interpreting a statute, we must ascertain and give effect to the

intent of the General Assembly. Parfrey, 830 P.2d at 911; Airth,

¶ 26. We do so by first looking to the words of the statute and

giving effect to their common meanings. Airth, ¶ 26. If those words

are clear and unambiguous, we apply the statute as written. Id.

¶ 16

We also interpret insurance policies de novo, employing “well-

settled principles of contractual interpretation.” Allstate Ins. Co. v.

Huizar, 52 P.3d 816, 819 (Colo. 2002); accord Shelter Mut. Ins. Co.,

246 P.3d at 666. We construe the plain language of the policy to

8

fulfill the intent of the parties, and we resolve ambiguities in favor of

the insured. Shelter Mut. Ins. Co., 246 P.3d at 666.

B. Applicable Law

¶ 17

Section 10-4-609(1) states that no automobile liability policy

shall be issued in Colorado unless it provides coverage for bodily

injury or death “for the protection of persons . . . legally entitled to

recover damages from owners or operators of uninsured motor

vehicles” at the limits set forth in section 42-7-103(2), C.R.S. 2021.

Section 42-7-103(2) requires coverage for bodily injury or death of

not less than $25,000 per person and $50,000 per accident.

Insurers must provide UM/UIM coverage limits of at least

$25,000/$50,000 unless the insured rejects such coverage in

writing. § 10-4-609(1)(a).

¶ 18

Section 10-4-609 continues,

(2) Before the [automobile liability] policy is

issued or renewed, the insurer shall offer the

named insured the right to obtain uninsured

motorist coverage in an amount equal to the

insured’s bodily injury liability limits, but in no

event shall the insurer be required to offer

limits higher than the insured’s bodily injury

liability limits.

(3) Notwithstanding the provisions of

subsection (2) of this section, after selection of

9

limits by the insured or the exercise of the

option not to purchase the coverages described

in this section, no insurer nor any affiliated

insurer shall be required to notify any

policyholder in any renewal or replacement

policy, as to the availability of such coverage or

optional limits. However, the insured may,

subject to the limitations expressed in this

section, make a written request for additional

coverage or coverage more extensive than that

provided on a prior policy.

(4) Uninsured motorist coverage shall include

coverage for damage for bodily injury or death

that an insured is legally entitled to collect

from the owner or driver of an underinsured

motor vehicle. An underinsured motor vehicle

is a land motor vehicle, the ownership,

maintenance, or use of which is insured or

bonded for bodily injury or death at the time of

the accident.

¶ 19

Under section 10-4-623(3)(c), C.R.S. 2021, an insurer “shall be

deemed to have complied with section 10-4-609(1) and the

insured’s uninsured motorist coverage shall be deemed valid if the

insurer has offered coverage at available levels and the insured has

selected coverage of a certain value.” The insurer does not have an

obligation to offer changes in uninsured motorist coverage when the

insured renews a policy unless “there is an increase in bodily injury

liability limits and the limits of the uninsured motorist coverage

would be less than such limits,” under which circumstances the

10

insurer “shall offer new uninsured motorist coverage to the insured

pursuant to section 10-4-609(2).” § 10-4-623(3)(c)(II).

¶ 20

The legislative purpose of section 10-4-609 “is to provide a

member of the driving public with an opportunity to make an

informed decision on an appropriate level of UM/UIM coverage.”

Parfrey, 830 P.2d at 912. In keeping with that purpose — and with

the presumption that the General Assembly intended the statute to

be effective, have a just and reasonable result, and be feasible of

execution, see id. — the Colorado Supreme Court has interpreted

section 10-4-609(2) as creating a “one-time duty upon an insurer to

notify an insured of the nature and purpose of UM/UIM coverage

and to offer the insured the opportunity to purchase such

coverage.” Parfrey, 830 P.2d at 912. The supreme court’s

conclusion that the insurer’s obligation to offer UM/UIM coverage

consistent with the statute is a “one-time duty” is supported by

section 10-4-609(3), which “relieves the insurer of the duty of

notification, prior to the issuance of any renewal or replacement

policy, once the insured has either selected UM/UIM limits or has

exercised the option not to purchase such coverage.” Parfrey, 830

P.2d at 912. “If the insurer fails to discharge its duty prior to the

11

issuance of the policy, the duty continues and can be discharged

only by an adequate notification and offer on some future occasion.”

Id.2

¶ 21

When an insurer fails to offer an insured optional coverage it

is statutorily required to offer, “additional coverage in conformity

with the required offer is incorporated into the agreement by

operation of law.” Jewett v. Am. Standard Ins. Co. of Wis., 178 P.3d

1235, 1238 (Colo. App. 2007) (quoting Thompson v. Budget Rent-A-

Car Sys., Inc., 940 P.2d 987, 990 (Colo. App. 1996)) (analyzing the

question in the context of statutorily required additional personal

injury protection coverage); accord Brennan v. Farmers All. Mut. Ins.

Co., 961 P.2d 550, 554 (Colo. App. 1998). Because an insured is

entitled to the coverage absent a statutorily required offer, the

operative question is not whether coverage was initially offered

before the initial purchase of a policy, but rather whether the

insurer provided the insured with the opportunity to purchase

2 The version of the statute the Parfrey court applied provided, in

relevant part, that “[p]rior to the time the policy is issued or renewed,

the insurer shall offer the named insured the right to obtain higher

limits of uninsured motorist coverage . . . .” § 10-4-609(2), C.R.S.

1987 (emphasis added).

12

coverage before the insured needed it. Airth, ¶ 22; see also Jewett,

178 P.3d at 1238.

¶ 22

But the supreme court has made clear that section 10-4-

609(2) requires that an insurer do more than simply make

statutorily required UM/UIM coverage available: “[A]n insurer’s duty

of notification and offer must be performed in a manner reasonably

calculated to permit the potential purchaser to make an informed

decision on whether to purchase UM/UIM coverage higher than the

minimum statutory liability limits of $25,000 per person and

$50,000 per accident.” Parfrey, 830 P.2d at 913.

In determining whether an insurer has fulfilled

its statutory duty, a court may appropriately

consider such factors as the clarity with which

the purpose of UM/UIM coverage was

explained to the insured, whether the

explanation was made orally or in writing, the

specificity of the options made known to the

insured, the price at which the different levels

of UM/UIM coverage could be purchased, and

any other circumstances bearing on the

adequacy and clarity of the notification and

offer.

Id.

¶ 23

A court should look to the objective reasonableness of the

insurer’s offer rather than the potential purchaser’s subjective

13

understanding of the offer. See Airth, ¶ 21; Reid v. Geico Gen. Ins.

Co., 499 F.3d 1163, 1169 (10th Cir. 2007) (“Parfrey . . . suggests

that we look to the objective reasonableness of [the insurer’s] offer,

not the potential purchaser’s subjective understanding.”). And no

one Parfrey factor is dispositive. Airth, ¶ 18. Ultimately, whether

the insurer discharged its statutory duty “to notify the insured of

the availability of higher UM/UIM coverage and to offer such

coverage to the insured must be resolved under the totality of the

circumstances.” Parfrey, 830 P.2d at 914; see also id. at 914 n.5

(“[W]e believe that the dispositive consideration is whether, under

the totality of the circumstances, the insurer’s notification and offer

to the insured adequately informed the insured that UM/UIM

coverage was available” in accordance with the statute.).

¶ 24

Against this backdrop, we evaluate the reasonableness of the

offer Metropolitan made to the Mullens to purchase UM/UIM

coverage.

C. Metropolitan’s Offer Did Not Fulfill Its Statutory Duty

¶ 25

Margaret contends that the district court erred by concluding

that Metropolitan satisfied its statutory duty to offer the Mullens

UM/UIM coverage in a manner reasonably calculated to enable

14

them to make an informed decision regarding the purchase of

UM/UIM coverage. We agree.

¶ 26

On or about May 6, 2010, Metropolitan provided the Mullens

with approximately seventy pages of written materials related to

their new insurance policy. As relevant here, the package included

these documents:

 the policy;

 the UM/UIM Selection Form;

 a “Colorado Private Passenger Automobile Insurance

Summary Disclosure Form” (Summary Disclosure); and

 a policy declarations page.

Because determining whether an insurer has discharged its

statutory duty to reasonably notify and offer UM/UIM coverage

must be resolved under the totality of the circumstances, see

Parfrey, 830 P.2d at 914, we consider these materials together.

¶ 27

For two reasons we conclude that Metropolitan did not

discharge its statutory duty. First, the UM/UIM Selection Form

sets forth an inaccurate statement of the law that incorrectly

suggests that UM/UIM coverage would not be available if an

underinsured motorist’s liability limits were the same as or greater

15

than the insured’s UM/UIM limits. Second, the information in the

UM/UIM Selection Form regarding available levels of coverage and

related premiums is confusing.

1. Inaccurate Statement of the Law

¶ 28

The UM/UIM Selection Form, page 6 of the packet of

materials, explains first that UM/UIM coverage is an important part

of the policy and that “this form is used to select the limits of

[UM/UIM coverage] that are best suited to your needs.” It further

explains that UM/UIM coverage provides protection for damages

caused by an “Underinsured Motorist,” which the form defines as

“an at-fault driver whose liability coverage limits are less than your

[UM/UIM] Coverage limits.” (Emphasis added.) This was an

incorrect statement of law at the time the policy was issued.

¶ 29

Before the 2008 amendments to section 10-4-609, an

underinsured motor vehicle was defined, as relevant here, as

a land motor vehicle, the ownership,

maintenance, or use of which is insured or

bonded for bodily injury or death at the time of

the accident, but the limits of liability for

bodily injury or death under such insurance or

bonds are . . . [l]ess than the limits for

uninsured motorist coverage under the

insured’s policy.

16

§ 10-4-609(4)(a), C.R.S. 2007 (version effective until Jan. 1, 2008);

see also Jordan v. Safeco Ins. Co. of Am., Inc., 2013 COA 47, ¶ 25.

Senate Bill 07-256 redefined underinsured motor vehicle as “a land

motor vehicle, the ownership, maintenance, or use of which is

insured or bonded for bodily injury or death at the time of the

accident,” eliminating the references to the underinsured motorist’s

limits of liability and the insured’s UM/UIM limits. Ch. 413, sec. 2,

§ 10-4-609(4), 2007 Colo. Sess. Laws 1922.

¶ 30

This change is significant because, before the 2008

amendments, the statute fixed the “maximum liability of the insurer

under the uninsured motorist coverage” at the lesser of “[t]he

difference between the limit of uninsured motorist coverage and the

amount paid to the insured” by the underinsured motorist or “[t]he

amount of damages sustained, but not recovered.” § 10-4-609(5),

C.R.S. 2007; see also Jordan, ¶ 24. The 2008 amendment

eliminated those liability limitations and instead clarified that

UM/UIM coverage “shall be in addition to any legal liability coverage

and shall cover the difference, if any, between the amount of the

limits of any legal liability coverage and the amount of the damages

sustained . . . up to the maximum amount of the coverage obtained

17

pursuant to this section.” § 10-4-609(1)(c), C.R.S. 2021; see Ch.

413, sec. 1, § 10-4-609(1)(c), 2007 Colo. Sess. Laws 1921.

¶ 31

The 2008 amendments clarify that UM/UIM coverage covers

the difference between a tortfeasor’s insurance liability limit and the

amount of damages sustained by the insured, up to the amount of

the UM/UIM coverage purchased. Under the pre-2008 version of

the statute, if the insured recovered $50,000 as the liability limit

from the tortfeasor but had only $50,000 in UM/UIM coverage, the

insured’s maximum recovery would be $50,000, even if they

sustained $100,000 in damages. See Jordan, ¶ 37 (first citing

Vaccaro v. Am. Fam. Ins. Grp., 2012 COA 9M, ¶ 59; then citing

Carlisle v. Farmers Ins. Exch., 946 P.2d 555, 558 (Colo. App. 1997));

see also Parfrey, 830 P.2d at 913 (explaining, relative to the pre-

2008 statute that, “because Colorado’s statutory scheme requires

minimum liability coverage of $25,000 per person and $50,000 per

accident, a person purchasing minimum UM/UIM coverage would

have no real protection against a motorist whose liability coverage

was at the same minimum level”). Under the current version of the

statute, however, assuming the same policy limits, the insured may

recover up to $100,000. Jordan, ¶ 37. Thus, as a division of this

18

court explained in Jordan, the amendments effectively changed

Colorado’s UM/UIM statutory scheme “from a ‘reduction’ approach

— where [UM/UIM] coverage was reduced by any payment received

or judgment against the tortfeasor — to an ‘excess’ approach —

where [UM/UIM] coverage is payable for damages exceeding the

tortfeasor’s liability policy limit, subject only to the [UM/UIM]

coverage limit in the insured’s policy.” Id. at ¶ 30.

¶ 32

Here, the district court recognized that the language of the

UM/UIM Selection Form was problematic, but it concluded that

while the language was not “a complete statutory definition of the

scope of [UM/UIM] coverage under § 10-4-609(1)(c) following the

2008 amendment, the language . . . is not totally incorrect; it is

simply not complete.” On this point, we disagree.

¶ 33

The language of the UM/UIM Selection Form invokes the old

statutory scheme by setting forth the outdated definition of

underinsured motorist. The form thus incorrectly suggests to the

insured that the UM/UIM coverage under the policy does not cover

damages caused by a tortfeasor whose liability limits match or

exceed the UM/UIM coverage selected by the insured, regardless of

the amount of damages the insured sustained. That is not an

19

accurate statement of the law as it exists now or as it existed in

2010, when Metropolitan issued the policy to the Mullens. Even if

the tortfeasor’s liability limits exceed the UM/UIM coverage under

the policy, the insured would be entitled to UM/UIM coverage for

any damages that exceed the tortfeasor’s liability limits, up to the

limits of UM/UIM coverage under the policy.

¶ 34

Metropolitan contends that, to the extent the information in

the UM/UIM Selection Form was “incomplete,” it should have

encouraged the Mullens to purchase more UM/UIM coverage, not

less, as Edward elected. This is so, it argues, because under the

pre-2008 law, the more UM/UIM coverage the insured had, the less

likely it would be that the tortfeasor would have the same or more

liability coverage. And if the tortfeasor had the same or more

liability coverage, the insured would not recover any UM/UIM

benefits. See § 10-4-609(5), C.R.S. 2007; Parfrey, 830 P.2d at 913;

Jordan, ¶ 37.

¶ 35

Regardless of whether the inaccurate statement of the law

should have encouraged the potential purchaser to buy more or less

coverage, we fail to see how such an inaccuracy would enable that

potential purchaser to make an informed decision about whether

20

and at what limit to purchase UM/UIM coverage. Cf. Briggs v. Am.

Nat’l Prop. & Cas. Co., 209 P.3d 1181, 1187-88 (Colo. App. 2009)

(holding that “if an insurance company has offered its customers

the option to purchase UM/UIM coverage on all their vehicles with

sufficient accurate information, it has satisfied its obligation under”

section 10-4-609(2), but concluding that an insurer’s continued use

of a UM/UIM-limiting exclusion invalidated by Colorado case law

did not satisfy that statutory obligation because it “could have been

materially misleading” such that the insured “might not have had

the opportunity to make an informed decision about whether and

how to purchase [UM/UIM] coverage”).

¶ 36

The district court concluded, however, that “[t]he complete and

accurate definition of ‘Underinsured Motorist,’ and of [UM/UIM]

coverage in general” is set forth in the Summary Disclosure

provided contemporaneously with the UM/UIM Selection Form. It

reasoned that the Mullens received complete and accurate

information about the scope of UM/UIM coverage “when the

information in all documents received is considered,” and that the

incomplete definition in the UM/UIM Selection Form “does not

21

compromise the complete and accurate information” in the

Summary Disclosure.3

¶ 37

Relative to UM/UIM coverage, the Summary Disclosure, found

at page 19 of the packet of materials Metropolitan provided to the

Mullens, explains as follows:

You must be offered [UM/UIM] coverage, and it

will be included in your policy unless you

reject it in writing.

. . . .

[UIM] coverage pays for bodily injury that you

are entitled to collect from an underinsured

owner or driver who is at fault for the accident

and when the damages exceed the driver’s

liability coverage.

Generally, an underinsured automobile is an

automobile whose liability coverage is not

enough to pay the full amount you are legally

entitled to recover as damages.

¶ 38

Although the Summary Disclosure gives a definition of

“underinsured automobile” that differs from the definition of

3 Metropolitan contends that we must defer to the district court’s

“factual determinations” about the information Metropolitan

provided the Mullens unless they are “clearly erroneous.” But when

the controlling facts are undisputed, as they are here, the legal

effect of those facts constitutes a question of law that we review de

novo. See Hicks v. Londre, 125 P.3d 452, 455 (Colo. 2005); Camp

Bird Colo., Inc. v. Bd. of Cnty. Comm’rs, 215 P.3d 1277, 1281 (Colo.

App. 2009).

22

“underinsured motor vehicle” under section 10-4-609(4), we

acknowledge that it generally sets forth an accurate description of

how UM/UIM coverage operates under the current version of

section 10-4-609(1)(c) — that is, UM/UIM coverage is available

when the insured’s damages exceed the tortfeasor’s liability

coverage. But the first page of the Summary Disclosure explains

that it is “only a general description and not a statement of contract

or a policy of any kind” and clarifies that “[a]ll coverage is subject to

the terms, conditions, and exclusions of your policy . . . .” Then, in

bold capital letters, it warns, “THIS SUMMARY DISCLOSURE FORM

SHALL NOT BE CONSTRUED TO REPLACE ANY PROVISION OF

THE POLICY ITSELF.”

¶ 39

The policy, in turn, at page 47 of the packet of materials,

defines “underinsured motor vehicle” as “a motor vehicle which has

a bodily injury liability bond or insurance policy in effect at the time

of the accident, in at least the minimum amount required . . . but

less than the limits of this coverage provided by this policy as stated

in the Declarations.” (Emphasis added.) The policy’s definition of

underinsured motor vehicle shares the same flaws as the UM/UIM

Selection Form’s definition of underinsured motorist. Both rely on

23

a statutory definition that the General Assembly eliminated two

years before Metropolitan issued the original policy to the Mullens.

And both result in the misimpression that the availability of

UM/UIM benefits depends on a comparison of the tortfeasor’s

liability limits and the insured’s UM/UIM limits.

¶ 40

It would have been reasonable for the Mullens to place the

most emphasis on the UM/UIM Selection Form, as it was the

standalone form purporting to require the selection or waiver of

such coverage. Cf. Airth, ¶ 19 (concluding that “reasonable people

would not disagree” that the insurer had complied with its statutory

notification and offer obligations under section 10-4-609(2) when

the standalone coverage selection document “explained, in writing,

the purpose of UM/UIM coverage in clear and understandable

terms” in the first sentence of the document). But even if the

Mullens had looked to the policy, as the Summary Disclosure

directed them to do, they would not have been given a clear,

adequate, or accurate description of the purpose or operation of

UM/UIM coverage under then-existing law.

24

2. Confusing Coverage Options

¶ 41

The UM/UIM Selection Form advises that Metropolitan must

give the insured UM/UIM coverage “for at least the minimum limits

required by law, unless you reject the coverage in writing.” It does

not explain what the “minimum limits required by law” are. The

UM/UIM Selection Form continues, “For a relatively modest

increase in premium, you may purchase [UM/UIM] Coverage in

greater amounts.” But, it clarifies in bold font, “your [UM/UIM]

limits cannot be greater than your Bodily Injury Liability Coverage

Limits.”

¶ 42

The UM/UIM Selection Form then sets forth four levels of

coverage, and an option to waive coverage entirely. It does not

provide the specific premiums associated with each level of

coverage.

25

¶ 43

Margaret contends that the absence of premium information

for each level of UM/UIM coverage, combined with the fact that the

UM/UIM Selection Form appears to offer a level of coverage

unavailable to the Mullens (the $250,000/$500,000 level exceeds

the policy’s bodily injury liability limits of $100,000/$300,000),

demonstrates that the offer was confusing and unreasonable. She

also contends that the language in the UM/UIM Selection Form

indicating that the insured’s UM/UIM benefits cannot be greater

than the insured’s bodily injury liability limits is not correct

because section 10-4-609(2) states only that an insurer is not

required to offer UM/UIM coverage with limits higher than the

insured’s liability coverage, not that an insurer cannot offer higher

limits.

¶ 44

We reject Margaret’s contention that the language “your

[UM/UIM] limits cannot be greater than your Bodily Injury Liability

Coverage Limits” is misleading. True, section 10-4-609(2) does not

prohibit an insurer from offering higher UM/UIM limits, but we

agree with the district court that this language in the UM/UIM

Selection Form is fairly read as reflecting Metropolitan’s position as

26

an insurance company not to offer UM/UIM limits greater than

those required by law.

¶ 45

We also conclude that Metropolitan’s failure to provide specific

premium amounts does not, by itself, render Metropolitan’s offer

insufficient under the statute. See Airth, ¶ 18 (reasoning that

failure to provide insured with stated premium “does not in and of

itself” render the insured’s UM/UIM offer insufficient under the

statute); cf. Johnson v. State Farm Mut. Auto. Ins. Co., 158 F. App’x

119, 122 (10th Cir. 2005) (“Although the lack of a discussion of the

price of enhanced [personal injury protection] insurance is an

important factor under the Parfrey analysis, State Farm’s failure to

inform [the insured] about the specific cost does not in itself render

the offer commercially unreasonable.”). It would be easy for an

insured interested in purchasing additional coverage to ask for the

premium price. See Johnson, 158 F. App’x at 122. Indeed, the

UM/UIM Selection Form encourages the insured to contact a

customer service representative with any questions. And the policy

declarations, found at page 33 of the packet of materials

Metropolitan provided to the Mullens, reflected an annual premium

of $120 for the $100,000/$300,000 limits included in the original

27

policy, which at least informed the Mullens of the cost of that level

of coverage.4

¶ 46

But we agree with Margaret that the absence of premium

information is not the only problem with the part of the UM/UIM

Selection Form setting forth coverage levels. When the Mullens

received the UM/UIM Selection Form, their policy already included

UM/UIM coverage limits of $100,000/$300,000. Thus, there would

have been no increase in premium — let alone any “relatively

modest increase in premium” — if the Mullens selected the

$25,000/$50,000, $50,000/$100,000, or $100,000/$300,000

coverage levels. In fact, selection of the $25,000/$50,000 and

$50,000/$100,000 levels would have resulted in (and did result in)

a decrease in premium from what the Mullens were already paying,

and selection of the $100,000/$300,000 level would have resulted

4 In rejecting Margaret’s argument that Metropolitan’s offer provided

insufficient premium information, the district court noted that, at

least as of August 19, 2010, the Mullens were aware that ten

months of coverage at the $25,000/$50,000 level cost $58 less than

coverage at the $100,000/$300,000 level for the same period,

because they received a refund in that amount when Edward

elected the lower coverage. But this information came long after

Metropolitan’s offer and Edward’s selection of UM/UIM coverage, so

we do not see how it is a relevant consideration to the

reasonableness of the offer when it was made.

28

in no change in premium. Because the UM/UIM Selection Form

was delivered to the Mullens simultaneously with a policy that

already included the maximum amount of UM/UIM coverage they

could purchase, the information Metropolitan provided about

increased premiums was inaccurate.5 Given that the policy

included bodily injury liability limits of $100,000/$300,000, the

Mullens could not have selected the $250,000/$500,000 coverage

level, even though it appeared to be an available option on the

UM/UIM Selection Form.

¶ 47

So, the UM/UIM Selection Form failed to inform the Mullens of

the minimum UM/UIM limits Metropolitan must legally provide or

what limits their policy already included, erroneously informed

them that selection of coverage greater than the unidentified

minimums would result in an increase in premium, failed to set

forth the premiums associated with each level of coverage, and

5 Had Metropolitan offered UM/UIM coverage through the UM/UIM

Selection Form before the policy was issued, as it is required to do

by section 10-4-609(2), C.R.S. 2021, the offer may not have been so

confusing. But we must consider the totality of the circumstances

when determining whether Metropolitan satisfied its statutory

obligation, see Allstate Ins. Co. v. Parfrey, 830 P.2d 905, 914 (Colo.

1992), and the timing of the offer relative to the issuance of the

policy is one such factor.

29

offered them coverage limits they were not allowed to select. Under

these circumstances, we conclude that the UM/UIM Selection Form

is confusing.

¶ 48

Considering the totality of the circumstances, see Parfrey, 830

P.2d at 914, we conclude that Metropolitan did not discharge its

statutory obligation to notify and offer the Mullens UM/UIM

coverage in a manner reasonably calculated to permit them to make

an informed decision about whether and at what limits to purchase

such coverage. Accordingly, we also conclude that the district court

erred by granting Metropolitan’s motion for summary judgment and

by denying Margaret’s motion for summary judgment.

III. Conclusion

¶ 49

We reverse the district court’s entry of summary judgment in

favor of Metropolitan and remand the case with directions to enter

summary judgment in favor of Margaret.

JUDGE FURMAN and JUDGE LIPINSKY concur.