August 17, 2018

Colorado Supreme Court: C.R.S. § 10-3-1116(1) Does Not Require Reduction of Damages Award by Amount of Benefits Delayed but Ultimately Paid

The Colorado Supreme Court issued American Family Mutual Insurance Co. v. Barriga on Tuesday, May 29, 2018.

Unreasonable Delay and Denial of Insurance Benefits—Damages.

The supreme court considered the operation of a statutory scheme that prohibits the unreasonable delay or denial of insurance benefits. Specifically, the court considered whether an award of damages under C.R.S. § 10-3-1116(1) must be reduced by an insurance benefit unreasonably delayed but ultimately recovered by an insured outside of a lawsuit. The court held that an award under C.R.S. § 10-3-1116(1) must not be reduced by an amount unreasonably delayed but eventually paid by an insurer because the plain text of the statute provides no basis for such a reduction. The court further concluded that the general rule against double recovery for a single harm does not prohibit a litigant from recovering under claims for both a violation of C.R.S. § 10-3-1116(1) and breach of contract.

The court of appeals’ decision was affirmed.

Summary provided courtesy of Colorado Lawyer.

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