Crosby v. American Family Mutual Insurance Co.
2010 Colo. App. LEXIS 1825
Colo. Ct. App.2010Background
- These appeals involve CAARA claims that American Family failed to offer extended PIP benefits as required by law.
- Plaintiffs allege breach of contract, bad faith and related theories arising from noncompliant policies and delayed or improper reformations.
- CAARA allowed policy reform to include extended PIP benefits; Hicks v. American Family addressed reformation of policies.
- Courts granted summary judgment to American Family on statute of limitations grounds under CAARA’s three-year limit.
- Accrual was deemed to occur when plaintiffs knew or should have known the insurer did not offer extended PIP, or when basic benefits ended and/or counsel was engaged; Hicks reformation did not toll accrual.
- Motions concluded that accrual dates ranged from 1993 to 2003, and tolling arguments were rejected; the cases were timely or untimely as of filing in 2008.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| accrual of CAARA claims under Murry framework | Crosby etc. argue accrual postponed to Hicks reformation (2005) or tolling | American Family argues accrual occurred earlier when basic PIP ended or when counsels engaged | Accrual occurred no later than when counsel engaged or basic benefits ended; Hicks did not toll the limitation period. |
| effect of Hicks reformation on tolling | Tolling during Hicks would render claims timely | No tolling from Hicks; facts—not law—control accrual | Hicks reformation did not toll accrual; claims untimely. |
| issue preclusion from Hicks ruling | Hicks precluded American Family from asserting limitations defenses | Hicks did not squarely adjudicate individual claims; not actually litigated | Issue preclusion does not apply to bar this limitations defense. |
| adequacy of CAARA statute of limitations and accrual rule here | Three-year period should toll with Brennan/Murry/Clark lineage; accrual later due to reformation | Accrual per Murry; tolling not justified; early accrual dates apply | Three-year CAARA statute applies; accrual date fixes untimeliness. |
| whether tolling or retroactivity analyses apply to Brennan/Clark lineage | Policy reform retroactivity could extend recovery window | Retroactivity not controlling for accrual; limitations run regardless | Limitations run irrespective of Brennan/Clark retroactivity; claims untimely. |
Key Cases Cited
- Murry v. GuideOne Specialty Mut. Ins. Co., 194 P.3d 489 (Colo. App. 2008) (accrual when insurer fails to offer extended PIP; three-year limit)
- Brennan v. Farmers Alliance Mut. Ins. Co., 961 P.2d 550 (Colo. App. 1998) (extended PIP required; reformation when not offered)
- Stickley v. State Farm Mut. Auto. Ins. Co., 505 F.3d 1070 (10th Cir. 2007) (CAARA purpose; extended coverage principle)
- Clark v. State Farm Mut. Auto. Ins. Co., 319 F.3d 1234 (10th Cir. 2003) (Brennan retroactivity applied; PIP reform context)
- Nelson v. State Farm Mut. Auto. Ins. Co., 419 F.3d 1117 (10th Cir. 2005) (knowledge standard for accrual; tolling limits)
- Wagner v. Grange Ins. Ass'n, 166 P.3d 304 (Colo. App. 2007) (CAARA accrual and limitations discussion)
- Thompson v. Budget Rent-A-Car Sys., Inc., 940 P.2d 987 (Colo. App. 1996) (earlier case on accrual and reform context)
- Cahill v. Am. Family Mut. Ins. Co., 610 F.3d 1235 (10th Cir. 2010) (Cahill II: tolling/ accrual principles applied to reformation)
- Cahill I (unpublished), (unpublished) (Colo. Court) (discussed in Cahill II; non-reportable)
- Olson v. State Farm Mut. Auto. Ins. Co., 174 P.3d 849 (Colo. App. 2007) (focus on discovery of essential facts to accrual)
- Moffat Cnty. Sch. Dist. RE No. 1 v. Indus. Comm'n, 732 P.2d 616 (Colo. 1987) (test for issue preclusion)