United States District Court, D. Colorado
R. Brooke Jackson United States District Judge
This matter is before the Court on defendant State Farm Mutual Automobile Insurance Company’s (“State Farm”) motion for summary judgment [ECF No. 16]. For the reasons described below, the motion is denied.
This case arises out of a car accident where plaintiff Tawnya Westby and Minnie Burn collided while driving in Denver. ECF No 16 at 1. Westby sustained injuries. Id. The following facts and timelines are undisputed unless otherwise noted.
Underlying accident and bodily injury claim • December 1, 2009: Westby and Burns are involved in a car crash. Id. at 1.
• October 23, 2012: Westby sued Burns in Denver District Court (2012 CV 6513), claiming that Burns’ negligence caused the accident. ECF Nos. 18 at ¶ 1; 16 at ¶ 9.
• December 2012: With the consent of Westby’s insurer, State Farm, Burns and Westby settled for $25, 000, which was the amount of the statutory minimum liability insurance coverage that Burns carried through her insurer Titan Insurance Company (“Titan”). Id. at ¶¶ 5, 10, 19; ECF No. 18 at 1.
• December 26, 2012: Titan, through its attorney and paralegal, sent a letter to Westby’s attorney Richard Kaudy. ECF No. 18-3 at 1. Titan enclosed two documents: (1) “a Full and Final Release of All Claims” (the “Release”) against Titan and (2) a proposed “Stipulation for Dismissal with Prejudice” (the “Stipulation”). Id. Titan also sent a check for the settlement amount of $25, 000. Id.; ECF No. 16-1 at 3. The letter instructed Kaudy to “review these documents and, if they meet with your approval, have them signed and notarized as necessary and return them to our offices.” Id. The letter also stated, “[p]lease do not disburse the settlement funds until all settlement paperwork has been returned to [Titan’s] office.” Id.
• December 28, 2012: Kaudy deposited the check “in a COLTAF [Colorado Lawyer Trust Account Foundation] trust account maintained by [him] at Compass Bank.” ECF No. 16 at ¶ 14.
• January 2, 2013: Kaudy signed the Stipulation and returned it for filing at the Denver District Court. ECF No. 16-1 at 6. The Stipulation stated that Westby’s claims against Burns were to be dismissed with prejudice. Id. The court filed the Stipulation and entered an order dismissing the lawsuit against Burns on that same day. ECF No. 16 at ¶¶ 15-16.
• February 7, 2013: Westby signed the Release. ECF No. 16 at ¶ 17.
• March 30, 2013: Kaudy disbursed the funds to Westby. Id. at ¶ 18. She received $3, 860.70 after the deduction of attorney’s fees, liens, and medical bills. ECF No. 18-5 at 1.
Underinsured Motorist Claim
Westby’s medical bills exceeded the amount that she received from the settlement with Titan. ECF No. 16 at 13. Therefore, she submitted a claim to her own insurer, State Farm, for “underinsured motorist” (UIM) insurance benefits. Id. at 2. Her policy included a UIM limit of $250, 000. Id. at ¶ 7. Kaudy and State Farm negotiated over the UIM claim. Id. at ¶ 20. As the following timeline demonstrates, the two sides came close to settling. See ECF No. 16-1.
• August 2013: State Farm made an initial offer of $137, 273.43. Snyder-Jones Affid. ECF No. 16-1 at 14 ¶ 3. Kaudy ...