March 17, 2018

Bills Signed Regarding Continuation of Family Medical Benefits After Death of State Worker, Creating a Crime of Cruelty to Police Horse, and More

On Wednesday, March 7, 2018, the governor signed 10 bills into law. To date, he has signed 40 bills this legislative session. The bills signed Wednesday included a bill to continue family medical benefits after the death of a state employee, a bill adding free-standing emergency rooms to Colorado’s safe haven laws, a bill creating the crime of cruelty to a working police horse, a bill removing the 30-day waiting period for importation of alcoholic beverages, and more. The bills signed Wednesday are summarized here.

  • HB 18-1010 – “Concerning Youth Committed to the Department of Human Services, and, in Connection Therewith, Requiring the Department to Report Certain Data and Adding Members to the Youth Restraint and Seclusion Working Group,” by Reps. Pete Lee & James Wilson and Sen. Don Coram. The bill requires the Department of Human Services to annually collect recidivism data and calculate the recidivism rates and educational outcomes for juveniles committed to the custody of the department who complete their parole sentences and discharge from department supervision.
  • HB 18-1024 – “Concerning the Nonsubstantive Relocation of Laws Related to the Regulation of Racing from Title 12, Colorado Revised Statutes, to a New Title 44 as Part of the Organizational Recodification of Title 12,” by Rep. Pete Lee and Sen. Daniel Kagan. The bill creates Title 44 and moves statutes related to the regulation of racing from title 12 to the new title.
  • HB 18-1026 – “Concerning the Nonsubstantive Relocation of the Law Creating the Liquor Enforcement Division and State Licensing Authority Cash Fund from Title 24, Colorado Revised Statutes, to a New Title 44 as Part of the Organizational Recodification of Title 12,” by Rep. Leslie Herod and Sens. John Cooke & Bob Gardner. The bill creates Title 44 and moves statutes creating the liquor enforcement division and state licensing authority cash fund from title 24 to the new title.
  • HB 18-1041– “Concerning Adding Certified Police Working Horses to the Crime of Cruelty to a Service Animal or a Certified Police Working Dog,” by Rep. Marc Catlin and Sen. Don Coram. The bill adds a definition for “certified police working horse” to statute and adds certified police working horses to the crime of cruelty to a service animal or a certified police working dog.
  • HB 18-1048 – “Concerning the Expenditure of Money from the Hesperus Account by the Board of Trustees of Fort Lewis College,” by Rep. Barbara McLaughlin and Sen. Don Coram. The bill eliminates the requirement that spending from the Fort Lewis College Hesperus account is subject to an appropriation by the general assembly.
  • HB 18-1105 – “Concerning the Unlicensed Sale of Vehicles,” by Reps. Larry Liston & Jovan Melton and Sen. Jack Tate. The bill clarifies that money received as fines for certain violations may be deposited in the auto dealers license fund.
  • SB 18-025 – “Concerning Modernization of Election Procedures for the Urban Drainage and Flood Control District to Conform with the Current Requirements of State Law,” by Sen. Kevin Priola and Rep. James Coleman. The bill makes several changes to statutory provisions related to flood control district elections.
  • SB 18-050 – “Concerning Including Staff of Free-standing Emergency Facilities as Part of Colorado’s Safe Haven Laws,” by Sen. Jim Smallwood and Reps. James Coleman & Marc Catlin. The bill expands Colorado’s safe haven laws to include staff members of community clinic emergency centers as persons allowed to take temporary physical custody of infants 72 hours old or younger when the infant is voluntarily surrendered by its parent or parents.
  • SB 18-124 – “Concerning the Removal of the Thirty-day Waiting Period Related to the Sale of Imported Alcohol Beverages,” by Sen. Owen Hill and Rep. Dan Pabon. Current law requires a manufacturer or importer of imported alcohol beverages to file a statement and notice of intent to import with the state licensing authority at least 30 days before the import or sale of the imported alcohol beverages. The bill removes the 30-day waiting period requirement.
  • SB 18-148 – “Concerning the Continuation of Certain Benefits Through the ‘State Employee Group Benefits Act’ for Dependents of a State Employee who Dies in a Work-related Death,” by Sens. Beth Martinez Humenik & Dominick Moreno and Reps. Polly Lawrence & Tony Exum. The bill specifies that dependents of an employee who dies in a work-related death are automatically qualified for the continuation of dental or medical benefits through the act for 12 months from the end of the month in which the work-related death occurred, so long as the dependents had dental or medical benefits pursuant to the act at the time of the employee’s work-related death.

For all of the governor’s 2018 legislative actions, click here.

Colorado Court of Appeals: District Court Erred in Summarily Dismissing Conversion and Unjust Enrichment Claims

The Colorado Court of Appeals issued its opinion in Scott v. Scott on Thursday, February 22, 2018.

Torts—Conversion—Unjust Enrichment—Life Insurance Proceeds—Motion to Dismiss under C.R.C.P. 12(b)(5) and (6)—Attorney Fees and Costs.

Roseann’s marriage to Melvin Scott was dissolved. Their separation agreement provided that Melvin’s life insurance policies were to be maintained until Roseann remarried, and at that time the beneficiaries could be changed to the children of the parties. Upon emancipation of the children, if Roseann had remarried, Melvin could change the beneficiary to whomever he wished. A Prudential life insurance policy was the policy at issue in this case.

After the divorce, Melvin married Donna and remained married to her until his death. Roseann never remarried. A few years before Melvin died and decades after his divorce from Roseann, Melvin changed the named beneficiary on his life insurance policies to Donna. Melvin died and Donna received the proceeds from his life insurance policies. Roseann sent a demand letter to Donna, requesting the proceeds pursuant to the separation agreement. The proceeds were placed in a trust account pending the outcome of this litigation.

Roseann sued Donna in Mesa County District Court, alleging civil theft, conversion, and unjust enrichment/constructive trust. Donna did not answer but removed the case to federal district court based on administration of the veteran life insurance policies by the federal government. She then moved to dismiss Roseann’s claims under a theory of federal preemption. Ultimately, the federal court agreed with the preemption argument and dismissed Roseann’s claims with prejudice as to the veteran policies but remanded the remaining claims to the Mesa County District Court for resolution regarding the Prudential policy.

Donna filed a motion in the district court to dismiss under C.R.C.P. 12(b)(5) and (6), arguing that Roseann’s claims failed to state a claim upon which relief could be granted and that she had failed to join Melvin’s estate, a necessary party. The district court granted the motion and a subsequent motion for attorney fees and costs.

On appeal, the court of appeals first examined whether Roseann had stated claims sufficient to withstand the plausibility standard required to survive a motion to dismiss under C.R.C.P. 12(b)(5). To state a claim for civil theft, a plaintiff must allege the elements of criminal theft, which requires the specific intent of the defendant to permanently deprive the owner of the benefit of his property. Roseann made a single, conclusory allegation, repeating the language in the statute, that Donna acted with the requisite intent to state a claim for civil theft. The court concluded that, without more, the allegation was not entitled to the assumption of truth, and the district court did not err in dismissing the civil theft claim.

Conversion, unlike civil theft, does not require that the convertor act with the specific intent to permanently deprive the owner of his property. Even a good faith recipient of funds who receives them without knowledge that they belonged to another can be held liable for conversion. Here, Roseann adequately alleged that Donna’s dominion and control over the Prudential policy proceeds were unauthorized because of the separation agreement language and Donna’s refusal to return the allegedly converted funds. Roseann pleaded each element of conversion sufficiently for that claim to be plausible and withstand a request for dismissal under C.R.C.P. 12(b)(5).

Similarly, the court concluded it was error to dismiss Roseann’s claim for unjust enrichment and constructive trust. In general, a person who is unjustly enriched at the expense of another is subject to liability in restitution. Here, Roseann alleged that Donna received a benefit that was promised to Roseann in the separation agreement and it would be inequitable for Donna to retain the funds. Roseann asked the court to impose a constructive trust on the assets. While this may be a difficult case in that two arguably innocent parties are asserting legal claims to the same insurance proceeds, resolution should be left to the fact finder and not resolved under a C.R.C.P. 12(b)(5) motion to dismiss.

It was not clear whether the district court had dismissed the claims for failure to join a necessary party under C.R.C.P. 12(b)(6), so the court addressed this issue as well. Here, the court held that Melvin’s estate was not a necessary party because Donna has possession of the proceeds at issue, and thus complete relief can be accorded between Roseann and Donna. In addition, the life insurance proceeds were never a part of Melvin’s estate assets and therefore the estate has no interest in those proceeds. Further, this is not an action for enforcement of the separation agreement, but is essentially an action in tort. The district court erred by dismissing the case under C.R.C.P. 12(b)(6).

Lastly, Roseann contended that Donna is not entitled to attorney fees and costs because the court erred in granting Donna’s motion to dismiss. The court agreed.

The judgment was affirmed in part and reversed in part, and the case was remanded with directions. The award of attorney fees and costs was vacated.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Written Rejection of Enhanced UM/UIM Coverage Not Required

The Colorado Court of Appeals issued its opinion in Airth v. Zurich American Insurance Co. on Thursday, January 25, 2018.

Motor Vehicle Insurance—Uninsured/Underinsured—Summary Judgment.

Airth was seriously injured in an accident while operating a semi truck owned by his employer, Sole Transport LLC, d/b/a Solar Transport Company (Solar). He was struck by a negligent, uninsured driver. Solar had uninsured/underinsured motorist (UM/UIM) insurance coverage of $50,000 for its employees through a policy issued by Zurich American Insurance Co. Airth brought a claim for declaratory relief, seeking to reform Solar’s policy to provide UM/UIM coverage of $1 million. He alleged he was entitled to the higher amount because Zurich had failed, as required by C.R.S. § 10-4-609, to (1) offer Solar UM/UIM coverage in an amount equal to its bodily injury liability coverage ($1 million), and (2) produce a written rejection by Solar of such an offer. On cross-motions for summary judgment, the district court entered judgment for Zurich ruling, as a matter of law, that (1) Zurich’s documents adequately offered Solar UM/UIM coverage in an amount equal to the bodily injury liability limits of the policy, and (2) there is no requirement that the rejection of UM/UIM limits in an amount equal to liability limits be in writing.

On appeal, Airth contended that both of the district court’s rulings were incorrect and the court therefore erred in granting Zurich’s summary judgment motion and denying Airth’s cross-motion. C.R.S. § 10-4-609(1)(a) prohibits an insurer from issuing an automobile liability policy unless a minimum amount of UM/UIM coverage is included in the policy, except where the named insured rejects UM/UIM coverage in writing. C.R.S. § 10-4-609(2) requires an insurer, before a policy is issued or renewed, to offer the insured the right to obtain UM/UIM coverage in an amount equal to the insured’s bodily injury liability limits. The facts here were undisputed. Before renewing Solar’s policy, Zurich sent a package of documents pertaining to Solar’s rights related to UM/UIM coverage and Solar’s counsel affirmed that he had read all the documents. This included an opportunity to reject UM/UIM coverage or to select a higher than minimum level of UM/UIM coverage. Airth argued that none of this constituted an “offer” of the ability to obtain higher UM/UIM coverage, because the documents did not contain a premium quote or a way to estimate the premium for purchasing UM/UIM coverage commensurate with a bodily injury liability limit of $1 million. The Colorado Court of Appeals agreed that this would be the case if it were applying the meaning of the term “offer” as used in contract law. But the Colorado Supreme Court has attributed a different meaning to “offer” as it is used in C.R.S. § 10-4-609; the dispositive question is whether, under the totality of the circumstances, the insured was adequately informed that higher UM/UIM coverage was available. Here, that standard was met by the documents Zurich provided to Solar.

Airth also argued that Zurich was not entitled to summary judgment because there was no evidence that anyone from Solar read or understood the document. This argument overlooks that attestation of Solar’s counsel.

Airth further argued that reversal is required because the documents were signed and dated a month after the policy went into effect. The operative question is whether the insurer gave the insured the opportunity to purchase statutorily-compliant coverage before the insured needed it. The record reflects that Solar had received and responded to the notification and offer before the accident that injured Airth.

Airth also contended that the district court erred in determining that the statute only requires a written rejection with respect to the minimum UM/UIM coverage available and not to the additional coverage available. The court agreed with the district court’s conclusion that a written rejection is required only if the insured declines the minimum amount of UM/UIM coverage, which was not the case here.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

Tenth Circuit: Workers’ Compensation Case Reversed Because Interpretation of Policy was Arbitrary and Capricious

The Tenth Circuit Court of Appeals issued its opinion in Owings v. United of Omaha Life Insurance Co. on Tuesday, October 17, 2017.

The plaintiff in this case, Owings, suffered a disabling injury while on the job and was afforded long-term disability benefits by the defendant, United of Omaha Life Insurance Company (United). Owings disagreed with the amount and beginning date of his disability benefits and filed suit. The district court granted summary judgment in favor of United, and Owings appealed.

Owings injured his back at work on July 1, 2013 while moving a surgical chair and cabinet, which left Owings unable to lift, bend, stoop, carry, push, and pull, resulting in Owings experiencing long-term back pain and spasms. The same day of his injury, Owings met with Bratton, the Director of Human Resources at United, who informed Owings that his title would be changed and his salary reduced, effective immediately. Owings went home and did not work for the company thereafter. Owings then applied for short-term disability benefits with United. As part of his application, Owings described the incident and the date it occurred, as well as statements from his employer and treating physician, Dr. McClintick. Dr. McClintick listed the “Date symptoms first appeared” as July 1, 2013, also noting that Owings had been continuously disabled and unable to work from the same date. Bratton, however, completed and signed an “Employer’s Statement” form for United, where she stated that Owings disability resulted from a previous injury and his last day of work was July 2, 2013.

Owings applied for long-term disability and was approved, although the letter stated that Owings became disabled on July 3, 2013. Owings, through his attorney, sent a letter to United asking for the date of disability to be changed to July 1, 2013. In response, United asked for copies of all of Owings’ time sheets. Bratton emailed Union twice with conflicting dates on Owings’ last day, but ultimately concluded that Owings left work at some time on July 2, 2013. Relying on this information, United denied the request to adjust Owings’ disability date, explaining that July 3 was the first day Owings was unable to work, since his employer verified he had worked July 2. United would only pay Owings the discounted salary set forth by Britton on July 1st. Owings subsequently filed suit.

Owings’ complaint is governed by the Employee Retirement Income Security Act (ERISA). A benefits decision under an ERISA-governed plan is generally left to the discretion of the administrator in determining the terms of the plan and of determining eligibility. In this case, the policy afforded United the discretion and final authority to construe and interpret the policy. The Tenth Circuit then examined whether the benefits decision at issue was arbitrary and capricious, limiting the review to determining whether the interpretation of the plan was reasonable and made in good faith.

Owings asserted that United abused its discretion in interpreting the term “disability” when calculating the amount of his monthly long-term disability benefit under the policy. Owings argued that the policy defined disability by reference to the inability to perform at least one of the material duties of his regular occupation, whereas United omitted the phrase “at least one of” to modify the policy to include each and every job duty.

The Tenth Circuit found United’s definition of disability to be inconsistent with the plain language of the policy, which requires only that the injury prevent the employee from being able to perform one material duty of occupation. The Tenth Circuit therefore found United’s definition of disability arbitrary and capricious.

The next issue was that United prohibited an employee from being declared disabled on the last day that he or she worked. United argues that Owings performed his job with no impairment for at least part of the day on July 1, so the earliest possible date disability could begin was on July 2. The Tenth Circuit found that United’s explanation could not be inferred from the policy’s definitional section. Nothing in the policy supported United’s conclusion that an employee cannot become immediately disabled after working for part of the day.

A third issue was whether United erred in relying exclusively on the statements from Bratton. The Tenth Circuit found that the record established, without question, that United rejected Owings’ initial request to adjust his disability date, as well as his subsequent administrative appeal, due to Bratton’s statements. The Tenth Circuit held that United erred in blindly relying on Bratton’s statements, as the determination should not have been based on whether Owings worked on a particular day, but rather on which day he sustained his injury.

The Tenth Circuit found that it was undisputed that Owings became injured on July 1. Owings’ treating physician identified July 1 as the date Owings was first unable to work. The only work Owings did on July 2 consisted of using the company cell phone; he did not physically go to the workplace. For these reasons, the Tenth Circuit concluded that United acted arbitrarily and capriciously in interpreting and applying the policy language. Under plain and ordinary meaning of the policy language, Owings became disabled on July 1, 2013. The proper remedy was to reverse the district court’s grant of summary judgment in favor of United.

The Tenth Circuit Court of Appeals REVERSED and REMANDED with directions to enter summary judgment in favor of Owings.

Colorado Court of Appeals: Restitution Statute Does Not Require Prosecution’s Requested Specificity for Setoff

The Colorado Court of Appeals issued its opinion in People v. Stanley on Thursday, September 7, 2017.

Traffic Accident—Unapportioned Settlement—Crime Victim Compensation Program—Restitution—Setoff—Burden of Proof.

Stanley’s automobile insurer, Geico Indemnity Co. (Geico), entered into a “Release in Full of All Claims” (release) with the victim and her husband. Under the settlement, Geico paid the victim $25,000 for all claims related to and stemming from the accident in exchange for a full and final release of all claims against Stanley and Geico. Thereafter, Stanley pleaded guilty to felony vehicular assault, driving under the influence, and careless driving. The prosecution filed a motion to impose restitution and attached a report from the Crime Victim Compensation Program (CVCP). It showed that the CVCP had paid the victim $30,000, the maximum amount allowable by statute, for pecuniary losses proximately caused by Stanley’s criminal conduct. The Court awarded Stanley a $25,000 setoff against restitution for the amount paid by Geico, and ordered him to pay the $5,000 net amount.

On appeal, the prosecution argued that Stanley should not receive a setoff for the settlement funds because the release was an unapportioned settlement that did not “earmark” the proceeds for the same expenses compensated by the CVCP, leaving open the possibility that the victim used the proceeds for losses not compensated by the CVCP. When a victim receives compensation from a civil settlement against a defendant, the defendant may request a setoff against restitution “to the extent of any money actually paid to the victim for the same damages.” For purposes of a setoff, however, the court cannot allocate proceeds from an unapportioned civil settlement agreement without “specific evidence that the settlement included particular categories of loss,” because in civil cases victims may recover both pecuniary losses covered by the restitution statute and other damages specifically excluded under the restitution statute. Because the information needed to determine whether a victim has been fully compensated or has received a double recovery is known only by the victim, once a defendant has shown that a civil settlement includes the same categories of losses or expenses as compensated by the CVCP and awarded as restitution, the defendant has met his burden of going forward, and the prosecution may then rebut the inference that a double recovery has occurred. Here, Stanley met his burden of proving a setoff, but the victim may have used some or all of the settlement proceeds for losses not compensated by the CVCP.

The order was affirmed, and the case was remanded to permit the prosecution to show that the victim did not receive a double recovery from the settlement proceeds and the CVCP payment.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Petition to Vacate Appraisal Award Properly Denied

The Colorado Court of Appeals issued its opinion in Owners Insurance Co. v. Dakota Station II Condominium Association, Inc. on Thursday, July 27, 2017.

Appraisal Award in Insurance Dispute—Impartial Appraiser Standard.

Owners Insurance Company (Owners) issued a property damage policy to Dakota Station II Condominium Association, Inc. (Dakota). Wind and hail storms damaged buildings in the residential community owned by Dakota. The losses were combined into a single insurance claim, but there was a dispute about the total amount of damages. The parties invoked the insurance policy’s appraisal provision. Each party selected an appraiser. They submitted proposed awards of different amounts and then nominated a neutral umpire as provided in the insurance policy. The final award of about $3 million was a mix of four damage estimates from Owners’ appraiser, Burns, and two estimates form Dakota’s appraiser, Haber. Burns refused to sign the final determination of costs. Haber and the umpire agreed and signed the award, and Owners paid Dakota.

Dakota then sued Owners in federal court for breach of contract and unreasonable delay in paying insurance benefits. During discovery, Owners learned several facts about Haber that it alleged demonstrated she was not an impartial appraiser. Owners filed a petition to vacate the appraisal award under C.R.S. § 13-22-223. Following a hearing, the trial court denied the petition.

On appeal, Owners argued that the trial court erred by not analyzing the insurance policy’s appraisal dispute provision, as well as the conduct and hiring of Haber, under the Colorado Uniform Arbitration Act’s (CUAA) standards for a neutral arbitrator in C.R.S. § 13-22-211(2). The Colorado Court of Appeals found no error because the policy did not incorporate CUAA’s standards and the parties’ stipulation that CUAA applied did not specifically state whether the appraisers were to be held to the statutory standard.

Owners then argued that Haber was not an “impartial appraiser” under the insurance policy. This term was not defined in the policy and has not been construed by a Colorado appellate court. The trial court interpreted it as an appraiser who applies appraisal principles with fairness, good faith, and lack of bias. The court agreed that this was the correct reading of the policy provision and its intent. The trial court’s application of this standard was supported by the record.

The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Agent May Exercise Apparent or Implied Authority to Reject UM/UIM Insurance Coverage

The Colorado Supreme Court issued its opinion in State Farm Mutual Automobile Ins. Co. v. Johnson on Monday, June 5, 2017.

Uninsured/Underinsured Motorist Insurance—Agency—Implied Authority.

This case presented two questions for the supreme court’s consideration. First, does the uninsured/underinsured motorist (UM/UIM) statute, C.R.S. § 10-4-609, require each named insured to reject UM/UIM coverage, or is one named insured’s rejection binding on all? And second, did the legislature, by enacting C.R.S. § 10-4-609, abrogate the common law agency principles of implied authority and apparent authority? The court started with the second question and concluded that nothing in the language of C.R.S. § 10-4-609 precludes an agent from exercising either apparent or implied authority to reject UM/UIM coverage on behalf of a principal. Turning to the facts of this case, the court concluded that the evidence presented at trial established that respondent Johnson delegated to his friend the task of purchasing insurance for their jointly owned car and that, in undertaking this task, the friend had implied authority to reject, and did in fact reject, UM/UIM coverage on Johnson’s behalf. Based on this conclusion, the court found it unnecessary to address the first question presented. The court thus reversed the court of appeals’ judgment and remanded the case for further proceedings consistent with this opinion.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: District Court Erred in Concluding Injured Worker Not Entitled to UIM Benefits from Personal Insurer

The Colorado Court of Appeals issued its opinion in American Family Mutual Insurance Co. v. Ashour on Thursday, May 18, 2017.

Personal InjuriesWorkers Compensation ActPersonal Automobile Insurance PolicyUninsured Motorist Benefits—Underinsured Motorist Benefits.

Ashour was an employee and co-owner of Nubilt Restoration & Construction (Nubilt). While employed with Nubilt, Ashour was severely injured when he was pinned by a 30-foot truck to a nearby tractor-trailer. The accident was caused by the negligence of his co-employee Peake, who failed to set the airbrake on the truck that rolled backward and pinned Ashour to the other vehicle. After the accident, Ashour submitted a claim to Nubilt’s workers’ compensation carrier and subsequently received benefits. He also submitted a claim to Nubilt’s corporate liability insurance provider and received a settlement for that claim based on a policy rider that allowed for coverage of workplace injuries. Ashour then made a claim under his personal automobile insurance policy with American Family Mutual Insurance Company (AFI) for underinsured (UIM) benefits to recover the remainder of his alleged damages. AFI then filed an action for declaratory relief as to whether Ashour was owed UIM coverage when the policy limited UIM benefits to situations where the insured was “legally entitled to recover” from the owner or operator of an uninsured or underinsured motor vehicle. The district court denied Ashour’s motion for summary judgment and granted AFI’s motion for summary judgment.

On appeal, Ashour contended that the district court erred by ruling, as a matter of law, that his claim for UIM coverage under his automobile insurance policy with AFI was precluded because he was not legally entitled to sue his employer or co-employee in tort for his injuries based on their immunity under the Workers’ Compensation Act of Colorado (the Act). Nubilt and its workers’ compensation insurance carrier are immune from suit by Ashour for his injuries sustained in the course and scope of his employment. By extension, co-employees are also immune from suit for injuries to a fellow employee arising out of the scope of employment. However, this exclusive remedy is limited to suits by an injured employee against his employer or co-employee; an injured employee may receive workers’ compensation benefits and bring suit against a third-party tortfeasor. Here, AFI’s uninsured motorist/underinsured motorist (UM/UIM) policy provides coverage where the tortfeasor is underinsured. Underinsured tortfeasors are those who are covered by insurance at the time of the accident. Thus, Nubilt and Peake are effectively underinsured in that Ashour received benefits up to Nubilt’s workers’ compensation insurance limits but still has additional damages from his workplace injury. It is the exhaustion of Nubilt’s and Peake’s limits of liability coverage (i.e., workers’ compensation insurance) that triggers AFI’s obligation to pay UM/UIM benefits. Therefore, Ashour’s claim for UIM benefits under his policy with AFI is not barred by the exclusivity provisions of the Act or by the “legally entitled to recover” language of the policy.

The judgment was reversed and the case was remanded with directions to enter summary judgment in favor of Ashour, declaring, as a matter of law, that AFI must provide coverage of UM/UIM benefits to Ashour upon his proof that Peake was at fault for causing his injuries and of the extent of his damages in excess of the coverage offered him under the Act.

Summary provided courtesy of The Colorado Lawyer.

Bills Delaying Accrual of Property Tax Abatement Refund Interest, Encouraging Mental Health Treatment for Peace Officers, and More Signed

On Monday, April 24, 2017, the governor signed eight bills into law. To date, the governor has signed 166 bills this legislative session. Some of the bills signed Monday include a bill delaying the accrual date of the property tax abatement refund interest, a bill expanding consumer options in fingerprint-based background checks, and a bill allowing campus liquor licenses for on-campus consumption of alcoholic beverages. The bills signed Monday are summarized here.

  • HB 17-1049“Concerning the Elimination of Refund Interest Related to a Property Tax Abatement,” by Reps. Dan Thurlow & Matt Gray and Sen. Don Coram. If property taxes are levied erroneously or illegally and a taxpayer has not protested the valuation within the time permitted by law, then the taxpayer has 2 years from the start of the property tax year to file a petition for abatement or refund with interest. The bill delays the start of the refund interest so that it accrues from the date a complete abatement petition is filed, with the exception of an abatement or refund for taxes paid as a result of omitted property being added to the assessment roll.
  • HB 17-1115“Concerning the Establishment of Direct Primary Health Care Agreements to Operate without Regulation by the Division of Insurance,” by Reps. Perry Buck & Joann Ginal and Sens. Jack Tate & John Kefalas. The bill establishes parameters under which a direct primary care agreement may be implemented. An agreement may be entered into between a direct primary health care provider and a patient for the payment of a periodic fee and for a specified period of time. The provider must be a licensed, registered, or certified individual or entity authorized to provide primary care services.
  • HB 17-1120“Concerning the Designation of a Campus Liquor Complex on the Campus of an Institution of Higher Education that is Licensed to Serve Alcohol Beverages for Consumption on the Licensed Premises to Allow the Institution to Obtain Permits to Serve Alcohol Beverages at Other Facilities Within its Campus Liquor Complex, and, in Connection Therewith, Making an Appropriation,” by Rep. Yeulin Willett and Sen. Don Coram. The bill allows a higher education institution that has a license to serve alcohol beverages for on-premises consumption to apply for designation as a campus liquor complex, thereby allowing the institution to designate multiple facilities on the campus as locations for serving alcohol beverages.
  • HB 17-1184“Concerning Developing Additional Resources for Modern Technology Education in Public Schools,” by Rep. Crisanta Duran and Sen. Kevin Grantham. The bill directs the State Board of Education, in the course of revising the academic standards, to incorporate into the standards for each subject skills relating to the use of information and communications technologies to find, evaluate, create, and communicate information.
  • HB 17-1215“Concerning Mental Health Support for Peace Officers,” by Rep. James Coleman and Sens. Daniel Kagan & Bob Gardner. The bill encourages each sheriff’s office and each municipal police department to adopt a policy whereby mental health professionals, to the extent practicable, provide on-scene response services to support officers’ handling of persons with mental health disorders, and counseling services to officers.
  • SB 17-108“Concerning Continuation of the Regulation of Speech-Language Pathologists by the Director of the Division of Professions and Occupations, and, in Connection Therewith, Implementing the Recommendations of the 2016 Sunset Report of the Department of Regulatory Agencies,” by Sen. Larry Crowder and Rep. Janet Buckner. The bill extends the automatic termination date of the “Speech-language Pathology Practice Act” to September 1, 2022.
  • SB 17-189“Concerning Elimination of the Requirement that a Law Enforcement Agency is the Only Entity Authorized to Take Fingerprints for Purposes of a Background Check,” by Sen. John Cooke and Rep. Mike Foote. The bill removes the statutory requirement that a law enforcement agency is the only authorized entity able to take fingerprints for background checks. If an approved third party takes the person’s fingerprints, the fingerprints may be electronically captured using Colorado bureau of investigation-approved or federal bureau of investigation-approved livescan equipment.
  • SB 17-190“Concerning Prohibiting a Carrier from Setting Fees for a Dental Service that is Not Paid For by the Carrier,” by Sens. Dominick Moreno & Larry Crowder and Rep. Matt Gray. The bill prohibits a contract between a carrier and a dentist from requiring a dentist to provide services to a covered person at a fee set by, or subject to the approval of, the carrier unless the services are covered services under the person’s policy and the carrier provides payment for the service under the person’s policy in an amount that is reasonable and not nominal or de minimis.

For a complete list of the governor’s 2017 legislative decisions, click here.

Bills Limiting Evidence in Groundwater Appeals, Expanding Juvenile Court Jurisdiction, and More Signed

On Tuesday, April 18, 2017, Governor Hickenlooper signed 11 bills into law. To date, he has signed 158 bills this legislative session. The bills signed Tuesday include a bill limiting the evidence that may be submitted in appeals from groundwater decisions, a bill expanding the exception for possession of sexually exploitative material to prosecutors and others involved in investigations, a bill giving the juvenile court jurisdiction to decide parental responsibilities issues in juvenile issues, and more. The bills signed Tuesday are summarized here.

  • HB 17-1012“Concerning the Creation of a Pueblo Chile License Plate,” by Rep. Daneya Esgar and Sen. Leroy Garcia. The bill creates the Pueblo chile special license plate. In addition to the standard motor vehicle fees, the plate requires 2 one-time fees of $25.
  • HB 17-1110“Concerning Juvenile Court Jurisdiction Regarding Matters Related to Parental Responsibilities in a Juvenile Delinquency Case,” by Rep. Susan Beckman and Sen. Nancy Todd. The bill allows the juvenile court to take jurisdiction involving a juvenile in a juvenile delinquency case and subsequently enter orders addressing parental responsibilities and parenting time and child support in certain circumstances.
  • HB 17-1138“Concerning the Reporting of Hate Crimes by Law Enforcement Agencies,” by Rep. Joseph Salazar and Sen. Angela Williams. The bill requires the Department of Public Safety to include in its annual hearing information concerning reports submitted by law enforcement agencies about crimes committed in the state during the previous year, including but not limited to information concerning reports of bias-motivated crimes.
  • HB 17-1174“Concerning the Establishment of an Exception for Rural Counties from the Limitations on the Establishment of a Local Improvement District to Fund the Construction of a Telecommunications Service Improvement for Advanced Service,” by Rep. James Wilson and Sens. Lucia Guzman & Larry Crowder. The bill allows a rural county with a population of fewer than 50,000 inhabitants to establish a local improvement district to fund an advanced service improvement in an unserved area of the county.
  • HB 17-1193“Concerning the Installation of Small Wireless Service Infrastructure within a Local Government’s Jurisdiction, and, in Connection Therewith, Clarifying that an Expedited Permitting Process Applies to Small Cell Facilities and Small Cell Networks and that the Rights-of-Way Access Afforded Telecommunications Providers Extends to Broadband Providers and to Small Cell Facilities and Small Cell Networks,” by Reps. Tracy Kraft-Tharp & Jon Becker and Sens. Andy Kerr & Jack Tate. The bill clarifies that the expedited permitting process established for broadband facilities applies to small cell facilities and small cell networks, and that the rights-of-way access afforded to telecommunications providers for the construction, maintenance, and operation of telecommunications and broadband facilities extend to broadband providers as well as small cell facilities and small cell networks.
  • SB 17-036“Concerning Groundwater,” by Sens. Don Coram & Ray Scott and Reps. Jon Becker & Jeni Arndt. The bill limits the evidence that a district court may consider, when reviewing a decision or action of the commission or state engineer on appeal, to the evidence presented to the commission or state engineer.
  • SB 17-068“Concerning Early Support for Student Success Through Access to School Counselors, and, in Connection Therewith, Serving All Grades Through the Behavioral Health Care Professional Matching Grant Program and the School Counselor Corps Grant Program,” by Sen. Nancy Todd and Rep. Jonathan Singer. The bill adds elementary schools to the list of public schools eligible to receive a grant through the behavioral health care professional matching grant program.
  • SB 17-088“Concerning the Criteria Used by a Health Insurer to Select Health Care Providers to Participate in the Insurer’s Network of Providers, and, in Connection Therewith, Making an Appropriation,” by Sens. Angela Williams & Chris Holbert and Reps. Kevin Van Winkle & Edie Hooten. The bill requires health insurers to develop and use standards for selecting participating providers for its network and tiering providers if the insurer carries a tiered network.
  • SB 17-112: “Concerning a Clarification of the Effect of Statutes of Limitations on the Dispute Resolution Process when a Taxpayer Owes Sales or Use Tax to One Local Government but has Erroneously Paid the Disputed Tax to Another Local Government,” by Sen. Tim Neville and Rep. Dan Pabon. The bill seeks to clarify the General Assembly’s intent when it enacted a dispute resolution process in 1985 to address a situation when a taxpayer paid a sales and use tax to one local government when it should have instead paid that disputed amount to a different local government.
  • SB 17-115“Concerning Possession of Sexually Exploitative Material by Persons Involved in Sexually Exploitative Material Cases,” by Sen. John Cooke and Reps. Mike Foote & Yeulin Willett. Under current law there is an exception to the crime of possession of sexually exploitative material for peace officers while in the performance of their duties. The bill expands the exception to a prosecutor, criminal investigator, crime analyst, or other individual who is employed by a law enforcement agency or district attorney’s office and performs or assists in investigative duties.
  • SB 17-137“Concerning the Continuation of the Colorado Health Service Corps Advisory Council,” by Sens. Nancy Todd & Michael Merrifield and Rep. Dominique Jackson. The bill continues the Colorado Health Service Corps Advisory Council indefinitely.

For a list of all of Governor Hickenlooper’s 2017 legislative decisions, click here.

Bills Regarding Hearsay Exception, Free Speech on College Campuses, Juvenile Court Jurisdiction, and More Signed

On Tuesday, April 4, 2017, the governor signed 16 bills into law. He also signed 14 bills into law on March 30, and 12 bills on March 23. To date, the governor has signed 122 bills into law.

Some of the bills recently signed include a bill clarifying the hearsay exception for people with intellectual and developmental disabilities, a bill correcting the Colorado Uniform Trust Decanting Act, a bill clarifying that a juvenile court has jurisdiction to issue civil protection orders in dependency and neglect cases, a bill clarifying a student’s right to free speech on college campuses, and more. The bills signed since March 23 are summarized here.

April 4, 2017

  • HB 17-1051“Concerning Modernization of the Colorado ‘Procurement Code’,” by Reps. Bob Rankin & Alec Garnett and Sens. Andy Kerr & Don Coram. The bill reviews the entirety of the Colorado Procurement Code and makes several updates in an effort to modernize the Code.
  • HB 17-1101“Concerning the Creation of the Youth Corrections Monetary Incentives Award Program in the Division of Youth Corrections,” by Rep. Paul Rosenthal and Sens. Nancy Todd & Kevin Priola. The bill authorizes the Division of Youth Corrections to establish, at its discretion, a youth corrections monetary incentives award program. The purpose of the program is to provide monetary awards and incentives for academic, social, and psychological achievement to juveniles who were formerly committed to the Division to assist and encourage them in moving forward in positive directions in life.
  • HB 17-1103“Concerning a State Sales and Use Tax Exemption for Historic Aircraft on Loan for Public Display,” by Reps. Dan Nordberg & Dan Pabon and Sens. Dominick Moreno & Bob Gardner. The bill creates a state sales and use tax exemption for a historic aircraft that is on loan for public display, demonstration, educational, or museum promotional purposes in the state provided certain conditions are met.
  • HB 17-1107“Concerning the Implementation of a New Computer System by the Division of Motor Vehicles to Facilitate the Division’s Administration of the Operation of Motor Vehicles in the State,” by Reps. Dan Thurlow & Jeff Bridges and Sen. Beth Martinez Humenik. The bill makes statutory changes regarding implementation of a new computer system.
  • HB 17-1109“Concerning Prosecuting in One Jurisdiction a Person who has Committed Sexual Assaults Against a Child in Different Jurisdictions,” by Reps. Terri Carver & Jessie Danielson and Sens. John Cooke & Rhonda Fields. The bill allows a prosecutor to charge and bring a pattern-offense case for all such assaults in any jurisdiction where one of the acts occurred, rather than prosecuting each act in the jurisdiction in which it occurred.
  • HB 17-1111“Concerning Allowing Juvenile Courts to Enter Civil Protection Orders in Dependency and Neglect Cases,” by Rep. Susan Beckman and Sen. Rhonda Fields. The bill clarifies that the juvenile court has jurisdiction to enter civil protection orders in dependency and neglect actions in the same manner as district and county courts. The court must follow the same procedures for the issuance of the civil protection orders and use standardized forms.
  • HB 17-1149“Concerning Special License Plates Issued to Members of the United States Military who Served in the United States Army Special Forces,” by Reps. Tony Exum & Dafna Michaelson Jenet and Sen. Bob Gardner. The bill clarifies which individuals are eligible for a U.S. Army Special Forces license plate.
  • HB 17-1151“Concerning the Regulation of Electrical Assisted Bicycles,” by Reps. Chris Hansen & Yeulin Willett and Sens. Owen Hill & Andy Kerr. The bill defines electrical assisted bicycles and enacts several regulations regarding manufacture, labeling, and government oversight of such bicycles.
  • HB 17-1152: “Concerning the Authority of a Federal Mineral Lease District to Manage a Portion of the Direct Distribution of Money from the Local Government Mineral Impact Fund to Counties for the Benefit of Impacted Areas,” by Reps. Yeulin Willett & Diane Mitsch Bush and Sen. Ray Scott. The bill gives a federal mineral lease district the option to invest a portion of the funding it receives from the local government mineral impact fund in a fund.
  • SB 17-015“Concerning the Unlawful Advertising of Marijuana,” by Sen. Irene Aguilar and Rep. Dan Pabon. The bill makes it a level 2 drug misdemeanor for a person not licensed to sell medical or retail marijuana to advertise for the sale of marijuana or marijuana concentrate.
  • SB 17-016“Concerning the Optional Creation of a Child Protection Team by a County,” by Sens. Cheri Jahn & Tim Neville and Reps. Tracy Kraft-Tharp & Dan Nordberg. The bill allows counties and groups of contiguous counties to choose whether to establish a child protection team, at the discretion of the county director or the directors of a contiguous group of counties.
  • SB 17-048“Concerning Requiring an Officer to Arrest an Offender who Escapes from an Intensive Supervision Program in the Department of Corrections,” by Sen. John Cooke & Rep. Yeulin Willett. The bill requires a peace officer who believes that an offender in an intensive supervision program has committed an escape by knowingly removing or tampering with an electronic monitoring device to immediately seek a warrant for the offender’s arrest or arrest the offender without undue delay if the offender is in the presence of the officer.
  • SB 17-062“Concerning the Right to Free Speech on Campuses of Public Institutions of Higher Education,” by Sen. Tim Neville and Reps. Jeff Bridges & Stephen Humphrey. The bill prohibits public institutions of higher education from limiting or restricting student expression in a student forum, and prohibits those institutions for penalizing free speech.
  • SB 17-066“Concerning Clarifying Retroactively the Authority of a Municipality to Employ a Police Force without Going Through Sunrise Review,” by Sens. Rhonda Fields & John Cooke and Reps. Steve Lebsock & Lori Saine. The bill clarifies that municipalities may employ a police force without going through the review process for groups seeking peace officer status.
  • SB 17-076“Concerning Authority to Spend Money in the Public School Performance Fund,” by Sen. Kevin Priola and Rep. James Coleman. The bill allows the Department of Education to spend money received as gifts, grants, and donations for monetary awards to certain high-performing public schools and in purchasing tangible items of recognition for the schools.
  • SB 17-125“Concerning Allowing Certain Persons who Have Been Exonerated of Crimes to Receive in Lump-Sum Payments Compensation that is Owed to Them by the State,” by Sen. Lucia Guzman and Rep. Dan Pabon. The bill allows an exonerated person to elect to receive the remaining balance of the state’s duty of compensation in a lump sum rather than periodic payments.

March 30, 2017

  • HB 17-1059: “Concerning the Scheduled Repeal of Reports by the Department of Public Safety to the General Assembly,” by Rep. Dan Thurlow and Sen. Jack Tate. The bill continues indefinitely statutory reporting requirements.
  • HB 17-1076“Concerning Rule-making by the State Engineer Regarding Permits for the Use of Water Artificially Recharged into Nontributary Groundwater Aquifers,” by Rep. Jeni Arndt and Sens. Stephen Fenberg & Don Coram. The bill adds a requirement that the state engineer promulgate rules for the permitting and use of waters artificially recharged into nontributary groundwater aquifers.
  • HB 17-1147“Concerning Defining the Purposes of Community Corrections Programs,” by Rep. Lang Sias and Sen. Daniel Kagan. The bill statutorily defines the purpose of community corrections as to further all purposes of sentencing and improve public safety.
  • HB 17-1180: “Concerning Requirements for the Tuition Assistance Program for Students Enrolled in Career and Technical Education Certificate Programs,” by Reps. Faith Winter & Polly Lawrence and Sens. Andy Kerr & Tim Neville. The bill allows students in technical education programs to receive tuition assistance even if they do not meet credit hour requirements for the federal Pell grant program.
  • SB 17-024“Concerning the Hearsay Exception for Persons with an Intellectual and Developmental Disability when a Defendant is Charged with a Crime Against an At-risk Person,” by Sen. Rhonda Fields and Rep. Dave Young. The bill clarifies that the hearsay exception for a person with an intellectual and developmental disability applies if the defendant is charged under the increased penalties for crimes against at-risk persons.
  • SB 17-031“Concerning the Scheduled Repeal of Reports by the Department of Corrections to the General Assembly,” by Sen. Jack Tate and Rep. Jeni Arndt. The bill continues indefinitely reporting requirements for the Department of Corrections and makes other changes.
  • SB 17-033“Concerning the Authority of a Professional Nurse to Delegate Dispensing Authority for Over-the-Counter Medications,” by Sen. Irene Aguilar and Rep. Polly Lawrence. The bill allows a professional nurse to delegate to another person, after appropriate training, the dispensing authority of an over-the-counter medication to a minor with the signed consent of the minor’s parent or guardian.
  • SB 17-073“Concerning Promotion of the Runyon-Fountain Lakes State Wildlife Area,” by Sen. Leroy Garcia and Rep. Donald Valdez. The bill directs stakeholders interested in the Runyon-Fountain lakes state wildlife area (including the Colorado division of parks and wildlife, the city of Pueblo, and the Pueblo conservancy district) to cooperatively engage in a long-term process to promote the maximum beneficial development and maintenance of the area.
  • SB 17-110“Concerning Expanding the Number of Unrelated Children to No More than Four to Qualify for License-exempt Family Child Care,” by Sens. Larry Crowder & John Kefalas and Reps. James Wilson & Jessie Danielson. The bill expands the circumstances under which an individual can care for children from multiple families for less than 24 hours without obtaining a child care license.
  • SB 17-122“Concerning the Duties of the Fallen Heroes Memorial Commission, and, in Connection Therewith, Repealing the Commission and Shifting all Remaining Responsibilities to the State Capitol Building Advisory Committee,” by Sen. Jack Tate and Reps. Terri Carver & Jessie Danielson. The bill repeals the fallen heroes memorial commission and requires the state capitol building advisory committee to take on any remaining duties of the commission.
  • SB 17-123“Concerning a High School Diploma Endorsement for Biliteracy,” by Sens. Rachel Zenzinger & Kevin Priola and Reps. James Wilson & Millie Hamner. The bill authorizes a school district, BOCES, or institute charter high school to grant a diploma endorsement in biliteracy to a student who demonstrates proficiency in English and at least one foreign language.
  • SB 17-124“Concerning a Correction to the ‘Colorado Uniform Trust Decanting Act’,” by Sens. Beth Martinez Humenik & Dominick Moreno and Reps. Edie Hooten & Dan Nordberg. The bill changes one reference to the second trust to the first trust to conform with the Uniform Law Commission’s corrected version of the Act.
  • SB 17-134“Concerning the Exclusion of Certain Areas of an Alcohol Beverage Licensee’s Operation in the Application of Penalties for Certain Violations,” by Sen. Jack Tate and Reps. Dan Nordberg & Leslie Herod. The bill limits penalties for violations relating to the sale of alcohol beverages to a visibly intoxicated or underage person that occur in a sales room for licensees operating a beer wholesaler, winery, limited winery, or distillery, or in a retail establishment, for licensees operating a brew pub, vintner’s restaurant, or distillery pub.
  • SB 17-194“Concerning an Exception to the Statutory Deadlines for Making Income Tax Refunds for Returns Suspected of Refund-related Fraud,” by Sen. Tim Neville and Rep. Dan Pabon. The bill specifies that if the department of revenue makes a determination, in good faith, that there is a suspicion of identity theft or other refund-related fraud, then the statutory deadlines do not apply.

March 23, 2017

  • HB 17-1015: “Concerning Clarifying the Manner in Which Reductions of Inmates’ Sentences are Administered in County Jails,” by Rep. Edie Hooten and Sen. John Cooke. The bill clarifies and consolidates various statutory sections concerning reductions of sentences for county jail inmates.
  • HB 17-1040: “Concerning Authorizing the Interception of Communication Relating to a Crime of Human Trafficking,” by Reps. Paul Lundeen & Mike Foote and Sens. Cheri Jahn & Kevin Priola. The bill adds human trafficking to the list of crimes for which a judge can issue an order authorizing the interception of certain communications.
  • HB 17-1044“Concerning Autocycles, and, in Connection Therewith, Clarifying that an Autocycle is a Type of Motorcycle and Requiring Autocycle Drivers and Passengers to Use Safety Belts and, if Applicable, Child Safety Restraints,” by Rep. Diane Mitsch Bush and Sen. Nancy Todd. The bill amends the definition of “autocycle” and amends the restraint requirements for autocycles.
  • HB 17-1048“Concerning the Prosecution of Insurance Fraud,” by Rep. Mike Foote and Sen. Jim Smallwood. The bill amends language describing the criminal offense of insurance fraud.
  • HB 17-1065“Concerning a Clarification of Requirements Governing the Formation of Metropolitan Districts, and, in Connection Therewith, Limiting the Inclusion of Agricultural Land Within a Metropolitan District Providing Park and Recreational Services and Clarifying Signature Requirements Governing Judicial Approval of a Petition for Organization of a Proposed Special District,” by Rep. Kimmi Lewis and Sen. Vicki Marble. The bill subjects metropolitan districts to certain limitations regarding parks and recreation and clarifies which signatures can be counted by the district court in determining validity.
  • HB 17-1071“Concerning a Process for Repayment of Certain Criminal Monetary Amounts Ordered by the Court to be Paid Following Conviction,” by Reps. Cole Wist & Pete Lee and Sens. Daniel Kagan & Bob Gardner. The bill establishes a process for a defendant who has paid a monetary amount due for a criminal conviction in a district or county court to request a refund of the amount paid if the conviction was overturned or the restitution award was reversed.
  • HB 17-1092“Concerning Contracts Involving License Royalties with Proprietors of Retail Establishments that Publicly Perform Music,” by Rep. Steve Lebsock and Sen. Jack Tate. The bill expands the law covering contracts between performing rights societies and proprietors of retail establishments to cover investigations and negotiations between the two.
  • HB 17-1133“Concerning the Annual Report on Filing-Office Rules by the Secretary of State,” by Reps. Dan Nordberg & Edie Hooten and Sens. Dominick Moreno & Jack Tate. The bill repeals the requirement that the secretary of state annually report to the governor and legislature regarding filing-office rules promulgated under the “Uniform Commercial Code – Secured Transactions.”
  • HB 17-1136“Concerning Consistent Statutory Language for Electronic Filing of Taxes,” by Rep. Mike Foote and Sen. Bob Gardner. The bill changes the EFT and electronic filing requirements in the taxation statutes for consistency, specifying in all cases that the department may require EFT and electronic filing and that the department may promulgate rules to implement EFT and electronic filing.
  • HB 17-1148“Concerning Applications for Registration to Cultivate Industrial Hemp,” by Rep. Jeni Arndt and Sen. John Cooke. The bill adds a requirement to existing registration requirements that applicants to cultivate industrial hemp for commercial purposes provide the names of each officer, director, member, partner, or owner of 10% or more in the entity applying for registration and any person managing or controlling the entity.
  • HB 17-1157“Concerning Reliance by a Financial Institution on a Certificate of Trust,” by Reps. Tracy Kraft-Tharp & Dan Nordberg and Sen. Kevin Priola. The bill requires trustees to provide additional information in a certificate of trust when trustees open a trust deposit account and permits the bank to rely on the certificate of trust absent knowledge of fraud.
  • SB 17-008“Concerning Legalizing Certain Knives,” by Sen. Owen Hill and Rep. Steve Lebsock. The bill removes gravity knives and switchblades from the definition of illegal weapons.

For a list of the governor’s 2017 legislative decisions, click here.

Colorado Court of Appeals: Penalty of Two Times Covered Benefit for Insurance Bad Faith Upheld

The Colorado Court of Appeals issued its opinion in Nibert v. Geico Casualty Co. on Thursday, February 23, 2017.

Bad Faith—C.R.S. § 10-3-1116—Jury Instructions—Statutory Delay—Attorney Fees.

Nibert and her husband were injured when a car collided with their motorcycle. As relevant to this appeal, Nibert had an underinsured motorist (UIM) policy through Geico Casualty Co. (Geico) with a $25,000 coverage limit. Geico offered Nibert $1,500 to settle her claim.

Nibert sued Geico for breach of contract, common law bad faith, and statutory delay under C.R.S. § 10-3-1116. After discovery and before trial, Geico paid Nibert the $25,000 UIM coverage limit to settle the breach of contract claim.

A jury returned verdicts awarding Nibert $33,250 in noneconomic damages on her bad faith claim and $25,000 for her statutory delay claim. The trial court entered judgment on the jury’s verdict for the bad faith claim and judgment of $50,000 for damages on the statutory delay claim. It also granted Nibert’s motion for attorney fees in the amount of $118,875.30.

On appeal, Geico argued that the trial court failed to adequately instruct the jury on its theory of defense that challenges to debatable claims are reasonable. The trial court relied on the Colorado pattern jury instructions governing common law bad faith and first-party statutory claims. While it did not accept Geico’s tendered instructions on these issues, it allowed Geico to present expert testimony regarding the “fairly debatable” issue and to argue its theory of defense to the jury. The Colorado Court of Appeals concluded that the instructions, as given, adequately instructed the jury on the applicable law and the parties were afforded ample opportunity to present their case theories to the jury. The trial court’s ruling was neither manifestly arbitrary, unreasonable, or unfair, nor a misapplication of the law.

Geico then argued that the trial court erred in awarding Nibert recovery of two times her UIM benefit as a penalty. C.R.S. § 10-3-1116(1) provides a first-party claimant the right to bring an action for “two times the covered benefit.” Geico argued that the trial court should have allowed a setoff of the ultimate statutory damages award in the amount of $25,000 previously paid to Nibert on her UIM claim. The court agreed with other divisions that have concluded that a statutory damages award of two times a delayed benefit—even when that benefit has already been paid, resulting in an effective payment of three times the contracted benefit—is contemplated by the plain meaning of C.R.S. § 10-3-1116.

Geico also contended it was error to award attorney fees incurred to prosecute the common law bad faith and statutory delay claims, both before and after the date when payment of the UIM benefit was delayed. They argued the attorney fees should be limited to the period from the date the benefit was first delayed to the date the benefit was actually paid. The court found no support for Geico’s argument that the section does not contemplate an award of attorney fees incurred litigating anything other than a contractual claim or incurred for the time before and after a delayed benefit accrues and is paid.

The court also granted Nibert’s request for an award of her appellate attorney fees.

The judgment and order were affirmed, and the case was remanded for a determination of the amount of reasonable attorney fees and costs.

Summary provided courtesy of The Colorado Lawyer.