Baker v. Allied Property & Casualty Insurance
2013 U.S. Dist. LEXIS 49538
| D. Colo. | 2013Background
- This case was removed to federal court on diversity jurisdiction.
- Motions for partial summary judgment concern primacy of UIM coverage and med-pay/underinsured claims.
- July 19, 2008 accident: Baker passenger; Viking Insurance policy $25,000; Chrysler insured by Allstate for UIM up to $100,000.
- Nationwide business auto policy covers GMC; its UM/UIM endorsement affects primacy and excess status.
- Plaintiff Baker sues Allstate and Nationwide for breach of UIM/med-pay, plus bad faith and unreasonable denial claims.
- Court addresses four motions and standard summary-judgment standards prior to ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Primacy of UIM coverage between Allstate and Nationwide | Baker argues co-primary UIM status; Allstate seeks primary with excess trigger. | Allstate argues excess only if two apply; Nationwide argues its coverage is excess or primary depending on vehicle. | Allstate and Nationwide are co-primary; losses shared dollar-for-dollar. |
| Validity and effect of excess clauses under DeHerrera | Excess clauses violate DeHerrera if they dilute statutorily mandated UIM coverage. | Excess clauses are valid and do not dilute UIM; Shelter supports apportionment. | Both excess clauses are valid under Colorado law; do not dilute statutorily mandated coverage; treated as co-primary. |
| Trigger for Allstate’s Other Insurance Clause | Baker was in a vehicle insured for UIM under another policy, triggering other-insurance clause. | Nationwide’s policy would not provide UIM for the Chrysler, so no trigger; Endorsement makes Nationwide excess. | Chrysler being insured for UIM under Nationwide triggers Allstate’s clause; co-primary result applies. |
| Med-pay three-year limit validity under § 10-4-635 | Three-year limit void as a matter of public policy; pre-2011 claims should be covered. | Limit is valid under Bailey/DeHerrera; not void; pre-litigation letters may constitute claims. | Three-year limit valid; Allied/Nationwide not per se liable for pre-limit med-pay claims; disputes remain on pre-litigation claims. |
| Bad faith and unreasonable delay pre- versus post-litigation | Pre-litigation conduct shows bad faith; delay post-litigation is irrelevant to pre-suit acts. | Duty to negotiate suspended by litigation; pre-litigation conduct disputed. | Genuine material facts exist; bad faith and unreasonable delay claims remain for pre-litigation conduct to be resolved at trial. |
Key Cases Cited
- DeHerrera v. Sentry Ins. Co., 30 P.3d 167 (Colo. 2001) (mandatory UM/UIM coverage; void provisions that dilute public policy)
- Shelter Mut. Ins. Co. v. Mid-Century Ins. Co., 246 P.3d 651 (Colo. 2011) (excess clauses valid; do not erode mandate; mutual repugnancy if overlapping)
- Allstate Ins. Co. v. Avis Rent-A-Car Sys., Inc., 947 P.2d 841 (Colo. 1997) (principles governing primary vs. excess and apportionment of liability)
- Bailey v. Lincoln Gen. Ins. Co., 255 P.3d 1039 (Colo. 2011) (freedom to contract; enforce clear non-contrary to statute)
- Rabin v. Fid. Nat. Prop. & Cas. Ins. Co., 863 F. Supp. 2d 1107 (D. Colo. 2012) (insurer duty to negotiate persists; suspension during certain litigation conditions)
- Vaccaro v. Am. Family Mut. Ins. Co., 275 P.3d 750 (Colo. App. 2012) (reasonableness standard for bad-faith/unreasonable delay; expert testimony guidance)
- Sanderson v. Am. Family Mut. Ins. Co., 251 P.3d 1213 (Colo. App. 2010) (bad faith standard; valuation disputes can weigh against bad faith)
- Countryman v. Farmers Ins. Exch., 865 F. Supp. 2d 1108 (D. Colo. 2012) (statutory med-pay coverage and reasonable expectations under Colorado law)