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Thompson v. Budget Rent-A-Car Systems9/5/1996
Rehearing Denied Oct. 10, 1996.
Certiorari Denied Aug. 11, 1997.
In this insurance coverage dispute, defendant, Budget Rent-A-Car Systems, Inc. (Budget), appeals from the partial summary judgment entered in favor of plaintiffs, Carol Thompson, individually, and Scott Hageman, by and through his conservator and guardian, Carol Thompson. We affirm.
On June 26, 1993, Hageman was seriously injured in an accident while a passenger in a car driven by an individual who had rented the car from Budget, which is a self-insurer pursuant to § 10-4-716, C.R.S. (1994 Rep. Vol. 4A). The insurance portion of the rental agreement provided, in pertinent part:
All coverages automatically conform to the basic requirements of any `No Fault' law which may be applicable. RENTER WAIVES UNINSURED AND UNDER-INSURED MOTORIST, SUPPLEMENTAL NO FAULT AND OTHER OPTIONAL COVERAGES. If any coverage herein cannot be excluded or waived renter agrees that such coverage shall be automatically reduced to the minimum requirements of the applicable financial responsibility law.
Following the accident, Budget paid Hageman $50,000 in rehabilitation benefits pursuant to § 10-4-706(1)(c), C.R.S. (1994 Repl. Vol. 4A), $50,000 in personal injury protection (PIP) benefits pursuant to § 10-4-706(1)(b), C.R.S. (1994 Repl.Vol. 4A), and $15,964 in benefits for loss of income.
Thereafter, plaintiffs brought this action seeking additional rehabilitation benefits and payment for essential services, and alleging bad faith breach of an insurance contract and outrageous conduct.
Plaintiffs filed a motion for partial summary judgment, and the trial court ruled that Budget was required to pay rehabilitation benefits without dollar or time limitation. The issue was certified for appeal and is now pending before the Colorado Supreme Court, pursuant to C.A.R. 50.
The trial court later granted plaintiffs' motions to amend the complaint to add a claim that Budget was obligated to pay medical and income loss PIP benefits without dollar or time limitation. Thereafter, the court entered partial summary judgment in favor of plaintiffs on these claims. This appeal followed.
I.
Budget first contends that plaintiffs are not entitled to seek modification or reformation of the insurance contract because Hageman was neither the named insured nor an intended third-party beneficiary of the contract. We disagree.
An accident victim to whom PIP benefits are payable is a third-party beneficiary of an insurance contract under the No-Fault Act and, as such, has standing to bring an action in contract against the insurer to recover benefits. Krieg v. Prudential Property & Casualty Insurance Co., 686 P.2d 1331 (Colo.1984); see also M. Rhodes, Couch on Insurance § 66:128 (2d ed. 1984) (third party beneficiaries may seek reformation of an insurance contract).
II.
Budget next contends that the trial court erred in concluding that it was required to provide rehabilitation benefits without dollar or time limitation. However, because this issue is before the Supreme Court in the separate appeal, we do not address it.
III.
Budget asserts that the trial court erred in reforming the rental agreement to include medical and loss of income PIP benefits without dollar or time limitation. We disagree.
The Auto Accident Reparations Act, (No-Fault Act) §§ 10-4-701 to 10-4-723, C.R.S. (1994 Repl.Vol. 4A), is incorporated into every automobile insurance contract, and its terms govern in any conflict with the terms of the insurance policy. Allstate Insurance Co. v. Allen, 797 P.2d 46 (Co
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