Justia Insurance Law Opinion Summaries

The issue this case presented for the Colorado Supreme Court's review centered on whether an injured passenger riding in a vehicle negligently driven by one co-worker and owned by another co-worker, when all three were acting within the course and scope of their employment, could recover UM/UIM benefits under the vehicle owner’s insurance policy. Although the parties disputed the meaning of the phrases “legally entitled to recover” and “legally entitled to collect” under section 10-4-609, C.R.S. (2020) the Court did not resolve that dispute here because, assuming without deciding that plaintiff Kent Ryser’s interpretation was correct, the Court concluded that he still could not prevail. Specifically, the Court found an injured co-worker was barred by operation of the Workers’ Compensation Act's (“WCA”) exclusivity and co-employee immunity principles from recovering UM/UIM benefits from a co-employee vehicle owner’s insurer for damages stemming from a work-related accident in which another co-employee negligently drove the owner’s vehicle and the injured party was an authorized passenger. Though the Court's reasoning differed from the appellate court's judgment, it affirmed the outcome: summary judgment was properly entered in favor of the insurance company. View "Ryser v. Shelter Mutual Insurance" on Justia Law

William Persichette, through Franklin D. Azar & Associates, P.C., brought an underinsured-motorist (“UIM”) action against Owners Insurance Company (“Owners”) for allegedly handling his insurance claim unreasonably and in bad faith. About three months later, Persichette retained Mark Levy of Levy Law, P.C. (collectively “Levy Law”) as co-counsel. Owners promptly moved to disqualify Levy Law pursuant to Colo. RPC Rule 1.9(a) on the ground that Levy Law was Owners’ longtime former counsel and had a conflict of interest. The district court denied the motion, finding that Levy Law’s representation of Persichette was not “substantially related” to Levy Law’s decade-plus representation of Owners. Owners then filed a C.A.R. 21 petition invoking the Colorado Supreme Court's original jurisdiction. The Supreme Court concluded the district court erred in denying Owners’ motion to disqualify, and reversed. View "Persichette v. Owners Ins. Co." on Justia Law

The Tenth Circuit Court of Appeals certified a question of law to the Colorado Supreme Court. The certified question arose from a dispute in which plaintiff Amica Life Insurance Company sought a declaratory judgment that it was not required to pay defendant Michael Wertz benefits under a life insurance policy naming Wertz as the beneficiary. The policy, which was issued in compliance with a standard enacted by the Interstate Insurance Product Regulation Commission (the “Commission”), contained a two-year suicide exclusion, and the insured committed suicide more than one year but less than two years after Amica had issued the life insurance policy to him. Wertz contended that the policy’s two-year suicide exclusion was unenforceable because it conflicted with Colorado statute, section 10-7-109, C.R.S. (2019). Wertz asserted that the Colorado General Assembly could not properly delegate to the Commission the authority to enact a standard that would effectively override this statute. After review, the Colorado Supreme Court agreed with Wertz, and accordingly, answered the certified question narrowly: the General Assembly did not have the authority to delegate to the Commission the power to issue a standard authorizing the sale of life insurance policies in Colorado containing a two-year suicide exclusion when a Colorado statute prohibited insurers doing business in Colorado from asserting suicide as a defense against payment on a life insurance policy after the first year of that policy. View "Amica Life Insurance Company v. Wertz" on Justia Law

A condominium association, Dakota Station II Condominium, filed two claims with its insurer, Owners Insurance Company, for weather damage. The parties couldn’t agree on the money owed, so Dakota invoked the appraisal provision of its insurance policy. The parties each selected an appraiser, putting the rest of the provision’s terms into motion. Ultimately, the appraisers submitted conflicting value estimates to an umpire, and the umpire issued a final award, accepting some estimates from each appraiser. Dakota’s appraiser signed onto the award, and Owners paid Dakota. Owners later moved to vacate the award, arguing that Dakota’s appraiser was not “impartial” as required by the insurance policy’s appraisal provision and that she failed to disclose material facts. The trial court disagreed and “dismissed” the motion to vacate. A division of the court of appeals affirmed. In its review, the Colorado Supreme Court interpreted the policy’s impartiality requirement and determined whether a contingent-cap fee agreement between Dakota and its appraiser rendered the appraiser partial as a matter of law. The Court concluded the plain language of the policy required appraisers to be unbiased, disinterested, and unswayed by personal interest, and the contingent-cap fee agreement didn’t render Dakota’s appraiser partial as a matter of law. Accordingly, the Court affirmed the judgment of the court of appeals with respect to the contingent-cap fee agreement, reversed with respect to the impartiality requirement, and remanded for further proceedings. View "Owners Ins. v. Dakota Station II Condo. Ass'n" on Justia Law

Dami Hospitality, LLC (“Dami”) was the owner-operator of a Denver motel that employed between four and ten people at any given time. As an employer of three or more persons, Dami was required by statute to maintain workers’ compensation insurance. Dami allowed its workers’ compensation coverage to lapse on in 2005. Upon receiving notification of the lapse from the Division of Workers’ Compensation (“DWC”), Dami conceded the violation and paid a corresponding settlement in June 2006. Dami again allowed its workers’ compensation coverage to lapse in 2006. From June 2007 to September 2010, Dami carried the proper insurance, but the company’s workers’ compensation coverage again lapsed on September 12, 2010 and went without insurance until July 9, 2014. On February 19, 2014, the DWC discovered that Dami had allowed its workers’ compensation insurance to lapse for these periods of time and issued a notice to Dami regarding this. Dami faxed a copy of workers' compensation insurance for the July 10, 2014 - July 10, 2015 period; Dami offered no such evidence for any other period, nor any explanation for the lapses. Fines accrued for noncompliance, totaling $841,200. The DWC ultimately issued an order upholding the fines. Dami appealed to the Industrial Claim Appeals Office (“ICAO”). The ICAO rejected all but Dami’s excessive fines argument. The ICAO remanded the matter to the DWC, directing it to review the constitutionality of the aggregated per diem fines assessed in accordance with the test established by the court of appeals in Associated Business Products v. Industrial Claim Appeals Office, 126 P.3d 323 (Colo. App. 2005). The ICAO would ultimately affirm the resulting fines, and Dami appealed to the Court of Appeals. The appellate court set aside the fines, assuming, without deciding, the Excessive Fines Clause could be applied to challenge regulatory fees imposed on a corporation. The Colorado Supreme Court concluded the proper test to assess the constitutionality of government fines under the Eighth Amendment required an assessment of whether the fine was grossly disproportional to the offense for which it was imposed. The Supreme Court thus reversed the court of appeals’ ruling and remanded to that court for return to the Division of Workers’ Compensation with instructions to, as appropriate and necessary, develop an evidentiary record sufficient to determine whether the $250–$500 fine that a business was required to pay for each day that it was out of compliance with Colorado’s workers’ compensation law is proportional to the harm or risk of harm caused by each day of noncompliance. View "Colo. Dept. of Labor & Emp. Div. of Workers' Comp. v. Dami Hosp." on Justia Law

The issue this case presented for the Colorado Supreme Court's review were the insurance proceeds owed to petitioners Rosalin Rogers and Mark Thompson because of a failed property investment orchestrated by their broker-dealer, United Securities Alliance. Ten years into litigation, the issue of the amount of debt at issue has remained at issue, and unresolvable by the courts. United's insurer, Catlin Insurance, was ordered to pay petitioners under a professional liability policy; an appellate court upheld a district court's determination of attorney fees and costs that Catlin could deduct from the liability limit under the policy. The Supreme Court first addressed whether the "Thompson IV" division erred when it upheld the district court’s decision to consider new evidence on remand from Thompson v. United Securities Alliance, Inc. (Thompson III), No. 13CA2037, (Colo. App. Oct. 16, 2014). And Secondly, the Supreme Court addressed whether the Thompson IV division erred when it held that there was no legal basis for awarding prejudgment interest in a garnishment proceeding. As to the first issue, the Supreme Court affirmed the court of appeals; as to the second, it reversed and remanded for further proceedings. View "Thompson v. Catlin" on Justia Law

Plaintiff-petitioner Charissa Schultz was injured in a 2015 car accident in which the other driver failed to stop at a stop sign. The other driver’s insurance company settled for its $25,000 policy limit, and Schultz made a demand on her own uninsured/underinsured motorist benefits under her GEICO policy, which also had a $25,000 limit. In April 2017, after months of correspondence and apparent review of an MRI performed on Schultz in April 2015, GEICO offered Schultz its full policy limit, and it did so without requesting that she undergo an independent medical examination (“IME”). Indeed, GEICO’s claim logs reveal that at the time GEICO decided to offer Schultz its policy limits, it “concede[d] peer review wouldn’t be necessary,” indicating an affirmative decision not to request an IME. A few months later, Schultz filed the present lawsuit asserting claims for bad faith breach of an insurance contract and unreasonable delay in the payment of covered benefits. GEICO denied liability, disputing the extent and cause of Schultz’s claimed injuries and asserting that causation surrounding the knee replacement surgeries was “fairly debatable” because Schultz had preexisting arthritis, which GEICO claimed may independently have necessitated her surgeries. To establish its defense, GEICO ordered the IME and the district court granted that request. The Colorado Supreme Court concluded GEICO’s conduct had to be evaluated based on the evidence before it when it made its coverage decision and that, therefore, GEICO was not entitled to create new evidence in order to try to support its earlier coverage decision. The Court also concluded the district court abused its discretion when it ordered Schultz to undergo an IME over three years after the original accident that precipitated this case and a year and a half after GEICO had made the coverage decision at issue. View "Schultz v. GEICO Casualty Company" on Justia Law

At issue before the Colorado Supreme Court in this matter was the issue of whether an insured was entitled to collect prejudgment interest when he settles an uninsured motorist claim (“UM claim”) with his insurer in lieu of filing a lawsuit and proceeding to judgment. The Court held that under the plain language of the prejudgment interest statute, 13-21-101, C.R.S (2017), an insured is entitled to prejudgment interest only after: (1) an action is brought; (2) the plaintiff claims damages and interest in the complaint; (3) there is a finding of damages by a jury or court; and (4) judgment is entered. Because the plaintiff in this case did not meet all of these conditions, he was not entitled to prejudgment interest. View "Munoz v. Am. Fam. Ins. Co." on Justia Law

The United States District Court for the District of Colorado certified a question of law to the Colorado Supreme Court. The question asked for an interpretation of the meaning of the words “suicide, sane or insane,” when used in life insurance policies. The Colorado Supreme Court concluded that, under Colorado law, a life insurance policy exclusion for “suicide, sane or insane” excluded coverage only if the insured, whether sane or insane at the time, committed an act of self-destruction with the intent to kill himself. View "Renfandt v. New York Life Insurance Company" on Justia Law

This case concerned a discovery dispute arising out of an automobile accident in which Gary Griggs, a driver insured by State Farm, injured Susan Goddard and several others. State Farm sought a declaratory judgment that Griggs breached the contractual duties set forth in his insurance policy by executing a settlement agreement pursuant to Nunn v. Mid-Century Insurance Co., 244 P.3d 116 (Colo. 2010), in which he waived a jury trial, consented to arbitration, and assigned to Goddard any rights that he had against State Farm. Goddard counterclaimed, asserting, among other things, that State Farm acted in bad faith by refusing both to settle her claims against Griggs and to indemnify Griggs for the judgment entered against him after the arbitration to which Griggs had consented. The district court determined State Farm impliedly waived the attorney-client privilege protecting communications between it and its former counsel when it submitted an affidavit from that former counsel to rebut allegations of discovery misconduct. The Colorado Supreme Court concluded after review that the attorney affidavit submitted in this case did not place any privileged communications at issue. Accordingly, the district court erred in finding that State Farm impliedly waived its attorney-client privilege. View "State Farm v. Griggs" on Justia Law