October

Heather Salg was co-chair of the annual CDLA/CTLA Professionalism Event at the Supreme Court on October 17, 2017.

October 2017 page

Frank Patterson made oral arguments before the Colorado Supreme Court on the important Fisher v State Farm case on October 18.  He expects a ruling by late Spring.  The Court of Appeals surprised everyone in 2015 by announcing a rule that UM/UIM carriers were required to make piecemeal payments of portions of the UM/UIM claim which were “undisputed”.  Typically, these would be economic damages such as medical expenses.  The Court discovered this requirement in the “Unreasonable Delay/Denial” statute which, Frank argued, makes no mention whatsoever of partial payments or even of the UM/UIM statute.  In effect, the Court of Appeals created a new pay-as-you-go medical coverage like the old PIP or No-Fault system.  Unfortunately, this new mandate from the Court of Appeals came with no guidelines, regulations or legislative guidance such as exist with MPC or existed under the old PIP system.  The case has generated substantial claims disputes and subsequent litigation over demands for “Fisher” payments.  We hope the Supreme Court reverses this unfortunate misinterpretation of Colorado statutes and reinstates the system which had worked well for almost 50 years.  Frank is happy to answer questions about the case or about the current state of the law in relation to Fisher.

Heather Salg tried and won the case of Julie Anne Jones v. State Farm Mut. Auto. Ins. Co., 2016CV33794,  in front of Judge David H. Goldberg on October 10-13, 2017.

5/2/12 plaintiff t-boned the tortfeasor Sasha Schwarz when the Ms. Schwarz ran a stop sign. Plaintiff claimed she was traveling about 30mph at the time of the impact, and to EMTs and at ER she reported pain in the neck, the chest (from the seatbelt) and right ankle (from hitting the brake). She started to get chiropractic care from Dr. Whidden. An MPC claim was made with State Farm and in response to State Farm’s request for apportionment Dr. Whidden apportioned 90% of patient’s care to the 5/2/12 mva. Plaintiff then began to get injections from Dr. Sandell at Pikes Peak Physical Medicine, but MPC paid for them, exhausting $25k MPC benefits. When those were unsuccessful she began to get injections through Michael E. Jansssen, DO at the Center for Spinal Disorders. Those were also unsuccessful. Plaintiff then made a claim for $525k in UIM benefits to State Farm through her then-attorney Philip Collins, Esq. However she provided altered Medical Release Authorizations and only for five providers. Counsel provided additional records to State Farm, but they were not complete. Dr. Janssen recommended surgery. Chad J. Prusmack, M.D. actually performed the surgery, which was unsuccessful. Plaintiff then received additional injections, which were also unsuccessful. Dr. Prusmack testified her nerve pain was permanent.

Plaintiff provided additional (though still incomplete) records to State Farm. State Farm retained physicist Dr. Rebecca Martin to perform an IME. Dr. Martin was the only doctor who reviewed all the records including pre- and post-accident MRIs. Dr. Martin opined plaintiff’s mva-related injuries were only to her chest and foot and those resolved within about 6 weeks. In light of plaintiff’s voluminous pre accident records, the IME, and all the other information in the claim file, State Farm evaluated the claim and advised plaintiff State Farm believed she had been adequately compensated by the $25k tortfeasor payment. Plaintiff retained the Ramos Law Firm and asked State Farm to reconsider based on a report of Dr. Prusmack indicating he reviewed Dr. Martin’s summary of plaintiff records and did not find evidence of pre-existing conditions. State Farm did not change its position. Plaintiff filed suit for UIM benefits and statutory unreasonable delay/denial claiming State Farm’s use of a physicist was inappropriate. Defendant answered and asserted plaintiff’s failure to provide medical authorizations and complete records was a failure to cooperate. Medicals: $258,038.89 (no wage losses claimed). Plaintiff’s final pre-trial demand: $900k. Defendant’s final pre-trial offer: $5k.

Plaintiff’s experts:

James E. Whidden IV, DC (chiropractor)

Timothy Sandell, MD (physiatrist)

Chad J. Prusmack, MD (surgeon)

Michael E. Jansssen, DO (surgeon

Defendant’s experts:

Rebecca Martin, MD (physiatrist)

David Werber, Esq. (industry Standards)

The jury determined plaintiff had been adequately compensated by the $25,000 she recovered from the tortfeasor and verdict entered for State Farm.

September

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.

June

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.

April

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.

February

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!

December

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.

November

Franklin D. Patterson and Karl Chambers tried and won the case of Nicholas Nelson v. State Farm Mutual Automobile Insurance Company in a 6-day jury trial in El Paso County.

This case stemmed out of a motor vehicle accident on March 20, 2010, when Plaintiff and several companions were returning to their California college from New Orleans. A drunk driver going the wrong way on a California highway hit them head-on. The drunk driver fled the scene on foot but was later caught. Plaintiff was in the back seat sleeping, but was seat-belted.  The force of the collision caused significant internal injuries.  The injuries were immediately life-threatening and he developed a hematoma at the sight of the abdominal wall rupture that grew from softball to watermelon size.  Emergency surgery included pulling his abdominal contents out and searching inch by inch for tears or no-viable tissue.  The surgeons removed large sections of the upper and lower intestines and bowels.

Plaintiff settled his claim against the drunk driver for policy limits of $100,000 and then made a demand for underinsured motorist (UIM) insurance benefits under an insurance policy issued by State Farm to his parents. That policy had $1,000,000 in limits.  A demand for policy limits was made 3 months before the Statute of Limitations expired.  State Farm requested additional information which was not provided prior to suit.  The information was provided within 90 days after filing suit. State Farm evaluated and offered $113,000 to resolve the claim.  After a failed mediation, State Farm advanced the $113,000.  State Farm informed the jury it had evaluated the claim in the range of $113,000-160,000 in addition to the BI limits previously received.
Just prior to the expiration of the Statute of Limitations, Plaintiff filed suit for UIM benefits, and alleging unreasonable delay, bad faith and (later) punitive damages.

State Farm admitted Plaintiff sustained serious, life-threatening injuries, but claimed he had made a remarkable recovery and had not sought treatment for anything since August, 2011.  In fact, he traveled to South America, living and working there for 6 months in 2011-12.  He had worked two lengthy stints in the backcountry for national parks in the Northwest, creating/restoring trails and removing invasive species, which work involved heavy manual labor.  Further, he completed a 1,500 mile bike trip from Oregon to Mexico. State Farm denied he had ongoing or future medical expenses or income loss.

As to the extra-contractual claims, State Farm alleged any delays were caused by plaintiff, through his lawyer-agents.  State Farm alleged that coverage for additional damages was voided due to failure to cooperate, and material misrepresentations made in correspondence about plaintiff’s ongoing treatment.  Plaintiff, through his lawyer-agents, failed over 3 years to return a signed medical authorization as requested under the policy, and failed to respond to requests for related medical information.  (Plaintiff claimed the other records were minor compared to the uncontested injuries, for which plaintiff counsel supplied the records.)  In addition, State Farm asserted material misrepresentations voided coverage because plaintiff counsel asserted that plaintiff had treatment in 2012 when treatment had actually ended in 2011.

DIRECTED VERDICTS: Defendant’s Motion for Directed Verdict was granted on plaintiff’s claims for future income loss ($660,000) and future medical expense ($440,000).

Plaintiff called Dave Torres as a Claims Handling expert.  Following voir dire, the court determined Mr. Torres lacked qualifications to provide an expert opinion

The jury returned a verdict for Defendant State Farm on Verdict Form A – Plaintiff failed to cooperate, voiding any additional coverage.  As a result, the jury did not address the remaining claims of UIM damages, unreasonable delay, bad faith or punitive damages.


Hillary Patterson obtained an order for dismissal for a pro se plaintiff’s failure to prosecute and for discovery violations  (Brenda Senna v. Leah Flink, 2016CV115). In retaliation for a separate eviction proceeding, Plaintiff brought personal injury claims on behalf of her children and herself against defendant landlord arising out of a water heater fire where plaintiff alleges she and her children were exposed to carbon monoxide. Plaintiff demanded several millions of dollars in damages, but  failed to make any disclosures and failed to appear at two separate depositions.  By obtaining dismissal, extensive  and unnecessary litigation costs were avoided in defending frivolous and meritless claims.

October

In Court of Appeals news, Frank Patterson and Brian Kennedy had a recent victory after briefing and presenting oral arguments before the Colorado Court of Appeals in the case of State Farm Mutual Automobile Insurance Company v. Mabel Garcia, 15CA1771.  In an opinion issued on October 27, 2016, the Colorado Court of Appeals affirmed the trial court’s ruling on State Farm’s summary judgment motion that a second household automobile policy covering a vehicle that was not involved in the accident did not provide additional liability coverage (See below for an excerpt of the court’s recitation of the background of the case).

On October 18, 2016, Mr. Patterson presented oral arguments in this case before the Colorado Court of Appeals at Fairview High School.  This case and its attorneys were selected for this special session of the Court of Appeals as part of the Judicial Branch’s Courts in the Community program. Counsel presented arguments in front of a large audience of students and community members and answered questions from the audience following their arguments.

Background

This case involves the interpretation of an auto liability policy. In 2012, Garcia was injured in a collision with State Farm’s insured, Susan Leavitt. Garcia sued Leavitt, seeking compensation for her injuries sustained in the accident. On the date of the accident, Leavitt was insured by two separate State Farm automobile insurance policies. Policy 1 insured Leavitt’s Volvo XC70 for liability up to $100,000. Policy 2 insured a Ford Explorer owned by Leavitt and her husband for liability up to $500,000. At the time of the accident, Leavitt was driving her Volvo XC70. Garcia asserts that Policy 2 provides coverage for the collision between Leavitt’s Volvo and Garcia. State Farm disagrees. . . . The district court entered summary judgment for State Farm, concluding that Policy 2 does not provide coverage for the collision because Leavitt is not an “insured” within the terms of the policy definition.

State Farm Mut. Auto. Ins. Co. v. Garcia, 15CA1771, slip op. at 1-2 (Colo. App. Oct. 27, 2016).

September

Erin M. Erhardt was elected as co-vice chair of the CDLA young lawyers committee. This position is in charge of planning 4 Continuing Legal Education (CLE) classes for the year, and will be promoted to co-chair at the end of the year. Congratulations, Erin!