January 15, 2019

Colorado Supreme Court: Insurer’s Conduct Must Be Evaluated Based Upon Evidence Before it When Coverage Decision Made

The Colorado Supreme Court issued its opinion in Schultz v. Geico Casualty Co. on Monday, November 5, 2018.

Insurance—Bad Faith—C.R.S. § 10-3-1115—Fair Debatability—C.R.C.P. 35—Independent Medical Exams.

In this original proceeding pursuant to C.A.R. 21, the supreme court reviewed the district court’s order requiring plaintiff to undergo an independent medical examination (IME), pursuant to C.R.C.P. 35, at defendant’s request. The court issued a rule to show cause.

In this case, plaintiff, who was insured by defendant, alleged that defendant insurance company breached its duty of good faith and fair dealing and violated its statutory obligation to evaluate and pay her insurance claim without unreasonable delay. Defendant denied liability, asserting that because the question of medical causation was “fairly debatable” at the time it made its coverage decision, it did not act unreasonably or in bad faith. To establish these defenses, defendant sought an IME of plaintiff, and over plaintiff’s objection, the district court granted that request.

The court concluded that defendant’s conduct must be evaluated based on the evidence before it when it made its coverage decision. Thus, defendant is not entitled to create new evidence to try to support its earlier coverage decision. The court further concluded that the district court abused its discretion when it ordered plaintiff to undergo an IME over three years after the original accident that precipitated this case and a year and a half after defendant had made the coverage decision at issue. The court therefore made the rule to show cause absolute.

Summary provided courtesy of Colorado Lawyer.

Colorado Supreme Court: MMI Not Statutorily Significant Where No Final Admission of Liability Filed

The Colorado Supreme Court issued its opinion in Harman-Bergstedt, Inc. v. Loofbourrow on Monday, January 27, 2014.

Workers’ Compensation—Temporary Total Disability Benefits—Maximum Medical Improvement—Final Admission of Liability—Division-Sponsored Independent Medical Examination.

Harman-Bergstedt, Inc. and its insurer sought review of a court of appeals’ judgment reversing a decision of the Industrial Claim Appeals Office (Panel). The Panel had disallowed claimant’s award of total temporary disability (TTD) benefits, reasoning that once her treating physician placed her at maximum medical improvement (MMI), notwithstanding the failure of her injury to result in any work loss, TTD benefits could not be awarded for the injury for which she initially had been treated in the absence of a division-sponsored independent medical examination (DIME) challenging that placement. The court of appeals found that under the unique circumstances of this case—including the fact that claimant had never been awarded TTD benefits and her employer had never filed a final admission of liability from which the statutory window for seeking a DIME could be measured—a DIME was not a prerequisite to an award of TTD benefits.

The Supreme Court affirmed the court of appeals’ judgment. The Court held that because a determination of MMI has no statutory significance with regard to injuries resulting in the loss of no more than three days or shifts of work time, claimant’s award of TTD benefits was not barred by her failure to first seek a DIME.

Summary and full case available here.