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Culichia v. Safeco Insurance Co. of America

United States District Court, D. Colorado

September 18, 2019

JAMES CULICHIA, Plaintiff,
v.
SAFECO INSURANCE COMPANY OF AMERICA, Defendant.

          ORDER GRANTING IN PART MOTION FOR SUMMARY JUDGMENT

          Daniel D. Domenico United States District Judge.

         This diversity case was brought by a motorist against his insurance company. After being rear-ended by an alleged underinsured at-fault driver, the motorist claimed, but has been unable to collect, any underinsured motorist benefits for which he contracted and paid premiums. He now seeks damages and statutory penalties for the insurer’s failure to pay. Before the Court is the insurer’s motion for summary judgment. For the following reasons, the motion is GRANTED IN PART.

         I. BACKGROUND

         The basic facts relevant to this Order are undisputed.[1] Plaintiff James Culichia carried an underinsured motorist insurance policy with Defendant Safeco Insurance Company of America. Pursuant to the policy, Safeco agreed to pay damages caused by an accident with an underinsured motor vehicle if Mr. Culichia were to sustain injuries exceeding the amount he could receive from an at-fault driver, up to the policy limit of $250,000. The policy provides that Safeco has no duty to provide coverage unless (1) it is notified promptly about the accident or loss; (2) Mr. Culichia cooperates with Safeco in the investigation, settlement, or defense of any lawsuit; (3) Mr. Culichia submits, as often as Safeco reasonably requires, to physical examinations by physicians selected by Safeco and examinations under oath; and (4) Mr. Culichia authorizes Safeco to obtain medical and other pertinent records. The policy also states that no legal action may be brought against Safeco until there has been full compliance with the policy’s terms.

         On March 11, 2015, Mr. Culichia was rear-ended in an automobile crash. The next day, he called Safeco to lodge a claim under the policy. On March 15, Safeco wrote to him:

We are very sorry to hear about your accident. . . . Please ask your medical providers to send all medical bills from the accident to us[.] . . . If your injury is more serious or your treatment is more extensive than what was originally reported, please contact us as soon as possible. We may need to contact your doctor to ensure that any additional bills or treatments are paid promptly.

On April 28, Mr. Culichia’s attorney responded by sending a letter of representation. On May 19, Safeco again requested medical bills and records.

         Nearly one year later, on March 2, 2016, Mr. Culichia[2] sent Safeco the police report associated with the accident and requested permission to resolve the claim against the at-fault driver. Safeco consented. On April 15, Mr. Culichia sent Safeco a letter representing that he had settled with the at-fault driver for the driver’s policy limits of $25,000, and making a demand for underinsured motorist benefits of $50,000 (“First Demand”). The First Demand did not attach any actual medical bills or records, though it did contain a detailed breakdown of providers, dates, treatments, and expenses totaling $11,259.98. It represented several injuries, including a meniscus tear and sprain in the right knee, neck and back sprains, headaches, left shoulder strain, bicipital tendonitis, right elbow contusion, memory and focus problems, and driving phobia and anxiety.

         On May 26, Safeco responded: “After review of the information within our file and the documentation you have provided, we have determined that [you were] adequately made whole by the underlying settlement” with the at-fault driver.[3]Safeco added, however, that it “was willing to re-evaluate this matter if additional documentation is provided. Specifically, we are requesting all medical records from three years prior to the motor vehicle accident, [and] records from your [ ] Emergency Room treatment.” From June 30 to December 17, 2016, Safeco sent six more letters,[4] each indicating its willingness to re-evaluate its decision if Mr. Culichia provided documentation. On January 30, 2017, it sent another letter informing him that his file was being inactivated but stating it would reopen and re-evaluate the claim if necessary. Mr. Culichia did not respond to these letters.

         On December 4, 2017-thirty-two months after the accident and twenty-one months after the First Demand-Mr. Culichia submitted a supplemental demand letter, this time indicating that the accident had caused him traumatic brain injury that limited his ability to experience pleasure, triggered mood swings, and reduced his motivation. He requested that Safeco pay him the policy limit of $250,000 (“Second Demand”). On December 28, Safeco requested complete copies of testing data and associated studies from scans and neurological and neuropsychological evaluations; an executed medical authorization form; and the opportunity to obtain Mr. Culichia’s statement.

         On January 4, 2018, Mr. Culichia wrote:

Enclosed please find a disc containing the data you requested from Cerescan. The other diagnostic studies have been requested and will be forwarded upon receipt. As far as Dr. Helffenstein’s actual testing data, it cannot be provided by Dr. Helffenstein without an Order of the Court. It can be forwarded directly to another expert.

         On February 4, Safeco requested that Mr. Culchia have the testing data sent to its retained neuropsychologist, Dr. Suzanne M. Kenneally. On February 21, Mr. Culichia responded that the data was ready for transmittal, but he requested that Dr. Kenneally complete all testing prior to receipt of the raw data “to avoid any problems with manipulation of tests of your insured.” On February 22, Safeco clarified that it needed a professional to review the records and raw testing data to provide an opinion. On February 23, Mr. Culichia responded that he did not have an issue with undergoing an independent medical exam later. But because he believed the statute of limitations was about to run on March 11, 2018, he requested a tolling agreement, which Safeco said was a “very good idea.”

         On March 1, 2018, without further response, Mr. Culichia filed this lawsuit against Safeco in the Colorado District Court for Denver County. Prior to filing, he never produced the actual neurological test data upon which he based his traumatic brain injury claim. On April 25, Safeco removed the case here on diversity of citizenship grounds.[5]See 28 U.S.C. §§ 1332, 1441(a), and 1446. The Amended Complaint contains two causes of action. First, Mr. Culichia seeks $250,000 for alleged unreasonable delay or denial of underinsured motorist benefits under the policy. Second, he claims up to two times the covered benefit as statutory damages under Colo. Rev. Stat. § 10-3-1116, which provides that a claimant “whose claim for ...


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