Summary
discussing the legislative history and public policy behind UM coverage
Summary of this case from State Farm Mut. Auto. Ins. Co. v. BrekkeOpinion
No. 92SC80 No. 92SC155
Decided October 11, 1994
Certiorari to the Colorado Court of Appeals Pursuant to C.A.R. 50
JUDGMENT REVERSED
Fish Coles, D. Bruce Coles, Denver, Colorado, Attorneys for Petitioner
Montgomery, Green, Jarvis, Kolodny Markusson, John T. Van Voorhis, Denver, Colorado, Attorneys for Respondents
Wilcox Ogden, Ralph Ogden, Denver, Colorado, Attorneys for Petitioners
Burg Eldredge, P.C., Matthew R. Giacomini, Scott J. Eldredge John A. Scruggs, Denver, Colorado, Attorneys for Respondent
In Passamano v. Travelers Indemnity Co., National Car Rental Systems, and North-West Leasing Corp., 835 P.2d 514 (Colo.App. 1991), the Colorado Court of Appeals affirmed the trial court's summary judgment in favor of the respondents, Travelers Indemnity Company (Travelers), National Car Rental Systems (National), and North-West Leasing Corporation (North-West), and against the petitioner, Antonio Passamano (Passamano). Passamano filed a civil action seeking reformation of an agreement between North-West and Passamano to require the respondents to provide liability insurance coverage for injuries Passamano sustained when a car he rented from North-West collided with a vehicle driven by an uninsured motorist. The trial court concluded that the agreement did not constitute a contract of insurance for purposes of the provisions of section 10-4-609(1), 4A C.R.S. (1994), permitting a named insured of an automobile liability insurance policy to reject uninsured and underinsured motorist coverage.
Section 10-4-609(1) provides as follows:
Insurance protection against uninsured motorists. (1) No automobile liability or motor vehicle liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle licensed for highway use in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in section 42-7-103(2), C.R.S., under provisions approved by the commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom; except that the named insured may reject such coverage in writing.
§ 10-4-609(1), 4A C.R.S. (1994).
In Kent v. Budget Rent-A-Car Systems, Inc., the trial court entered a summary judgment against petitioners, Cecil Kent and Chuck Brown, and in favor of respondent, Budget Rent-A-Car Systems (Budget). Kent and Brown filed a civil action seeking reformation of an agreement between Budget and Kent by requiring Budget to provide liability insurance coverage for injuries the petitioners received in an accident involving a car rented to Kent by Budget and a vehicle driven by an uninsured motorist. The trial court apparently adopted Budget's argument that as a self-insurer it was not required to offer uninsured motorist coverage. Kent and Brown appealed the trial court's order to the court of appeals and also filed a petition with this court for certiorari review before judgment, pursuant to C.A.R. 50. Having granted both petitions, we reverse the judgment of the court of appeals in Passamano and the judgment of the trial court in Kent.
We initially entered an opinion affirming the court of appeals' judgment in Passamano and the trial court's judgment in Kent on the ground that rental automobiles were not subject to the regulatory provisions of § 10-4-609(1). We subsequently granted petitions for rehearing filed by Passamano, Kent, and Brown to reconsider that conclusion.
I A
On March 9, 1987, Passamano rented an automobile in Vail, Colorado, from North-West, a National licensee, pursuant to an agreement containing several options with respect to insurance coverage. At the time, North-West was a party to a liability insurance policy issued by Travelers covering North-West's vehicles. When purchasing the Travelers policy in effect at the time Passamano was injured, North-West rejected uninsured motorist coverage.
Prior to executing the agreement on March 9, 1987, Passamano and North-West's agent discussed the type of vehicle to be rented and the terms of the agreement, including provisions permitting purchase of "personal accident insurance" and a "collision damage waiver." Passamano elected to purchase the collision damage waiver and elected not to purchase personal accident insurance. There was no discussion of uninsured motorist coverage.
According to Passamano's affidavit filed in opposition to North-West's summary judgment motion, with the exception of these two options, the rental agreement was offered on a "take it or leave it basis."
The agreement contains the following relevant provisions pertaining to liability insurance:
5. LIABILITY INSURANCE
Authorized Driver is covered by an automobile liability insurance policy or qualified self-insurance arrangements, on a primary basis in respect to other insurance, for bodily injury or death (limits $100,000 each person, $300,000 each accident) and for property damage (limit $25,000) for each accident arising from use of Vehicle as permitted by this Agreement. Minimum Mandatory No Fault coverage as required by applicable law, is also provided. Company will not provide "Uninsured Motorist" coverage, "Underinsured Motorist" coverage or supplementary "No Fault" unless such coverages are required to be provided by applicable law and cannot be rejected. If required, and not rejectable, the limits will be the minimum required by law.
The Authorized Drivers will indemnify and hold harmless National Car Rental from and against all loss, liability and expense in excess of the limits of liability as indicated in this Agreement, as a result of bodily injury, death or property damage caused by, or arising out of, the use or operation of the rental Vehicle.
Authorized Drivers insured under the policy agree to comply with and be bound by all its terms, conditions, limitations and restrictions, which are made a part of the Agreement by reference. Evidence of this insurance is available for inspection at the Company's Home Office.
An Authorized Driver will immediately report any accident to the Company at the location where the Vehicle was rented and will also deliver to the Company at that location every summons, complaint or paper of any kind received by Authorized Driver in any way relating to an accident involving the Vehicle while rented under this Agreement. An Authorized Driver will not aid or encourage the filing of any claim as a result of any accident and will cooperate fully with the Company and its insurer in the investigation and defense of any claim or lawsuit. . . .
The agreement also contains the following provision pertaining to the option for obtaining a collision damage waiver:
(b) CDW — If you elect to accept and pay Collision Damage Waiver as indicated on Page 2 and Authorized Driver complies with all terms and conditions of this Agreement, you are relieved from liability for damages to Vehicle caused by collision. THIS COLLISION DAMAGE WAIVER IS NOT INSURANCE.
These provisions appear on the back side of the two-sided agreement and are printed in a small type-size. North-West agents did not furnish Passamano with a copy of the rental agreement prior to the initiation of negotiations concerning the renting of the vehicle.
While driving the car on March 10, 1987, near Leadville, Colorado, Passamano was involved in an accident caused by the negligence of an uninsured motorist. Passamano sustained serious injuries, including several broken bones and permanent loss of vision in his left eye; required lengthy hospitalization; and was absent from work for over six months. He subsequently filed suit against the respondents.
In his amended complaint, Passamano alleged that the agreement was in effect a contract of insurance; that with regard to such contract the defendants are in effect the insurer and he, Passamano, is the named insured; and that the defendants violated section 10-4-609(1) by failing to offer him uninsured motorist coverage. Passamano also alleged that Travelers was the insurer of North-West for the risk covered by the liability insurance provided to Passamano by the agreement; that North-West's rejection of uninsured motorist coverage under the Travelers policy violated public policy and the legislative intent in adopting section 10-4-609(1); that the agreement is unconscionable because it fails to state that North-West had rejected uninsured motorist coverage and because under the circumstances, including the format of the agreement and the conduct of North-West's agents, Passamano was not given a meaningful opportunity to read the entire agreement; and that the respondents' conduct was unconscionable in failing to offer Passamano an opportunity to purchase uninsured motorist coverage.
The defendants filed a motion for summary judgment. They argued that because North-West was the named insured under the contract of insurance executed by North-West and Travelers, only North-West had authority under section 10-4-609(1) to reject uninsured motorist coverage. The defendants also argued that the agreement between North-West and Passamano does not constitute a contract of insurance and that Colorado does not require a rental car agency to provide uninsured motorist coverage to its customers.
The trial court granted defendant's motion for summary judgment. Relying on this court's decision in Davis v. M.L.G. Corporation, 712 P.2d 985 (Colo. 1986), the trial court determined that the agreement between Passamano and North-West is a bailment contract, not a contract of insurance. The trial court also determined that under the insurance policy issued to North-West by Travelers, North-West is the named insured and Passamano is an additional insured. The trial court concluded that Passamano had no authority to acquire or reject uninsured motorist coverage, and further concluded that the conduct of North-West and the terms and format of the rental agreement were not unconscionable.
On appeal, the court of appeals affirmed the trial court's summary judgment. The court of appeals concluded that in general an agreement for the lease of a vehicle from a car rental agency creates a bailment contract for the mutual benefit of the parties and that the language of the agreement executed by Passamano demonstrates that the agreement did not constitute a contract of insurance. Passamano, 835 P.2d at 515-16. The court of appeals agreed with the trial court that North-West was the named insured for purposes of the requirements of section 10-4-609(1) and that the rental agreement was not unconscionable.
B
On February 27, 1981, Kent rented an automobile from Budget in Denver, Colorado. The agreement contained the following relevant provisions:
6) LIABILITY INSURANCE: IF THERE IS NO VIOLATION OF ANY OF THE USE RESTRICTIONS IN PARAGRAPH 5 ABOVE, Renter and any Authorized Driver shall, while operating the Vehicle, be provided with liability coverage in accordance with the standard provisions of a Basic Automobile Liability Insurance Policy or in accordance with the requirements of a qualified self-insurer instead of such coverage, for protection against liability for causing bodily injury (including death) and property damage with one of the following applicable coverage limits:
— coverage limits imposed by the state financial responsibility law where this rental transaction takes place; OR
— coverage limit of $100,000 for each person, but not more than $300,000 for each occurrence, and property damage limits of up to $25,000 for each occurrence if a Renter, at time of rental, possessed valid Budget CorpRate or Sears Checklist Charge credentials, and such rental is charged at a valid Budget CorpRate or Sears Checklist Charge rate.
— (If S.L.I. is offered and accepted, a higher limit of liability insurance will be provided as described in the applicable brochure[.])
A. All coverages automatically conform to the basic requirements of any "No-Fault" law which may be applicable. RENTER WAIVES UNINSURED AND UNDERINSURED MOTORIST, SUPPLEMENTAL NO-FAULT AND OTHER OPTIONAL COVERAGES.
B. If any coverages herein cannot be excluded or waived, Renter agrees that such coverages shall be automatically reduced to the minimum requirements of the applicable financial responsibility law and that such coverages shall be excess to any other applicable insurance. . . .
Budget was self-insured and neither offered nor provided uninsured motorist coverage to Kent. The rental agreement did provide Kent with liability coverage of $100,000 per person and $300,000 per occurrence, as well as property damage coverage of $25,000.
While operating the car, Kent was forced off a road by the negligent conduct of an uninsured motorist who was driving a vehicle while under the influence of alcohol. As a result, Kent and Brown, a passenger in the car, sustained severe injuries. Kent and Brown subsequently filed a civil action against Budget in the District Court for the City and County of Denver. Their complaint requested damages, costs, and a declaratory judgment reforming the rental agreement to include uninsured motorist coverage of $100,000 per person and $300,000 per occurrence.
Budget filed a motion for summary judgment, asserting that as a self-insurer it was not required to provide uninsured motorist coverage to Kent. The trial court granted the motion and entered judgment for Budget and against Kent and Brown.
II
Passamano, Kent, and Brown argue that the agreements they executed are in effect liability insurance policies or, alternatively, are agreements that include liability insurance policies. They argue that, in either event, section 10-4-609(1) requires lessor car rental companies to provide the option of purchasing uninsured motorist coverage to their lessees. We agree.
A
In Passamano, the court of appeals concluded that the agreement executed by Passamano and North-West constituted a bailment contract. Passamano, 835 P.2d at 516. To the extent the agreement provides for the leasing of personalty on specified terms and conditions, we agree. Davis, 712 P.2d at 987-88; Christensen v. Hoover, 643 P.2d 525, 528-29 (Colo. 1982). However, the agreement also contains several provisions describing particular automobile liability insurance coverages. In our view, those provisions constitute more than mere conditions of the bailment. North-West, as the owner of the vehicle, was required to provide certain minimum insurance coverage for personal injuries sustained by any user thereof. § 10-4-703(2), (6), (8), 4A C.R.S. (1994). It elected to do so by purchasing a policy of insurance from Travelers covering all North-West's vehicles. Under that contract North-West is the named insured and Passamano is an additional insured.
However, North-West also elected to offer Passamano several options with respect to amounts of coverage for particular losses. The options were offered at specified rates. Section 10-1-102(7), 4A C.R.S. (1994), defines the term "insurance" for purposes of the provisions of Title 10 respecting regulation of all forms of insurance as follows:
It is unclear whether Passamano was informed that some of the "options" described in his agreement with North-West in fact constituted offers to purchase coverages in addition to coverage already provided by an existing insurance policy under which Passamano was an insured.
"Insurance" means a contract whereby one, for consideration, undertakes to indemnify another or to pay a specified or ascertainable amount or benefit upon determinable risk contingencies, and includes annuities.
Section 10-1-102(8), 4A C.R.S. (1994), defines the term "insurer" for purposes of Title 10 as follows:
"Insurer" means every person engaged as principal, indemnitor, surety, or contractor in the business of making contracts of insurance.
By offering to sell Passamano various insurance coverages for specified prices, North-West was an insurer for purposes of section 10-4-609(1) with respect to its negotiations with Passamano. This view of the nature of the agreement between North-West and Passamano gives effect to its substance rather than to its form. See Lorenzen v. Mustard's Last Stand, Inc., 196 Colo. 265, 267, 586 P.2d 12, 14 (1978).
The determination that North-West is an insurer for purposes of the provisions of section 10-4-609(1) requiring insurers to offer uninsured motorist coverage to potential insureds begins rather than ends the inquiry, however. We are aware that courts are divided on the question of whether lessor car rental agencies such as North-West, which are insured by a third party such as Travelers, must offer uninsured motorist coverage to their lessees. Compare Moon v. Guarantee Ins. Co., 764 P.2d 1331 (Okla. 1988) (lessor's business auto policy contained uninsured motorist coverage by operation of law, and only written rejection of same by "named insured," held to be the lessee, effected valid waiver of uninsured motorist coverage) with Kohly v. Royal Indem. Co., 190 So.2d 819 (Fla.Dist.Ct.App. 1966) (automobile rental agency was "named insured" and therefore authorized to reject uninsured motorist coverage); Lapp v. Transport Indem. Co., 210 Cal.Rptr. 135 (Cal.Ct.App. 1985) (truck lessor was named insured, and therefore authorized to reject uninsured motorist coverage, binding permissive user). The majority of courts that have addressed the issue have concluded that in such circumstances the lessor car rental agency is the named insured under the applicable insurance policy and is therefore the sole entity entitled to accept or reject uninsured motorist coverage. See Lapp, 210 Cal.Rptr. at 136. Under this view, the failure of a car rental agency to offer uninsured motorist coverage to a lessee who is an insured under an insurance policy previously purchased by the agency does not violate applicable legislation requiring insurers to provide such an option to named insureds.
Relying on Lapp and similar decisions, North-West and Travelers argue that Passamano was not a named insured under the Travelers policy and, therefore, was not authorized to exercise the option to purchase uninsured motorist coverage under that policy.
In our view, the statutory scheme adopted by the General Assembly with respect to automobile insurance policies in general and uninsured motorist coverage in particular compels a different conclusion.
We have determined that North-West was not only the named insured under its insurance policy with Travelers, but was also an insurer with respect to its rental agreement with Passamano. Thus the rental agreement constitutes an insurance policy for purposes of our statutes regulating automobile liability insurance policies. As the named "Authorized Driver" of the rented automobile in the rental agreement, Passamano was the "named insured" thereunder for purposes of section 10-4-609(1) and was entitled to acquire or reject uninsured motorist coverage.
Travelers and North-West suggest that because the rental agreement in question is a collision damage waiver and "personal accident insurance," which are first party coverages, it is not a policy of automobile or motor vehicle liability insurance for purposes of § 10-4-609. We disagree. The statutory provisions regulating automobile liability provisions may not be construed in isolation from statutes regulating first-party coverages.
North-West and Travelers contend that the rental agreement executed by Passamano is not subject to the requirements of section 10-4-609(1). Section 10-4-601 defines the term "policy" for the purposes of part 6 in pertinent part as follows:
Definitions. As used in this part 6, unless the context otherwise requires:
. . . .
(2) "Policy" means an automobile insurance policy providing coverage for all or any of the following coverages: Collision, comprehensive, bodily injury liability, property damage liability, medical payments, and uninsured motorist coverage, or a combination automobile policy providing bodily injury liability, property damage liability, medical payments, uninsured motorist, and physical damage coverage, delivered or issued for delivery in this state, insuring a single individual, or husband and wife, or family members residing in the same household, as named insured, and under which the insured vehicles therein designated are of the following types only:
(a) A motor vehicle of the private passenger or station wagon type that is not used as a public or livery conveyance for passengers nor rented to others . . . .
§ 10-4-601, 4A C.R.S. (1994). North-West and Travelers argue that this language reflects the General Assembly's intent to exempt liability insurance policies covering rental vehicles from the provisions of section 10-4-609(1) requiring insurers to offer their customers the option of purchasing uninsured motorist coverage. We disagree.
Section 10-4-608 provides: "This part 6 shall not apply . . . to any policy insuring more than four automobiles . . . ." While the policy issued by Travelers to North-West may be presumed to cover more than four vehicles, the policy under scrutiny here — the rental agreement between North-West and Passamano — covers only one vehicle. Thus the exemption created by § 10-4-608 is irrelevant.
In construing a statute we must give full effect to the legislative intent. People v. Schuett, 833 P.2d 44, 47 (Colo. 1992); Snyder Oil Co. v. Embree, 862 P.2d 259, 266 (1993). We endeavor to ascertain that intent from consideration of the language of the statute. Farmers Ins. Group v. Williams, 805 P.2d 419, 422 (Colo. 1991). However, if relevant statutory language is ambiguous, we must adopt other means of determining the legislative intent. § 2-4-203, 1B C.R.S. (1980). An examination of relevant legislative history frequently proves most beneficial in ascertaining the intent of the General Assembly. General Elec. Co. v. Niemet, 866 P.2d 1361, 1364 (Colo. 1994); Charnes v. Boom, 766 P.2d 665, 667 (Colo. 1988).
In this case, we must give full effect to the language of the General Assembly requiring all insurers to offer uninsured motorist coverage, as set forth in section 10-4-609, as well as the definitional provisions of section 10-4-601(2). However, we must also consider the introductory language to the definitional provisions of section 10-4-601, which provides that in some contexts the definitions contained therein, including the definition of the term "policy," might not be applicable.
We thus consider the legislative history of these nine sections to ascertain whether in context the broad language of section 10-4-609 is limited by the definition of "policy" contained in section 10-4-601.
In 1965, the General Assembly adopted House Bill 1116, entitled "AN ACT RELATING TO MOTOR VEHICLES AND PROVIDING FOR FINANCIAL RESPONSIBILITY IN CONNECTION WITH THE OWNERSHIP OF THE SAME." Act approved April 30, 1965, ch. 91, 1965 Colo. Sess. Laws 333-58. The first two sections of House Bill 1116 (hereafter sometimes referred to as "the uninsured motorist provisions") established the requirement that uninsured motorist coverage must be made available to purchasers of automobile liability insurance policies. The uninsured motorist provisions were codified at 1963 C.R.S. sections 72-12-19 and -20 (1965 Perm. Supp.), as amendments to article 12 of title 72, which article was entitled "Casualty, Fidelity, Surety and other Motor Vehicle Insurance — Rates and Rating Organizations."
The first section of House Bill 1116 contained the following language:
Section 1. — Declaration of purpose. — The general assembly is acutely aware of the toll in human suffering and loss of life, limb, and property caused by negligence in the operation of motor vehicles in our state. Although it recognizes that this basic problem can and is being dealt with by direct measures designed to protect our people from the ravages of irresponsible drivers, the general assembly is also very much concerned with the financial loss visited upon innocent traffic accident victims by negligent motorists who are financially irresponsible. In prescribing the sanctions and requirements of this act, it is the policy of this state to induce and encourage all motorists to provide for their financial responsibility for the protection of others, and to assure the widespread availability to the insuring public of insurance protection against financial loss caused by negligent financially irresponsible motorists.
Ch. 91, sec. 1, 1965 Colo. Sess. Laws 333. House Bill 1116 did not expressly provide for the codification of this "Declaration of purpose." The declaration of purpose was initially codified at 1963 C.R.S. section 72-12-20 (1965 Perm. Supp.), presumably by the reviser of statutes.
Section 2 of House Bill 1116 contained the following provisions:
Section 2. Article 12 of chapter 72, Colorado Revised Statutes 1963, is hereby amended BY THE ADDITION OF A NEW SECTION 72-12-19 to read:
72-12-19. — Insurance protection against uninsured motorists. — No automobile liability or motor vehicle liability policy, insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in section 13-7-3(11), C.R.S. 1963, as amended, under provisions approved by the insurance commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom; provided, that the coverage required under this section shall not be applicable where any insured named in the policy shall reject the coverage; and provided further, that unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured had rejected the coverage in connection with a policy previously issued to him by the same insurer.
H.B. 1116, Ch. 91, sec. 2, 1965 Colo. Sess. Laws 333-34. This section of House Bill 1116 was codified at 1963 C.R.S. section 72-12-19 (1965 Perm. Supp.).
The majority of the remaining sections of House Bill 1116 repealed numerous statutory provisions formerly codified in article 7 of chapter 13 of the Colorado Revised Statutes and reenacted those provisions as the "Motor Vehicle Financial Responsibility Act" (1965 Financial Responsibility Act). The 1965 Financial Responsibility Act contained a "Declaration of purpose" identical to the language of section 1 of House Bill 1116. 1963 C.R.S. § 13-7-2 (1965 Perm. Supp.). The language of the declaration of purpose contained in the 1965 Financial Responsibility Act has remained intact. § 42-7-102, 17 C.R.S. (1994 Supp.). See Ch. 337, sec. 1, § 42-7-102, 1994 Colo. Sess. Laws 2094, 2473.
In 1969, four years after the enactment of the uninsured motorists provisions and the 1965 Financial Responsibility Act, the General Assembly adopted "AN ACT CONCERNING THE REGULATION OF AUTOMOBILE INSURANCE POLICY CANCELLATION." Act approved July 1, 1969, ch. 192, secs. 1-10, 1969 Colo. Sess. Laws 549-51. Senate Bill 350 contained ten sections, the last two of which consisted of a safety clause and a provision establishing the effective date thereof. The eight substantive sections of Senate Bill 350, which eight sections will hereafter be referred to as the "Cancellation Act," related exclusively to the regulation of procedures for the cancellation of automobile insurance policies and were initially codified at 1963 C.R.S. sections 72-30-1 to -8 (1969 Perm. Supp.).
The parties have not suggested that the few minor amendments to portions of §§ 10-4-601 to -608 on various occasions since 1965 affect the substance of these provisions.
The prefatory language to the definitional sections of the Cancellation Act reflects the General Assembly's intent to limit the definitions contained therein to the eight substantive provisions thereof. The broad declaration of policy contained in 1963 C.R.S. sections 72-12-19 and -20 (1965 Perm. Supp.), and repeated verbatim by section 2 of the 1965 Financial Responsibility Act, then codified at 1963 C.R.S. section 13-7-2, (1965 Perm. Supp.), was not affected by the adoption of the Cancellation Act. Thus as of July 1, 1969 — the effective date of the Cancellation Act — the General Assembly had adopted two distinct statutory schemes. Former House Bill 1116, then codified at 1963 C.R.S. sections 72-12-19 and -20 (1965 Perm. Supp.), required that all purchasers of automobile liability insurance policies be offered the option of purchasing uninsured motorist coverage to effectuate the broad policy articulated in the declaration of policy set forth in 1963 C.R.S. section 72-12-20 (1965 Perm. Supp.) encouraging motorists to protect themselves against losses caused by the negligent conduct of financially irresponsible motorists. See Kral v. American Hardware Mut. Ins. Co., 784 P.2d 759, 765 (Colo. 1989). Former Senate Bill 350, then codified at 1963 C.R.S sections 72-30-1 to -8 (1969 Perm. Supp.), established criteria for cancellation of certain defined automobile insurance policies. The adoption of the Cancellation Act in 1969 did not undermine the intent or effect of the adoption in 1965 of House Bill 1116.
The prefatory language to the definitional sections of Senate Bill 350 referred to the definition "[a]s used in this Act." Act approved July 1, 1969, ch. 192, sec. 1, 1969 Colo. Sess. Laws 549. As codified in title 72, article 30, the phrase was altered to state "[a]s used in this article." § 72-30-1, 1963 C.R.S. (1969 Perm. Supp.). The change in language did not alter the fact that the definitional provisions of the Cancellation Act did not in any way affect the broad sweep of the uninsured motorist provisions of House Bill 1116.
In 1973, pursuant to 1963 C.R.S. section 135-6-1 (1971 Perm. Supp.), the revisor of statutes completed a general recodification of the Colorado Revised Statutes. The uninsured motorist provisions originally contained in House Bill 1116 were recodified without change at sections 10-4-319 and -320, 4 C.R.S. (1973). The Cancellation Act was recodified without change at sections 10-4-601 to -608, 4 C.R.S. (1973). As in 1969, the limiting language of the definition of the term "policy", codified at section 10-4-601(2), 4 C.R.S. (1973), had no effect on the broad language of the uninsured motorist provisions then codified at sections 10-4-319 and -320, 4 C.R.S. (1973).
"Colorado Revised Statutes 1973 was enacted as a repeal and reenactment of the Colorado Revised Statutes 1963 and the supplements thereto, as provided for in section 2-5-122." § 2-5-113(1), 1B C.R.S. (1994 Supp.). The revisor was authorized to make changes in arrangement and terminology which would improve the style and clarity of the laws, but was not to change the substance of any statute. § 2-5-103(2), 1B C.R.S. (1980).
In 1979, the General Assembly repealed section 10-4-319, 4 C.R.S. (1973), requiring that purchasers of automobile liability insurance be offered the opportunity to purchase uninsured motorist coverage, originally adopted in 1965 as section 2 of House Bill 1116 and initially codified at 1963 C.R.S. § 72-12-19 (1965 Perm. Supp.). Ch. 69, sec. 7, 1979 Colo. Sess. Laws 360. Simultaneously, the identical language of former section 2 of House Bill 1116 was enacted as section 10-4-609, 4 C.R.S. (1973 1979 Supp.). Ch. 69, sec. 11, § 10-4-609, 1979 Colo. Sess. Laws 377. The Cancellation Act remained codified at section 10-4-601 to -608, 4 C.R.S. (1973 1979 Supp.). The language of section 10-4-609, 4 C.R.S. (1973 1979 Supp.), remained directed exclusively to the requirement that purchasers of automobile liability insurance policies be offered the opportunity to purchase uninsured motorist coverage. That requirement furthered the declaration of purpose articulated in section 1 of House Bill 1116; it had no relationship to the purposes and requirements of the Cancellation Act first articulated in 1969 in Senate Bill 350 and recodified in 1973 at sections 10-4-601 to -608, 4 C.R.S. (1973).
This language is now codified at § 10-4-609, 4 C.R.S. (1994).
It is also noteworthy that the eight sections comprising the Cancellation Act do not address the same subject matter as section 10-4-609, 4A C.R.S. (1994). The definitions and policies embodied in sections 10-4-601 to -608 are designed to protect private but not commercial consumers from unfair insurance policy termination procedures. They have no relevance to the uninsured motorist provision set forth in section 10-4-609.
In 1979, section 10-4-320, 4 C.R.S. (1973), containing the declaration of purpose initially adopted in 1965 as section 1 of House Bill 1116, was also repealed. Ch. 69, sec. 7, 1979 Colo. Sess. Laws 360. However, language identical to the declaration of purpose set forth initially in section 1 of House Bill 1116 was retained unaltered in section 42-7-102, 17 C.R.S. (1973). Thus in 1979 the General Assembly reaffirmed its continued commitment to the broad policy and specific requirements established in 1965 by the uninsured motorist provisions of House Bill 1116 as well as to the policies articulated and effectuated by the Cancellation Act.
In our view, this examination of the history of the codification of the uninsured motorist provisions of House Bill 1116, the Cancellation Act, and the 1965 Financial Responsibility Act evidences an unflagging legislative intent to assure that motorists in this state are afforded an opportunity to protect themselves from losses resulting from the negligent conduct of financially irresponsible operators of motor vehicles. A legislative intent to change the meaning of a statute in the course of a general revision will not be inferred unless such an intention is required by express legislative language. See Davis v. Conour, 178 Colo. 376, 382, 494 P.2d 1015, 1018 (1972). No such intent was indicated by the General Assembly when it recodified section 2 of House Bill 1116 to section 10-4-609(1). To the contrary, the decision of the General Assembly in 1979 to retain the language of section 1 of House Bill 1116 verbatim in section 2 of the Motor Vehicle Financial Responsibility Act codified at section 42-7-102, 17 C.R.S. (1973), reflects the General Assembly's intent to perpetuate the broad policy articulated therein.
The General Assembly reaffirmed this policy with the passage in 1973 of the Colorado No Fault Act, which statute provides in pertinent part as follows:
The general assembly declares that its purpose in enacting this article is to avoid inadequate compensation to victims of automobile accidents; to require registrants of motor vehicles in this state to procure insurance covering legal liability arising out of ownership or use of such vehicles and also providing benefits to persons occupying such vehicles and to persons injured in accidents involving such vehicles.
Ch. 94, sec. 1, § 13-25-2, 1973 Colo. Sess. Laws 334.
The language of the 1965 Declaration of purpose is now codified at § 42-7-102, 17 C.R.S. (1993).
For the foregoing reasons, we conclude that the definition of "policy" contained in section 10-4-601(2), 4A C.R.S. (1994), does not limit the intent of the General Assembly, first articulated in 1965, continually reaffirmed since then, and currently reflected by section 10-4-609, 4A C.R.S. (1994), and section 42-7-102, 17 C.R.S. (1993), that all purchasers of automobile liability insurance policies must be afforded the opportunity to purchase uninsured motorist coverage. We also conclude that the rental agreement offered by North-West and signed by Passamano constituted an automobile liability insurance policy for purposes of the provisions of section 10-4-609(1), 4A C.R.S. (1994), notwithstanding the provisions of section 10-4-601(2), 4A C.R.S. (1994), defining the term "policy" for purposes of sections 10-4-601 to -608, 4A C.R.S. (1994). We therefore reject the contrary determination reached by the court of appeals.
B
Kent and Brown argue that the agreement executed by Budget and Kent constitutes a contract of insurance pursuant to which Kent is the named insured and Budget is the insurer. They contend that Budget, as the insurer, was required by section 10-4-609(1) to offer Kent the right to accept or reject uninsured motorist coverage. We conclude that the agreement between Budget and Kent constitutes a contract of insurance for purposes of section 10-4-609(1) and that Budget was required to offer uninsured motorist coverage to Kent.
Kent and Brown were injured in 1981. Although § 10-4-609(1) was adopted in 1983, see ch. 92, sec. 1, § 10-4-609(1), 1983 Colo. Sess. Laws 454-55, its predecessor, § 10-4-609, 4 C.R.S. (1981 Supp.), contained substantially similar language.
Both parties have pointed to numerous decisions from other jurisdictions that have addressed the issue of whether applicable legislative provisions establishing terms and conditions of automobile insurance contracts require self-insured lessor car rental agencies to offer uninsured motorist coverage to their lessees. Several courts have held that self-insured lessors cannot reject uninsured motorist coverage on behalf of their prospective lessees. Twyman v. Robinson, 342 S.E.2d 313 (Ga. 1986); Ashline v. Simon, 466 So.2d 622 (La.Ct.App. 1985); Jones v. King, 549 So.2d 350 (La.Ct.App. 1989); Hartford Ins. Co. v. Hertz Corp., 572 N.E.2d 1 (Mass. 1991); Crocker v. Transport of New Jersey, 404 A.2d 1293 (N.J.Super.Ct. Law Div. 1979); Allstate Ins. Co. v. Shaw, 418 N.E.2d 388 (N.Y. 1980); Moon v. Guarantee Ins. Co., 764 P.2d 1331 (Okla. 1988); Modesta v. Southeastern Pa. Transp. Auth., 469 A.2d 1019 (Pa. 1983); Southern Home Ins. Co. v. Burdette's Leasing Serv., Inc., 234 S.E.2d 870 (S.C. 1977). Other courts have concluded that self-insured lessors are empowered to reject uninsured motorist coverage on behalf of their prospective lessees. Cincinnati Ins. Co. v. Hertz Corp., 776 F. Supp. 1235 (S.D. Ohio 1991); Mountain States Tel. Tel. Co. v. Aetna Casualty and Sur. Co., 568 P.2d 1123 (Ariz.Ct.App. 1977); Lapp v. Transport Indem. Co., 210 Cal.Rptr. 135 (Cal.Ct.App. 1985); White v. Regional Transp. Dist., 735 P.2d 218 (Colo.App. 1987); Diversified Serv. v. Avila, 606 So.2d 364 (Fla. 1992); Kohly v. Royal Indem. Co., 190 So.2d 819 (Fla.Dist.Ct.App. 1966); Robinson v. Hertz Corp., 489 N.E.2d 332 (Ill.App.Ct. 1986); Hill v. Catholic Charities, 455 N.E.2d 183 (Ill.App.Ct. 1983); Jordan v. Honea, 407 So.2d 503 (La.Ct.App. 1981) (superseded by statute, see Cuccia v. Clark, 557 So.2d 989 (La.Ct.App. 1990)); Snyder v. Roadway Express, Inc., 455 N.E.2d 11 (Ohio Ct. App. 1982); American States Ins. Co. v. Utah Transit Auth., 699 P.2d 1210 (Utah 1985); Shelton v. American Re-Insurance Co., 173 S.E.2d 820 (Va. 1970). These decisions are to a great extent based upon examination of particular legislative provisions governing the content of automobile insurance contracts.
We have determined that the provisions of section 10-4-609(1) requiring an insurer to provide a named insured with the opportunity to purchase uninsured motorist coverage are applicable to automobile insurance policies covering rental vehicles. Cf. § 10-4-601(2)(a), 4A C.R.S. (1994). Entities such as Budget are entitled, pursuant to section 10-4-716, 4A C.R.S. (1994), to elect to become self-insurers. However, the fact that Budget elected to become a "self-insurer" is not controlling. What is material is the relationship Budget had with its client, Kent. Just as North-West was an insurer by way of the rental agreement Passamano executed, Budget stands in the role as an insurer with respect to Kent in view of the rental agreement executed by Kent. In our view, Kent, as the driver named in the car rental agreement, is the named insured under the automobile insurance contract between Kent and Budget. Therefore, Budget, as an insurer, was required by section 10-4-609(1) to offer Kent, the named insured, the option of rejecting uninsured motorist protection. We reject the contrary conclusion reached by the trial court.
Section 10-4-716 states in pertinent part as follows:
Self-insurers. (1) Any person in whose name more than twenty-five motor vehicles are registered may qualify as a self-insurer by obtaining a certificate of self-insurance issued by the director.
§ 10-4-716(1), 4A C.R.S. (1994). This provision, like the uninsured motorist provision, was enacted as a part of the Motor Vehicle Financial Responsibility Act. Ch. 91, sec. 3, § 13-7-51(1), 1965 Colo. Sess. Laws 333, 354.
III
For the foregoing reasons, we reverse the judgment of the court of appeals in Passamano v. Travelers Indemnity Company and also reverse the judgment of the trial court in Kent and Brown v. Budget Rent-A-Car Systems, Inc.
JUSTICE ERICKSON specially concurs. JUSTICE VOLLACK dissents, and CHIEF JUSTICE ROVIRA joins in the dissent.