Vaccaro v. American Family Insurance Group
2012 Colo. App. LEXIS 62
Colo. Ct. App.2012Background
- Plaintiff was injured in a 2005 two-car collision; tortfeasor carried $25,000 liability limits.
- Plaintiff’s UIM policy with defendant provided up to $100,000; plaintiff settled with tortfeasor for $25,000.
- In 2007 plaintiff sought $75,000 in UIM benefits; defendant initially valued the claim between $21,000 and $25,000 after considering medical records.
- January 2008 offers: $2,500 to settle; after reconsideration, defendant increased to $26,000–$30,000 and then offered $5,000 as full and final settlement, which plaintiff rejected.
- June–September 2008 an independent medical evaluation by Dr. Nadler suggested substantial ongoing treatment; defendant declined to reassess its settlement.
- Plaintiff filed suit May 26, 2009 alleging breach of contract and unreasonable denial under statutes 10-3-1115 and 10-3-1116, effective August 5, 2008.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Statutes apply to post-enactment conduct only | Vacearo argues statutory claim applies prospectively to post-8/5/2008 conduct. | American Family contends retroactivity or pre-8/5/2008 conduct cannot trigger the Statutes. | Statutes apply prospectively; conduct after August 5, 2008 may support the statutory claim. |
| Whether the statutory claim was properly submitted to the jury | Plaintiff contends there was evidence of unreasonable delay/denial after 8/5/2008 supporting the statute. | Defendant argues retroactive application and misalignment with common law bad faith. | Properly submitted; jury instructed to consider post-8/5/2008 conduct. |
| Whether the evidence supports liability under the Statutes | Disagreement with valuation alone does not defeat the statutory claim if evidence shows unreasonable denial after 8/5/2008. | Disputes over damages/valuation could be fairly debatable and negate liability. | Evidence supported that defendant ignored the IME findings after 8/5/2008; statutory liability affirmed. |
| Whether prejudgment interest was properly awarded up to policy limits | Interest should run on the statutory and contract claims according to standards. | Interest should not exceed the UIM policy limit of $75,000. | Prejudgment interest limited to $75,000; portion above the policy limit vacated. |
Key Cases Cited
- Parker v. USAA Gen. Indem. Co., 200 P.3d 350 (Colo. 2009) (prejudgment interest under UIM cannot exceed policy limits)
- Savio v. State Farm Mut. Auto. Ins. Co., 706 P.2d 1258 (Colo. 1985) (unreasonable delay/denial standard for bad faith claims)
- Zolman v. Pinnacle Assur., 261 P.3d 490 (Colo.App. 2011) (reasonableness of insurer’s actions for UIM claims; fairly debatable doctrine)
- In re Estate of DeWitt, 54 P.3d 849 (Colo. 2002) (retroactivity constitutional limits and prospective operation of statutes)
- Sanderson v. Am. Family Mut. Ins. Co., 251 P.3d 1213 (Colo.App. 2010) (fairly debatable standard in statutory bad faith context)