Dоnald L. ETHERTON, Plaintiff-Appellee, v. OWNERS INSURANCE COMPANY, Defendant-Appellant.
No. 14-1164
United States Court of Appeals, Tenth Circuit.
July 19, 2016
829 F.3d 1209
Ethan A. McQuinn (Chad P Hemmat, and Jason G. Alleman, with him on the brief), Anderson, Hemmat & McQuinn, LLC, Greenwood Village, Colorado appearing for Plaintiff-Appellee.
Before HARTZ, GORSUCH, and MATHESON, Circuit Judges.
MATHESON, Circuit Judge.
I. INTRODUCTION
On December 19, 2007, a driver rear-ended Donald Etherton‘s vehicle. The collision injured Mr. Etherton‘s back. He filed a claim with his insurer, Owners Insurance Company (“Owners“), seeking uninsured or underinsured motorist coverage up to his policy limit. After months of back and forth, Owners offered to pay an amount significantly lower than the policy limit. Mr. Etherton sued, alleging claims for (1) breach of contract and (2) unreasonable delay or denial of a claim for benefits under
A jury found in Mr. Etherton‘s favor on both claims. The district court entered judgment for Mr. Etherton, awarding $2,250,000 in damages. Owners appeals. Exercising jurisdiction under
II. BACKGROUND
A. Factual History
Mr. Etherton filed his claim with Owners on July 6, 2009. His policy included uninsured or underinsured motorist coverage up to $1,000,000. The other driver‘s insurer settled with Mr. Etherton for $250,000. Mr. Etherton‘s claim to Owners requested payment up to $750,000, the remainder of his policy limit. Mr. Etherton‘s vehicle had only minor damage, but he underwent three back surgeries to repair disc damage in his spine.
Between July and December of 2009, Mr. Etherton and Owners communicated frequently. Owners repeatedly indicated it needed additional information to assess his claim. On December 30, 2009, Owners of
B. Procedural History
Mr. Etherton sued in Colorado state court. Owners removed the action to federal court, where it was assigned to Judge Krieger.
As trial approached, Owners filed a motion in limine under
Judge Krieger recused herself from the case, and it was reassigned to Judge Brimmer, who granted Mr. Etherton‘s motion to reconsider. Based upon his review of the Daubert hearing transcript, Judge Brimmer concluded Dr. Ramos‘s methodology was reliable and he therefore could testify.
The court held a six-day jury trial. At the close of evidence, Owners moved for judgment as a matter of law on Mr. Etherton‘s claim for the unreasonable delay or denial of an insurance claim under
Owners filed a motion seeking a new trial under
Mr. Etherton moved to amend the judgment under
Owners filed a timely notice of appeal. See
III. DISCUSSION
Owners appeals the district court‘s decision (a) denying Owners’ motion for a new trial based on the alleged erroneous admission of Dr. Ramos‘s testimony under
A. Motion for New Trial—Rule 702
Owners does not contest the Rule 702/Daubert standard the district court used to assess Dr. Ramos‘s testimony. It argues the court erred in applying that standard. We disagree and therefore affirm.
1. Standard of Review
We review a district court‘s application of Rule 702/Daubert for abuse of discretion. Gen. Elec. Co. v. Joiner, 522 U.S. 136, 138-39, 118 S.Ct. 512, 139 L.Ed.2d 508 (1997).1 “We must afford substantial deference to the district court‘s application оf Daubert.” Hollander v. Sandoz Pharm. Corp., 289 F.3d 1193, 1204 (10th Cir. 2002) (citing Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 152, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999)); accord Bitler v. A.O. Smith Corp., 400 F.3d 1227, 1232 (10th Cir. 2004) (recognizing “the wide latitude a district court has in exercising its discretion to admit or exclude expert testimony“). A court abuses its discretion when its ruling is “arbitrary, capricious, whimsical or manifestly unreasonable or when we are convinced that the district court made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances.” Dodge v. Cotter Corp., 328 F.3d 1212, 1223 (10th Cir. 2003) (quotations omitted).
“The trial court‘s broad discretion applies both in deciding how to assess an expert‘s reliability, including what procedures to utilize in making that assessment, as well as in making the ultimate determination of reliability.” Goebel v. Denver & Rio Grande W. R.R. Co., 346 F.3d 987, 990 (10th Cir. 2003). As the Supreme Court said in Kumho Tire, “The trial judge must have considerable leeway in deciding in a
When applying
2. Legal Background
A witness who is qualified as an expert by knowledge, skill, experience, or education may testify in the form of an opinion or otherwise if:
(a) the expert‘s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.
The reliability determination calls for a “preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue.” Daubert, 509 U.S. at 592-93, 113 S.Ct. 2786. These two steps are codified in
[W]e can neither rule out, nor rule in, for all cases and for all time the applicability of the factors mentioned in Daubert, nor can we now do so for subsets of cases categorized by category of expert or by kind of evidence. Too much depends on the particular circumstances of the particular case at issue.
526 U.S. at 150, 119 S.Ct. 1167.2
“The focus, of course, must be solely on principles and methodology, not on the conclusions that they generate.” Daubert, 509 U.S. at 595, 113 S.Ct. 2786. “The plaintiff need not prove that the expert is undisputably correct.... Instead, the plaintiff must show that the method
3. Daubert Hearings and the District Court‘s Rulings
Judge Krieger held
In every case you have to start with a good history, thorough history, a good physical examination, a review of any diagnostic studies. You have to look at the records as they apply, if there is a previous record of injury. That‘s important, particularly if it‘s one that was existing at the time. And you have to use the medical literature and the knowledge base that you gain as a[] physician and apply to that.
Now, where that‘s summarized in the medical literature as far as causation analysis is basically summarized as three major—I guess the macroscopic view of a good history, a good physical examination, and evaluation of the diagnostics, review of preexisting records or preexisting injury history—how that‘s applied macroscopically is that we look as physicians to say: Is the injury plausible? That‘s the simplest, first question. And essentially that‘s asking, Is this possible? It‘s usually a fairly low hurdle to clear, and it‘s usually fairly simple.
The second thing that we ask is is there a temporal relation between the injuries, the patient‘s pain complaints that we have found through that history and that physical examination, those other things that I‘ve identified. Is there a temporal relationship of that to an event?
If the injury is plausible, there is a temporal relationship, we ask a final question, which is: Is there a more likely cause? Is something else more likely that we can attribute to this?
And by following that analysis out, what you gather with those underlying areas that I‘vе outlined, you come to a determination of causation....
App. Vol. V at 1454-55. In short, Dr. Ramos employed a three-step methodology to determine the injury‘s cause.
First, he determined whether it is plausible that a collision caused the back injury. This step is easily satisfied, he explained, because “[t]here is a lot of literature that shows very specifically if you get rear-ended, you injure your back. Yes, very specifically: disc herniations, facet injuries, absolutely.” App. Vol. V at 1475.
Second, he assessed whether a collision likely caused the specific injury by reviewing diagnostic studies, examining the injured person‘s medical history and physical examinations, and determining whether the collision occurred just before back pain commenced. App. Vol. V at 1485 (“I would
Third, he considered whether other, more likely causes produced the injury by reviewing the person‘s medical history, physical examinations, and any other available information. He testified, “My methodology would include anything else that would be a more likely cause or a better alternative cause for the condition [a patient] was presenting for. And so that would include the intervening events, any thing else essentially that would be a more likely cause.” App. Vol. V at 1487. He stated his methodology accounted for the possibility that degeneration caused Mr. Etherton‘s injuries, and noted “the medical literature would suggest he‘s at a higher risk for this [type of injury] due to those degenerative changes.” Id.
Dr. Ramos testified the medical community generally accepts his methodology, which is based on peer-reviewed medical literature studying live crash-testing and on his experience studying the cadavers of people who died in motor collisions. Although he said error rates are a “Pandora‘s box” in the area of causation determination, the literature “outline[s] the frequency with which people get injured with these things, rear-end impacts particularly.... And bаsed on that, certainly you could come out with—with error or not error....” App. Vol. V at 1457-58.
Judge Krieger ruled from the bench that Dr. Ramos‘s methodology was unreliable and excluded his testimony. She explained Dr. Ramos‘s methodology was generally accepted in the medical community for treatment purposes, but his methodology did not exclude alternative explanations or causes or include a step to ensure alternative causes are considered. She said Dr. Ramos‘s methodology was analytically deficient because it purported to demonstrate specific causation based on general population-wide results without consideration of the specifics of Mr. Etherton‘s collision. Finally, she noted the absence of evidence on rates of error.
On June 7, 2012, Judge Krieger recused herself from the case. It was reassigned to Judge Brimmer. On September 13, 2012, he agreed to revisit the admissibility of Dr. Ramos‘s testimony. Upon reconsideration, Judge Brimmer determined Dr. Ramos‘s testimony was reliable and therefore admissible. He concluded Dr. Ramos‘s methodology is well accepted in the medical community for medical treatment purposes, and the methodology was reliably applied in this case, including that Dr. Ramos accounted for alternative explanations for the cause of Mr. Etherton‘s injury. He also concluded Dr. Ramos did not improperly extrapolate his conclusion from general population-wide results and instead employed a reliable causation methodology.
The case proceeded to trial, where Dr. Ramos testified and a jury found in favor of Mr. Etherton. Owners moved for a new trial, arguing the court erred by admitting Dr. Ramos‘s testimony. The court denied the motion.
4. Analysis
Owners contends Dr. Ramos‘s testimony should have been excluded because (a) the academic literature he cited did not support the first step, (b) the second step relied on the logical fallacy that correlation is causation, and (c) the differential diagnosis in the third step was incomplete. Owners also asserts (d) the district court abused its discretion in exercising its gatekeeping function by failing to review the scientific articles cited by Dr. Ramos. These arguments do not specify whether
a. Step one was not based on an unsupported assumption
Owners argues Dr. Ramos‘s first step simply assumed, without scientific support, that any motor collision can cause the type of injuries suffered by Mr. Etherton. This argument does not question reliance on academic literature as a general matter, but does challenge Dr. Ramos‘s reliance as to Mr. Etherton. It is therefore a
Dr. Ramos testified that the first step asks, “Is the injury plausible? ... It‘s usually a fairly low hurdle to clear, and it‘s usually fairly simple.” App. Vol. V at 1455. He explained that “the medical literature is rampant with evidence that rear-end-impact motor vehicle crashes can lead to lumbar spine injury. That peer-reviewed literature clears the plausibility hurdle....” Id. at 1470; see also id. at 1472-73 (“[T]he medical literature would suggest that the velocity is not a reliable predictor of injury, [and] damage to a vehiclе is not a reliable predictor of injury.“); id. at 1475 (“There is a lot of literature that shows very specifically if you get rear-ended, you injure your back. Yes, very specifically: disc herniations, facet injuries, absolutely.“).
Moreover, Dr. Ramos relied on more than academic literature. He testified,
I‘ve also been an instructor at the Spine Research Institute in San Diego. That‘s particularly relevant to this case here, because it‘s largely a biomechanical course. ... This is one of the few places in the United States ... that did live human crash test studies, where they actually put occupants into cars, put in black boxes that were donated by various automobile companies, put in seats donated by various automobile companies. We did very high quality research on the kinematics to an occupant of a car at different speeds, at different vectors, at different angles. I was a lecturer at that particular seminar for three years, about.
App. Vol. V at 1451.
In light of Dr. Ramos‘s reliance on medical literature and his own experience studying spinal injuries from live сrash-testing, we disagree with Owners that the first step of his methodology is based on an unsupported assumption.
b. Step two did not mistake correlation for causation
Owners argues the second step mistakenly attempted to establish causation only by identifying correlation between Mr. Etherton‘s collision and injury. This argument challenges Dr. Ramos‘s reliance on correlation generally, and is therefore a
Although correlation alone may be insufficient to establish causation, see, e.g., Norris v. Baxter Healthcare Corp., 397 F.3d 878, 885 (10th Cir. 2005) (“A correlation does not equal causation.“); Goebel, 346 F.3d at 999 (“The court is not permitted to ... rely on the temporal relationship [between an injury and a purported cause] by itself as evidence of causation.“), it is nonetheless relevant to identifying causal relationships. Indeed, it may be “a necessary but not sufficient condition for causation.” Joseph F. Healey, The Essen
Temporality was only one factor in Dr. Ramos‘s three-step methodology. He first concluded the collision plausibly caused Mr. Etherton‘s injury. He next examined Mr. Etherton‘s medical records3 to determine whether the injury coincided with the collision. He then considered alternative explanations for the injury based on diagnostic testing and Mr. Etherton‘s medical history and physical examinations, including those conducted immediately after the collision.
Dr. Ramos therefore did not rely solely on correlation. Instead, the second step considered whether Mr. Etherton‘s injuries coincided with the purported cause. The temporal relationship bеtween an injury and its potential cause is relevant because, if Dr. Ramos had found no correlation between the injury and the collision, that could indicate no causal relationship. Dr. Ramos‘s consideration of the temporal relationship between Mr. Etherton‘s injury and the collision was an appropriate part of his broader analysis.
c. Step three accounted for alternative causes
Owners argues Dr. Ramos incorrectly applied differential diagnosis at step three by ruling out unlikely alternative causes but not likely ones. Owners specifically contends Dr. Ramos considered only traumatic alternative explanations and failed to account for degeneration.4 This is a
This court has recognized that differential diagnosis can reliably determine causation. See Bitler, 400 F.3d at 1236; Goebel, 346 F.3d at 1000. Owners does not contest the reliability of the method itself. “Differential diagnosis refers to the process by which a physician rules in all scientifically plausible causes of the plaintiff‘s injury. The physician then rules out the least plausible causes of injury until the most likely cause remains.” Hollander, 289 F.3d at 1209 (quotations and alterations omitted). “Experts must provide objeсtive reasons for eliminating alternative causes when employing a differential analysis.” Bitler, 400 F.3d at 1237 (quotations omitted). “[B]ut this is not to say that an expert, in order to testify on causation, must be able to categorically exclude each and every possible alternative cause—to require otherwise would mean that few experts would ever be able to testify.” Id. at 1238 n. 6 (quotations and alterations omitted).
Contrary to Owners’ position, Dr. Ramos did consider alternative causes for
Dr. Ramos concluded non-traumatic daily activities did not likely cause Mr. Etherton‘s injuries because “the medical literature would suggest that ... the more likely cause would be a traumatic force.” Id. at 1489. Dr. Ramos also acknowledged that “the medical literature would suggest [Mr. Etherton is] at a higher risk for [injury] due to those degenerative changes,” id. which confirms he considered degeneration as an alternative cause. He maintained that the collision was the “most likely cause,” see Hollander, 289 F.3d at 1209, while noting Mr. Etherton might have been more susceptible to injury because of degeneration.
Moreover, when the court denied Owners’ motion for a new trial, it relied on the following deposition testimony from Dr. Ramos refuting the possibility that Mr. Etherton‘s injury was due solely to degeneration: “[I]t‘s likely that Mr. Etherton had some degenerative changes in his low back associated with just age and time that were mild,” but “a disk as is described in April of ‘08 that starts to lateralize to the right, that‘s more concerning that maybe there was some compressive forces across his degenerative disk that forced it to the right and that may be more crash related.” App. Vol. IV at 1156-57.
Dr. Ramos considered alternative explanations for Mr. Etherton‘s injuries. He ruled them out based on his physical examination of Mr. Etherton and his assessment of Mr. Etherton‘s medical history. Concluding Dr. Ramos complied with
d. Failure to review Dr. Ramos‘s scientific articles was not an abuse of discretion
During the Daubert hearing, Dr. Ramos testified that academic literature supported his causation methodology. He identified multiple sources. Owners complains the district court did not discuss or even review this material, which is a challenge to the court‘s
“[A] district court has discretion to limit the information upon which it will decide the Daubert issue....” Dodge, 328 F.3d at 1228; see Goebel, 346 F.3d at 990 (recognizing the district courts’ broad discretion in deciding how to assess an expert‘s reliability). The district court noted that Dr. Ramos‘s approach is generally accepted in the medical community for treatment. It carefully considered—and ultimately rejected—critiques of the methodology‘s specific causation comрonent. It explained that the methodology is similar to those previously found reliable in this circuit. And it acknowledged the academic literature when denying Owners’ motion for a new trial. The court‘s analysis indicates it adequately considered whether Dr. Ramos‘s methodology was scientifically sound and reliably applied. We afford substantial deference to its reasoned conclusion that his testimony was reliable and
e. Dr. Ramos‘s methodology properly “fit”
Owners argues Dr. Ramos‘s methodology lacked “fit” for demonstrating causation, and was therefore not helpful. This is a
“Expert testimony which does not relate to any issue in the case is not relevant and, ergo, non-helpful.” Daubert, 509 U.S. at 591, 113 S.Ct. 2786 (quotations omitted). Daubert described such testimony as lacking “fit.” See id. “‘Fit’ is not always obvious, and scientific validity for one purpose is not necessarily scientific validity for other, unrelated purposes.” Id.
Owners cites only Ralston v. Smith & Nephew Richards, Inc., 275 F.3d 965 (10th Cir. 2001), in which this court considered whether a district court erred by excluding an expert‘s testimony because the proposed expert was not qualified. Id. at 969–70. The putative witness was a board-certified orthopedic surgeon whose opinions about a specialized topic (intramedullary nailing) were based only on general orthopedic and surgical principles and concepts. Id. at 969. She had admitted having little or no knowledge about the specialized subject and conceded she was not an expert in that area. Id. at 969. We affirmed, explaining that “merely possessing a medical degree is not sufficient to permit a physician to testify concerning any medical-related issue.” Id.
Ralston is inapposite. Dr. Ramos‘s qualifications are not contested. His opinions about Mr. Etherton‘s injuries did not rely solely on generalized knowledge but also on his specialized experience treating musculoskeletal injuries and studying spinal injuries caused by motor collisions. Moreover, Dr. Ramos testified the collision caused Mr. Etherton‘s injuries—a central issue. His testimony “fit” the case.
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In sum, the district court properly aрplied Rule 702/Daubert to Dr. Ramos‘s testimony and did not abuse its discretion.
B. State-Law Claims
Owners also appeals the district court‘s decisions denying Owners’ motion for judgment as a matter of law and granting Mr. Etherton‘s motion to amend the judgment. Both motions relate to Mr. Etherton‘s state-law claims.
When jurisdiction is based on the parties’ diverse citizenship, a federal court must assess state law claims based on the substantive law of the state. Macon v. United Parcel Serv., Inc., 743 F.3d 708, 713 (10th Cir. 2014). Our objective when interpreting and applying state substantive law is to reach the same result that would be reached in state court. Commonwealth Prop. Advocates, LLC v. Mortg. Elec. Registration Sys., Inc., 680 F.3d 1194, 1204 (10th Cir. 2011). If the state‘s highest court has interpreted a state statute, we defer to that decision. See Long v. St. Paul Fire & Marine Ins. Co., 589 F.3d 1075, 1081 (10th Cir. 2009). If the state‘s highest court has not interpreted a state statute, we instead predict how that court would rule. Valley Forge Ins. Co. v. Health Care Mgmt. Partners, Ltd., 616 F.3d 1086, 1093 (10th Cir. 2010). “The decisions of lower state courts, while persuasive, are not dispositive.” Long, 589 F.3d at 1081. “The decision of an intermediate appellate state court is a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise.” Stickley v. State Farm Mut. Auto Ins. Co., 505 F.3d 1070, 1077 (10th Cir. 2007) (quotations omitted).
“When interpreting a state statute in a diversity case, this court must apply state rules of statutory construction.” United Rentals Nw., Inc. v. Yearout Mech., Inc., 573 F.3d 997, 1001 (10th Cir. 2009). Under Colorado law, the “primary task in construing a statute is to give effect to the intent of the General Assembly,” which requires courts to “look first to the plain language of the statute.” Farmers Grp., Inc. v. Williams, 805 P.2d 419, 422 (Colo. 1991); see
1. Motion for Judgment as a Matter of Law—Unreasonable Delay or Denial Claim
At the close of evidence, Owners moved, under
a. Standard of Review
We review de novo a district court‘s decision to grant or deny a motion for judgment as a matter of law, applying the sаme legal standards as the district court. Hardeman v. City of Albuquerque, 377 F.3d 1106, 1112–13 (10th Cir. 2004). “Judgment as a matter of law is appropriate only if the evidence points but one way and is susceptible to no reasonable inferences which may support the nonmoving party‘s position.” Elm Ridge Expl. Co. v. Engle, 721 F.3d 1199, 1216 (10th Cir. 2013). “We draw all inferences from the evidence in favor of the non-moving party, and do not weigh the evidence or judge witness credibility.” Henry v. Storey, 658 F.3d 1235, 1238 (10th Cir. 2011).
b. Legal Background
Mr. Etherton asserted a claim for the unreasonable delay or denial of his claim for benefits under
A person engaged in the business of insurance shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party claimant.
A first-party claimant whose claim for payment of benefits has been unreasonably delayed or denied may bring an action in a district court to recover reasonable attorney fees and court costs and two times the covered benefit.
A few other provisions are pertinent to our discussion. “First-party claimant” is defined in
In determining whether an insurer‘s delay or denial was reasonable, the jury may be instructed that willful conduct of the kind set forth in section 10-3-1104(1)(h)(I) to (1)(h)(XIV) is prohibited and may be considered if the delay or denial and the claimed injury, damage, or loss was caused by or contributed to by such prohibited conduct.
c. Analysis
Owners argues (i) the insurance agreement provides that the “amount of damages Etherton is legally entitled to recover is to be determined by agreement,” and further argues it did not violate
i. Mr. Etherton‘s Insurance Agreement Does Not Preclude an Unreasonable Delay or Denial Claim
Mr. Etherton‘s insurance agreement states:
Whether an injured person is legally entitled to recover damages and the amount of such damages shall be determined by an agreement between the injured person and us.
App. Vol. XIII at 3107 (emphasis omitted). This provision concerns whether and how much Mr. Etherton is entitled to damages for injuries caused by the uninsured motorist.
Owners argues it cannot be liable for unreasonably delaying or denying Mr. Etherton‘s claim for benefits because this contract provision requires that it first agree to what it owes, and it never did. This understanding would immunize insurers from liability for unreasonable delay or denial of a claim for benefits so long as the insurer disagrees with how much is owed. In addition to being an unreasonable interpretation of the contract, this reading conflicts with
Under Owners’ reading, the narrow contract provision would override the more broadly worded statute. The provision would therefore be void under Colorado law. See, e.g., Aetna Cas. & Sur. Co. v. McMichael, 906 P.2d 92, 101 (Colo. 1995) (en banc) (“Insurance policy clauses that are contrary to a provision of a statute are void as against public policy.“); Radil v. Nat‘l Union Fire Ins. Co., 207 P.3d 849, 852 (Colo. App. 2008) (same). We further spell out here why the plain meaning of the statute conflicts with Owners’ reading of its contract with Mr. Etherton.
First, Owners’ reading would mean the statute could prohibit only unreasonable delays or denials of payments an insurer has already agreed it owes. But
Second, the word “deny” includes the insurer‘s decision not to approve a claim for benefits, not simply a refusal to pay benefits that are indisputably owed. The statute is not confined to claims where the payment is due and owing. It proscribes unreasonable denials, and if an insurer denies a claim for benefits, the payment is not due and owing.
Third, the surrounding subsections indicate the statute applies to claims for disputed benefits, not simply those where the amount is due and owing.
Fourth, the Colorado Court of Appeals has construed the statute, consistent with our interpretation, to require for liability “only that a first-party claim be denied without a reasonable basis.” Vaccaro v. Am. Family Ins. Grp., 275 P.3d 750, 756 (Colo. App. 2012) (emphasis added). In Vaccaro, the court upheld a jury verdict under
In sum, Owners’ interpretation of the contract provision is unreasonable and would be void as against public policy as stated in
ii. Unreasonable Delay
Owners asserts Mr. Etherton‘s claim under
1) Reasonable basis to dispute
According to the Colorado Court of Aрpeals, an insurer‘s delay or denial of benefits is not necessarily reasonable under
We agree with the foregoing authority and conclude that, under Colorado law, fair debatability can be a relevant but not necessarily a determinative factor as to whether the insurer acted reasonably.6 We also agree with the district court that Mr. Etherton had presented sufficient evidence that Owners unreаsonably delayed his claim, thereby precluding judgment as a matter of law on his unreasonable delay or denial claim. For example, Mr. Etherton‘s evidence showed that after months of communication, Owners sent a letter on January 2010 to Mr. Etherton‘s counsel expressing concerns about causation because of Mr. Etherton‘s “preexisting shoulder condition and the fact that he went without treatment for any back complaints for several months.” App. Vol. XII at 2982. But this conflicted with documentation Mr. Etherton provided months earlier showing he sought treatment for back pain two weeks after the accident. [App. Vol. XII at 2988 (attorney letter from July 2009 to Owners summarizing documentation sent); App. Vol. XIII at 3157 (notes from January 3, 2008—two weeks after the accident—describing results from Longmont Clinic‘s x-ray of Mr. Etherton‘s spine).]
2) Compliance with industry standards
Owners alternatively argues the claim should not have been submitted to the jury because Owners complied with industry standards and therefore acted reasonably, especially in light of its compliance with Colorado‘s insurance claim regulations. This argument fails because Mr. Etherton рresented sufficient evidence for the jury to find Owners did not comply with industry standards and therefore acted unreasonably.
“The reasonableness of an insurer‘s conduct is determined objectively, based on proof of industry standards.” Fisher, — P.3d at —, 2015 WL 2198515, at *9. At trial, Mr. Etherton‘s expert witness, Richard Kaudy, testified that objective industry standards “come from many sources, including the legislature, the Unfair Claims Settlement Practices Act, manuals from carriers, ... [and] decisions by Colorado courts.” App. Vol. VIII at 2066.
Colorado‘s Unfair Claims Settlement Practices Act is codified at
Owners countered with its expert witness, Garth Allen, who testified that Owners satisfied industry standards by explaining in the offer notification letter that the $150,000 offer was “based on the supporting documentation that [Mr. Etherton] provided.” App. Vol. X at 2601. Mr. Allen‘s testimony provided a competing view, but we cannot as an appellate court weigh evidence or judge the credibility of witnesses. Viewing the evidence in a light most favorable to Mr. Etherton, see Henry, 658 F.3d at 1238, the jury could reasonably have found in Mr. Etherton‘s favor based on Mr. Kaudy‘s testimony. As such, the district court did not err in denying Owners’ motion for judgment as a matter of law.7
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The district court correctly denied Owners’ motion for judgment as a matter of law.
2. Mr. Etherton‘s Rule 59(e) Motion to Amend the Judgment
The district court granted Mr. Etherton‘s motion to amend the judgment and increasеd his damages award from $1,500,000 to $2,250,000 based on its interpretation of
a. Standard of Review
We review
b. Colo. Rev. Stat. § 10-3-1116
(1) A first-party claimant as defined in section 10-3-1115 whose claim for payment of benefits has been unreasonably delayed or denied may bring an action in a district court to recover reasonable attorney fees and court costs and two times the covered benefit.
....
(4) The action authorized in this section is in addition to, and does not limit or affect, other actions available by statute or common law, now or in the future. Damages awarded pursuant to this section shall not be recoverable in any other action or claim.
c. Analysis
It bears repeating that Mr. Etherton prevailed at trial on both his claim for breach of contract and his claim for unreasonable delay or denial, and that the court concluded the most he could recover on his breach of contract claim was $750,000, the remainder of his policy limit. Owners argues
Mr. Etherton asserts
We agree with Mr. Etherton that
Owners asserts the district court‘s interpretation of
Owners also argues allowing recovery of the covered benefit in a separate action renders the second sentence in
The Colorado Court of Appeals reached the same conclusion, holding that a claimant asserting an unreasonable delay or denial claim can “receive the covered benefit and also receive two times the amount of the benefit.” Hansen, — P.3d at —, 2013 WL 6673066, at *10. It said ”
We conclude the district court correctly interpreted
The district court‘s order amending the judgment indicated the jury found, by a preponderance of the evidence, that Owners (1) breached its insurance contract with Mr. Etherton, and (2) unreasonably delayed or denied payment of Mr. Etherton‘s insurance benefits. The jury further found Mr. Etherton‘s damages for physical impairment or disfigurement were $150,000, his noneconomic losses were $375,000, and his economic losses were $857,000. The district court explained these damages exceeded the remainder of Mr. Etherton‘s policy limit, which was $750,000. The court therefore entered judgment in the amount of $2,250,000—$750,000 for Mr. Etherton‘s breach of contract claim, and $1,500,000 for his unreasonable delay or denial claim.
We do not detect errors in the district court‘s award or any abuse of discretion and therefore affirm.
IV. CONCLUSION
We affirm on all grounds. First, the district court properly applied Rule 702/Daubert and did not abuse its discretion by finding Mr. Etherton‘s expert‘s methodology reliable and admitting his expert testimony. Second, the court correctly denied Owners’ motion for judgment as a matter of law because
HARTZ, Circuit Judge, concurring, joined by GORSUCH, Circuit Judge.
I join.
I confess, however, some confusion about Colorado law. In particular, can an insurer be liable under
What complicates matters is that the state Court of Appeals had said in the same case that American Family could be liable under the statute even if its denial of coverage was a “fairly debatable” position. And the Supreme Court said, “Because we find that American Family had a reasonable basis for denying coverage based on the unambiguous language of the contract, we need not consider its alternative argument that its denial of coverage was, at the very least, a ‘fairly debatable’ position.” Id. This sentence leaves open the possibility that a “fairly debatable” position may not be a “reasonable” position and would leave an insurer open to potential statutory liability if its position was merely “fairly debatаble.”
But a jury instruction in this case said, “A justification is ‘fairly debatable’ if reasonable minds could disagree as to the coverage-determining facts or law.” Aplt. App. at 776. It seems to me that a reason-
SCOTT M. MATHESON, JR.
UNITED STATES CIRCUIT JUDGE