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State Farm Mutual Automobile Insurance Co. v. Brekke12/6/2004
Ins. Co., 16 P.3d 223 (Colo. 2001). In my view, neither the statute nor the cases suggest that the "actual trial" portion of the policy language is in contravention of public policy. Hence, I respectfully dissent.
II. FACTS
In this consolidated appeal, State Farm challenges two decisions of the court of appeals concerning its liability for damages entered on default judgment against two uninsured motorists. The two plaintiffs in the underlying cases, Gloria J. Brekke and Clinton Shaffer, had auto insurance policies with State Farm, which policies included uninsured motorist ("UM") coverage. Both Brekke and Shaffer were hit by uninsured motorists and later sought coverage.
In September 1995, Brekke was involved in a hit-and-run accident with a vehicle registered in the name of Garfield Gus Garcia. Shaffer's accident occurred in August 1996 when he was hit by a car driven by Jordan Rodriguez.
Three years after Brekke's accident, she filed a personal injury action naming Garcia and State Farm as defendants. She asserted a contract claim against State Farm under her UM coverage and sued Garcia for negligence. Shaffer sued more then four years after his accident, asserting negligence and loss of consortium against Rodriguez and breach of contract against State Farm. State Farm promptly filed an answer and demanded jury trials in both Brekke's and Shaffer's cases and cross-claimed Rodriguez in Shaffer's suit. Neither Garcia nor Rodriguez appeared to defend the claims against them. As a consequence, default entered against both individuals. In both cases, State Farm filed motions asking the trial court to delay entry of the default judgment until after trial on the damages issues, or alternatively, asking that any default judgment entered against Garcia and Rodriguez not be binding on State Farm.
In Brekke, the trial court ruled only that the entry of default judgment against Garcia did not bar the insurer from challenging damages. The court later denied State Farm's motion to reconsider the default judgment issue and its request for jury trial, concluding that the policy did not encompass the right to trial by jury and that State Farm's right would be adequately protected in the damages hearing. Following the subsequent hearing, the trial entered a damages judgment in Brekke's favor.
The court of appeals affirmed the trial court's decision, concluding that State Farm had implicitly waived its right to a jury trial because the policy requires only an "actual trial." In addition, the court held that if the policy had not effectuated a waiver, the "actual trial" clause would be void as against public policy.
In Shaffer, the trial court found the default judgment against Rodriguez binding on State Farm, reasoning that, "State Farm has a reasonable opportunity to protect its interest in the suit by participation in the evidentiary hearing on damages." The court entered an award of damages following a hearing, and State Farm appealed. As in Brekke, the court of appeals affirmed, concluding that because State Farm's language only spoke of "actual trial," the company had waived its right to jury trial. Moreover, the court concluded that Rodriguez's default automatically divested State Farm of its right to a jury trial.
III. DISCUSSION
Using the declaration of purpose underlying section 10-4-609, C.R.S. (2004) as a backdrop, the majority decides that State Farm's "actual trial" clause contravenes public policy. As the majority explains it, our longstanding recognition of the role of UM coverage in protecting against loss caused by financially irresponsible motorists has informed this court's decisions, which bro
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