United States District Court, D. Colorado
WENDY L. PEDEN, Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
ORDER
LEWIS
T. BABCOCK, JUDGE.
This
matter is before me on several pre-trial issues raised in
Plaintiff's Amended Trial Brief [Doc
#156] and in Defendant's Trial Brief
[Doc #153] related to the admissibility of
proffered evidence and potential arguments at trial. As set
forth on the record at the status/scheduling conference on
July 13, 2018, I will treat these requests for pretrial
rulings as motions in limine and, after
consideration of the parties' briefs and responses, I
rule as follows.
I.
Background
Plaintiff
Wendy Peden and three other passengers were injured when the
1962 Volkswagen van they were riding in was involved in a
single car accident. Plaintiff's claims against the
at-fault driver for bodily liability coverage were settled by
Defendant State Farm Mutual Automobile Insurance Company
(“State Farm”). Because the amount of her
compensatory damages exceeded the liability settlement,
Plaintiff made a claim to State Farm pursuant to the
available under-insured motorists (“UIM”)
coverage of $350, 000. State Farm concluded that Plaintiff
was fairly compensated for the injuries she sustained, via
the liability benefits paid, and thus it denied her UIM claim
in February of 2014. Following State Farm's denial,
Plaintiff filed this lawsuit asserting claims for: 1) Breach
of the Insurance Contract; 2) Common Law Breach of Good Faith
and Fair Dealing; and 3) Violation of Colorado Revised
Statutes §10-3-1115 and §10-3-1116 (Unreasonable
Delay or Denial of Benefits).
After
Plaintiff filed this lawsuit, State Farm re-evaluated
Plaintiff's UIM claim - a year after its initial denial -
and made an offer of settlement in the amount of $179, 660.01
on February 27, 2015. Then, on May 15, 2015, State Farm paid
Plaintiff the remaining $170, 339.99. As such, State Farm has
now paid Plaintiff $350, 000, which constitutes the full
amount of the UIM benefits available.
On
September 9, 2015, I granted State Farm's Motion for
Summary Judgment and dismissed Plaintiff's case on the
basis that State Farm's decisions made in adjudicating
Plaintiff's UIM claim “were, at the time they were
made, reasonable as a matter of law.” [Doc #72]
Plaintiff appealed and, on November 15, 2016, Tenth Circuit
reversed and remanded. Peden v. State Farm Mut. Auto.
Ins. Co., 841 F.3d 887 (2016). The Tenth Circuit ruled
that a genuine issue of material facts existed as to whether
State Farm adequately investigated whether Plaintiff knew
that the at-fault driver was drunk and planning to drive
(assumed the risk), and whether State Farm reasonably
investigated the damages Plaintiff could obtain against the
at-fault driver (adequately investigated his liability to
her). Id. at 891-92. The Tenth Circuit also
indicated that a genuine issue of material fact existed as to
“the reasonableness of State Farm's initial refusal
to pay anything for future non-economic damages or future
wage loss.” Id. at 894.
Following
remand, on December 14, 2016, I granted Plaintiff's
Partial Motion for Summary Judgment in which she sought a
legal ruling (as related to her Statutory Unreasonable Delay
or Denial of Benefits claim under §10-3-1115 &
§10-3-1116) that the “covered benefit” in
§10-3-1116(1) means the $350, 000 UIM policy limits that
were ultimately paid to her by State Farm. [Doc #88]
On
April 20, 2017, I dismissed Plaintiff's Breach of
Contract claim. [Doc #96] And, on November 6, 2017, I
dismissed Plaintiff's Bad Faith Breach of Contract Claim
upon her Stipulation for Dismissal. [Doc #120] As a result,
Plaintiff's only remaining claim is for Unreasonable
Delay or Denial of Benefits in violation of §10-3-1115
and §10-3-1116.
II.
Plaintiff's Trial Brief
In her
Amended Trial Brief, Plaintiff seeks rulings on the following
potential defense arguments at trial. [Doc #156]
A.
Burden of Proof:
Plaintiff
anticipates that State Farm will argue that it was obligated
to pay Plaintiff's UIM claim only if Plaintiff met some
burden or level of proof when presenting her claim. Plaintiff
argues that the underlying insurance policy only requires her
to give State Farm notice of the accident; it does not
require specific information to support her claim or impose
any burden of proof. Plaintiff asks that I prohibit State
Farm from arguing (or implying) to the jury that its duty to
investigate, evaluate and pay her UIM benefits were
conditioned upon Plaintiff meeting some undefined burden of
proof. State Farm responds that the case law is clear that
the party seeking UIM benefits has the burden to prove that
he or she is entitled to those benefits.
State
Farm is correct that Plaintiff (as the insured) has the
burden in UIM breach of contract cases to prove liability and
damages at trial. See e.g. Briggs v. Am. Family Mut. Ins.
Co., 833 P.2d 859, 861 (Colo.App. 1992)(the insured has
the burden to prove that the uninsured motorist was negligent
and the extent of the damages). Plaintiff's only claim in
this case, however, is for Unreasonable Delay or Denial under
§10-3-1115 & 1116 - her breach of contract and bad
faith breach of contract claims have both been dismissed. The
jury instruction on her remaining claim requires only that
Plaintiff prove, by a preponderance of the evidence, that
State Farm 1) delayed or denied payment of benefits owed to
her, and 2) that such delay or denial was without a
reasonable basis. CJI-Civ 25:4.
In
addition, I agree with Plaintiff that she did not have any
burden to prove she was entitled to UIM benefits at the
time she filed her claim. The case law does not require
that she prove anything before triggering State Farm's
duty to investigate, evaluate and pay her UIM claim, and the
insurance policy only requires that she give State Farm
notice of her claim. I conclude that while Plaintiff has the
ultimate burden to prove, by a preponderance of the evidence,
the elements of her Unreasonable Delay or Denial claim, there
was no burden imposed on her at the time she made her claim
for UIM benefits. Therefore, State Farm may not argue or
imply that Plaintiff was required to meet some requisite
burden or level of proof when filing her claim for UIM
benefits in order to trigger State Farm's duty to
investigate, evaluate and pay her claim.
B.
Failure to Cooperate
Plaintiff
also anticipates that State Farm will argue that she breached
her contractual requirement to cooperate, under the insurance
policy, when seeking her UIM benefits. Plaintiff asserts
that: 1) State Farm's answer does not allege a failure to
cooperate affirmative defense; and 2) State Farm's
responses to discovery do not substantiate any failure to
cooperate.
State
Farm argues that it did in fact raise Plaintiff's failure
to cooperate as an affirmative defense in its Answer at
Paragraphs 10 & 11, which provided that:
10. Plaintiff's claims are barred, limited or
proportionately reduced by the terms and conditions of the
insurance policy issued by defendant including, but not
limited to, the limits of the subject insurance policy.
11. Plaintiff's claims may be barred or reduced by any
failure to satisfy conditions precedent to the right of
recovery under the insurance ...