2024 CO 77
Colo.2024Background
- Marcus Fear was in a 2018 rear-end car accident, not at fault, and sought additional compensation under his underinsured motorist (UIM) coverage from GEICO after settling with the tortfeasor's insurer for policy limits.
- GEICO offered partial settlements in 2020, conditioned on a full release of claims, but Fear declined and ultimately received no partial payments.
- Fear sued GEICO for statutory bad faith, alleging unreasonable delay or denial of benefits under Colo. Rev. Stat. § 10-3-1115.
- At trial, Fear's key evidence on undisputed non-economic damages was GEICO's internal claim evaluation; his expert interpreted it to mean certain amounts were undisputed.
- The district court found GEICO unreasonably withheld undisputed non-economic damages, but the Colorado Court of Appeals reversed, holding internal evaluations inadmissible as evidence of undisputed benefits owed and reasoning non-economic damages are inherently subjective.
- The Colorado Supreme Court granted certiorari on whether non-economic damages can ever be "undisputed" under the statute and whether claim evaluations are admissible to prove "benefits owed."
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can a UIM insurer ever unreasonably delay non-economic damages solely because they are subjective? | Fisher requires payment of any undisputed portion, and some non-economic damages can be undisputed. | Non-economic damages are always reasonably disputable, thus, never undisputed before resolution of all claims. | Not all non-economic damages are automatically in dispute; some could be undisputed, but not shown here. |
| Is an insurer's internal settlement evaluation admissible to prove undisputed benefits owed? | Claim evaluation should show what amounts are truly undisputed and owed. | Evaluation is settlement-protected under CRE 408 and is intertwined with settlement offers, therefore inadmissible. | Claim evaluations are inadmissible as evidence of undisputed benefits owed under CRE 408, though potentially admissible for other purposes (e.g., good/bad faith). |
Key Cases Cited
- State Farm Mut. Auto. Ins. Co. v. Fisher, 418 P.3d 501 (Colo. 2018) (insurer must pay undisputed covered benefits even while reasonable disputes remain over other portions of a claim)
- Goodson v. Am. Standard Ins. Co. of Wis., 89 P.3d 409 (Colo. 2004) (reasonableness of insurer's conduct determined by industry standards and is generally a factual question)
- Silva v. Basin W., Inc., 47 P.3d 1184 (Colo. 2002) (reserves/settlement authority not admissions of claim value)
- Sunahara v. State Farm Mut. Auto. Ins. Co., 280 P.3d 649 (Colo. 2012) (internal insurer evaluations/discoverability rules in bad faith)
- Vaccaro v. Am. Fam. Ins. Grp., 275 P.3d 750 (Colo. App. 2012) (valuation dispute alone is insufficient to establish fair debatability in bad faith)