On September 14, 2017, The Colorado Court of Appeals affirmed the directed verdict for the defendant obtained by attorneys Frank Patterson and Hillary Patterson in the case of My Roofer, Inc. v. State Farm Fire & Casualty Company (16CA1478; Weld County District Court, 2015CV30425). In an unpublished opinion, the court of appeals ruled that decking damaged by the separate, nonfortuitous loss of ‘wear, tear, and deterioration’ was not covered by the OL (Ordinance and Law) endorsement of the State Farm policy. The court also ruled the pre-existing damaged decking did not constitute ‘undamaged’ property under the terms of the policy for purposes of coverage under the OL endorsement. Finally, the court ruled that My Roofer failed to preserve the issue of whether the Loss Settlement section of the policy required coverage for the decking under a theory that decking is an inseparable component of a roof assembly or a roof system. The court declined to rule on the unpreserved issue as the new legal theory was not unequivocally correct. Oral arguments were presented on September 6, 2017.
In the case of Robert Stephenson v. Lindsey Heaston (2016CV031355), Hillary Patterson obtained an Order of Dismissal for Continued Violation of Discovery Obligations. This is an important victory not only because it dismissed all claims against the defendant, but also because it reflects the firm’s goals and commitment to clients to vigorously defend their interests while avoiding unnecessary and excessive litigation fees and costs.
The revised Colorado Rules of Civil Procedure aim to promote more complete disclosure and to curtail discovery costs. While dismissal is a drastic sanction, the circumstances of this litigation and the discovery violations warranted dismissal. In the Order of Dismissal, Adams County District Court Judge Moss astutely quoted the following excerpt from a timely and relevant article in the Colorado Lawyer:
“‘[T]he elephant in the living room of civil litigation is that even ‘proportionate’ litigation costs in the average case are so high [as] to be out of reach for all but the wealthiest of individuals and corporations…. Judges have some responsibility for this situation, because many of us are so resistant to enforcing the existing rules with the bite of sanctions.’ Wang & Hoffman, A Year after Significant Civil Justice Reforms in Colorado, Colorado Lawyer (Jan. 2017).
Order of Dismiss. For Cont’d Violation of Discov. Obligations. Aug. 8, 2017.
Heather Salg is speaking at a National Business Institute seminar on September 7, 2017 on Insurance Bad Faith: Investigation and Discovery Tips . For more information, or to register for the event, click on the link above.
Heather Salg won the case of Arena v. State Farm in a 5-day trial in Boulder District Court.
Plaintiff Arena was involved in a car accident December 9, 2002 in which he alleged he sustained permanent neck and back injuries which were so debilitating he was unable to work, or stand or sit for more than 15 min., and he could not lift more than 5 pounds. He sued Front Range Barricade et al, in Case No. 05CV1118, Boulder, trial June 4-8, 2007. (It was reported in JVR Vol. 25, No. 47, Dec. 3, 2007). Mr. Arena was awarded $1,765,700 (before interest and costs) on June 8, 2007 by a Boulder jury.
The Court precluded defendant from telling the jury that there had been a lawsuit, or from telling the jury what plaintiff had recovered. However, defendant was permitted to tell the jury that plaintiff and some of the treating providers called in this trial had also given statements under oath in a “prior proceeding”.
Between 2008 and 2010, Mr. Arena bought a speedboat, an ATV, and an RV. He posted pictures of those on Facebook which were admitted at the trial of this matter.
Mr. Arena treated extensively at the Centeno-Schultz clinic from 2004-June 6, 2011. He received “massive” amounts of narcotic medications, in excess of 4 times the amount the Federal Government recommends as the high dosage for daily morphine equivalents during that time. The Centeno-Schultz clinic, during that time, told Mr. Arena they would not continue his “medication management” unless he underwent injections, branch blocks and other “interventional pain management”, which would cost upward of $15,000 in a day. The Centeno-Schulz clinic was unable to produce a narcotic contract signed by Mr. Arena. Dr. Schultz and Dr. Kleiner agreed that all of the very expensive treatment Mr. Arena received at the Centeno-Schultz clinic was not “theraputic” (it did not reduce Mr. Arena’s pain) and it was not “diagnostic” (there was no indication that the treatment actually helped determine an organic origin for Mr. Arena’s pain).
On June 6, 2011, Mr. Arena (who was having trouble paying for his treatment) was told by Physician’s Assistant Bock at the Centeno-Schultz clinic that he was being discharged from the clinic and he would have to obtain narcotic medication elsewhere.
Three days later, on June 9, 2011, Mr. Arena was rear ended. Mr. Arena resumed treatment with the Centeno Schultz clinic who charged an additional $132,339.29 before discharging Mr. Arena from care in September, 2013 as the Centeno Schultz clinic was no longer accepting Medicare after that time.
At trial, Mr. Arena contended that his primary complaint after the 2002 accident was neck pain, and that his primary complaint after the 2011 accident was low back pain. His doctors apportioned his neck pain 20% to the 2011 accident and his back pain 80% to the 2011 accident.
Mr. Arena made claims for MPC and then UIM coverage. State Farm paid about $2.5k in MPC benefits before asking Dr. Wunder to evaluate whether expenses sought were reasonable, necessary, or accident related. Dr. Wunder opined they were not, and State Farm denied the claim for further MPC benefits. Plaintiff then sued the tortfeasor, and her liability carrier paid $100,000. Plaintiff then sought UIM benefits. The claim was denied. Plaintiff provided a new apportionment opinion from Dr. Schultz. Plaintiff’s counsel alleged Dr. Wunder was biased, but provided no evidence to support that allegation. A second opinion was sought from Dr. Wunder who again opined plaintiff’s claimed expenses were not related to the accident. Dr. Wunder also noted that plaintiff’s claims appeared to have a significant psychological overlay. The UIM claim was denied. Plaintiff submitted to State Farm a report from psychologist David Robinson, who claimed there was no psychological component to plaintiff’s claims. This did not change State Farm’s position.
Plaintiff filed suit. On June 5, 2017, just two months before trial, plaintiff endorsed a brand new (non-treating, and retained only) expert, Dr. Kleiner, as a “rebuttal” expert, to also opine on apportionment. Over defendant’s objection Dr. Kleiner was permitted to testify.
At trial plaintiff claimed that as a result he had $97,217.55 in post-accident related medical care. He also contended he had $224,200 in pain and suffering and $100,000 in permanent impairment. Plaintiff asserted State Farm breached its contract with Mr. Arena for failing to pay UIM benefits; that it unreasonably denied the benefits; and that State Farm acted in “bad faith”.
$97,217.55 in post-accident related medical care to treat neck and back pain. He also contended he had $224,200 in pain and suffering and $100,000 in permanent impairment. He sought $100k for unreasonable denial and $100-500 per day, for life (29.5 years) for the bad faith claim.
$100k demand; no offers.
John Schultz, MD
Jeffrey Kleiner, MD
Stephen Strzelec (industry standard expert)
David R. Robinson, PhD
Jeffrey Wunder, MD
Jury found that plaintiff did cooperate with State Farm in its investigation and that he did not make material misrepresentations to State Farm. However, jury found plaintiff did not sustain any damages in the June 9, 2011 accident (Jury Instruction Form provided Court would offset, if appropriate, the $100,000 liability amount).
Prior to trial, State Farm filed a Motion for Summary Judgment asserting plaintiff’s unreasonable denial and bad faith claims were barred by applicable statutes of limitation. The Court agreed the applicable SOL for unreasonable denial was 1 year. However the Court found that because State Farm reopened its file after new information was submitted by plaintiff, there was a fact question with respect to when plaintiff knew his claims had accrued. There was therefore a Special Interrogatory provided to the jury with this question: “On what date did Mr. Arena know, or should he have known, that State Farm was denying his claim for UIM benefits?” The jury answered 12/5/14 (the date of State Farm’s initial denial). Suit was filed April 8, 2016.
Heather Salg presented The Sunstate case: Anatomy of an Appellate Argument at the 2017 NCIGF Legal Seminar in New York City in June, and will present for the National Business Institute on Insurance Bad Faith: Investigation and Discovery Tips via teleconference on September 7, 2017, 2-3:30pm ET. Registration information can be found here.
Heather Salg recently defended a two day jury trial in the District Court in and for the City and County of Denver in which plaintiffs claimed they sustained severe disabilities after a rear end accident with minor property damage. Initially, plaintiffs were represented by attorneys and at that time they alleged almost $300,000 in accident related medical expenses. After the plaintiffs’ depositions, plaintiff’s counsel withdrew. The case was then tried by the plaintiffs pro se. Judgment entered for the defendant as the jury felt plaintiffs had failed to prove they sustained injury in the subject accident.
Heather Salg successfully defended a Motion to Reconsider a Court Order entering Summary Judgment in favor of a client who had done repair work to sprinkler system pipes at a property, and was later sued when the pipes froze and burst. The Order addresses various Rules under which reconsideration may be appropriate under circumstances which were not present in the case.
Karl Chambers won the case of Sentry v. Barragan, Adams County, Case No. 16CV31486 on summary judgment. This was a declaratory judgment action that we filed on behalf of Sentry Insurance seeking a declaration that there was no insurance coverage under an “operator’s policy” issued to the mother when her daughter was driving the car. The court agreed with our postion and held that Sentry was not required to provide libility coverage when the daughter was involved in an accident while driving her mom’s car. You can read the order here.
Heather Salg obtained summary judgment for a client who had done repair work to sprinkler system pipes at a property, and was later sued when the pipes froze and burst. This case involved the application of Colorado’s economic loss rule and third party beneficiary status to contract.
There have been recent changes to the Rules of Civil Procedure regarding disclosure obligations and discovery requests. Requests for disclosure or discovery must be narrowly tailored and proportional to the needs of the case. In light of these changes, Frank Patterson recently obtained a favorable Order for his client in a bad faith case precluding extensive discovery of what has come to be thought of as “institutional discovery.” The Order can be reviewed here.
In a declaratory relief action filed by the insurer for failure to cooperate after the insured entered into a Nunn Agreement, Frank Patterson and Lindsay Dunn obtained an order denying the defendants’ motion to dismiss. The defendants argued that Nunn Agreements are allowed under Colorado law and therefore, cannot be a failure to cooperate. The trial court denied the motion holding that the case law does not automatically allow for such agreements and that an insured may enter into such an agreement when the insurer has acted unreasonably or in the face of a colorable bad faith claim. This case will have significant ramifications for insurers’ ability to challenge Nunn Agreements.
Karl Chambers obtained a defense verdict in the case of Shaun Olguin v. Louis Chacon dba Louie’s Barber Shop in Boulder County. The plaintiff claimed that he was injured while receiving a haircut at Louie’s Barber Shop and developed a staph infection that required medical treatment, including surgery. Karl defended Mr. Chacon on the theory that the plaintiff was never in the barber shop on the date that he claimed, but even if he was, the staph infection was not caused by conditions at the barber shop, but rather was due to a pre-existing medical condition that plaintiff had. The jury returned a defense verdict in favor of Mr. Chacon finding that the plaintiff’s alleged injuries were not caused by any negligence of Mr. Chacon or Louie’s Barber Shop.
Partner Heather Salg has been selected as one of Colorado’s Top 50 Women Super Lawyers for 2017! She has been selected as a Super Lawyer since 2014.
Congratulations to Heather!
We are pleased to announce that Todd Dieterich has been named a Non-Equity Partner. Todd has been with the firm for over five years and has met with success as a trial lawyer and developing solid relationships in the community. Congratulations, Todd!
Hillary Patterson obtained summary judgment for a client that paid work loss PIP benefits to its insured following a motor vehicle accident that occurred in Michigan (State Farm Mut. Auto. Ins. Co. v. Timika Thomas, 16CV30578). The insured subsequently recovered duplicate Social Security Disability Insurance benefits, but refused to reimburse the insurer pursuant to Michigan law. This case involved the application of Colorado’s choice of law principles, Michigan insurance law, and Michigan law governing breach of contract.