Colorado Supreme Court
Skillett v. Allstate Fire and Casualty Insurance Co. – Supreme Court holds adjusters not liable under statutory bad faith act – 2022 CO 12 (03/14/22). The Supreme Court accepted jurisdiction to answer a certified question of law from the US District Court to decide whether an action for unreasonably delayed or denied insurance benefits under CRS §§ 10-3-1115 to -1116 may proceed against an individual claims adjuster. The Court concluded that, given the plain language of the statutory provisions, read in context and in their entirety, did not support an action for unreasonably delayed or denied insurance benefits proceeds against an individual adjuster but rather is limited to actions against an insurer.
Colorado Court of Appeals
People v. Arnold Martinez – Court of Appeals holds insurer is eligible for restitution – 2022COA28 (03/03/22). Arnold Martinez tried to steal a $6,000 bicycle out of an open garage. The bike’s owner pursued Martinez in his car and Martinez ran into the car’s bumper causing damage to the vehicle. Martinez pleaded guilty to offenses in another case in exchange for prosecutors dropping charges related to the bike theft. As part of the plea, he agreed to pay restitution for damages caused by the crime. The prosecutor filed a motion for restitution for $2,393 to cover the cost to repair the car. The trial court ordered ordering Martinez to pay the victim $500 to cover the insurance deductible and the rest to the victim’s insurer, GEICO. On appeal, Martinez argued the lower court erred by awarding restitution to GEICO. Under state law, a “victim” entitled to restitution is someone “who has suffered losses because of a contractual relationship with, including but not limited to, an insurer.” Martinez argued that only a policyholder can have a contractual relationship with an insurer, but since GEICO was the insurer, it was not eligible for restitution. The Colorado Court of Appeals disagreed with Martinez’s interpretation. The statute’s plain language extends protections to any party that suffers loss connected to crimes.
Hale v. SE Colo. Power Ass’n — Court of Appeals permits trial court to review offer of settlement as if it were a contract – 2022COA36 (03/24/22). In this interlocutory appeal, a division of the court of appeals considers whether a trial court is precluded by Centric-Jones Co. v. Hufnagel, 848 P.2d 942 (Colo. 1993), from recognizing, and taking action with respect to, an ambiguity/mistake in an offer of settlement made pursuant to section 13-17-202 after the offer has been accepted but before a judgment has been entered. The division concludes that the answer is “no” and the trial court is not precluded from taking further action. Specifically, the division concluded that, pursuant to section 13-17-202(1)(a)(IV), a court need not enforce a settlement agreement as written and may instead apply common law contract principles to alter, modify, or decline to enforce the agreement.
Other Cases of Interest
Pavlicek v. American Steel Systems, Inc., et al. – North Dakota court limits CGL coverage for construction defect work – North Dakota Supreme Court (02/18/22). Grinnell Mutual Reinsurance Company appealed a district court judgment ordering it to pay Larry Pavlicek $214,045.55 under a CGL policy Grinnell had with JRC Construction. Grinnell argued the district court misinterpreted the insurance policy, and that it was not required to indemnify JRC Construction because its work product was defective. In 2013, Pavlicek hired a contractor to construct a steel building on his property. JRC Construction installed the concrete floor and floor drain for the project. Another subcontractor installed the in-floor heating system for the concrete floor. After JRC completed the floor drain, it failed to properly install the concrete floor, and its attempts to repair the concrete damaged the drain. Pavlicek sued JRC for breach of contract relating to the defective work. In February 2020, Pavlicek filed a supplemental complaint against Grinnell, alleging it was required to satisfy the judgment as JRC’s insurer. Grinnell claimed it had no obligation to indemnify JRC under the CGL policy. The district court concluded JRC’s defective work on the concrete floor was not covered under the CGL policy, but damage to the floor drain was covered. Because removal and replacement of the floor and in-floor heat were necessary to repair the drain the court concluded the CGL policy covered all of those costs. The North Dakota Supreme Court found that although the CGL policy provided coverage to repair the floor drain, it did not cover the cost of replacing the concrete floor because that damage was the result of JRC’s defective work. The district court erred in finding the CGL policy covered the entire concrete floor replacement because replacement of the floor was the only way to repair the floor drain. Further, the Supreme Court found the district court erred in concluding the CGL policy provided coverage for replacement or repair of the in-floor heating system beyond that which may be necessary to repair the drain.