Toy v. American Family Mutual Insurance Company
ORDER denying 191 Defendant's Motion in Limine to Preclude Plaintiff from Misrepresenting the Law Concerning Burden of Proof by Presenting Argument and Evidence at Trial Suggesting Defendant Has an Obligation to Help Plaintiff Prove His Claims. By Judge Philip A. Brimmer on 2/6/14. (pabsec)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 12-cv-01683-PAB-MJW
AMERICAN FAMILY MUTUAL INSURANCE COMPANY,
This matter is before the Court on Defendant’s Motion in Limine to Preclude
Plaintiff from Misrepresenting the Law Concerning Burden of Proof by Presenting
Argument and Evidence at Trial Suggesting Defendant Has an Obligation to Help
Plaintiff Prove His Claims [Docket No. 191]. Plaintiff Gregory Toy filed a response in
opposition. Docket No. 207-1.
Defendant American Family Mutual Insurance Company argues that, with regard
to underinsured motorist (“UIM”) claims, the insured has the burden to prove liability
and damages. Docket No. 191 at 3 (citing Peterman v. State Farm Mut. Auto. Ins. Co.,
961 P.2d 487, 493 (Colo. 1998)). As such, defendant claims that it had no duty to
investigate plaintiff’s UIM claim. Docket No. 191 at 4. Plaintiff responds by arguing that
the burden on an insured to prove a UIM claim does not abrogate an insurer’s duty to
investigate the claim. Docket No. 207-1 at 3.
“UIM coverage is designed to put a driver who is injured by an underinsured
motorist in the same position as if the underinsured motorist had liability limits in
amounts equal to the insured’s coverage.” Sunahara v. State Farm Mut. Auto. Ins. Co.,
280 P.3d 649, 657 (Colo. 2012). Colorado courts have held, in the context of uninsured
motorist coverage claims, that “the insured has the burden to prove that the uninsured
motorist was negligent and the extent of the damages.” Briggs v. Am. Family Mut. Ins.
Co., 833 P.2d 859, 861 (Colo. App. 1992). The same burden applies in the UIM
context. The Colorado Supreme Court has acknowledged that, in suits for contract
damages by a UIM insured against a UIM insurer, the UIM insurer is in an “almost
adversarial” relationship to the insured. Sunahara, 280 P.3d at 657.
The parties use different terminology to characterize the issue in this motion.
Defendant insists that it has no “obligation to help Plaintiff insured prove his UIM
claims” and that defendant does not “bear the burden” of refuting plaintiff’s claims
regarding the amount of damages. Docket No. 191 at 3-4. Plaintiff characterizes the
issue as defendant’s “duty to reasonably investigate” plaintiff’s UIM claim. Docket No.
207-1 at 2.
Although the insured has the burden to prove the underinsured motorist’s liability
and the amount of damages the insured sustained in the accident, that does not mean
the insurer is otherwise free of duties governing the manner in which it handles the
insured’s UIM claim. For example, “[f]ailing to adopt and implement reasonable
standards for the prompt investigation of claims arising under insurance polices” and
“[r]efusing to pay claims without conducting a reasonable investigation based upon all
available information” are considered violations of the Unfair Claims Settlement
Practices Act (“UCSPA”). Colo. Rev. Stat. § 10-3-1104(1)(h)(III)-(IV). The UCSPA
provides “valid, but not conclusive, evidence of industry standards.” Am. Family Mut.
Ins. Co. v. Allen, 102 P.3d 333, 344 (Colo. 2004). Moreover, an insurer’s “duty of good
faith and fair dealing continues unabated during the life of an insurer-insured
relationship.” Sanderson v. Am. Family Mut. Ins. Co., 251 P.3d 1213, 1217 (Colo. App.
Although defendant does not disavow a duty to investigate, Docket No. 247 at 1,
defendant’s argument appears to be that, because its relationship to plaintiff was
“almost adversarial” with respect to determining plaintiff’s actual damages, defendant
had a lesser obligation to act reasonably in handling plaintiff’s UIM claim. Defendant’s
argument rests on Peterman and Sunahara. Peterman and Sunahara, however, did not
address or otherwise modify an insurer’s duty to act in good faith when dealing with an
insured’s UIM claim. Moreover, a UIM insurer’s liability in bad faith cases often turns on
the reasonableness of its investigation and conduct during the claims handling process.
See, e.g., Baker v. Allied Prop. & Cas. Ins. Co., 939 F. Supp. 2d 1091, 1110 (D. Colo
2013) (finding genuine dispute as to whether UIM insurer was reasonable in delaying its
investigation of claims); Sanderson, 251 P.3d at 1220-21 (analyzing UIM insurer’s
investigation and claim handling conduct and finding insurer did not act in bad faith).
Although it was plaintiff’s burden here to prove actual damages as to his UIM claim,
defendant provides no basis upon which to conclude that such a burden altered
defendant’s duty to act in good faith. Thus, the Court will deny defendant’s motion.
For the foregoing reasons, it is
ORDERED that Defendant’s Motion in Limine to Preclude Plaintiff from
Misrepresenting the Law Concerning Burden of Proof by Presenting Argument and
Evidence at Trial Suggesting Defendant Has an Obligation to Help Plaintiff Prove His
Claims [Docket No. 191] is DENIED.
DATED February 6, 2014.
BY THE COURT:
s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge
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