July 18, 2019

Archives for November 16, 2016

District of Colorado Local Rules Amended, Effective December 1, 2016

The U.S. District Court for the District of Colorado has adopted changes to its local rules, effective December 1, 2016. The changes include a new Rule 2.1, “Forms of Action,” and an entire section on Local Patent Rules.

New Rule 2.1 clarifies that a proceeding not defined as a civil action under F.R.C.P. 2 should be filed as a civil miscellaneous (“mc”) or registered judgment (“rj”) action only if included in the List of Miscellaneous Cases. Rule 5.3 was amended by the addition of a subparagraph (c) dealing with written discovery requests or responses. The subparagraph specifies that other than in prisoner cases or as otherwise ordered, discovery requests shall be submitted by email or in other non-paper form. There were several other minor changes to various rules.

Section III on the Local Patent Rules is a comprehensive section dealing with the handling of patent claims in the U.S. District Court. The local rules are to be cited as D.C.Colo.LPtR _. The rules are to be known as the Local Rules of Practice of the United States District Court for the District of Colorado – Patent Rules. The rules specify that the civil local rules apply except as inconsistent with the patent rules. Topics addressed in the local patent rules include scheduling conferences and orders, discovery and confidentiality, infringement, invalidity, declaratory judgment, reliance on counsel’s opinion, claim construction, final infringement and invalidity contentions, and word limits. The remaining sections were renumbered accordingly.

Comments about the local rules may be submitted to the Advisory Committee on the Local Rules via email. For more information about the local rule changes, click here. For a redline of the changes, click here.

Tenth Circuit: Delay in Tendering Insurance Benefits Found Unreasonable

The Tenth Circuit Court of Appeals issued its opinion in Peden v. State Farm Mutual Automobile Insurance Co. on Tuesday, November 15, 2016.

Wendy Peden was among a group of friends drinking and celebrating the birthday of Terrell Graf’s fiancee. Mr. Graf gathered the friends into the van he had purchased for his fiancee, drove away, and crashed. Ms. Peden suffered serious injuries. She obtained $240,000 in insurance benefits, but claimed more in underinsured motorist benefits. State Farm initially denied the claim, but ultimately paid her $350,000, the maximum amount available. Ms. Peden sued State Farm for bad faith under Colorado common law and statutory law.

Ms. Peden argued in her claim for uninsured/underinsured motorist benefits that she had seven forms of injury totaling from $647,484.76 to $1,115,504.76. Ms. Peden sought benefits from a State Farm policy carried by Mr. Graf’s fiancee and also from her own State Farm policy. State Farm denied the claim, stating that the $240,000 she had received had fairly compensated her. When Ms. Peden brought suit against State Farm, it investigated further and ultimately paid her the maximum amount allowable under the policies. Ms. Peden continued to claim that State Farm had unreasonably delayed payment of benefits. State Farm moved for summary judgment, arguing that the handling of the claim was reasonable as a matter of law. Ms. Peden moved for partial summary judgment on her statutory bad faith claim. The district court granted State Farm’s motion, and Ms. Peden appealed.

The Tenth Circuit found that under Colorado law, all insurance contracts contain an implied duty of good faith and fair dealing, and that there is both a common law and statutory duty to handle claims in good faith. For an uninsured motorist claim involving a breach of the common law duty, the insured must prove that the insurer acted unreasonably under the circumstances and knowingly or recklessly disregarded the validity of the insured’s claim. A statutory claim includes a requirement that the insurer cannot “unreasonably delay or deny payment of a claim.” The Tenth Circuit examined industry standards and determined that State Farm had a duty to investigate the claim as diligently to prove its merit as it would to deny benefits, and had a duty to find all facts to try to understand the claimant’s medical condition. The Tenth Circuit found that in this case, State Farm had discredited Ms. Peden’s claim because she went for a ride with a drunk driver. Ms. Peden argued that she did not know Mr. Graf was drunk and she did not think he was going to drive the vehicle—she believed they were only getting in the van to take a group picture. State Farm did not interview Ms. Peden or otherwise investigate her story. The Tenth Circuit found that by failing to interview Ms. Peden, State Farm breached its duty.

The Tenth Circuit also found that State Farm unreasonably failed to investigate the total amount of damages before denying Ms. Peden’s claim. State Farm did not include any payment for future noneconomic damages, prejudgment interest, or wage loss in its initial valuation of the claim, and its tender of damages was between 24 and 42 percent of the amounts claimed by Ms. Peden. The Tenth Circuit found that a reasonable fact-finder could infer that State Farm failed to adequately investigate the damages that would have been available to Ms. Peden if she had sued Mr. Graf. The Tenth Circuit noted that State Farm could have consulted with a physician, asked Ms. Peden to submit to a physical examination, or interviewed her, and it did none of these things. The Tenth Circuit held that a fact-finder could question the reasonableness of this investigation.

The Tenth Circuit reversed the district court’s grant of summary judgment to State Farm. The Tenth Circuit vacated the district court’s denial of Ms. Peden’s partial summary judgment motion as moot, since it was no longer moot. The Tenth Circuit remanded to the district court for further findings.

Tenth Circuit: Unpublished Opinions, 11/15/2016

On Tuesday, November 15, 2016, the Tenth Circuit Court of Appeals issued four published opinions and six unpublished opinions.

Lister v. City of Wichita

United States v. Armienta

United States v. Aguirre-Ramirez

Needham v. State of Utah

White v. Kansas Department of Corrections

Case summaries are not provided for unpublished opinions. However, some published opinions are summarized and provided by Legal Connection.