Countryman v. Farmers Insurance Exchange
2012 U.S. Dist. LEXIS 78384
D. Colo.2012Background
- This is a putative class action for breach of insurance contract and related claims arising from med-pay benefits under Colorado policies.
- Plaintiff seeks a two-year limitation subclass defined by Colorado Rev. Stat. § 10-4-635(2)(a) and related criteria.
- The court considers whether the two-year submission window for med-pay claims violates public policy and the statute's intent.
- Defendants move to dismiss the two-year limitation subclass as not void and not contrary to policy; the motion is granted.
- Colorado med-pay coverage became optional after CAARA sunset, with Senate Bill 11 influencing the 5,000-dollar med-pay reserve and claim hierarchy.
- The court concludes the two-year limitation aligns with statutory intent and public policy as interpreted by Colorado law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the two-year med-pay claim limitation violates public policy. | Two-year limit defeats statutory intent. | Limitation does not contravene public policy. | Limitation does not offend statutory/public policy. |
| Whether a limitation on med-pay claims is void under §10-4-635. | Limitation undermines mandatory med-pay purposes. | Limitation compatible with statutory scheme. | Limitation valid; claims dismissed. |
| Whether exclusion/limitation provisions within mandated insurance are void for being inconsistent with statute. | Exclusion void if contrary to policy. | Exclusions may exist if not contrary to policy. | Exclusions permissible under public policy standard. |
| What is the appropriate standard of review for a 12(b)(6) dismissal in this context. | Pleadings show plausible claims. | Pleadings insufficient to state plausible claims. | Court applies Twombly/Iqbal plausibility standard and grants dismissal. |
Key Cases Cited
- Twombly, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard)
- Iqbal v. Ashcroft, 556 U.S. 662 (U.S. 2009) (plausibility pleading standard clarified)
- Cruz v. Farmers Insurance Exchange, 12 P.3d 307 (Colo.App.2000) (statutory limitations and policy considerations in insurance)
- Chacon v. American Family Mutual Insurance Co., 788 P.2d 748 (Colo.1990) (exclusion not void unless contravenes public policy)
- Bailey v. Lincoln General Insurance Co., 255 P.3d 1039 (Colo.2011) (exclusions within mandatory insurance laws allowed)
- Principal Mutual Life Insurance Co. v. Progressive Mountain Insurance Co., 1 P.3d 250 (Colo.App.1999) (exclusions not required to advance statute goals, but cannot contravene public policy)
- Shelter Mutual Insurance Co. v. Mid-Century Insurance Co., 246 P.3d 651 (Colo.2011) (Colorado contract freedom; caution in public policy)
- DeHerrera v. Sentry Insurance Co., 30 P.3d 167 (Colo.2001) (public policy considerations in insurance)
- Huizar v. Allstate Insurance Co., 952 P.2d 342 (Colo.1998) (Colorado policy favoring fair, timely resolution of claims)