Countryman v. Farmers Insurance Exchange et al

Filing 93

ORDER. Defendants Motion To Dismiss the Claims of the Two-Year Limitation Subclass and Memorandum of Law in Support 67 filed 8/12/2011, is DENIED WITHOUT PREJUDICE. By 4/2/2012, defendants SHALL FILE a supplemental motion to dismiss addressing th e question of legislative intent vis--vis §10-4-635, C.R.S. The response and any reply SHALL BE FILED in the time and manner prescribed by D.C.COLO.LCivR 7.1C. The page limitations prescribed by REB Civ. Practice Standard IV.B.1. SHALL APPLY to the supplemental motion, response, and reply. By Judge Robert E. Blackburn on 2//29/2012.(sah, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Case No. 10-cv-01075-REB-KMT
LAWRENCE COUNTRYMAN, on behalf of himself and all others similar situated,
Plaintiff,
v.
FARMERS INSURANCE EXCHANGE, an insurer, and owner of MID-CENTURY
INSURANCE COMPANY, a California corporation,
Defendant.

ORDER DENYING WITHOUT PREJUDICE MOTION TO DISMISS
AND ORDER REQUIRING SUPPLEMENTAL BRIEFING
Blackburn, J.
The matter before me is Defendants’ Motion To Dismiss the Claims of the
Two-Year Limitation Subclass and Memorandum of Law in Support [#67]1 filed
August 12, 2011. I deny the motion without prejudice and order the parties to submit
supplemental briefing as follows.
This is a putative class action for breach of insurance contract and related
causes of action. Defendants issued automobile insurance policies to plaintiff and other
similarly situated individuals in Colorado, which policies provide coverage for
“reasonable and customary expense[s] for necessary medical services furnished within
two years from the date of the accident, because of bodily injury sustained by an
insured person.” Plaintiff claims that this limitation is void and unenforceable and, thus,
1

“[#67]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.

seeks to represent, inter alia, a subclass of individuals defined as:
All eligible injured persons, as defined by C.R.S. §
10-4-635(2)(a), who are Colorado residents, who have
received Med-Pay benefits under Defendants’ insurance
policies, and whose claims for payment of medical bills were:
....
(3)(a) only partially paid and the two-year limit policy
language was cited as an explanation for partial payment, or
(b) not submitted before the second anniversary of the
accident and the associated medical records reference the
covered automobile accident as the basis for treatment . . .
Defendants have moved to dismiss the claims of this putative “two-year limitation
subclass.”
The substantive basis for all the various claims of the two-year limitation subclass
is §10-4-635, C.R.S., which provides, in relevant part:
no automobile liability or motor vehicle liability policy insuring
against loss resulting from liability imposed by law for bodily
injury or death suffered by any person arising out of the
ownership, maintenance, or use of a motor vehicle shall be
delivered or issued for delivery in this state unless coverage
is provided in the policy or in a supplemental policy for
medical payments with benefits of five thousand dollars for
bodily injury, sickness, or disease resulting from the
ownership, maintenance, or use of the motor vehicle.
§10-4-635(1)(a), C.R.S. Because the statute itself does not limit the time in which
claims for such “med-pay” benefits must be submitted, plaintiff concludes that the
policies’ restriction to that effect is an attempt to “dilute, condition, or limit statutorily
mandated coverage,” and, thus, void and unenforceable as contrary to public policy.
See DeHerrera v. Sentry Insurance Co., 30 P.3d 167, 173 (Colo. 2001) (citation and
internal quotation marks omitted).
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Yet plaintiff’s argument begs the question: What coverage does the statute
mandate? A statute’s silence on a matter does not necessarily lead to the conclusion
that additional conditions or limitations not expressly addressed therein are precluded,2
especially where the particular condition or limitation "would be expected to be within
[the statute’s] scope." People v. Carey, 198 P.3d 1223, 1229 (Colo. App. 2008). See
also People v. Newton, 764 P.2d 1182, 1189 (Colo. 1988); People v. Mosley, 2011
WL 5865891 at *3 (Colo. App. Nov. 23, 2011). It appears to this court that a limitation
on the time in which claims for med-pay benefits must be submitted is one such
limitation. If true, then the statute is ambiguous, and when “explicit statutory provisions
are ambiguous or silent regarding the matter at issue, [the court] interpret[s] the statute
to comport with the legislature's objectives.” Buckley v. Chilcutt, 968 P.2d 112, 117
(Colo. 1998).
However, the task of interpreting legislative purpose and intent from the
patchwork that followed the 2003 sunset of the Colorado Auto Accident Reparations
Act, §§10-4-701 – 10-4-726, C.R.S. (“CAARA”), is not an easy one. Certain provisions
of CAARA have been reenacted, such that certain types of minimum coverages still
must be carried by and/or offered to insureds. See generally Grund, John W.; Miller, J.
Kent; & Jackson, Graden P., Practice Pointers, COLORADO PRACTICE SERIES,
PERSONAL INJURY PRACTICE – TORTS AND INSURANCE § 48.1 (2nd ed. 2011); Laugesen,

2

Relatedly, a policy exclusion or limitation is not void simply because it narrows the
circumstances under which coverage applies. Cruz v. Farmers Ins. Exchange, 12 P.3d 307, 312 (Colo.
App. 2000); Farmers Insurance Exchange v. Chacon, 939 P.2d 517 (Colo. App. 1997). “Even within the
context of statutorily mandated insurance, insurers are free to include ‘conditions and exclusions that are
not inconsistent with’ Colorado's mandatory insurance laws.” Bailey v. Lincoln General Insurance Co.,
255 P.3d 1039, 1047 (Colo. 2011) (quoting § 10–4–623(1), C.R.S.).

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Richard W., After the Sunset – Colorado Motor Vehicle Insurance Post-July 1, 2003,
COLORADO LAWYER 111-115 (July 2003). Med-pay benefits, by comparison, are one of
the new categories of benefits covering economic losses that previously fell under the
umbrella of CAARA’s mandatory no-fault personal injury protection (“PIP”) benefits. As
a consequence, there is limited decisional authority regarding the parameters of these
types of benefits, and none directly on point with the issue presented here.
The resolution of the question of legislative intent may be dispositive of the
motion, as all the claims of the putative subclass – indeed, the very existence of the
subclass – are premised on the notion that the policies’ two-year submission deadline is
void and unenforceable under Colorado law. If it does not, then not only are defendants
not liable for violation of the statute itself (regardless whether a private right of action
exists for violation thereof), but they cannot have breached their contractual obligations
by including this provision, nor can they have committed a deceptive trade practice in so
doing.
However, as neither defendants nor plaintiff have addressed the issue of
legislative intent in any depth in their briefs, I find I am unable to resolve this seminal
issue. I find and conclude that the issues presented by the motion would be illuminated
further, and resolution thereof enhanced, by requiring the parties to address the
question of legislative intent in supplemental briefing. In the meantime, the motion to
dismiss these claims will be denied without prejudice.3

3

The parties need not reiterate the issues and arguments raised in their initial papers in order to
preserve them for the court’s review. After supplemental briefing is concluded, I will consider all
arguments raised in both motions to the extent necessary to resolve the issues inherent to the motions.

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THEREFORE, IT IS ORDERED as follows:
1. That Defendants’ Motion To Dismiss the Claims of the Two-Year
Limitation Subclass and Memorandum of Law in Support [#67] filed August 12,
2011, is DENIED WITHOUT PREJUDICE;
2. That by April 2, 2012, defendants’ SHALL FILE a supplemental motion to
dismiss addressing the question of legislative intent vis-à-vis §10-4-635, C.R.S.;
3. That the response and any reply SHALL BE FILED in the time and manner
prescribed by D.C.COLO.LCivR 7.1C.; and
4. That the page limitations prescribed by REB Civ. Practice Standard IV.B.1.
SHALL APPLY to the supplemental motion, response, and reply.4
Dated February 29, 2012, at Denver, Colorado.
BY THE COURT:

4

However, this order relieves the parties of the usual obligation to seek leave of court to file a
second motion if the combined page total of both motions exceeds the court’s page limitations. See REB
Civ. Practice Standard IV.B.1 (providing that “opening briefs and response briefs shall not exceed fifteen
(15) pages total for all such motions (not each such motion) filed by that party”).

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