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

 

Philip Jordan and Roberta Jordan v. Safeco Insurance Company of America, Inc., 2013COA47 (March 28, 2013)

Mind the gap. In this case, the gap is between a settlement less than the policy limits of an insured motorist who caused an accident, and the total amount of actual damages. Under a former version of CRS 10-4-609, underinsured motorist (UIM) coverage must cover the difference between any settlement and the total amount of damages – a reduction approach. But, the law changed, and now UIM policies must only cover the amount of total damages in excess of the policy limits of an insured motorist. Here, the UIM policy was excess and consistent with CRS 10-4-609. The court of appeals therefore held that UIM coverage was not available where, as here, the settlement was less than the policy limits of the available insurance. In light of the public policy reflected by the statute, the court was not free to reach a different result. Thus, there was no unreasonable denial of coverage.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/12CA0934-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8888&courtid=1

Shelter Mutual Insurance v. Steven Vaughn and Alvin Miller, 2013COA25 (February 28, 2013)

“Keep your friends close, and your enemies closer.” ­ Machiavelli. At a YMCA basketball game, Vaughn, the father of a player, hit Miller, a referee, and injured him. Miller sues and Vaughn’s insurer, Shelter, defends under a reservation of rights because its policy excludes coverage for intentional acts. Vaughn is found negligent. Vaughn then assigned his rights in his insurance coverage to Miller, in a Bashor Agreement. Shelter brought a declaratory judgment action denying coverage and wins. Vaughn and Miller argued that Shelter was precluded from disclaiming coverage because Vaughn was found to have acted negligently, not intentionally. The court disagreed, affirming judgment for Shelter. Shelter was not collaterally estopped, because 1) Vaughn’s and Shelter’s interests conflicted and 2) Shelter could not have argued Vaughn acted intentionally while defending him.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/12CA0654-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8851&courtid=1

Rose Marie Hall v. American Standard Insurance Company of Wisconsin, 2012COA201, (November 8, 2012)

“Are we there yet?” “Are we there yet?” In this case, addressing the finality of a trial court judgment, the court of appeals said “No!” Plaintiff brought a first-party claim against her insurance company under CRS 10-3-1116 for unreasonable delay or denial of payment and for bad faith breach of an insurance contract. The jury found for plaintiff and awarded damages on both counts. The statute, however, provides for two kinds of damages: 1) attorneys’ fees and costs, and 2) two times the covered benefit. Thus, attorneys’ fees are a component of damages. Until a final order on damages issues, no final judgment has entered. Without final judgment, the court of appeals lacks jurisdiction. The insurance company appealed judgment on liability before all claims had been resolved and before attorney fee damages had been ordered. Thus, the court dismissed the appeal.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/12CA0681-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8740&courtid=1

Arlene Abady, et. al. v. Certain Underwriters at Lloyd’s London, 2012COA173 (October 11, 2012)

Hard money lenders are private investment companies that offer shorter term loans secured by real property when traditional commercial real estate loans are not available from banking institutions. Here, a hard money lender, CCI, insured against its own losses for want of fidelity by CCI’s own officers, with a fidelity bond from Lloyds. CCI officers allegedly committed fraud in attracting investors to invest in CCI, which made hard money loans to commercial real estate borrowers. Following CCI’s bankruptcy, investors sued Lloyds on behalf of CCI, and CCI itself,  to recover losses. Lloyds claimed its policy did not cover the investors’ losses. The court of appeals agreed. Indirect losses to investors are protected by liability policies, not fidelity bonds. Because Lloyds issued a fidelity bond to protect CCI directly, it did not cover indirect losses by investors.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/11CA1870-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8698&courtid=1

Kyle Larson Enterprises Inc., Roofing Experts v. Allstate Insurance Co. 2012COA160 (September 27, 2012)

Repair vendors such as roofers, who are entitled to insurance payments for work done on behalf of an insured party like a homeowner, can sue the insurance company as if they were the homeowner, for unreasonable delay or denials of payment. In this case, homeowners contracted with a roofer to make repairs. The homeowners’ insurer approved initial repairs and costs, but the roofer later made additional repairs that were necessary to comply with building codes and maintain manufacturer warranties.  The insurance company refused to pay for the additional repairs. Roofer sued as a first-party claimant under C.R.S. 10-3-1115 claiming an improper denial of claims. The trial court dismissed that claim. The court of appeals reversed, finding that the insurance company’s involvement with roofer’s repairs, completed “on behalf of” the homeowners, made the roofer a first-party claimant.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/11CA2205-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8677&courtid=1

Kyle Larson Enterprises Inc., Roofing Experts v. Allstate Insurance Co. 2012COA160 (September 27, 2012)

Repair vendors such as roofers, who are entitled to insurance payments for work done on behalf of an insured party like a homeowner, can sue the insurance company as if they were the homeowner, for unreasonable delay or denials of payment. In this case, homeowners contracted with a roofer to make repairs. The homeowners’ insurer approved initial repairs and costs, but the roofer later made additional repairs that were necessary to comply with building codes and maintain manufacturer warranties. The insurance company refused to pay for the additional repairs. Roofer sued as a first-party claimant under C.R.S. 10-3-1115 claiming an improper denial of claims. The trial court dismissed that claim. The court of appeals reversed, finding that the insurance company’s involvement with roofer’s repairs, completed “on behalf of” the homeowners, made the roofer a first-party claimant.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/11CA2205-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8677&courtid=1

Davis v. GuideOne Mutual Insurance Co., 2012COA70 (April 26, 2012)

Auto accidents hurt everyone. Wife became the named insured on an auto policy originally issued to her ex-husband. She got into an accident and obtained a sizable verdict against the insurer based on its failure to offer personal injury protection (PIP) options anew at the time she became insured. The core holding of the court of appeals was to uphold reformation of the policy to include the maximum PIP benefits that would have been offered had they been offered at the time the policy was issued to the ex-wife.  But two other holdings may have wider applicability. One, a motion for a new trial does not preserve an issue for appeal presented as an issue of law.  For that, a motion for “judgment notwithstanding verdict” is required. Second, a complaint may be amended to include punitive damages at the close of evidence if the defendant presented evidence contradicting the claim during trial.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/10CA1625%20&%2010CA2514-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8490&courtid=1

Figuli v. State Farm Insurance, 2012COA53 (March 29, 2012)

Raw sewage is a pollutant. When renters discovered toxic mold and raw sewage in their property, they sued the owner, who in turn submitted the suit for coverage under State Farm insurance policies. The policies (a renters policy and a personal injury umbrella policy) contained absolute pollution exclusions. The court of appeals upheld the trial court’s determination that raw sewage was a pollutant, and, therefore, the owner’s liability to the renters for claims arising from raw sewage were not covered under State Farm’s policy.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/11CA0613-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8456&courtid=1

National Farmers Union Property and Casualty Company v. Garfinkel, et. al. 2012COA46 (March 15, 2012)

With wildfires burning, this Homeowner’s Insurance coverage case is timely. The Insurer brought a coverage action disclaiming liability under a Homeowner’s policy for a wildfire started on property owned by a LLC operated by the homeowners. The trial granted summary judgment for the insureds, holding 2 exclusions did not apply, and coverage existed. The court of appeals disagreed in part. First, under the “Business Pursuits” exclusion, it held the test is 1) continuity or regularity of the activity, and 2) profit motive. Applying that test, the court reversed. Leasing a farm to homeowners may be a “business pursuit,” but is a question of fact requiring a trial. Second, the policy excluded uninsured property “owned” but not “controlled” by the insured. But it applies only where the insured is the title owner. Here title was in the LLC, so the exclusion did not apply to the homeowners.

http://www.courts.state.co.us/Courts/Court_Of_Appeals/Opinion/2012/11CA0230-PD.pdf

http://www.cobar.org/opinions/opinion.cfm?opinionid=8442&courtid=1