Estate of Casper v. Guarantee Trust Life Insurance Co
2016 COA 167
| Colo. Ct. App. | 2016Background
- Michael Casper bought a "First Diagnosis" cancer policy from Guarantee Trust Life (GTL); diagnosed with prostate cancer months later and GTL denied benefits. Casper sued for breach of contract, common-law bad faith, and statutory unreasonable denial of benefits under § 10-3-1116.
- At trial the court directed a verdict for Casper on breach (policy ambiguous). A jury returned a verdict awarding economic damages ($50,000 total), additional economic and noneconomic damages, and $4,000,000 punitive damages.
- The trial judge orally announced entry of judgment and directed the clerk to enter it; a written signed judgment under C.R.C.P. 58 was not signed before Casper died nine days later.
- GTL moved to limit recovery under Colorado’s survival statute (§ 13-20-101), arguing Casper’s death before a final written judgment extinguished noneconomic and punitive damages; it also challenged calculation of punitive damages and fee awards and objected to a jury instruction quoting an insurance regulation.
- The district court denied GTL’s abatement argument, reduced some damages under statutory caps, awarded attorney fees under § 10-3-1116, entered an amended judgment nunc pro tunc to the verdict date, and awarded appellate fees on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff’s death after verdict but before a signed C.R.C.P. 58 judgment bars recovery of noneconomic and punitive damages under § 13-20-101 (survival statute) | Casper: verdict resolved the merits and entitled him to judgment; surviving to verdict preserves noneconomic and punitive awards; judgment could relate back (nunc pro tunc) | GTL: because no written, signed judgment was entered before death, the survival statute limits recovery to economic damages sustained before death ($50,000) | Court: survival to verdict suffices; verdict resolved the merits and judgment would necessarily follow, so noneconomic and punitive damages did not abate; affirmed judgment (nunc pro tunc to verdict date permissible) |
| Whether attorney fees and costs awarded under § 10-3-1116 count as "actual damages" for purposes of calculating punitive damages | Casper: § 10-3-1116 expressly awards reasonable attorney fees and costs as part of the statutory remedy; these are compensatory/actual damages | GTL: such fees are not actual damages (or are penalties); Bernhard and common-law rules preclude treating fees as actual damages | Court: under the plain meaning and structure of § 10-3-1116, attorney fees and costs are actual/compensatory damages (statute departs from common-law Bernhard rule); properly included in calculations |
| Whether the district court erred by awarding supplemental post-trial attorney fees without a two-thirds reduction/apportionment | Casper: supplemental fees were related to the statutory claim and were properly awarded after reasonable apportionment | GTL: court should have applied same two-thirds apportionment used earlier; some supplemental entries unrelated to statutory claim should be reduced | Court: no abuse of discretion; trial court adequately examined entries and applied reasonable apportionment (goal is rough justice, not auditing perfection) |
| Whether giving a jury instruction quoting Division of Insurance Regulation 4-2-3 was improper | Casper: regulation was relevant evidence of industry standard in sale/marketing and admissible as non-conclusive evidence of bad-faith conduct | GTL: instruction irrelevant because related marketing defendants had settled | Court: instruction was a correct statement of law and relevant to the bad-faith theory; no abuse of discretion in giving it |
| Right to appellate attorney fees under § 10-3-1116 | Estate: successful on appeal to affirm statutory recovery; appellate fees recoverable under statute | GTL: (did not prevail) | Court: appellate fees recoverable; remanded to district court to quantify and award reasonable appellate fees |
Key Cases Cited
- Ahearn v. Goble, 7 P.2d 409 (Colo. 1932) (discusses merger of verdict into judgment and that judgment normally does not abate)
- People v. Guenther, 740 P.2d 971 (Colo. 1987) (legislative word choice is deliberate and guides statutory construction)
- Tunnell v. Edwardsville Intelligencer, Inc., 252 N.E.2d 538 (Ill. 1969) (verdict that resolves factual issues prevents abatement when plaintiff dies after verdict)
- Reed v. United States, 891 F.2d 878 (11th Cir. 1990) (settlement/decision that conclusively resolves dispute prevents abatement before final judgment)
- Bernhard v. Farmers Ins. Exch., 915 P.2d 1285 (Colo. 1996) (common-law rule limiting recovery of attorney fees in bad-faith claims; court explains that statute can abrogate common-law rule)
- Kisselman v. Am. Family Mut. Ins. Co., 292 P.3d 964 (Colo. App. 2012) (interpreting § 10-3-1116 and legislative intent behind statutory bad-faith remedies)
- Kruse v. McKenna, 178 P.3d 1198 (Colo. 2008) (interpreting survival statute’s bar on punitive damages post-death)
- Musick v. Woznicki, 136 P.3d 244 (Colo. 2006) (distinguishing judgments from final, appealable judgments under Colorado rules)