FILED
United States Court of Appeals
Tenth Circuit
June 19, 2018
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
AUTO-OWNERS INSURANCE
COMPANY, a Michigan corporation,
Plaintiff Counter
Defendant - Appellee,
v. No. 17-1075
JENNIFER CSASZAR, a Colorado
individual,
Defendant Counter
Claimant - Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. NO. 1:15-CV-02318-CMA-KMT)
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.
Before TYMKOVICH, Chief Judge, BRISCOE, and BACHARACH, Circuit
Judges.
TYMKOVICH, Chief Judge.
Auto-Owners Insurance Company provided automobile insurance to Frank
and Nancy Csaszar and their daughter, Jennifer. 1 But when that policy’s term
came to a close, Auto-Owners informed Mr. and Mrs. Csaszar that, because of
their daughter’s driving record, it would only renew their policy if it excluded her
from coverage. The Csaszars agreed. The policy accordingly included an
“excluded-driver” provision that stated the policy “shall provide no coverages”
for “claims arising out of [Jennifer Csaszar’s] operation or use of any
automobile.” App. at 205.
While this new policy was operative, an uninsured motorist rear-ended Ms.
Csaszar while she was driving a vehicle not scheduled under her parents’ Auto-
Owners policy. To receive compensation for her injuries, Ms. Csaszar filed a
claim with Auto-Owners, requesting it pay her $500,000 in uninsured and
underinsured motorist (UM/UIM) coverage. Auto-Owners denied the claim
because it believed the excluded-driver provision barred Ms. Csaszar from such
coverage. It then sought a declaratory judgment that Ms. Csaszar is not entitled
to any coverage, including UM/UIM coverage, under her parents’ policy. In
1
The policy also insured the Csaszars’ other daughter, Angela. Because
Angela’s insurance coverage is not relevant to this appeal, we only discuss
Jennifer’s coverage.
Further, for clarity we refer to Jennifer Csaszar as “Ms. Csaszar,” and her
parents as “Mr. and Mrs. Csaszar” or “the Csaszars.”
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response, Ms. Csaszar filed a counterclaim seeking a declaration she is, in fact,
entitled to this coverage.
The district court granted Auto-Owners’ motion for summary judgment.
Exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM. As we explain, the
excluded-driver provision unambiguously bars Ms. Csaszar from all
coverage—including UM/UIM coverage—when she drives any automobile. Ms.
Csaszar also argues that if the excluded-driver provision bars her from coverage
when she drives any automobile, then the provision is void as contrary to
Colorado public policy. We disagree. The Colorado Court of Appeals squarely
rejected this argument in Massingill v. State Farm Mutual Automobile Insurance,
176 P.3d 816 (Colo. App. 2007), when it held that if an insurer excludes a
resident relative such as Ms. Csaszar from liability coverage, it may also exclude
that person from UM/UIM coverage.
I. Background
Auto-Owners Insurance Company provided automobile insurance to Frank
and Nancy Csaszar and their daughter, Jennifer. But towards the end of that
policy’s terms, because of Ms. Csaszar’s driving record, Auto-Owners sent Mr.
and Mrs. Csaszar a “Notice of Non-Renewal” stating it would only renew the
policy if they “agree[d] in writing that the policy does not apply to . . . Jennifer L.
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Csaszar.” App. at 188. The Csaszars agreed. The new policy thus included the
following “Exclusion of Named Person” provision (excluded-driver provision):
Dear Policyholder:
The following is a renotification of an excluded driver(s) under your
automobile policy with our company.
This policy shall provide no coverages for any damages, losses or
claims arising out of operation or use of any automobile to which this
policy would otherwise apply when such automobile is operated or
used by the below individual(s).
This exclusion shall apply whether or not such operation or use is
with expressed or implied permission of a person or organization
insured by this policy.
All other policy terms and conditions apply.
Excluded driver(s):
Jennifer L. Csaszar
App. at 205.
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 car with her mother that was not scheduled
under her parents’ Auto-Owners policy—a Subaru Impreza. She bought a
separate insurance policy from Geico to cover her use of the Subaru. That policy
included $300,000 in UM/UIM coverage.
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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. But hoping
to more fully recover compensation for her injuries—Ms. Csaszar claims the
accident caused her over $4,000,000 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 is not entitled to coverage, including UM/UIM
coverage, under her parents’ policy. Ms. Csaszar filed a counterclaim seeking a
declaration she is entitled to such coverage. Both parties moved for summary
judgment.
The district court granted Auto-Owners’ motion for summary judgment. It
first concluded the excluded-driver provision unambiguously barred Ms. Csaszar
from coverage. The court also rejected her public policy argument.
II. Analysis
We review a district court’s decision to grant a motion for summary
judgment de novo. Philadelphia Indem. Ins. v. Lexington Ins., 845 F.3d 1330,
1336 (10th Cir. 2017). A court “shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Savant
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Homes, Inc. v. Collins, 809 F.3d 1133, 1137 (10th Cir. 2016). And when, as in
this case, our jurisdiction is based on diversity of citizenship, “we apply the
substantive law of the forum state”—which here is Colorado. Cornhusker Cas.
Co. v. Skaj, 786 F.3d 842, 850 (10th Cir. 2015).
Ms. Csaszar argues the district court erred by granting summary judgment
in favor of Auto-Owners for two reasons: (1) the excluded-driver provision does
not unambiguously bar her from coverage when she drives an unscheduled
vehicle, and (2) if the excluded-driver provision does bar her from this coverage,
it violates Colorado public policy and is thus void. 2 Both arguments lack merit.
A. The Excluded-Driver Provision
Under Colorado law, when “construing the terms of insurance policies, we
apply principles of contract interpretation.” Cotter Corp. v. Am. Empire Surplus
Lines Ins., 90 P.3d 814, 819 (Colo. 2004). In so doing, “we accord contract terms
their plain and ordinary meanings.” Bohrer v. Church Mut. Ins., 965 P.2d 1258,
1261 (Colo. 1998). When “the language of an insurance contract is clear and
unambiguous on its face, it must be upheld as written.” Spaur v. Allstate Ins.,
942 P.2d 1261, 1263 (Colo. App. 1996). And Colorado law compels us to
2
Ms. Csaszar also argues the district court improperly relied on extrinsic
evidence—specifically, the “Notice of Nonrenewal and the Exclusion of Named
Person” form. Aplt. Br. at 31. Even assuming the district court improperly relied
on this document, this does not warrant reversal. Under de novo review—and
based on the insurance policy itself, not extrinsic evidence—we conclude the
policy unambiguously bars Ms. Csaszar from UM/UIM coverage.
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“neither rewrite an unambiguous policy nor force a strained construction in order
to” interpret it “against the insurer.” Id.
At the same time, when “an insurer seeks to restrict coverage, the limitation
must be clearly expressed.” Ryder Truck Rental Inc. v. Guar. Nat. Ins., 770 P.2d
1380, 1382 (Colo. App. 1989). If the limitation is “ambiguous, then the contract
must be construed in favor of coverage and against” the limitation. Id. “A
contractual term is ambiguous ‘if it is susceptible on its face to more than one
reasonable interpretation.’” Am. Family Mut. Ins. v. Hansen, 375 P.3d 115, 120
(Colo. 2016) (quoting USAA Cas. Ins. v. Anglum, 119 P.3d 1058, 1059 (Colo.
2005)). Whether an insurance policy is ambiguous is a question of law. Tynan’s
Nissan, Inc. v. Am. Hardware Mut. Ins., 917 P.2d 321, 232 (Colo. App. 1995).
The insurer bears the burden of establishing the exclusion is not subject to any
other reasonable interpretation. Hecla Mining Co. v. New Hampshire Ins., 811
P.2d 1083, 1090 (Colo. 1991).
Colorado also follows the doctrine of reasonable expectations. As relevant
here, under this doctrine Colorado will not enforce an exclusionary provision
“where an ordinary, objectively reasonable person would, based on the language
of the policy, fail to understand that he or she is not entitled to the coverage at
issue.” Mountain States Mut. Cas. Co. v. Roinestad, 296 P.3d 1020, 1024–25
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(Colo. 2013). 3 Thus, even if a “coverage-provision[] may not be ambiguous in a
technical sense”—that is, it is not ambiguous enough to be “subject to the rule
that ambiguities must be construed against the drafter”—the provision may
nevertheless “be held unenforceable” under the doctrine if it is “ambiguous from
the perspective of an ordinary reader.” Bailey v. Lincoln Gen. Ins., 255 P.3d
1039, 1050 (Colo. 2011).
Ms. Csaszar contends the excluded-driver provision only bars her from
coverage when she drives a scheduled vehicle. We disagree. By its terms, the
exclusion unambiguously bars Ms. Csaszar from coverage when she drives any
automobile—not just a scheduled vehicle under the policy. As the provision’s
plain language states, the “policy shall provide no coverage . . . arising out of
operation or use of any automobile to which this policy would otherwise apply.”
App. at 205 (emphasis added). The plain and ordinary meaning of “any
automobile” is just that—any automobile. Nowhere does the provision state it
only applies when Ms. Csaszar operates “any scheduled automobile.” Nor does
any language in the provision modify “automobile” in a manner that suggests the
3
The doctrine of reasonable expectations also applies “where, because of
circumstances attributable to an insurer, an ordinary, objectively reasonable
person would be deceived into believing that he or she is entitled to coverage,
while the insurer would maintain otherwise.” Roinestad, 296 P.3d at 1025. When
the doctrine applies in this way, it serves as “a means of avoiding an unfair result
where the insurer has engaged in some sort of deception.” Craft v. Philadelphia
Indem. Ins., 343 P.3d 951, 960 (Colo. 2015). This application of the doctrine is
not implicated by this case.
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term applies only to scheduled vehicles. And in fact, at oral argument Ms.
Csaszar’s counsel conceded the excluded-driver provision bars her from
coverage. 4 We therefore conclude the excluded-driver provision unambiguously
precludes Ms. Csaszar from all coverage when she drives any automobile. 5
Ms. Csaszar’s arguments to the contrary prove unpersuasive. She focuses
on the fact the provision only bars coverage “arising out of the use of any
automobile to which this policy would otherwise apply.” App. at 205 (emphasis
added). In her view, the policy only “otherwise appl[ies]” to the three vehicles
scheduled under it. She thus contends the exclusion provision, too, only applies
when she drives one of those three vehicles. But Ms. Csaszar cannot have it both
ways. Her entire theory of the case is that she can recover UM/UIM benefits
4
See Oral Argument at 8:30–9:14:
The Court: So your argument is solely that it is a
violation of public policy. But you’re not questioning
the . . . express exclusion under the policy . . . of any
UM coverage [for Ms. Csaszar] for driving a non-
schedule automobile, am I correct?
Counsel: As written, if you apply it as written, that’s
what it says.
5
Ms. Csaszar also argues the doctrine of reasonable expectations entitles
her to coverage. She states that since her interpretation of the policy “is
eminently reasonable,” this “confirm[s] the exclusion is susceptible to multiple
reasonable interpretations and thus is ambiguous under the reasonable
expectations doctrine.” Aplt. Br. at 29. But as we explained above, this
interpretation is afield from an ordinary interpretation of the provision’s plain
language.
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under the policy for an injury that arose while she was operating an unscheduled
vehicle. Ms. Csaszar’s interpretation of “otherwise apply,” then, conflicts with
her theory of recovery.
Further, Ms. Csaszar highlights how the exclusion provision “shall apply
whether or not such operation or use is with expressed or implied permission of a
person or organization insured by this policy.” App. at 205. Because her parents
could only give her permission to drive cars they own—the three scheduled
automobiles—Ms. Csaszar argues the exclusion itself must also apply only to
those three vehicles. This permission provision does not, however, stand for as
much. The provision is a narrow clarification that the exclusion continues to
apply even when permission was given. It does not prove the inverse—that the
exclusion can only apply to vehicles that Mr. and Mrs. Csaszar could give their
daughter permission to drive. In other words, the tail of the permission provision
cannot wag the dog of the entire excluded-driver provision.
In sum, the excluded-driver provision unambiguously bars Ms. Csaszar
from coverage under her parents’ Auto-Owners policy for any injuries arising
from her operation of any automobile.
B. Colorado Public Policy
Next, if the excluded-driver provision bars her from coverage, Ms. Csaszar
argues it is void because it violates Colorado public policy. We disagree.
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“[A]ttempting to dilute, condition, or limit statutorily mandated coverage”
violates Colorado public policy. DeHerrera v. Sentry Ins., 30 P.3d 167, 173
(Colo. 2001). To determine if a policy does so, Colorado courts “look to both the
plain language of the statute and its legislative purpose.” Id. The purpose of
requiring UM/UIM coverage is to “assure the widespread availability to the
insuring public of insurance protection against financial loss caused by negligent
financially irresponsible motorists.” Id. at 174 (quoting Ch. 91, sec. 1, 1965
Colo. Sess. Laws 333). Thus, a “policy that limits UM/UIM benefits under
circumstances where the General Assembly intended for UM/UIM benefits to be
recovered is invalid.” Id. at 173.
The parties agree that, absent any exclusion, Ms. Csaszar would be covered
by her parents’ insurance policy since she qualifies as a resident relative. Colo.
Rev. Stat. § 10–4–601(5) (defining “[i]nsured” to include “relatives of the named
insured who reside in the same household as the named insured”); see also
DeHerrera, 30 P.3d at 176 (noting a “son, as a resident relative of the named
insured, is a person insured under the policy”). And under Colorado law, all
“motor vehicle liability polic[ies] insuring against loss resulting from liability”
must include UM/UIM coverage. Colo. Rev. Stat. § 10–4–609(1)(a). But the
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statute carves out an exception: “the named insured may reject such coverage in
writing.” Colo. Rev. Stat. § 10–4–609(1)(a). 6
Nevertheless, Ms. Csaszar claims Colorado public policy does not permit
excluding resident relatives from UM/UIM coverage—at least when an un/under
insured motorist is completely at fault for injuring the relative. Her argument
centers on the difference between liability coverage and UM/UIM coverage. It
makes sense, she says, to allow insurers to exclude resident relatives with poor
driving records from liability coverage, since insuring those drivers involves a
substantial amount of risk. Yet she insists it does not make sense to allow
insurers to exclude them from UM/UIM coverage when the injured relative was
completely without fault. After all, every driver—whether their record is poor or
pristine—is equally likely to be injured by an at-fault uninsured motorist.
6
More specifically, the full statute provides:
In any case where an insurer is authorized under this
part 6 to cancel or refuse to renew or increase the
premiums on an automobile liability insurance policy
under which more than one person is insured because of
the claim experience or driving record of one or more
but less than all of the persons insured under the policy,
the insurer shall in lieu of cancellation, nonrenewal, or
premium increase offer to continue or renew the
insurance but to exclude from coverage, by name, the
person whose claim experience or driving record would
have justified the cancellation or nonrenewal.
Colo. Rev. Stat. § 10–4–630(1).
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This has some valence as a policy argument. And indeed, as Ms. Csaszar
points out, numerous states have followed this reasoning to conclude it violates
that state’s public policy to bar innocent-insured drivers like her from UM/UIM
coverage. See, e.g., State Farm Mut. Auto. Ins. v. Washington, 641 A.2d 449, 452
(Del. 1994). But we, of course, do not view this policy question in a vacuum.
We must apply Colorado law. And in Massingill v. State Farm Mutual
Automobile Insurance, 176 P.3d 816 (Colo. App. 2007), the Colorado Court of
Appeals rejected the exact argument Ms. Csaszar now advances.
In Massingill, the Colorado Court of Appeals considered “whether an
insurance company may deny UM/UIM coverage to a resident relative driver . . .
when the policy excludes the driver from coverage because of a poor driving
record.” 176 P.3d at 818. And there, as here, the resident relative argued barring
him from UM/UIM coverage improperly diluted or limited statutorily mandated
coverage. Id. at 821. The Colorado Court of Appeals was unpersuaded. It
emphasized that the “language of the UM/UIM statute . . . demonstrates that
coverage for an excluded driver is not mandated.” Id. After all, the statute only
mandates UM/UIM coverage for “persons insured thereunder.” § 10–4–609(1).
This phrase, the court concluded, “means that insurers must provide UM/UIM
coverage for the protection of persons insured under the liability policy that the
insurer is issuing.” Massingill, 176 P.3d at 822 (second emphasis added) (quoting
DeHerrera, 30 P.3d at 175).
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The court went on to consider—and reject—Ms. Csaszar’s risk-based
argument. It “recognize[d] that UM/UIM coverage is designed to protect persons
who are not ‘at fault’ in an accident, and that the risks in insuring against
uninsured and underinsured motorists are very different from those taken into
account in the liability provisions of a policy.” Id. Nevertheless, the court
“perceive[d] no reason why an insurance company can permissibly preclude all
other coverage under an automobile policy using a named driver exclusion, but
not UM/UIM coverage.” Id.
Massingill therefore controls this case. Under it, so long as an insurance
policy provides no liability coverage to a resident relative, denying that relative
UM/UIM coverage comports with Colorado public policy. Thus, because the
Auto-Owners policy bars Ms. Csaszar from liability coverage, it does not violate
Colorado public policy for it to also bar her from UM/UIM coverage. 7
7
We realize that “we are not bound by a lower state court decision,” but
must instead predict what the Colorado Supreme Court would do if presented with
the issue. See, e.g., Clark v. State Farm Mut. Auto. Ins., 319 F.3d 1234, 1240–41
(10th Cir. 2003). Even so, “decisions of a state's intermediate appellate courts are
some evidence of how the state supreme court would decide the issue, and we can
consider them as such.” Id. And the Colorado Court of Appeals’ decisions are
particularly instructive when there is “no indication that the Colorado Supreme
Court would decide the matter differently.” Romero v. Int’l Harvester Co., 979
F.2d 1444, 1449 n.3 (10th Cir. 1992).
Ms. Csaszar points us to no Colorado Supreme Court case that casts doubt
on Massingill’s reasoning. As we explain, the cases Ms. Csaszar contends
question Massingill are, in fact, distinguishable. We are consequently convinced
that, if presented with this issue, the Colorado Supreme Court would find the
(continued...)
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Ms. Csaszar argues Massingill is distinguishable for two reasons. 8 Neither
persuades us. First, she highlights how the driver in Massingill was “between
zero and forty percent at fault.” Id. She thus argues Massingill’s holding is
limited to situations in which the excluded driver was partially at fault; it does not
apply where, as here, the excluded driver was entirely without fault. But this
argument ignores the fact that the driver in Massingill was “between zero and
forty percent at fault,” and could have been partially at fault, or he could have
been entirely without fault. Id. (emphasis added). That Massingill nonetheless
held it did not contravene Colorado public policy to exclude that driver from
UM/UIM coverage demonstrates Masingill’s holding applies in both situations.
Second, Ms. Csaszar contends the excluded-driver provision here
substantively differs from the provision in Massingill. 9 But she bases this
difference on her view that this exclusion applies only when she drives a
scheduled vehicle. We have already rejected this argument.
7
(...continued)
reasoning of Massingill persuasive and apply it.
8
Ms. Csaszar also argues the “Massingill opinion is fundamentally flawed
because it relies upon No Fault or PIP law rather than UM/UIM law in reaching
its conclusion.” Aplt. Br. at 22. But the Colorado Court of Appeals merely
analogized to PIP and No Fault cases; we see no reason why this renders the
opinion “fundamentally flawed.”
9
The exclusion in Massingill stated that “no liability or obligation of any
kind shall attach . . . while any motor vehicle is operated” by the excluded driver.
Massingill, 176 P.3d at 819.
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She also argues her parents’ policy violates Colorado public policy because
it provides her with partial UM/UIM coverage. In short, Ms. Csaszar claims
Colorado public policy requires UM/UIM coverage to be all or nothing—perhaps
insurers can completely preclude someone from such coverage, but they cannot
chop the coverage up and sometimes provide it, but sometimes not. This is
precisely what her parents’ policy does, she claims, because she can recover
UM/UIM benefits as a pedestrian or a passenger, but cannot when she operates an
automobile.
Ms. Csaszar cites three cases that, in her view, demonstrate it violates
public policy to provide partial UM/UIM coverage. First, in DeHerrera, the
Colorado Supreme Court held it violated public policy for an insurer to only
provide UM/UIM coverage if a resident relative was injured while driving a car,
not if he was injured driving a motorcycle. 30 P.3d at 173–76. Likewise, in
Jaimes v. State Farm Mut. Auto. Ins., the Colorado Court of Appeals held it
contravened Colorado public policy to offer an insured driver UM/UIM coverage
only when he drove a vehicle covered by that policy, not when he drove non-
scheduled vehicles. 53 P.3d 743, 744–47 (Colo. App. 2002). Finally, in Pacheo
v. Shelter Mut. Ins., this court held it violated Colorado public policy to only
provide resident relatives UM/UIM coverage if they did not own a vehicle. 583
F.3d 735, 738–41 (10th Cir. 2009).
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Yet Ms. Csaszar glosses over a key detail from all three cases. In each one,
the insurer provided liability coverage to the driver the policy partially precluded
from UM/UIM coverage. These cases therefore only stand for the proposition
that it violates Colorado public policy for insurers to provide partial UM/UIM
coverage to those whom they provide full liability coverage. See Aetna Cas. &
Sur. Co. v. McMichael, 906 P.3d 92, 98 (Colo. 1995) (stating it “interpret[s]
[§] 10–4–609(1) to require insurers to offer UM/UIM coverage to a class of
individuals coextensive with the class covered by the liability provision of the
respective policy”). They do not address the different situation in this case in
which the driver being denied UM/UIM coverage is expressly excluded from
liability coverage. Massingill addressed that situation, and answered the question
in the negative. 10
In sum, Colorado public policy does not prohibit the UM/UIM exclusion in
Auto-Owners’ automobile policy.
III. Conclusion
The district court properly granted Auto-Owners’ motion for summary
judgment. The excluded-driver provision in the Csaszars’ policy from Auto-
Owners expressly bars Ms. Csaszar from all coverage—including UM/UIM
10
Ms. Csaszar also argues two of the policy’s subsections relating to
UM/UIM coverage, subsections 2.a and 2.b(2), violate public policy. Because we
conclude Ms. Csaszar is entirely excluded from UM/UIM coverage for injuries
arising from her operation of any vehicle, we need not consider this argument.
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coverage—for injuries arising from her operation of any automobile. This does
not violate Colorado public policy.
We accordingly AFFIRM.
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