JUSTICE EID delivered the Opinion of the Court.
¶ 1 Respondent Jennifer Hansen was injured in a motor vehicle accident on December 30, 2007. Four months later, she presented an underinsured motorist ("UIM") claim to petitioner American Family Mutual Insurance Company ("American Family"), asserting coverage under an American Family auto insurance policy on her 1998 Ford Escort. As proof of insurance, Hansen offered lienholder statements issued to her by American Family's local agent that identified her as the named insured at the time of the accident. American Family's own records, however, including a November 2007 declaration page, indicated that the named insureds on the policy at the time of the accident were Hansen's stepfather and mother, William and Joyce Davis (the "Davises"). In reliance upon the policy as reflected in its own records, American Family determined that Hansen was not insured under the policy and denied coverage. Hansen filed an action against American Family asserting claims for breach of contract, common law bad faith, and statutory bad faith for unreasonable delay or denial of benefits under sections 10-3-1115 and -1116, C.R.S. (2015). Prior to trial, American Family reformed the contract to name Hansen as the insured, and the parties settled the breach of contract claim, leaving only the common law and statutory bad faith claims for trial.
¶ 2 The trial court ruled that the deviation in the records issued by American Family's agent and those produced by its own underwriting department created an ambiguity in the insurance policy as to the identity of the named insured, and instructed the jury that an ambiguous contract must be construed against the insurer. The jury found in American Family's favor on the common law bad faith claim but in Hansen's favor on the statutory bad faith claim, indicating on a special verdict form that American Family had delayed or denied payment without a reasonable basis for its action. The trial court awarded Hansen attorney fees, court costs,
¶ 3 American Family appealed the judgment and award of statutory damages to Hansen, arguing, among other things, that the trial court erred in finding that the lienholder statements created an ambiguity in the insurance contract as to the identity of the insured and that, at the very least, the contract was arguably unambiguous such that the company had a reasonable basis to deny coverage and could not be liable for statutory bad faith. The court of appeals affirmed, finding that the lienholder statements created an ambiguity and that, even assuming American Family's legal position was a reasonable one, American Family could still be held liable for statutory bad faith.
¶ 4 We granted certiorari and now reverse. Because the insurance contract unambiguously named William and Joyce Davis as the insureds at the time of the accident, the trial court and court of appeals erred in relying on extrinsic evidence to find an ambiguity in the insurance contract. An ambiguity must appear in the four corners of the document
¶ 5 Hansen bought a 1998 Ford Escort on May 18, 2002. At trial, Hansen testified that she purchased an insurance policy on the car in 2002 from the Heath Burchill American Family Insurance Agency ("Burchill"), an American Family captive agent. On April 9, 2007, Hansen went to Burchill's office to add more coverage to the policy on her Ford Escort. On that date, Hansen obtained a lienholder statement from Burchill (the "2007 lienholder statement"). Apart from a note at the top of the page stating, "FOR LIENHOLDER USE," the document resembles the declaration page of an insurance policy. It lists a policy inception date of August 1, 2002, effective dates of "12-15-2006 UNTIL CANCELLED," $100,000 per person in underinsured motorist coverage, and "DAVIS, JENNY" as the named insured. Although Hansen has never been named Jenny Davis, Davis is Hansen's stepfather's and mother's last name.
¶ 6 On December 30, 2007, Hansen sustained injuries when she was a passenger in a vehicle owned and operated by her boyfriend. Because her boyfriend carried only $25,000 in insurance, Hansen filed a claim for UIM benefits on April 24, 2008, from American Family.
¶ 7 In contrast to the 2007 lienholder statement issued by Burchill to Hansen, American Family's own underwriting department produced a declaration page effective from November 26, 2007, to August 1, 2008 (the "November 2007 declaration page") naming "DAVIS, WILLIAM & JOYCE" — Hansen's stepfather and mother — as the insureds.
¶ 8 The matter lay dormant until the fall of 2009, when Hansen received an offer from her boyfriend's insurer to settle her claim for the policy limits of $25,000. In response, Hansen contacted Burchill and requested a copy of her policy. She received a lienholder statement dated January 13, 2010, identifying "HANSEN, JENNIFER" as the named insured at the time of the accident. This document listed the same policy number and vehicle description as the 2007 lienholder statement, but now showed effective dates of "12-01-2007 to 08-01-2009."
¶ 9 On January 18, 2010, American Family sent Hansen a letter requesting verification of Hansen's residence at the time of the accident, in order to determine her eligibility for UIM coverage under her parents' policy. The letter advised Hansen that if she did not respond, the claim would be closed. On March 1, 2010, Hansen's attorney sent American Family a letter enclosing the January 13, 2010, lienholder statement and requesting permission to settle with Hansen's boyfriend's insurance company. Relying on the certified policy obtained from its own underwriting department, American Family denied coverage on April 27, 2010.
¶ 10 On August 5, 2010, Hansen filed an action against American Family asserting claims for breach of contract, common law bad faith, and statutory bad faith for unreasonable delay or denial of benefits under sections 10-3-1115 and -1116.
¶ 11 On December 8, 2010, Hansen filed a motion for partial summary judgment, arguing that the discrepancy between American Family's own records and those issued by its agent rendered the identity of the named insured ambiguous. On December 27, 2010, American Family filed a cross-motion for summary judgment, asserting that the insurance policy unambiguously identified the Davises as the named insureds, that Hansen did not reside with her parents at the time of the accident, and that the policy therefore afforded Hansen no UIM coverage.
¶ 12 On January 5, 2011, however, American Family filed a motion to withdraw its cross-motion for summary judgment on the question of ambiguity. The motion stated that American Family had learned that Hansen owned the Ford Escort and had done so since the inception of the policy in 2002. American Family stated that the coverage issue was moot because it was voluntarily electing to reform the policy on the Ford Escort to provide coverage to the vehicle's owner. American Family emphasized that its motion was not a confession of Hansen's own motion for summary judgment, but that "the circumstances of this claim permit[ted], but [did] not compel" its choice to reform the policy. On March 1, 2011, after mediation, the parties settled the contract claim for the maximum policy benefit of $75,000 (the $100,000 UIM policy limit minus the $25,000 Hansen had already received from her boyfriend's insurance company).
¶ 14 On April 27, 2011, the third day of trial, the trial court determined that the insurance contract was ambiguous as a matter of law. In reaching this conclusion, the court relied on
¶ 15 The jury found in American Family's favor on Hansen's common law bad faith claim but in Hansen's favor on her statutory claim. Relevant here, in two special verdict forms, the jury found that (1) Hansen was the named insured; (2) American Family had delayed or denied payment without a reasonable basis in violation of section 10-3-1115; but (3) the UIM benefit for which payment was delayed or denied without a reasonable basis was $0. The trial court awarded Hansen attorney fees and costs pursuant to section 10-3-1116, but did not enter a monetary award. On May 9, 2011, Hansen filed a motion to amend the verdict, requesting that the court award a penalty of two times the covered benefit, or $150,000, under section 10-3-1116. The trial court granted the motion.
¶ 16 On May 10, 2011, American Family filed its own motion to reconsider entry of judgment, arguing that it could not have denied Hansen's claim without a reasonable basis when the identity of the named insured was "fairly debatable."
¶ 17 American Family appealed the judgment and award of statutory damages to Hansen, arguing that the trial court erred by (1) concluding that the insurance policy was ambiguous and referring its construction to the jury; (2) denying American Family's motion to reconsider entry of judgment when the identity of the named insured was "fairly debatable"; (3) entering judgment in Hansen's favor on her statutory claim when the jury found that the UIM benefit for which payment was delayed or denied without a reasonable basis was $0; and (4) awarding two times the covered benefit under section 10-3-1116(1) without setting off the $75,000 settlement against the statutory penalty.
¶ 18 The court of appeals upheld the judgment and award of damages. The court of appeals, like the trial court, found that "the preparation and delivery to the claimant of a lienholder statement by the insurance agent which was inconsistent with the declaration pages maintained by the insurance company" created an ambiguity in the insurance policy as to the identity of the named insured.
¶ 19 The court of appeals also rejected American Family's argument that because the identity of the named insured was "fairly
¶ 20 The court of appeals also held that the $0 entered by the jury did not matter because the parties had defined the covered benefit for purposes of section 10-3-1116 in their mediated settlement of Hansen's breach of contract claim for $75,000.
¶ 21 We granted certiorari
¶ 22 American Family argues that the court of appeals erred in holding that lienholder statements extrinsic to the insurance contract created an ambiguity in the contract. We agree.
¶ 23 Whether a contract is ambiguous is a question we review de novo.
¶ 24 An insurance contract is subject to the general rules of contract interpretation.
¶ 25 In reaching a contrary conclusion, the trial court relied on
¶ 26 Although the court of appeals determined that there was no ambiguity as to the named insureds on the November 2007 declaration page, it went on to conclude that an ambiguity was created by "the preparation and delivery to the claimant of a lienholder statement by the insurance agent which was inconsistent with the declaration pages maintained by the insurance company."
¶ 27 For example, in
¶ 28 Here, the dispute is not over the meaning of "DAVIS, WILLIAM & JOYCE" on the declaration page, but rather over whether the designation of Hansen's parents as the named insureds on the policy insuring her Ford Escort accurately reflected the intent of the parties. Because there was no disagreement over the meaning of the contract terms as written, extrinsic evidence was not admissible to create an ambiguity.
¶ 29 Hansen makes a slightly different argument that Burchill's issuance of the 2007 lienholder statement to her created an ambiguity because insurance agents have the authority to bind insurance companies. We need not consider whether agents have such authority generally or if the agent had such authority in this case, however, because Hansen does not claim that the 2007 lienholder statement constitutes a contract of insurance standing on its own, nor does she explain how it could modify the November 2007 declaration page naming her mother and stepfather as the insureds. Nor can she rely on the January 13, 2010, lienholder statement, given that the agent's issuance of a lienholder statement two years after the accident cannot have any effect on the identity of the named insured at the time of the accident. At bottom, this alternative argument fails for
¶ 30 Hansen further argues that, even if the insurance contract itself is unambiguous, ambiguity nevertheless arises under the doctrine of reasonable expectations. In Colorado, the reasonable expectations of insureds have "succeeded over exclusionary policy language ... 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."
¶ 31 Importantly, a finding of no ambiguity does not leave Hansen without a remedy. Indeed, she could have sought reformation of the contract to accurately reflect the intention of the parties.
¶ 32 Because we find that the November 2007 declaration page unambiguously named William and Joyce Davis as the insureds, we conclude that the court of appeals erred in relying on extrinsic evidence to find an ambiguity in the contract. We further hold that American Family's denial of Hansen's claim in reliance on the unambiguous insurance contract was reasonable. Under section 10-3-1115, an insurer's delay or denial is unreasonable "if the insurer delayed or denied authorizing payment of a covered benefit
¶ 33 Given our holding that Hansen's statutory claim fails based on the unambiguous language of the insurance contract, she cannot recover attorney fees, court costs, or two times the covered benefit under section 10-3-1116(1). We thus need not reach American Family's arguments regarding the jury's finding of $0 unreasonably delayed or denied and the proper calculation of the statutory penalty.
¶ 34 For the foregoing reasons, we reverse the judgment of the court of appeals and remand the case for further proceedings consistent with this opinion.
Section 10-3-1116(1) provides that