1:21-cv-02363
D. Colo.Aug 25, 2022Background
- Rear-end auto accident; plaintiff alleges medical damages between $996,273 and $1,075,083.
- Plaintiff settled with the tortfeasor for $50,000; asserts stacked UIM coverage of $1.75 million (three $250,000 policies + $1,000,000 umbrella).
- Defendant (American Family) has paid at least $500,000 and sought an independent medical examination (IME); plaintiff resisted, invoking Schultz v. GEICO.
- Defendant sought tolling to obtain an IME before the statute of limitations ran; plaintiff filed suit for breach of contract and bad faith instead.
- Magistrate judge authorized the IME; plaintiff objected under Fed. R. Civ. P. 72(a); the district court reviewed and overruled the objection.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Schultz bars an IME here | Schultz prevents insurer from creating new evidence (IME) to justify a past coverage decision; insurer waived IME entitlement by paying coverage | Schultz only applies when insurer already made a coverage decision; here coverage/entitlement to additional benefits is still disputed, so IME is permissible | Court: Schultz inapplicable because defendant has not made final coverage decision; IME allowed |
| Meaning of "coverage" vs "entitlement to benefits" | Coverage has been established (policy in effect); plaintiff says Schultz therefore bars IME | Coverage and entitlement differ: coverage means policy in place; entitlement to additional benefits requires proof of damages beyond amounts already paid | Court adopts defendant's distinction; plaintiff conflates terms |
| Deference to magistrate judge's nondispositive ruling | Magistrate erred in permitting IME under Schultz | Magistrate’s factual/legal findings entitled to deference absent clear error | Court finds no clear error and affirms magistrate’s ruling |
Key Cases Cited
- Schultz v. GEICO Cas. Co., 429 P.3d 844 (Colo. 2018) (insurer may not create new evidence via post-decision IME to justify an earlier coverage determination)
- Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d 1458 (10th Cir. 1988) (district court should not overturn magistrate unless left with a definite and firm conviction that a mistake was committed)
- United States v. U.S. Gypsum Co., 333 U.S. 364 (U.S. 1948) (articulation of the "definite and firm conviction" standard)
- Anderson v. City of Bessemer, 470 U.S. 564 (U.S. 1985) (difference in outcome alone does not justify reversal of a factual finding)
- Allen v. Sybase, Inc., 468 F.3d 642 (10th Cir. 2006) (application of clear-error review to magistrate judge rulings)