Estate of Michael Dean Casper, by and through Nick Casper, personal representative, Plaintiff-Appellee,
Guarantee Trust Life Insurance Company, an Illinois corporation, Defendant-Appellant.
County District Court No. 12CV740 Honorable David W.
Rosenberg PC, Bradley A. Levin, Nelson A. Waneka, Denver,
Colorado; Keating Wagner Polidori Free PC, Zachary C. Warzel,
Denver, Colorado, for Plaintiff-Appellee
& Evans, LLC, Kevin E. O'Brien, Alan Epstein, Malcolm
S. Mead, Cristin J. Mack, Denver, Colorado, for
1 Under Colorado law, the death of a plaintiff in a personal
injury action extinguishes his entitlement to recover
noneconomic and punitive damages. But what happens when the
plaintiff dies after those damages have been awarded by a
jury but before the district court has entered a judgment?
This question had never been answered in Colorado.
2 Michael Dean Casper bought a cancer insurance policy from
defendant, Guarantee Trust Life Insurance Company (GTL); when
he was diagnosed with cancer seven months later, GTL refused
to pay his claims. Casper sued GTL for breach of contract,
bad faith breach of an insurance contract, and statutory
unreasonable denial of benefits. A jury awarded him more than
$4, 500, 000 in punitive and other noneconomic damages.
3 The trial court immediately entered an oral order making
the verdict a judgment. But Casper died nine days later,
before the court had reduced its oral order entering judgment
to a written judgment as required by C.R.C.P. 58. After
resolving attorney fees and interest issues, the court
entered a signed and dated written judgment in favor of
plaintiff, the Estate of Michael Dean Casper (the Estate), in
the amount of $1, 997, 996.40, nunc pro tunc to the date of
4 GTL says that as a matter of law the delay in entering the
written judgment means that under the Colorado survival
statute, § 13-20-101, C.R.S. 2016, the Estate is
entitled only to the $50, 000 awarded as economic damages for
the breach of contract claim. We disagree. Because the
verdict resolved the merits of the case, and judgment would
necessarily follow, the survival statute did not extinguish
Casper's right to damages. We therefore affirm the
5 Casper bought a "First Diagnosis" cancer
insurance policy in August 2010. According to his testimony,
he was sold the policy by Joanna Gaylord, a door-to-door
insurance salesperson who worked for Platinum Supplemental
Insurance, Inc. (Platinum), an agency with exclusive rights
to sell GTL's policy. Casper listened to Gaylord's
presentation but expressed concern about his ability to
qualify for benefits, based on prior arterial blockages in
his legs. Gaylord assured him that, as long as he had not
been diagnosed with, or been advised to seek treatment for,
AIDS, cancer, a heart attack, or a stroke, he would be
covered by the policy. Casper answered truthfully that he had
not been diagnosed with or advised to seek treatment for any
of those conditions. He filled out the application,
authorized GTL to obtain ten years' of medical records,
and agreed to monthly electronic premium payments. A month
later, GTL approved his application.
6 In March 2011, Casper was diagnosed with prostate cancer.
He submitted claims to GTL, which denied them. According to
page twelve of the policy, cancer was not a covered condition
"when advice or treatment is received . . . prior to the
Effective Date, and such advice or treatment results in the
First Diagnosis of Cancer." GTL maintained that Casper
had received such advice, in connection with his treatment
for a non-cancerous condition involving an enlarged prostate,
which had ultimately resulted in the detection of
Casper's prostate cancer.
7 In 2012, Casper sued GTL for breach of contract, bad faith
breach of insurance contract, and unreasonable denial of
benefits in violation of sections 10-3-1115 and -1116, C.R.S.
2016. He also sued, but then settled with, Gaylord and
Platinum on claims for negligent misrepresentation and fraud
based on their role in marketing the policy on behalf of GTL.
8 Trial was originally scheduled to begin in February 2014.
But in October 2013, the court, on its own motion, reset the
trial to July 2014.
9 During trial, the court directed a verdict for Casper on
his breach of contract claim, finding that the exclusion
provision was ambiguous and, therefore, as a matter of law,
the policy had to be construed as covering Casper's
cancer. On July 15, 2014, the jury returned a verdict in
favor of Casper on all claims. It awarded Casper $50, 000 for
breach of contract, $50, 000 for unreasonable denial of
benefits, $150, 000 in economic damages for bad faith breach
of the contract, $550, 000 in noneconomic damages for bad
faith breach of the contract, and $4, 000, 000 in punitive
10 Because Casper was in hospice care by then, his lawyer
requested that the court immediately enter judgment on the
verdict to avoid any limitation on recovery under
Colorado's survival statute. The court attempted to
oblige, announcing that it was entering judgment. It directed
the clerk to receive and enter the verdict in the court
registry. Then it entered an unsigned minute order reflecting
that it had ordered judgment to be entered.
11 When Casper died nine days later, GTL moved to set aside
the verdict in part and to limit the recoverable damages. It
argued that because attorney fees and prejudgment interest
had not been determined and statutory caps had not been
applied, Casper had died before final judgment had been
entered. Thus, according to GTL, the statutory bad faith
denial of benefits claim was extinguished, as was
Casper's entitlement to recover noneconomic and punitive
damages. GTL requested that the court enter final judgment on
the breach of contract claim in the amount of $50, 000. In
the alternative, GTL requested that the court impose
statutory caps on the noneconomic and punitive damages.
12 Casper's attorneys, in the meantime, moved to
substitute the Estate as plaintiff, and then they requested
an award of attorney fees under section 10-3-1116 and
prejudgment interest to July 15, 2014, the date the court had
orally entered judgment.
13 The district court denied GTL's motion to set aside
the verdict, ruling that the survival statute was not
implicated because Casper had died after entry of judgment on
the verdict. It did, however, grant GTL's motion to
enforce the statutory caps on damages.
14 On October 30, 2014, after reducing the noneconomic and
punitive damages pursuant to statutory caps and awarding
approximately one-third of the fees requested by Casper's
attorneys, the district court entered an amended final
judgment, nunc pro tunc to July 15, 2014, in favor of the
Estate in the amount of $1, 997, 996.40.
15 On appeal, GTL contends that the district court erred by
failing to vacate all of the damages (with the exception of
the $50, 000 breach of contract damages), by characterizing
the attorney fees awarded under section 10-3-1116 as
compensatory damages for purposes of calculating punitive
damages, by failing to further reduce the attorney fees
award, and by instructing the jury on an insurance regulation
related to the standard of care for the sale and marketing of
insurance policies. We take up each of these contentions,
reject them, and therefore affirm.
Colorado's Survival Statute
16 At common law, claims based on personal torts abated upon
the death of either party. To ameliorate the harsh effects of
this rule, Colorado, like most other states, enacted a
survival statute in the late 1800s. Its current iteration -
section 13-20-101 - provides:
All causes of action, except actions for slander or libel,
shall survive and may be brought or continued notwithstanding
the death of the person in favor of or against whom such
action has accrued, but punitive damages shall not be awarded
nor penalties adjudged after the death of the person against
whom such punitive damages or penalties are claimed; and, in
tort actions based upon personal injury, the damages
recoverable after the death of the person in whose favor such
action has accrued shall be limited to loss of earnings and
expenses sustained or incurred prior to death and shall not
include damages for pain, suffering, or disfigurement, nor
prospective profits or earnings after date of death. An
action under this section shall not preclude an action for
wrongful death under part 2 of article 21 of this title.
17 GTL contends that because Casper died before a final,
appealable judgment was entered, the Estate may recover only
the $50, 000 awarded as economic damages.
Standard of Review and Principles of Interpretation
18 Resolution of this case turns on the interpretation of a
statute, an issue of law subject to de novo review. Kyle
W. Larson Enters., Inc. v. Allstate Ins. Co.,
2012 COA 160M, ¶ 9.
19 Our primary task when construing a statute is to ascertain
and give effect to the legislature's intent based on its
chosen language. Young v. Brighton Sch. Dist. 27J,
2014 CO 32, ¶ 11; see also State v. Nieto, 993
P.2d 493, 502 (Colo. 2000) ("Legislative intent is the
polestar of statutory construction." (quoting
Schubert v. People, 698 P.2d 788, 793 (Colo.
1985))). We give words and phrases their plain and ordinary
meanings, and we read the statute as a whole, giving
consistent, harmonious, and sensible effect to all of its
parts. Young, ¶ 11. We must choose a
construction that serves the purpose of the legislative
scheme and avoids absurd results. Town of Erie v.
Eason, 18 P.3d 1271, 1276 (Colo. 2001).
20 If the statutory language is unambiguous, we apply it as
written. Reno v. Marks, 2015 CO 33, ¶ 20. If a
statute is ambiguous, however, we may consider indicia of
legislative intent such as the object to be attained, the
circumstances under which the statute was enacted, the common
law, and the consequences of a particular construction.
§ 2-4-203, C.R.S. 2016; see also State Eng'r v.
Castle Meadows, Inc., 856 P.2d 496, 504 (Colo. 1993)
(listing indicators of legislative intent). "Because we
also presume that legislation is intended to have just and
reasonable effects, we must construe statutes accordingly and
apply them so as to ensure such results." Castle
Meadows, Inc., 856 P.2d at 504; see also §
2-4-201(1)(c), C.R.S. 2016.
21 The survival statute sets forth a broad rule, with two
exceptions. As relevant here, all causes of action survive
the death of a party. But, neither punitive damages nor
penalties shall be "awarded" or
"adjudged" after the death of a party,
in personal injury cases, the damages "recoverable"
after the death of the plaintiff are limited to economic
damages suffered before death and shall not include
noneconomic damages or future earnings. § 13-20-101.
22 GTL maintains that the survival statute precludes recovery
of punitive or noneconomic damages if the plaintiff dies
before his claims merge into a final judgment, an event that
prevents abatement. And, it argues, the judgment that was
entered in July 2015, days before Casper's death, was not
final because it did not include an award of attorney fees or
prejudgment interest. Therefore, the jury's award of
damages became a nullity when extinguished by Casper's
death nine days later.
23 We agree with GTL that, as a general matter, claims merge
into a judgment and a judgment does not abate, even if the
cause of action would not have survived the party's
death. Ahearn v. Goble, 90 Colo. 173, 176, 7 P.2d
409, 410 (1932). And, neither the court's oral
pronouncement nor the minute order constituted a
"judgment" within the meaning of C.R.C.P. 58(a)
because the rule requires entry of a written, dated, and
signed judgment. But we do not believe that these
propositions lead inexorably to a conclusion that the
survival statute precludes recovery of punitive and other
noneconomic damages if the plaintiff dies after the verdict
is returned but before judgment is entered. We conclude that,
based on the language, history, and purpose of the statute,
the legislature did not intend to draw such a bright line
between verdict and judgment. Rather, in our view, one
naturally leads to the other, so that a party who survives to
verdict and obtains an entitlement to a judgment may recover
punitive and other noneconomic damages, regardless of whether
the party is alive when the resulting judgment is entered.
24 To begin, the statute does not set the date of judgment as
the time when a claim for noneconomic damages is no longer
subject to abatement. Nor does it mention the date of
verdict. Some other states' survival statutes do explain
more explicitly when the party's death extinguishes a
right to recover damages. See, e.g., Cal. Prob. Code
§ 573 (West 1991) ("Where a person having a cause
of action dies before judgment, the damages recoverable . . .
are limited to the loss or damage the decedent sustained or
incurred prior to death, including any penalties or punitive
or exemplary damages . . . but not including any damages for
pain, suffering, or disfigurement.") (repealed 1992);
Nev. Rev. Stat. § 41.100 (2016) ("[W]hen a person
who has a cause of action dies before judgment, the damages
recoverable by the decedent's executor . . . include all
losses or damages which the decedent incurred or sustained
before the decedent's death, including any penalties or
punitive and exemplary damages . . . and damages for pain,
suffering or disfigurement . . . ."); Or. Rev. ...