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American Family Mutual Insurance Co. v. Allen12/6/2004
JUDGMENT REVERSED IN PART AND AFFIRMED IN PART
EN BANC
In this appeal, we review and reverse in part and affirm in part the court of appeals' decision in Allen v. American Family Mut. Ins. Co., 80 P.3d 799 (Colo. App. 2002). This case arises out of a single car accident and involves a claim for coverage under an automobile insurance contract containing a Personal Injury Protection (PIP) endorsement and a tort claim for the breach of an insurer's duty of good faith. The court of appeals upheld the trial court's construction of this insurance policy that made ownership of the vehicle involved in the accident irrelevant in determining whether coverage existed. With respect to the tort claim, the court of appeals held that expert testimony was not required to establish industry standards of care when claiming that the insurer breached its duty of good faith.
On the contract claim, we hold that this particular policy only provides PIP coverage for injuries sustained by permissive drivers of vehicles owned by the named insured and identified in the policy. Therefore, we reverse the court of appeals on the contract claim and order a new trial for the jury to resolve the disputed factual issue of who owned the vehicle involved in the accident.
On the issue of whether expert testimony was required for the tort claim, we affirm the court of appeals and hold that in a first-party claim for the breach of an insurer's duty of good faith, expert testimony is not required to establish the insurer's standard of care when a statute provides valid, but not conclusive, evidence of the standard of care and when the standard of care is within the common knowledge and experience of the average juror. Hence, upon remand, the damage award on the contract claim and the tort claim shall stand in the event the jury returns a finding that ownership of the vehicle had not transferred to the plaintiff at the time of the accident.
FACTS AND PROCEEDINGS BELOW
Cynthia Allen, respondent before us and plaintiff in the trial court, lived with Phillip Jackson and his wife in Grand Junction, Colorado. Jackson sold automobile insurance out of his home office for American Family Mutual Insurance Company, petitioner here and defendant in the trial court. Allen was paid by the Jacksons to do housework and carve spears which Jackson sold at local and regional art fairs. Jackson paid Allen's weekly salary in cash which varied depending on the number of hours she worked and the number of spears she completed. From her salary, Jackson would deduct $100 for rent plus other expenses but did not withhold taxes or other employment deductions.
Allen occasionally borrowed Jackson's 1986 GMC truck to run errands and visit family in the Grand Junction area. On June 19, 1998, Allen and Jackson entered into a hand-written agreement for Allen to purchase the truck for $2,600. The terms of this agreement permitted Jackson to deduct an additional $75 to $100 from Allen's weekly salary. On the top of the first page was written: "Contract entered into June 19th 1998 [-] Represents a Bill of Sale." The agreement contained the terms of the sale:
Cindy will purchase 1986 GMC P-up . . . for the amount of $2,600, with no interest charged if paid in full by Jan. 31st 1999. Cindy agrees to pay for vehicle weekly, from bonus monies earned, min of $75 weekly and try for $100 weekly. To be taken from her earnings, exceptions to this payment schedule, must be agreed upon by both parties.
Three payments totaling $300 were recorded on the first page of the document and initialed by both parties. The agreement contained several blank pages to record future payments. O
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