2017 COA 7M
Colo. Ct. App.2017Background
- In October 2010 Donna Kovac was seriously injured in a car accident caused by Kevin Filipelli; Filipelli’s insurer (Shelter) had $100,000 liability limits and Kovac alleges > $1.4M in damages.
- On March 27, 2013 Shelter mailed Kovac’s attorney a $100,000 check accompanied by a release and language indicating payment was conditioned "upon acceptance" and requesting return of the signed release if the amount was acceptable.
- Kovac’s counsel notified Kovac’s UIM insurer, Farmers, on April 2, 2013 and Farmers consented to the settlement on April 3; Kovac signed the release and endorsed the check on April 5, 2013 and later received the funds.
- Kovac sued Farmers on April 3, 2015 for UIM benefits and related claims; Farmers moved for summary judgment arguing the UIM statute of limitations had run because Shelter’s offer/check was delivered to counsel on or before April 2, 2013.
- The trial court granted summary judgment for Farmers; the appellate court reversed, holding the accrual date for the UIM limitations period is when the insured "received payment of the settlement," i.e., when the settlement was completed and payment became legally due (April 5, 2013).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does the UIM two-year limitations period begin after an underlying settlement: upon tender/receipt by counsel of a conditional check, or upon the insured's acceptance/actual receipt? | Kovac: accrual occurs when she accepted the settlement and was legally entitled to payment (April 5, 2013). | Farmers: accrual occurred when counsel received the insurer’s check/offer on or before April 2, 2013, so the two-year period expired before suit. | Court held accrual occurred when Kovac accepted the settlement/received payment (April 5, 2013); suit filed April 3, 2015 was timely. |
Key Cases Cited
- Westin Operator, LLC v. Groh, 347 P.3d 606 (Colo. 2015) (standard of review for summary judgment)
- Pham v. State Farm Auto. Ins. Co., 296 P.3d 1038 (Colo. 2013) (purpose of UIM statute and timing rules for preserving UIM claims)
- Monez v. Reinertson, 140 P.3d 242 (Colo. App. 2006) (federal decisions applying Colorado law are persuasive but not binding)
- Fiscus v. Liberty Mortg. Corp., 373 P.3d 644 (Colo. App. 2014) (accrual-date issues reviewed de novo when facts undisputed)
- Resolution Trust Corp. v. Avon Ctr. Holdings, Inc., 832 P.2d 1073 (Colo. App. 1992) (settlement agreements are contracts and construed like other contracts)
- Yaekle v. Andrews, 195 P.3d 1101 (Colo. 2008) (contract formation principles apply to settlement agreements)