Tag Archives: Ambiguous

Jennifer Hansen v. American Family Mutual Ins. Co. 2013COA173 (Dec. 19, 2013)

Twice the covered benefits plus attorneys’ fees and costs is what an insurance company must pay if it acts in bad faith when deciding an uninsured or underinsured insurance claim under CRS 10-3-1116. In this case, the claimant/plaintiff was awarded $0 damages on a statutory bad faith claim, but ultimately recovered three times the amount of UIM coverage available under the policy: double for statutory bad faith and a third under the settlement of a bad faith breach of contract claim. The court of appeals affirmed. First, it held that the policies were ambiguous on the identity of the insured, allowing the jury to conclude claimant was an insured. Then it held that even if the question of coverage was fairly debatable, delay or denying coverage was not necessarily reasonable. And finally, a successful statutory claim independently entitles a claimant to double the covered benefits.

http://www.courts.state.co.us/Courts/Court_of_Appeals/Opinion/2013/11CA1430-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=9194&courtid=1

 

Advertisements

Leave a comment

Filed under Contracts, Insurance, Personal Injury

Federal Deposit Insurance Corporation [as Receiver for Community Banks] v. Yale Fisher, 2013CO5 (January 22, 2013)

There is an old saying, “Banks will only lend money to people who don’t need a loan.” Actually, banks normally off-set the risk of non-payment by adding a 36% default interest rate. But in this case, the original agreement did not include 36% default interest. A series of later modifications added a 36% default rate, but without noting it as a changed term. That seemed to make the rate ambiguous. The Supreme Court disagreed, finding the later modifications unambiguously included the 36% rate. The Credit Agreement Statute of Frauds, CRS 38-10-124, allows for extrinsic evidence to be considered to resolve ambiguous credit agreements. Here, extrinsic evidence suggested that the 36% rate was only added later as a computer error. However, as the contract was unambiguous, the statute didn’t apply and the evidence could not be considered. The borrower owed 36% on the defaulted amount.

1 Comment

Filed under Contracts, Evidence

Extreme Construction Co. v. RGC Glenwood, LLC and Mike Spradlin, 2012COA220 (December 27, 2012)

Ambiguity keeps lawyers employed. In this case, a construction contract had an ambiguous “Cost/Plus” price provision that “included, without limitation” “wages [of] construction workers directly employed.” Owner believed the price was limited to the actual cost of wages. Builder believed “costs” referred to fixed wage rates that included unemployment insurance, workers’ compensation, and other expenses. Owner did not object to Builder’s interpretation until after litigation arose. The court of appeals held that Owner was estopped from arguing his interpretation was correct because he had full knowledge of the facts, unreasonably delayed, and Builder detrimentally relied on Owner’s delay. This was the first time a Colorado court applied the equitable estoppel doctrine to the interpretation of an ambiguous contract. It was remanded to recalculate damages.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/12CA0084-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8788&courtid=1

Leave a comment

Filed under Contracts

Colorado Pool Systems, Inc. and Patrick Kitowski v. Scottsdale Insurance Company and Don Hansen, 2012COA178 (October 25, 2012)

“It’s not my fault—it was an accident!” In this case, a swimming pool had to be rebuilt. An adjuster told the insured the work would be covered, but the insurer later denied coverage under a general commercial liability insurance policy. Construing the policy, the court held: 1) “accident” is an ambiguous term that means any damage not intended; 2) an “occurrence” is damage to non-defective work, but not to defective work, because defective work is required to be repaired; and 3) the Construction Professional Commercial Liability Insurance Act is retroactive, but unconstitutional as applied. The insured also brought a negligent misrepresentation claim. The court held that because “accident” was ambiguous in the policy, the claim was actionable. It was also reasonable for the insured to rely upon the adjuster’s statements as if they were fact. Summary Judgment was reversed.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/10CA2638-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8710&courtid=1

Leave a comment

Filed under Constitutional, Contracts, Insurance, Torts