Justia Insurance Law Opinion Summaries

Norma Hoff owned a home she rented through a property management agency. The roof sustained hail damage, and she contracted with Alliance Construction & Restoration, Inc. (Alliance) to make the repairs. Alliance subcontracted the roof repairs to MDR Roofing, Inc. (MDR). MDR employed Hernan Hernandes as a roofer. While working on Hoff's roof, Hernandez fell from a ladder and suffered serious injuries. He filed a workers' compensation claim against MDR, but MDR's insurer, Pinnacol Assurance, denied the claim because MDR's insurance coverage had lapsed. The issue this case presented for the Supreme Court's review was whether Pinnacol had a legal obligation to notify MDR of a certificate of insurance when the policy evidenced by the certificate was cancelled. Based on the certificate at issue in this case and the applicable statute, the Colorado Supreme Court concluded that the insurer had no such obligation. Therefore, the Court reversed the appellate court's judgment to the contrary. View "Pinnacol Assurance v. Hoff" on Justia Law

Respondent Jennifer Hansen was injured in a motor vehicle accident in late 2007. Four months later, she presented an underinsured motorist (“UIM”) claim to petitioner American Family Mutual Insurance Company (“American Family”), insurer of her vehicle. 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, 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. 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 favor of Hansen 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, and a statutory penalty. American Family appealed the judgment and award of statutory damages, 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. After its reverse, the Supreme Court reversed. 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, "[a]n ambiguity must appear in the four corners of the document before extrinsic evidence can be considered." Accordingly, American Family’s denial of Hansen’s claim in reliance on the unambiguous insurance contract was reasonable, and American Family could not be held liable under sections 10-3-1115 and -1116 for statutory bad faith. View "Am. Family Mut. Ins. Co. v. Hansen" on Justia Law

Travelers Property Casualty Company of America (Travelers) petitioned for review of a court of appeals judgment affirming the district court’s denial of its motion for directed verdict in a lawsuit brought by its insured, Stresscon Corporation. Stresscon, a subcontracting concrete company, filed suit against Travelers, alleging, among other things, that Travelers acted in bad faith, unreasonably delaying or denying its claim for covered insurance benefits; and Stresscon sought awards of two times the covered benefits along with fees and costs, as prescribed by statute. Stresscon’s claims for relief arose from a serious construction accident in July 2007, which was caused by a crane operator employed by a company that was itself a subcontractor of Stresscon. Stresscon’s general contractor, Mortenson, sought damages from Stresscon, asserting Stresson’s contractual liability for the resulting construction delays, and Stresscon in turn sought indemnification from Travelers. Although there was much dispute over the factual and legal import of Travelers’ reservation of rights and other of its communications with both Stresscon and Mortenson concerning Mortenson’s claim, there was no dispute that by December 31, 2008, Travelers had not paid the damages asserted by Mortenson. The appellate court rejected Travelers’ contention that the no-voluntary-payments clause of their insurance contract relieved it of any obligation to indemnify Stresscon for payments Stresscon had made without its consent. Instead, the court of appeals found that the Colorato Supreme Court's opinion in "Friedland v. Travelers Indemnity Co.," (105 P.3d 639 (2005)) had effectively overruled prior “no voluntary payments” jurisprudence to the contrary and given Stresscon a similar opportunity. The Supreme Court found that its adoption of a notice-prejudice rule in "Friedland" did not overrule any existing “no voluntary payments” jurisprudence in Colorado, and because the Court declined to extend notice-prejudice reasoning in Friedland to Stresscon’s voluntary payments, made in the face of the no-voluntary-payments clause of its insurance contract with Travelers, the judgment of the court of appeals was reversed. View "Travelers Prop. Cas. Co. v. Stresscon Co." on Justia Law

Stresscon Corporation, a subcontracting concrete company, filed suit against Travelers Property Casualty Company of America, alleging, among other things, that Travelers acted in bad faith, unreasonably delaying or denying its claim for covered insurance benefits; and Stresscon sought awards of two times the covered benefits along with fees and costs, as prescribed by statute. Stresscon’s claims for relief arose from a 2007 serious construction accident which was caused by a crane operator employed by a company that was itself a subcontractor of Stresscon. Stresscon’s general contractor, Mortenson, sought damages from Stresscon, asserting Stresson’s contractual liability for the resulting construction delays, and Stresscon in turn sought indemnification from Travelers. Travelers petitioned for review of the court of appeals’ judgment affirming the district court’s denial of its motion for directed verdict in a lawsuit brought by its insured, Stresscon. Much as the district court had done, the appellate court rejected Travelers’ contention that the no-voluntary-payments clause of their insurance contract relieved it of any obligation to indemnify Stresscon for payments Stresscon had made without its consent. Instead, the court of appeals found that the Colorado Supreme Court's opinion in "Friedland v. Travelers Indemnity Co.," (105 P.3d 639 (2005)) had effectively overruled the Court's prior “no voluntary payments” jurisprudence to the contrary and given Stresscon a similar opportunity. The Supreme Court reversed, finding that its adoption of a notice-prejudice rule in "Friedland" did not overrule any existing “no voluntary payments” jurisprudence. The Court declined to extend a notice-prejudice reasoning to Stresscon’s voluntary payments, made in the face of the no-voluntary-payments clause of its insurance contract with Travelers. View "Travelers Prop. Cas. Co. v. Stresscon Co." on Justia Law

The Colorado Division of Insurance initiated an investigation into Milton Trujillo's application to renew as a insurance producer license with bail bond authority. It later denied the application based on a complaint it received. The Division charged Trujillo with twelve counts of violating the insurance code, professions and occupations code, and Division regulations. The ALJ revoked the license; the Commissioner of Insurance adopted the ALJ's decision. The court of appeals affirmed the Commissioner's action, determining that Trujillo violated a fiduciary duty prescribed by 10-2-704(a). The Supreme Court reversed, finding that the court of appeals erred in applying section 10-2-704(1)(a) to this case: "[w]hile there are unappealed findings of fact upon which the Commissioner on remand could uphold the sanction it ordered, it is not clear [to the Court] whether, absent the agency's construction of 10-2-704(1)(a), the Commissioner would have exercised his authority to revoke Trujillo's license and deny his renewal application." The case was therefore remanded for redetermination by the Commissioner the appropriate sanction for Trujillo's conduct. View "Trujillo v. Colorado Division of Insurance" on Justia Law

Respondent Helen Rodriguez injured herself after falling down a flight of stairs at work. The Supreme Court granted certiorari to consider whether an "unexplained" fall satisfied the "arising out of" employment requirement of the Workers' Compensation Act. The Court agreed with the appellate court that respondent's unexplained fall was compensable, but it disagreed with the reasoning. The Supreme Court concluded that the appellate court erred when it agreed with respondent's view that her injuries arose out of employment, and held that an unexplained fall necessarily stemmed from a "neutral" risk attributable to neither the employment nor the employee. "Under our longstanding 'but-for' test, such an unexplained fall 'arises out of' employment if the fall would not have occurred but for the fact that the conditions and obligations of employment placed the employee in a position where he or she was injured." View "City of Brighton v. Rodriguez" on Justia Law

Harman-Bergstedt, Inc. appealed the appellate court's decision to reverse an Industrial Claim Appeals Office decision disallowing respondent Elaine Loofbourrow's award of temporary disability benefits. The ICAO concluded that once respondent's treating physician placed her at maximum medical improvement, temporary total disability benefits could not be awarded for the injury for which she was initially treated. The appellate court concluded that under the circumstances of this case, such an independent medical exam was not a prerequisite to temporary total disability benefits. After its review of this case, the Supreme Court concluded the appellate court was correct in its decision: because a determination of maximum medical improvement has no statutory significance with regard to injuries resulting in loss of no more than three days (or shifts) of work time, respondent's award of temporary total disability benefits was not barred by her failure to first seek a division-sponsored independent medical examination. View "Harman-Bergstedt, Inc. v. Loofbourrow" on Justia Law

Steven Pham represented the estate of a driver of a car involved in a traffic accident. He appealed (along with the driver's parents and the five passengers in the car at the time of the accident) the court of appeals' judgment which affirmed summary judgment in favor of the insurer, State Farm, on the grounds that plaintiffs' claims were bound by the statute of limitations governing underinsured motorist claims. Upon review, the Supreme Court found that plaintiffs failed to file their action or demand arbitration of their underinsured motorist claims within either three years of the accrual of their cause or within two years after receiving payment of a settlement or judgment on an underlying bodily injury liability claim preserved as prescribed by the applicable statute. Accordingly, the Supreme Court affirmed the appellate court's decision. View "Pham v. State Farm Auto Ins. Co." on Justia Law

Respondents Christopher Roinestad and Gerald Fitz-Gerald were overcome by poisonous gases while cleaning a grease clog in a sewer near the Hog's Breath Saloon & Restaurant. The district court concluded that Hog's Breath caused respondents' injuries by dumping substantial amounts of cooking grease into the sewer thereby creating the clog and consequent build up of the gas. On summary judgment, the district court found the saloon liable under theories of negligence and off-premises liability and granted respondents damages. The saloon carried a commercial general liability policy issued by Petitioner Mountain States Mutual Casualty Company which sought a ruling it had no duty to indemnify Hog's Breath. The district court agreed that under the terms of the policy, the insurer had no duty under a pollution exclusion clause. The appellate court reversed the ruling in favor of the insurer, finding the pollution exclusion clause was ambiguous and that its application to cooking grease (a common waste product) could lead to absurd results and negate essential coverage. Upon review, the Supreme Court reversed, finding that the saloon released enough grease to amount to a discharge of a pollutant, and that the insurance policy pollution exclusion clause barred coverage in this case. View "Mountain States Mutual Casualty Company v. Roinestad" on Justia Law

Respondent Robert Lego admitted his wife to Porter Hospital's emergency room. She stayed there for approximately two months. The Legos' insurance provider notified Respondent in writing that it would stop covering Mrs. Lego's hospital care after six weeks. Respondent disputed the insurer's position and refused to discharge his wife from the hospital after six weeks. The hospital followed the insurer in notifying Respondent the insurance coverage for Mrs. Lego would end, and that the Legos would be responsible for any uncovered charges. In an effort to recoup those charges Respondent refused to pay, the hospital sued on the grounds of unjust enrichment with recovery in quantum meruit. Respondent moved to dismiss, arguing that the action was barred by a general statute of limitations codified in section 13-80-103.5(1)(a) C.R.S. (2011). The trial court denied the motion; the appellate court reversed, finding the trial court erred in determining the amount the insurance company did not pay was liquidated or determinable damages within the meaning of the statute. The Supreme Court reversed the appellate court, interpreting section 13-80-103.5(1)(a) C.R.S. (2011) to mean its six-year limitations period applied in this case, particularly when the amount owed was ascertainable either by reference to the agreement, or by simple computation using extrinsic evidence. View "Portercare Adventist Health System v. Lego" on Justia Law