Original Proceeding Pursuant to C.A.R. 21 Weld County
District Court Case No. 17CV30881 Honorable Marcelo Kopcow,
Judge
Attorneys for Plaintiff: Speights & Worrich, LLC David
Roth Jennifer A. Milne Denver, Colorado
Attorneys for Defendant: Deisch, Marion & Klaus, P.C.
Gregory K. Falls Denver, Colorado
OPINION
GABRIEL JUSTICE
¶1
In this original proceeding pursuant to C.A.R. 21, we review
the district court's order requiring the
plaintiff-petitioner, Charissa Schultz, to undergo an
independent medical examination ("IME"), pursuant
to C.R.C.P. 35, at the request of the defendant-respondent
GEICO Casualty Company. We issued a rule to show cause and
now make the rule absolute.
¶2
In this action, Schultz alleges that GEICO breached its duty
of good faith and fair dealing and violated its statutory
obligation to evaluate and pay her insurance claim without
unreasonable delay. GEICO denies liability, asserting that
because the question of medical causation was "fairly
debatable" at the time it made its coverage decision, it
did not act unreasonably or in bad faith. To establish these
defenses, GEICO sought an IME of Schultz, and over
Schultz's objection, the district court granted that
request.
¶3
We now conclude that GEICO's conduct must be evaluated
based on the evidence before it when it made its coverage
decision and that, therefore, GEICO is not entitled to create
new evidence in order to try to support its earlier coverage
decision. Accordingly, we further conclude that the district
court abused its discretion when it ordered Schultz to
undergo an IME over three years after the original accident
that precipitated this case and a year and a half after GEICO
had made the coverage decision at issue.
I.
Facts and Procedural Background
¶4
In February 2015, Schultz and another driver collided when
the other driver failed to stop at a stop sign. Thereafter,
Schultz underwent multiple knee replacement surgeries.
¶5
The other driver's insurance company settled with Schultz
for its $25, 000 policy limit, and Schultz then made a demand
for uninsured/underinsured motorist ("UM/UIM")
benefits under her GEICO policy, which also had a $25, 000
policy limit. In connection with this demand, Schultz
provided GEICO with medical authorizations to allow it to
obtain the medical records associated with her claim.
¶6
In April 2017, after months of correspondence and apparent
review of an MRI performed on Schultz in April 2015, GEICO
offered Schultz its full policy limit, and it did so without
requesting that she undergo an IME. Indeed, GEICO's claim
logs reveal that at the time GEICO decided to offer Schultz
its policy limits, it "concede[d] peer review
wouldn't be necessary," indicating an affirmative
decision not to request an IME.
¶7
A few months later, Schultz filed the present lawsuit
asserting claims for bad faith breach of an insurance
contract and, pursuant to sections 10-3-1115 and 10-3-1116,
C.R.S. (2018), unreasonable delay in the payment of covered
benefits. GEICO denied liability, disputing the extent and
cause of Schultz's claimed injuries and asserting that
causation surrounding the knee replacement surgeries was
"fairly debatable" because Schultz had preexisting
arthritis, which GEICO claimed may independently have
necessitated her surgeries.
¶8
As part of its effort to support these defenses, GEICO
requested that Schultz undergo a medical examination pursuant
to C.R.C.P. 35. Schultz objected, arguing that C.R.C.P. 35
was inapplicable because her physical condition was no longer
in controversy. The parties attended a hearing before the
district court to resolve this question.
¶9
At the hearing, GEICO contended that it had decided to pay
Schultz's UM/UIM claim even though it had recognized that
the question of causation was unresolved. In light of
Schultz's current claims, however, GEICO argued that
causation was again a live issue because "[y]ou
can't delay a benefit that was never owed." GEICO
thus asserted that it was entitled to explore the causation
issue through, among other means, an IME of Schultz. Schultz
disagreed, asserting that the reasonableness of GEICO's
conduct had to be evaluated based on the information that
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