Coverage for damages to harvested crops

Colorado Case Law

GRANT FAM. FARMS v. COLO FARM BUREAU MUT INS, 05CA1455
(Colo.App. 11-2-2006) Grant Family Farms, Inc.,
Plaintiff-Appellant, v. Colorado Farm Bureau Mutual
Insurance Company, Defendant-Appellee. Court of Appeals No.
05CA1455. Colorado Court of Appeals. Division VI.
November 2, 2006.

Arapahoe County District Court No. 03CV3699, Honorable J.
Mark Hannen, Judge.

In this insurance coverage dispute, plaintiff, Grant
Family Farms, Inc. (Grant), appeals the trial court’s
summary judgment in favor of defendant, Colorado Farm
Bureau Mutual Insurance Company (the insurer). We affirm.

JUDGMENT AFFIRMED.

Ray, Jouard & Pickering, P.C., Stephen J. Jouard, Fort
Collins, Colorado, for Plaintiff-Appellant.

Nathan, Bremer, Dumm & Myers, P.C., Mark H. Dumm, Willow
I. Arnold, Denver, Colorado, for Defendant-Appellee.

Opinion by JUDGE STERNBERG.[fn*]

[fn*] Sitting by assignment of the Chief Justice under
provisions of Colo. Const. art. VI, § 5(3), and
§ 24-51-1105, C.R.S. 2006.

Grant operates an organic farm in Larimer County. The
insurer issued an insurance policy to Grant in June 1998.
The policy provided coverage for, among other things,
damages to harvested crops. Grant asserted that during the
time the policy was in effect, it sustained losses to a
spinach crop while the spinach was in transit to a
distributor.

Grant discovered the loss in April 2000 and notified the
insurer of its claim. On September 24, 2001, Grant made a
formal claim, through counsel, for damages to the spinach
crop. The insurer denied this claim, no later than December
2001, on the basis that the policy did not provide coverage
for the peril that caused the loss.

On April 25, 2003, Grant filed this lawsuit, pursuant to
§ 13-51-101, et seq., C.R.S. 2006, seeking a
declaration of rights under the insurance policy. The
parties eventually submitted the claim for resolution by
the trial court on stipulated facts. After reviewing the
stipulation and the associated exhibits, the trial court
entered summary judgment in favor of the insurer and
dismissed the complaint with prejudice.

The pertinent provisions of the insurance policy are these:

Suits Against Us. No lawsuit or action can be brought
against us unless all the policy provisions have been
complied with and the action is started within two (2)
years after the date of loss.

Conformity with Statute. Terms of this policy, in
conflict with the statutes of the state where the property
or insured activity described on the Declaration Page(s)
is located are amended to conform to such statutes.

(Emphasis added.)

In its order, the trial court held that the insurer was
entitled to judgment as a matter of law because Grant’s
claims were time barred by the contractual limitations
period contained in the insurance policy. Because the trial
court concluded that the two-year contractual limitations
period was enforceable, it did not reach the issue whether
the loss would have been covered under the policy.

Grant’s principal contention on appeal is that the trial
court erred when it ruled that Grant’s claims against the
insurer were barred by the two-year contractual limitations
period. Grant argues that the contractual limitations
period is “in conflict” with the three-year statutory
limitations period for breach of contract actions found in
§ 13-80-101(1)(a), C.R.S. 2006. Grant reasons that,
because of this conflict, the conformity clause requires
that the insurance policy be amended to conform to this
statute. Accordingly, Grant asserts that it had three years
within which to file suit against the insurer. We disagree.

The interpretation of an insurance policy presents a
question of law that we review de novo. Allstate Ins. Co.
v. Huizar, 52 P.3d 816, 819 (Colo. 2002); Farmers Alliance
Mut. Ins. Co. v. Ho, 68 P.3d 546, 548 (Colo.App. 2002). The
words of the insurance policy “should be given their plain
meaning according to common usage, and strained
constructions should be avoided.” Allstate Ins. Co. v.
Huizar, supra, 52 P.3d at 819.

Also, a grant of summary judgment is reviewed de novo and
is proper only upon a showing that there are no issues of
material fact and that the moving party is entitled to
judgment as a matter of law. See C.R.C.P. 56(c); McCormick
v. Union Pac. Res. Co., 14 P.3d 346 (Colo. 2000).

This case turns on the meaning of the term “in conflict”
as used in the conformity clause. The dictionary definition
of the word “conflict” includes “clash . . . of opposing or
incompatible forces or qualities.” Webster’s Third New
International Dictionary 476 (1986). A statute and policy
provision are not “in conflict” merely because they are
different from one another. See Thomas v. Allstate Ins.
Co., 974 F.2d 706, 709 (6th Cir. 1992) (holding similar
provision was “different from” but not “in conflict” with
applicable statute of limitations).

Although Colorado courts have not previously addressed the
precise issue before us, courts in other jurisdictions have
done so and have concluded that contractual and statutory
limitations provisions are in conflict only if contractual
shortening is prohibited by statute. Gravely v. S. Trust
Ins. Co., 258 S.E.2d 753, 754 (Ga.Ct.App. 1979); Atwood v.
St. Paul Fire & Marine Ins. Co., 363 Ill. App. 3d 861, 845
N.E.2d 68 (2006); Meridian Mut. Ins. Co. v. Caveletto, 553
N.E.2d 1269, 1270 (Ind.Ct.App. 1990); Webb v. Kentucky Farm
Bureau Ins. Co., 577 S.W.2d 17, 18 (Ky.Ct.App. 1978). We
find these cases persuasive. If contractual shortening of
the statute of limitations is prohibited, the contractual
and statutory limitations periods are incompatible and are
therefore in conflict. That is not the case here.

The statute of limitations applicable to this claim,
§ 13-80-101(1)(a), provides that all contract suits
“shall be commenced within three years after the cause of
action accrues, and not thereafter.” This statute provides
a period of limitation different from the two-year
limitation period found in Grant’s insurance policy.
However, parties to a contract may require that actions
founded on the contract be commenced within a shorter
period of time than that prescribed by the applicable
statute of limitations. Hepp v. United Airlines, Inc., 36
Colo. App. 350, 353, 540 P.2d 1141, 1143 (1975). Section
13-80-101(1)(a) contains no language prohibiting
contractually shortening the three-year limitations period.
Therefore, we agree with the trial court that the
contractual limitations period is not “in conflict” with
§ 13-80-101(1)(a).

Accordingly, we conclude that Grant had to bring its suit
within two years of the date of loss. Because the suit was
not brought until April 25, 2003, well beyond the two-year
contractual limitations period, the trial court correctly
held that Grant’s claim against the insurer was time
barred.

Furthermore, although we agree with Grant that any
ambiguity in an insurance policy must be interpreted
against the insurer, the phrase “in conflict” as used here
is unambiguous. Therefore, the two-year limitations period
contained in the policy must be enforced. See Bolejack v.
Travelers Ins. Co., 64 P.3d 939, 940 (Colo.App. 2003) (“An
unambiguous limitation or exclusion in a policy must be
enforced.”).

Grant also contends that the trial court erred in
determining that the cause of action accrued on the “date
of loss.” In support of its contention, Grant asserts that
the accrual provisions in the policy conflicted with the
accrual provisions in § 13-80-108(6), C.R.S. 2006.
Assuming the “date of loss” language defining the accrual
point is open to interpretation, we agree with the trial
court that, even if the action did not accrue until August
28, 2000, as Grant argues, its suit filed on April 25, 2003
was still time barred by the two-year contractual
limitations period, and thus there is no need to determine
the precise meaning of that term in the policy.

The judgment is affirmed.

JUDGE WEBB and JUDGE J. JONES concur.