United States District Court, D. Colorado
LEWIS T. BABCOCK, JUDGE
This case is before me on Defendant American Family Mutual Insurance Company’s (“American Family”) Motion for Summary Judgment Regarding Plaintiff’s Claims [Doc # 32]. After consideration of the motion, all related pleadings, and the case file, I deny American Family’s motion for the reasons set forth below.
Based on its failure to pay her underinsured motorist (“UIM”) coverage benefits of $300, 000, Plaintiff Kendall Hauger (“Hauger”) asserts claims against American Family for breach of contract, bad faith, and statutory violations of Colorado law. The following facts are undisputed for purposes of American Family’s motion unless otherwise noted.
A. Facts Relating to Hauger’s Claim for UIM Benefits
Hauger was injured in an automobile accident on March 12, 2009. Hauger, through her attorney, Andrew Newcomb, first notified American Family of the March 12, 2009 accident via a general letter of representation dated October 29, 2010. On November 8, 2010, American Family acknowledged receipt of the October 29, 2010 letter and asked Hauger to complete and return a medical authorization and to submit any bills received to date. Hauger did not respond to American Family’s November 8, 2010 communications.
By letter dated December 21, 2010, American Family advised Hauger that if she intended to make a claim for the March 12, 2009, she should contact the adjuster. This letter further advised Hauger that failure to contact the adjustor within 14 days would result in the closure of the file.
On September 16, 2011, Hauger’s counsel contacted American Family and was advised that the file would be re-opened and assigned to a new adjustor once certain information about the claim was received. On October 14, 20011, American Family re-opened Hauger’s file and assigned it to a new adjustor for medical payment (“medpay”) coverage only. Then, by letter dated December 21, 2011, American Family notified Hauger that no medpay coverage was available.
On February 12, 2012, Hauger filed suit relating to the March 12, 2009 accident. Hauger alleges that she filed this lawsuit to preserve claims in light of the applicable 3 year statute of limitations and that she did not anticipate asserting a claim for UIM benefits against American Family at that time.
On February 12, 2013, Hauger underwent a two-level lumbar fusion which resulted in medical expenses in excess of $300, 000. Hauger’s spinal surgeon, Chad Prusmack, M.D., opined that the March 12, 2009 accident caused Hauger’s “pain syndrome” that led to her having spinal surgery.
On April 8, 2013, Hauger notified American Family of her claim for UIM benefits and requested consent to settle the case against the other driver involved in the March 12, 2009 accident for $45, 000. Hauger’s April 8, 2013 letter also asked whether American Family wanted to intervene in the lawsuit relating to the March 12, 2009 which was scheduled to commence approximately one month later. Hauger’s April 8, 2013 letter further notified American Family that she had been involved in two additional automobile accidents in 2010. Hauger settled claims with the parties to the 2010 accidents for a total recovery of $50, 000.
At American Family’s request, Hauger provided a recorded statement on April 16, 2013. In this statement, Hauger revealed that she had undergone another back surgery in 2007. American Family requested records relating to this previous back surgery but had not received them prior to the commencement of this case.
On April 23, 2013, American Family consented to Hauger’s settlement with the other driver from the March 12, 2009 accident. Then, on August 21, 2013, Hauger’s counsel submitted a demand packet to American Family relating to her claim for UIM benefits. By letter dated August 22, 2013, American Family denied Hauger’s UIM claim on the basis that ...