2015 COA 86
Colo. Ct. App.2015Background
- On Nov. 18, 2008 Stoesz was injured by an underinsured motorist.
- Three-year limitations period for filing UIM claims expired in mid-November 2011.
- Days before the three-year deadline, Stoesz and Progressive (the underinsured motorist’s insurer) exchanged emails confirming a policy-limits settlement; Progressive later issued a settlement check on Dec. 16, 2011 (after the three-year period).
- State Farm (Stoesz’s UIM carrier) approved the settlement after the three-year period had run.
- Stoesz sued State Farm for UIM benefits on Dec. 12, 2013 (within two years of receiving the settlement funds, but more than three years after the accident).
- The trial court granted summary judgment for State Farm, holding that the pre-check settlement agreement was not a “payment” that preserved the underlying liability claim under § 13-80-107.5(1)(b).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the statute’s term “payment” (for preserving the underlying liability claim) includes a binding settlement agreement executed before funds are delivered | Stoesz: a settlement agreement is a "payment" (or at least preserves the claim), so her UIM suit filed within two years after settlement was timely | State Farm: § 13-80-107.5(1)(b) requires actual payment (not merely agreement to pay) during the 3-year period to preserve the claim | Court: "payment" does not include a pre-payment settlement agreement; preservation requires actual payment or filing suit against the tortfeasor within 3 years |
| Whether the term “payment” is ambiguous, allowing resort to policy to expand meaning | Stoesz: omission of a statutory definition renders the term ambiguous; policy favors a broad reading to fully compensate injured insureds | State Farm: term has ordinary meaning and is not ambiguous; court should apply plain meaning | Court: "payment" has a plain, ordinary meaning and is not ambiguous; cannot substitute policy for clear language |
| Whether treating a pre-payment settlement agreement as "payment" would create unacceptable uncertainty or extend limitations unfairly | Stoesz: excluding agreements causes absurdity—insureds would need to file needless lawsuits to preserve claims | State Farm: including agreements would create uncertainty about enforceability and could improperly extend the two-year post-payment period | Court: agrees with State Farm; allowing agreements to qualify would create uncertainty and potentially extend the limitations period improperly |
| Whether Progressive’s waiver/tolling of limitations as to the insured bound State Farm | Stoesz: Progressive agreed to waive statute-of-limitations defenses, which should preserve the claim | State Farm: Progressive’s agreement did not bind State Farm; no evidence Progressive had authority to waive State Farm’s defenses | Court: Progressive’s tolled agreement only bound Progressive and Stoesz; it did not affect State Farm’s limitations defense |
Key Cases Cited
- Granite State Ins. Co. v. Ken Caryl Ranch Master Ass'n, 183 P.3d 563 (Colo. 2008) (statutory interpretation principles; start with text to discern legislative intent)
- Wolford v. Pinnacol Assurance, 107 P.3d 947 (Colo. 2005) (courts must avoid interpretations that render statutory language superfluous)
- Brown v. Am. Family Ins. Grp., 989 P.2d 196 (Colo. App. 1999) (purpose of statutes of limitations to prevent stale claims and promote finality)
- Cacioppo v. Eagle Cnty. Sch. Dist. Re-50J, 92 P.3d 453 (Colo. 2004) (courts should not decide hypothetical questions about possible future interpretations)
- DiFrancesco v. Particle Interconnect Corp., 39 P.3d 1243 (Colo. App. 2001) (disputes often arise where parties exchange settlement terms without reducing to a single enforceable writing)