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O'Sullivan v. Geico Casualty Co.

United States District Court, D. Colorado

April 10, 2017




         This insurance dispute is pending under the Court's diversity jurisdiction, 28 U.S.C. § 1332, and set for jury trial to commence on April 10, 2017. Now before the Court are Defendant's Amended Disputed Jury Instructions (ECF No. 142), and Plaintiff's Objections thereto (ECF No. 150). Although not filed as a motion, the Court construes Defendant's filing, in part, as a Motion for Bifurcation and a Motion to Modify the Final Pretrial Order. To rule on those requests, and because the issues presented warrant resolution and clarification before trial begins, the Court enters this Order, denying Defendant's request for relief for the reasons explained below.[1]

         I. BACKGROUND

         The factual and legal background have been detailed in the Court's prior Orders. (See generally ECF Nos. 95, 99.) Familiarity with that background is presumed but a brief recitation of relevant procedural history is helpful here.

         In short, Plaintiff alleges that when he purchased an insurance policy from Defendant in August 2013, Defendant did not provide an offer of uninsured/underinsured motorist (“UM/UIM”) coverage in a manner that complied with Colorado law, specifically with the requirements of Colorado Revised Statutes § 10-4-609(2), as interpreted in Allstate Insurance Co. v. Parfrey, 830 P.2d 905 (Colo. 1992). As a result, Plaintiff claims that he is entitled to UM/UIM coverage up to a limit of $100, 000 for injuries he suffered in an accident in 2014, while Defendant maintains that Plaintiff was entitled to only a $25, 000 limit for UM/UIM coverage, as the amount written into Plaintiff's insurance policy.

         In this lawsuit, Plaintiff pursued four claims for relief: (1) breach of contract; (2) breach of the duty of good faith and fair dealing; (3) unreasonable delay or denial of insurance benefits, Colo. Rev. Stats. §§ 10-3-11115 & -1116; and (4) exemplary damages. (See ECF No. 41.) Although not set out as a separate claim for reformation of contract, Plaintiff also pled that “Geico was required to reform its policy and extend $100, 000 of underinsured motorist benefits to [Plaintiff].” (Id. ¶ 21; see also Id. ¶ 36.) This claim that “Defendant had an obligation to reform the UIM policy to 100k UIM limits” remained in the Final Pretrial Order as entered July 26, 2016, and remains in the Amended Final Pretrial Order entered March 23, 2017. (ECF No. 87 at 2; ECF No. 136 at 2-3.)

         At the summary judgment phase, Defendant acknowledged that it had “issued a Policy to [Plaintiff], ” and that “Plaintiff . . . filed this action to reform his insurance policy.” (ECF No. 60 at 5; id. at 8 ¶ 1.)[2] However, Defendant moved for summary judgment, arguing that it was “entitled to summary judgment . . . as a matter of law, on [Plaintiff's] claim for contract reformation, ” because Defendant argued the Court should find its notification and offer of UM/UIM coverage had been sufficient as a matter of law under Parfrey. (See Id. at 32.) The Court disagreed, ruling that Defendant had not shown its offer of UM/UIM coverage was sufficient as a matter of law, and leaving the issue for the jury to decide. (See generally ECF No. 95 at 4-21; id. at 22 n.5.)

         The parties then entered a number of agreements which Defendant docketed with the Court as the “Parties' Stipulations.” (ECF No. 100.) Most significantly for present purposes, the parties agreed to the following: (a) that the jury would decide whether Defendant extended a sufficient notification and offer of UM/UIM insurance to Plaintiff under § 10-4-609(2) and Parfrey; and (b) what consequences would follow from the jury's answer to that question:

The parties agree the first issue for the jury to decide is whether GEICO extended an offer regarding uninsured/underinsured motorist benefits in a reasonable manner calculated to permit the insured to make an informed decision in compliance with Colorado law. If the Jury answers yes to this question the case is over and the Plaintiff loses. If the jury answers no to this question, then they will answer the next question as to whether the delay or denial was without a reasonable basis. If the jury answers no to the first question concerning whether a compliant offer was made, then the parties agree that GEICO will pay the disputed $75, 000 uninsured/underinsured motorist benefit in full satisfaction of the breach/reformation of contract claim regardless of the jury's answer to the question concerning whether the delay or denial was without a reasonable basis, subject to GEICO's appellate rights.

(Id. ¶ 1)

         In the same stipulations, Plaintiff agreed to dismiss all claims “with the exception of breach of contract and his claim for Unreasonable Delay and Denial of Benefits, ” and Defendant agreed to dismiss certain defenses. (Id. ¶¶ 2-3; see also ECF No. 6 at 9-10; ECF No. 44 at 9-10.) The parties further “agree[d] not to try the issue of damages” (id. at 2) and that if the jury “determines that GEICO's conduct/offer . . . was delayed or denied without a reasonable basis the Court will apply the damages penalties on the [§] 10-3-1116 claim after the verdict based on the disputed benefit amount of $75, 000.” (Id. ¶ 6.) The parties also agreed Plaintiff would call only one of his two disclosed experts, and would do so in his case in chief. (Id. ¶¶ 4-5.) These stipulations were also reflected, with minimal changes, in the proposed Amended Final Pretrial Order, which the parties submitted at the Court's direction, and which the Court entered on March 23, 2017. (ECF Nos. 105, 113 at 4-5, 136 at 4-5.)

         However, in the parties' subsequent filings, particularly Defendant's amended proposed jury instructions (ECF No. 142), the parties take different views of the effect and consequences of these stipulations. The parties' disputes implicate what questions remain to be put to the jury, how the Court should act on Plaintiff's reformation of contract claim, which party bears the burden of proof, and whether trial may proceed in one phase or must be bifurcated. (See ECF No. 142.) These issues require resolution before trial begins.

         II. ANALYSIS

         A. Status and Effect of the Parties' Stipulations

         Defendant does not explicitly ask the Court to set aside the parties' stipulations, but the Court concludes that it could accept Defendant's positions only by doing so. Accordingly, the first question to resolve is whether the Court will enforce the stipulations. “A stipulation is an admission which cannot be disregarded or set aside at will.” Wheeler v. John Deere Co., 935 F.2d 1090, 1097 (10th Cir. 1991). W hile stipulations may be withdrawn “to prevent manifest injustice, ” this Court is “vested with broad discretion in ...

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