Kipling v. State Farm – Sorting Through Insurance Policies


In any injury case where insurance companies are involved, it’s important to seek guidance from an experienced attorney before agreeing to any settlements or accepting any payouts. This is especially true when the injuries are significant and there is more than one insurer and/or policy.

The reason is language in some policy provisions can be complicated. One could negate the other. You may be entitled to some but not all. You may be entitled to all but only offered some.

Insurers are notorious for using aggressive tactics to mitigate the amount of damages paid, regardless of the severity of injuries or even if you are reeling from the loss of a loved one.

That was the case in Kipling v. State Farm Mutual Automobile, where the injured widow of a man killed in a car accident was left to sort through the mess of insurance policies – some issued in different states – giving rise to complex litigation that reached the U.S. Court of Appeals for the Tenth Circuit.

As our Naples car accident attorneys understand it, plaintiff and her husband, Colorado residents were involved in a collision in July 2009 as the result of another driver negligently hitting their sport utility vehicle. Plaintiff was seriously injured. Her husband died.

The negligent driver was covered by insurance, but it was insufficient to cover the damages incurred by plaintiff.

The vehicle in which plaintiff and her husband had been driving was provided by her husband’s employer for both his business and personal use.

The company is incorporated in Minnesota, but has a wholly-owned subsidiary in Colorado.

Because the at-fault driver lacked adequate insurance, plaintiff sought underinsured motorist benefits from several policies issued by State Farm through her husband’s employer. The first was a policy issued by the company in Colorado on the vehicle itself. The insurer paid UIM benefits in full on that policy and also under a separate Colorado policy issued to the firm on another company vehicle.

The dispute arose when plaintiff requested additional UIM benefits under four policies issued by State Farm in Minnesota to the company. Those policies insured four other vehicles provided to four other employees of the company, all based in Minnesota.

None of the vehicles were ever driven in Colorado and neither plaintiff nor her husband had driven the cars. Under Minnesota law, plaintiffs would not be covered under those policies. Thus, State Farm denied the claim.

However, under Colorado law, stacking of insurance was permitted. That state bars limiting UIM coverage on covered vehicles simply because they weren’t occupied at the time of the accident.

Plaintiff sued in federal district court, and a judge determined Colorado law was applicable and denied insurer’s request for summary judgment. A jury trial was held to determine damages and a judgment entered.

Insurer appealed, arguing even under Colorado law, the out-of-state policies would not have provided coverage, and further the court erred in applying conflict-of-law principles for torts rather than for contract law.

The appellate court rejected the first argument for failure to timely raise it, but it did side with insurer on the second point. Thus, the case was reversed and remanded for the court to apply the correct principles in determining coverage.

If you have been injured in an accident, contact the Hollander Law Firm at (561) 347-7770 for a free and confidential consultation. There is no fee unless we win.

Additional Resources:

Kipling v. State Farm Mutual Automobile, Dec. 29, 2014, U.S. Court of Appeals for the Tenth Circuit

More Blog Entries:

Florida Motorcycle Injuries and Comparative Fault, Dec. 7, 2014, Naples Car Accident Lawyer Blog