Riccatone v. Colorado Choice Health Plans
2013 COA 133
| Colo. Ct. App. | 2013Background
- Plaintiffs are plan participants under the San Luis Valley Educators Health Plan; Choice and CNIC are current/former plan administrators; GBS is a broker/adviser.
- Duran, sixteen at the time of a 2007 car crash, had a positive alcohol test; the Plan denied benefits for injuries resulting from illegal alcohol use.
- Plaintiffs sued CNIC, Choice, and later added GBS for contract, bad faith, and statutory claims under 10-3-1116(1).
- CNIC moved for summary judgment and was granted; GBS and Choice also moved and won summary judgment; a settlement dismissed Plan claims.
- Plaintiffs sought reconsideration and amendments; the court denied these efforts and granted further summary judgments for GBS and Choice on statutory claims.
- The court held CNIC, GBS, and Choice owed no common-law bad-faith duty and that GBS/Choice were not liable under the statutory claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court erred on bad faith | Riceatone argues third-party admins owe bad faith duty. | CNIC/Choice/GBS contend no duty unless insurer-insured relationship exists. | No duty found; summary judgment affirmed. |
| Whether GBS/Choice improperly denied benefits under 10-3-1116(1) | Plaintiffs contend unreasonable denial occurred and liability attaches. | GBS/Choice not proper defendants under the statute. | Statutory claims against GBS/Choice dismissed; no liability found. |
| Whether the motion to amend to add aiding-and-abetting claims was abuse of discretion | Plaintiffs sought third amendment after dismissal of CNIC and other facts. | Undue delay, prior amendments, and futility justify denial. | No abuse; district court’s denial affirmed. |
Key Cases Cited
- Cary v. United of Omaha Life Ins. Co., 68 P.3d 462 (Colo. 2003) (insurer owes duty of good faith; third party admins may owe if financially incentivized)
- Farmers Grp., Inc. v. Trimble, 691 P.2d 1138 (Colo. 1984) (insurance contract special relation; duty to act in good faith as a tort)
- Wetzel v. Johnson, 821 P.2d 804 (Colo. 1991) (workers' comp context; inapposite to general insurance duties)
- Kisselman v. Am. Family Mut. Ins. Co., 292 P.3d 964 (Colo. App. 2011) (statutory private right of action; legislative intent guides scope)
- Montes v. Hyland Hills Park & Recreation Dist., 849 P.2d 852 (Colo. App. 1992) (analysis of statutory interpretation and common law sources)
- Spahmer v. Gullette, 113 P.3d 158 (Colo. 2005) (use of legislative intent and interpretive aids)