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Farmers Insurance Exchange and American States Insurance Co. v. District Court for Fourth Judicial District11/22/1993
Original Proceeding
In this original proceeding, petitioner Farmers Insurance Exchange asks us to prohibit the district court from hearing a declaratory judgment action brought by Patricia Neely against the petitioner, American States Insurance Company, and Earl Bryant for lack of standing. We issued a rule to show cause and now make the rule absolute.
The underlying suit involves Patricia Neely's claim against Earl Bryant for injuries she suffered in an automobile accident allegedly caused by Bryant's negligence. The issue before this court is whether Neely has standing to bring a declaratory judgment action against the insurance companies obligated to indemnify Bryant. During settlement negotiations, Farmers Insurance Exchange (Farmers) posited that its liability was limited to $25,000. Farmers offered to settle for that amount. Neely responded by bringing this declaratory judgment action asking the court to decide whether the contract obligating Farmers to indemnify Bryant, if Bryant is found negligent, is limited to $25,000. We hold that Neely does not have standing to bring the declaratory judgment action.
I.
Neely and Bryant were involved in an automobile collision on January 25, 1990, in Colorado Springs. According to the police report, the car driven by Bryant struck the side of Neely's 1972 Pontiac Grand Ville as Neely entered an intersection on a green light. Both Bryant and Neely were taken to St. Francis Hospital, where Bryant was admitted for treatment. Neely, who was sixty-two at the time of the accident, was treated for a contusion to the left thigh and released.
Bryant, who was eighteen years old when the accident occurred, was driving a 1987 Chrysler LeBaron owned by Kenneth Twyford. Bryant was living at the Twyford residence and had permission to use the car. Two insurance policies potentially provide coverage for Bryant's accident with Neely: a Farmers policy that provided liability coverage for damages caused by the Chrysler owned by Twyford, and an American States policy issued to Bryant's mother.
On September 4, 1991, Neely and her spouse filed an action in El Paso County District Court against Bryant for injuries she sustained in the auto accident. Neely's complaint stated that she
suffered physical injuries to her knee, shoulder and back as well as a closed head injury. These injuries may be permanent and disabling. As a result of these injuries, the Plaintiff has endured excruciating pain and suffering and will continue to endure pain and suffering in the future.
Neely further averred that she
has incurred medical expenses which at the time of filing this Complaint have a reasonable value in excess of $2,500. . . .
As a further direct result of the Defendant's negligent conduct the Plaintiff has suffered lost earnings and will continue to suffer lost earnings in the future along with a diminution in her earning capacity.
Neely's spouse asserted a claim for loss of consortium.
During the settlement negotiations, Farmers took the position that its liability coverage for Bryant's accident was limited to the statutory minimum of $25,000, even though the usual limit for bodily injury under Twyford's policy was $100,000. Farmers based its assertion on the "Other Insurance" clause in the policy, which states:
We will not provide insurance for a person, other than you or a family member, if that person has other insurance applicable to a loss covered by this part with limits equal to at least those of the Colorado Financial Responsibility Law.
If there is no other insurance then the insurance provided to
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