and County of Denver District Court No. 15CV32703 Honorable
Michael A. Martinez, Judge
Law Firm, Jennifer E. Bisset, Denver, Colorado, for
Vaughan & DeMuro, David R. DeMuro, Richard K. Rediger,
Denver, Colorado, for Defendant-Appellee
Gold Law Firm, LLC, Michael J. Rosenberg, Greenwood Village,
Colorado, for Amicus Curiae Colorado Trial Lawyers
Taubman and Rothenberg [*] , JJ., concur
1 In this bad faith breach of an insurance contract case,
plaintiff, Richard Lorenzen, sued defendant, Pinnacol
Assurance, his employer's workers' compensation
insurer, after Pinnacol initially denied his request for
surgery to treat a work-related injury. Pinnacol's denial
resulted in a thirteen-day delay between the date of the
request and the date Lorenzen underwent surgery.
2 Before trial, Lorenzen disclosed four doctors as experts
who intended to opine that the delay in approving the request
caused Lorenzen to suffer permanent nerve damage. The experts
relied on a theory that prolonged nerve compression from a
herniated disc leads to nerve damage and, therefore, surgery
must be performed sooner rather than later. As one of the
doctors explained the theory, "timing matters."
3 The district court concluded that the theory relied on by
the doctors - for patients with a disc herniation causing
neurological deficits, prompt surgery is preferable to
delayed surgery to preserve nerve function - was not a
scientifically reliable theory of medical causation and
disallowed the expert testimony. Without his experts'
testimony, Lorenzen could not prove causation or damages, and
so the district court granted summary judgment in favor of
4 On appeal, Lorenzen contends that the district court erred
in excluding his expert testimony. He maintains that the
court imposed too stringent a causation standard and that,
even under the standard applied by the court, he presented a
reliable and relevant theory of causation that satisfies CRE
5 Lorenzen also contends that the district court erred in
entering judgment for Pinnacol, as he retained a claim for
noneconomic damages that did not require expert testimony.
6 We reject his contentions and therefore affirm.
7 On February 3, 2014, while Lorenzen was working as a
groundskeeper for a country club, he injured his back and
suffered a herniated disc with an extruded caudally migrated
fragment.Lorenzen's employer reported the injury
to Pinnacol the next day.
8 Lorenzen was referred to Dr. Tracey Stefanon. She placed
Lorenzen on work restriction, recommended over-the-counter
anti-inflammatories, ordered an MRI, and referred Lorenzen to
an orthopedic surgeon, Dr. Douglas Beard.
9 On February 6, Dr. Beard advised Lorenzen that he would
likely need surgery, but, because Lorenzen wanted to avoid
surgery if possible, Dr. Beard prescribed steroids with
further monitoring. Lorenzen returned to Dr. Beard on
February 10, still experiencing pain and foot weakness, and
they decided that Lorenzen should have surgery as soon as
10 Lorenzen spoke with a claims adjuster on February 12 and
discovered that Dr. Beard had not submitted a request for
authorization of the surgery. He called Dr. Beard's
office with a reminder to submit the request to Pinnacol, and
Dr. Beard faxed a request to Pinnacol marked
"urgent." According to Dr. Beard, an urgent request
does not denote an emergency.
11 On February 17, Pinnacol verbally advised Lorenzen that it
would not authorize surgery, and the next day, it formally
denied his request on the ground that Lorenzen's injury
was not work related.
12 On February 20, Lorenzen, now proceeding under his private
health insurance, consulted with Dr. William Biggs, an
orthopedic surgeon, and Dr. Biggs performed the surgery on
February 25. After the surgery, Lorenzen continued to
experience right foot weakness due to permanent nerve
13 On June 20, 2014, Pinnacol changed its position and
determined that Lorenzen's injury was work related. It
reimbursed him for his medical costs and paid other
workers' compensation benefits.
14 Lorenzen filed this action against Pinnacol, asserting a
claim for bad faith breach of an insurance contract. He
alleged that "[a]s a result of the delay in receipt of
surgical intervention, Lorenzen has permanent weakness and
loss of control over his foot with loss of strength and
stability, which affects his work, his activities of daily
living and his hobbies . . . ."
15 In support of his claim, Lorenzen disclosed four medical
experts (Drs. Stefanon, Beard, and Biggs, and Dr. Rebeka
Martin) who intended to opine that the delay in authorizing
surgical intervention for Lorenzen resulted in his permanent
16 Pinnacol filed a pretrial motion to exclude the
experts' testimony on the issue of medical causation,
contending that their opinions were not scientifically
reliable and were therefore inadmissible at trial.
17 The district court held a hearing on the motion at which
it reviewed the deposition testimony and heard argument from
counsel. None of the doctors testified at the hearing.
Thereafter, the district court made detailed findings and
issued an order disallowing the doctors from testifying at
trial that the thirteen-day delay caused by Pinnacol resulted
in Lorenzen's permanent impairment.
18 Pinnacol then moved for summary judgment, arguing that
without the expert testimony, Lorenzen could not prove his
bad faith claim. Lorenzen responded by filing a motion to
reconsider the order prohibiting his experts' testimony.
He attached to his motion additional ex parte
"deposition" testimony of Dr. Beard and an
affidavit by Dr. Martin. His motion for reconsideration
continued to assert the theory that prompt surgical
intervention is generally indicated for patients suffering
from nerve compression, but it also raised a new theory of
19 The district court denied Lorenzen's motion for
reconsideration, denied as moot Pinnacol's motion to
strike the doctors' new testimony, and granted
Pinnacol's motion for summary judgment.
Exclusion of Expert Evidence on Causation
20 Lorenzen argues that the district court applied an overly
stringent but-for causation test rather than a more lenient
"substantial factor" test. But in any event, he
says, his expert evidence satisfies a but-for test and,
therefore, the district court erred in excluding the
experts' testimony. We disagree. A. The Applicable
Standard of Causation
21 The issue of the correct standard of causation is a legal
one. Reigel v. SavaSeniorCare L.L.C., 292 P.3d 977,
985 (Colo.App. 2011). Therefore, our review of that issue is
de novo. Id.
22 To prevail on a common law claim of bad faith breach of an
insurance contract, the plaintiff must prove that the insurer
acted unreasonably and that the insurer's unreasonable
conduct caused the plaintiff's injury or damages. See
Bankr. Estate of Morris v. COPIC Ins. Co., 192 P.3d 519,
523 (Colo.App. 2008).
23 Damages for bad faith breach of an insurance contract are
based on traditional tort principles. City of Westminster
v. Centric-Jones Constructors, 100 P.3d 472, 484
(Colo.App. 2003). Under traditional tort principles, the
plaintiff must show that the defendant's conduct
"proximately caused" the claimed injury.
Reigel, 292 P.3d at 985; see also June v. Union
Carbide Corp., 577 F.3d 1234, 1238 (10th Cir. 2009)
("In Colorado, as elsewhere, a party seeking recovery in
tort must demonstrate that the defendant's conduct caused
the alleged injury.").
24 Proximate cause has two components: causation in fact and
legal causation. Moore v. W. Forge Corp., 192 P.3d
427, 436 (Colo.App. 2007). Legal causation - which refers to
the scope or foreseeability of liability, see June,
577 F.3d at 1240 - is not at issue here; Lorenzen only
challenges the test for causation in fact.
25 As to causation in fact, the test is "whether, but
for the alleged [tortious conduct], the harm would not have
occurred." Reigel, 292 P.3d at 985 (quoting
N. Colo. Med. Ctr., Inc. v. Comm. on Anticompetitive
Conduct, 914 P.2d 902, 908 (Colo. 1996)). Alternatively,
the plaintiff can show factual causation by establishing that
the defendant's conduct was a "necessary component
of a causal set that would have caused the injury."
Id. at 987; see also Restatement (Second)
of Torts § 432(1), (2) (Am. Law Inst. 1965). Thus,
Lorenzen had to present evidence that, but for the
thirteen-day delay between the request for authorization and
the surgery, the permanent nerve damage would not have
occurred, or that the delay was a necessary component of a
causal set that would have caused his impairment.
26 Relying on Sharp v. Kaiser Foundation Health Plan of
Colorado, 710 P.2d 1153 (Colo.App. 1985),
aff'd, 741 P.2d 714 (Colo. 1987), Lorenzen
argues that he could instead establish causation under the
"substantial factor" test by showing that
Pinnacol's conduct was a substantial factor in increasing
the risk that he would have a less optimal surgical outcome.
27 In Sharp, the division held that the jury could
decide causation where the plaintiff presented expert
testimony that the defendants' conduct was a substantial
factor in causing the injury in that it "substantially
increased plaintiff's risk of the resulting harm or
substantially diminished the chance of recovery." 710
P.2d at 1155. On review, the supreme court did not reach the
issue of whether the substantial factor theory was a
cognizable, less stringent standard of causation because the
court concluded that the plaintiff had met her burden to show
but-for causation. Sharp, 741 P.2d at 720.
28 However, as the Tenth Circuit explained in June,
the "substantial factor" and but-for standards of
causation are not alternatives; but-for causation is a
prerequisite to establishing the substantial factor test. 577
F.3d at 1241.
29 In explaining the substantial factor test, section 432 of
the Restatement (Second) of Torts, which the Sharp
division did not consider, imposes a causation requirement at
least as stringent as the but-for standard consistently
applied by our supreme court:
(1)Except as stated in Subsection (2), the actor's
negligent conduct is not a substantial factor in bringing
about harm to another if the harm would have been sustained
even if the actor had not been negligent.
(2)If two forces are actively operating, one because of the
actor's negligence, the other not because of any
misconduct on his part, and each of itself is sufficient to
bring about harm to another, the actor's negligence may
be found to be a substantial factor in bringing it about.
"the allegedly negligent conduct of the defendant must
satisfy" a but-for test "before it can even qualify
as a substantial factor under the other Restatement