Three vehicles were scheduled under the policy: an Audi, a Porsche, and a Toyota. In addition to providing liability coverage, the policy also included up to $500,000 of uninsured and underinsured motorist (“UM/UIM”) coverage.

Ms. Csaszar jointly owned a Subaru Impreza with her mother that was not scheduled under her parents' Auto-Owners policy. She bought a separate insurance policy from Geico to cover her use of the Subaru. That policy included $300,000 in UM/UIM coverage.

While Ms. Csaszar was driving the Subaru Impreza, an uninsured driver rear-ended her. The uninsured driver was completely at fault. Ms. Csaszar suffered numerous injuries from the accident, including a serious brain injury. She sought, and received, Geico's $300,000 UM/UIM coverage limit. Hoping to more fully recover compensation for her injuries – Ms. Csaszar claimed that the accident caused her over $4 million in damages – she asked Auto-Owners to pay her the $500,000 UM/UIM coverage limit of her parents' policy.

Auto-Owners denied the claim. It subsequently sought a declaratory judgment that Ms. Csaszar was not entitled to coverage, including UM/UIM coverage, under her parents' policy.

Ms. Csaszar filed a counterclaim seeking a declaration that she was entitled to such coverage. Both parties moved for summary judgment.

The U.S. District Court for the District of Colorado granted Auto-Owners' motion for summary judgment. The district court first concluded that the excluded-driver provision unambiguously barred Ms. Csaszar from coverage. The district court also rejected her public policy argument.

Ms. Csaszar appealed to the Tenth Circuit. She argued that the district court had erred by granting summary judgment in favor of Auto-Owners for two reasons: (1) the excluded-driver provision did not unambiguously bar her from coverage when she drove an unscheduled vehicle, and (2) if the excluded-driver provision did bar her from this coverage, it violated Colorado public policy and was void.

The Tenth Circuit's Decision

The Tenth Circuit affirmed, holding that the Auto-Owners policy unambiguously barred Ms. Csaszar from UM/UIM coverage and that it did not violate Colorado public policy.

In its decision, the circuit court first rejected Ms. Csaszar's contention that the excluded-driver provision only barred her from coverage when she drove a scheduled vehicle. According to the circuit court, the exclusion “unambiguously” barred Ms. Csaszar from coverage when she drove any automobile, not just a scheduled vehicle under the policy. The circuit court noted that the policy stated that it “shall provide no coverage . . . arising out of operation or use of any automobile to which this policy would otherwise apply.” (Emphasis added.)

According to the circuit court, the “plain and ordinary” meaning of “any automobile” was “just that – any automobile.” Nowhere did the provision state that it only applied when Ms. Csaszar operated “any scheduled automobile,” and no provision modified “automobile” in a manner that suggested that the term applied only to scheduled vehicles, the circuit court ruled.

The circuit court then rejected Ms. Csaszar's argument that Colorado public policy did not permit excluding resident relatives from UM/UIM coverage, at least when an uninsured or underinsured motorist was completely at fault for injuring the relative. The circuit court acknowledged Ms. Csaszar's argument that it made sense to allow insurers to exclude resident relatives with poor driving records from liability coverage, because insuring those drivers involved a substantial amount of risk, but that it did not make sense to allow insurers to exclude them from UM/UIM coverage when the injured relative was completely without fault. However, the circuit court said, that argument had been rejected by the Colorado court of appeals in Massingill v. State Farm Mutual Automobile Insurance, 176 P.3d 816 (Colo. Ct.App. 2007), which held that if an insurer excluded a resident relative from liability coverage, it also could exclude that person from UM/UIM coverage.

The Tenth Circuit concluded, therefore, that Colorado public policy did not prohibit the UM/UIM exclusion in Auto-Owners' automobile policy.

The case is Auto-Owners Ins. Co. v. Csaszar, No. 17-1075 (10th Cir. June 19, 2018). Attorneys involved include: Stephen B. Shapiro, Shapiro Beiging Barber Otteson LLP (M. Gabriel McFarland, Evans & McFarland, LLC, Golden, Colorado, with him on the briefs), Denver, Colorado, for Appellant. John D. Mereness (Gregory R. Giometti with him on the brief), Gregory R. Giometti & Associates, P.C., Denver, Colorado for Appellee.