Trials – Patterson Ripplinger, P.C.

February – 2020

February 17, 2020

Frank Patterson and Karl Chambers received a successful ruling from the Court of Appeals in Donna Roulston v State Farm (18CA1600, ann’d 2/13/20) on issues that arise frequently in bad faith/unreasonable delay cases. The great majority of these cases are nothing more than disagreements over the value of the claimants injuries and damages. The unreasonable delay statute, C.R.S. 10-3-1115, creates a tremendous incentive for claimants and their attorneys to create value disputes and to file suit alleging unreasonable delay. Following the Supreme Court’s ruling in Schultz v Geico, many claimants argue in litigation that the insurance carrier’s decisions are frozen in time as of its pre-suit evaluation. They argue the carrier is forbidden from obtaining post-suit medical examinations and that it is precluded from introducing any evidence it did not explicitly rely upon prior to suit. Fortunately, the Court of Appeals in Roulston recognized that when a contract claim is unresolved at the time suit is filed, the carrier continues investigating and evaluating it. The carrier is allowed to continue its investigation and to introduce evidence at time of trial as to its ongoing evaluation. The Court also recognized that the act of evaluating a claim is not a one-time event, that it occurs over time as information is received. Unfortunately, the Court’s opinion was not selected for official publication. If anyone wants a copy, we would be happy to provide one.

Frank and Karl note there are a couple of caveats to keep in mind in similar situations. First, Colorado law is still that the insurance company’s actions or decisions must be judged by the information known to the company at the time of the act or decision. A claimant can still ask the jury to consider what the insurer actually knew at an earlier time and ask the jury to conclude the insurer lacked the information it should have had. They can also argue the insurance company was trying to back-fill information after suit was filed.

Colorado Court of Appeals Oral Arguments

October – 2019

October 9, 2019

Jennifer White and Debra DeRee won summary judgment as to all of Plaintiff’s claims with regard to the matter entitled Ronald Lindsey v. State Farm Mutual Automobile Insurance Co. a/k/a State Farm Insurance Co. in Las Animas County, case number 2017CV30075. The case involved the alleged theft of Plaintiff’s 2013 Chrysler 300, which was insured by State Farm, in Las Vegas, Nevada. The undisputed evidence showed that (1) the title presented with the vehicle for sale on the same date that Plaintiff claimed it was stolen lists Plaintiff as the seller and contained a signature using Plaintiff’s nickname; (2) a law enforcement investigator determined that the vehicle had not been stolen; (3) Plaintiff had reported two vehicles stolen prior to the alleged loss; (4) the vehicle was operated with a properly coded key fob at the time of the alleged theft; (5) despite Plaintiff claiming that one of the two key fobs issued to him at the time of the vehicle purchase was destroyed down a garbage disposal, Plaintiff was able to produce one key fob to State Farm and the other was found with the current owner of the vehicle (thus accounting for both original key fobs); and (6) a handwriting expert determined that it was “highly probable” that Plaintiff had signed the title on the date that he claimed it was stolen.

Plaintiff’s Complaint alleged claims for: (1) Breach of Contract; (2) Bad Faith Breach of Insurance Contract; (3) Unreasonable Conduct or Position; and (4) Statutory Violations of the Unfair Settlement Claim Practices Act (claiming delay-denial statute damages). State Farm denied such allegations, asserting that the vehicle was not stolen and, instead, had been sold by Plaintiff and sought summary judgment on all issues. The trial court agreed with State Farm and specifically found that: (1) it was reasonable for State Farm to challenge Plaintiff’s claim and that their handling and denial of Plaintiff’s claims was reasonable as a matter of law, including noting their compliance with Division of Insurance Amended Regulation 5-1-14; and (2) Plaintiff made material misrepresentations to the insurance company as to the key fobs and this, in combination with the fact that it was “highly probable” that Plaintiff had signed the title as seller, made it clear to the trial court that reasonable minds could not differ that the vehicle was not stolen without any involvement on Plaintiff’s part. The trial court found that Plaintiff’s misrepresentations voided the policy and granted summary judgment in favor of the insurance company on all claims, finding that, as a matter of law, a reasonable jury could not return a verdict for Plaintiff.

Frank Patterson and Gordon Queenan recently obtained a defense verdict on behalf of State Farm following an eight-day jury trial in Lawrence Turcotte v. State Farm Fire and Casualty Company. The jury quickly returned a defense verdict, concluding plaintiff was responsible for the fire which destroyed his residence.

Plaintiff claimed that an intentionally set fire damaged his home and personal property on October 2-3, 2016. Plaintiff claimed that he had hired an electrician to work on his home while he was out of state in Michigan. He claimed the electrician (who could not be located or identified) found a moneybox in the house with $17,000 in it, stole the money, and set a fire in the house to conceal his theft. State Farm denied plaintiff’s claim, alleging plaintiff had caused or procured the fire. Plaintiff said he was 1,000 miles away and denied he had opportunity or motive for the fire. Plaintiff sued for unpaid contract benefits of $240,000 for property damage and $72,000 for personal property; $85,925.17 for asbestos mitigation; $191,796.83 for house repairs; $19,375.18 for fire mitigation. Unreasonable Delay/Denial Damages of $624,000 (plus attorney fees); Unspecified Bad Faith Damages.

State Farm denied there was any electrician. State Farm alleged that plaintiff was trying to do electrical work himself to bypass the city meter so he could start a marijuana grow operation in his basement. When he messed up the electrical work and the house was without power, he inexplicably decided to drive to Michigan to see his sick mother. He first paid for a hotel for other residents of the house so it would be empty. Before he left town to drive to Michigan, he moved furniture to the middle of the living room, surrounded it with combustibles like cloth, towels, paper, and cardboard boxes, and left multiple canisters of butane and propane and cans of camping fuel in the room. He connected an extension cord from a neighbor’s house to a heat lamp which was clamped onto the furniture. Ignitable liquid and gas containers were found around the heat lamp. During expert discovery, a melted timing device was found in the debris connected to the lamp. State Farm alleged the timing device and heat lamp provided the opportunity to start the fire and undermined his alibi of being 1,000 miles away. State Farm also alleged plaintiff did not have $17,000 in cash in his house, arguing that he had spent almost all of his “nest-egg” over the preceding 4 years since his retirement.

At trial, witness testimony established that the alleged electrician did not, in fact, exist and that Mr. Turcotte had been working on his own electric meter and breaker box days before the fire. The jury entered a verdict for State Farm on the basis that Mr. Turcotte was not entitled to insurance benefits because he had intentionally started the fire at his residence.

Plaintiff’s final demand before trial was $1,000,000. State Farm offered a mutual dismissal walk-away.

March – 2019

March 29, 2019

Frank Patterson successfully defeated a bad faith set-up case in the trial of Lloyd Sidley vs Roshan Dulal and State Farm Mutual Automobile Ins Co. Trial was before Judge Frederick Martinez in Arapahoe County. Plaintiff was severely injured in a motorcycle accident, with medical expenses in excess of $1 Million. The defendant had only $25,000 in liability coverage. Plaintiff’s attorney sent a letter to State Farm saying plaintiff would accept the limits in settlement of the claim if State Farm satisfied 3 conditions – 1) supply proof of the liability limits; 2) perform due diligence in determining whether there was any other liability insurance; and 3) provide an affidavit, which he provided, signed by the insured which indicated the defendant’s assets. State Farm did all three and offered its limits. Plaintiff filed suit against State Farm’s insured, arguing that State Farm failed to satisfactorily complete the three conditions, thus exposing the insured to a large excess verdict and making State Farm liable for the excess. The trial court allowed State Farm to intervene and bifurcated the trial to determine first whether a settlement had been reached. The jury quickly returned a verdict that State Farm had properly completed the conditions and that there was indeed a settlement for $25,000.

This case is a good example of a situation with large damages and little insurance, where the plaintiff’s attorney was trying to set-up the insurance company to be on the hook for all the damages. It was clear that counsel never had any real intent to settle. He was going to argue that the insurer failed to satisfy the conditions no matter what it had done. We were fortunate in this case that our insurance client was allowed to intervene in the underlying injury suit rather than having to wait until a sizable judgment was entered against its insured and then fight it in separate litigation.

December – 2018

December 3, 2018

Karl Chambers tried the case of Grace Stean and Adam Stevens v. Margaret Molloy in a four day trial in Arapahoe District Court.

This action arose out of a motor vehicle accident involving plaintiff’s wife, Grace Stean, and our client, Margaret Molloy. Ms. Stean claimed that she was injured in the accident, including an alleged mild traumatic brain injury and a cervical facet injury. Plaintiff, Adam Stevens, was not involved in the accident, but claimed that he suffered a loss of consortium due to his wife’s injuries. We admitted that defendant negligently caused the accident, but challenged the injuries and damages claimed by Ms. Stean and her husband. Ms. Stean settled her claim prior to trial and Mr. Stevens elected to litigate his loss of consortium claim. Our defense was that he did not suffer a loss of consortium. The jury agreed and returned a defense verdict finding that Mr. Stevens did not suffer a loss of consortium.

October – 2018

October 30, 2018

Frank & Hillary Patterson obtained a Defense Verdict in an October trial over UIM benefits. The case is Velvet Entz v. State Farm Mutual Automobile Insurance Company, Pueblo County District Court, 2016CV030960. Plaintiff claimed the accident caused serious cervical injuries including a herniated disc, with past medical expenses of $160,000 and an anticipated future cervical surgery at a cost of $140,644.00 – $244,430. The liability carrier had previously paid its $100,000 in limits. Plaintiff demanded the full UIM policy limits of $500,000. The last and lowest offer to settle by Plaintiff was $350,000.

Frank and Hillary disputed causation. In the trial they admitted plaintiff may have had a slight exacerbation of some pre-accident complaints but denied that the disc herniation or subsequent surgeries were the result of the accident. They argued that plaintiff had a pre-existing degenerative condition in her cervical spine for which she sought periodic chiropractic treatment in the years preceding the accident and that her post-accident treatment was not consistent with a herniation caused by the accident. Instead, they argued that the significant herniation at C5-6 occurred 8 months after the accident and it was not related to the accident.

The jury agreed, finding that Plaintiff’s total damages from the accident were $4,300. Since she had already recovered the liability limits far in excess of that, State Farm owed no UIM payment.

Plaintiff’s treating doctors who testified were Dr. Lloyd Mobley, Dr. Roger Sung, Dr. John Warner, DC and Dr. William Anderson, DC. The defense expert who testified was Dr. Henry Roth.

September – 2018

September 28, 2018

Karl Chambers gave oral arguments in the case Bailey v. State Farm Mutual Automobile Insurance Company. In a published opinion, the Colorado Court of Appeals affirmed the judgment of the trial court in favor of our client, State Farm. The plaintiff sued the party that caused the accident along with State Farm seeking underinsured motorist benefits from State Farm claiming that his damages exceeded the liability policy limits of the at-fault party. Shortly before trial the liability insurer for the at-fault party agreed to pay the judgment regardless of the amount. The jury returned a verdict for an amount greater than the at-fault party’s policy limits and his insurer paid the full amount of the judgment. Notwithstanding the fact that the full amount of the judgment was paid by the liability insurer the plaintiff argued that he was still entitled to $100,000 in UIM coverage. We argued that there was no UIM coverage because the entire judgment had been paid by the liability insurer. The trial court agreed with us and entered a judgment only against the at-fault party. Plaintiff filed an appeal of the trial court’s judgment and the Court of Appeals also agreed with us that no UIM benefits were owed because the entire judgment was paid by the liability insurer.

Colorado Court of Appeals Oral Arguments

August – 2018

August 3, 2018

Patrice Fujisaki Sauter v. State Farm Fire & Casualty Company

On August 1, 2018, attorneys Frank Patterson and Hillary Patterson obtained a directed verdict for the defendant in the case of Patrice Fujisaki Sauter. v. State Farm Fire & Casualty Company (Denver County District Court, 2017CV33275).

Plaintiff Patrice Fujisaki Sauter is the daughter of the deceased homeowner and State Farm insured, Rose Fujisaki. Plaintiff alleged a hail and wind storm caused damage to Rose Fujisaki’s home and lightweight concrete tile roof. State Farm determined the concrete tile roof was not damaged in the hail/wind event, but had sustained unrelated damage from improper installation and footfall. State Farm issued payment to Rose Fujisaki for other damage to the property caused by hail/wind. Plaintiff lived in the home, but did not own the home, was not the named insured on the State Farm policy, and was not the personal representative of the Estate of Rose Fujisaki. Plaintiff brought a first-party claim in her own right alleging breach of contract, common law bad faith, and unreasonable delay and denial pursuant to C.R.S. §§ 10-3-1115 and 10-3-1116.

Plaintiff’s claims of breach of contract and common law bad faith were dismissed on summary judgment because Plaintiff was not the homeowner or policyholder, and therefore had no standing to pursue those claims. The Court denied summary judgment on the claim of unreasonable delay/denial, ruling a fact question remained as to whether Plaintiff had authority to assert the claim on behalf of the Estate of Rose Fujisaki. Plaintiff never moved to amend the pleadings and presented no other timely evidence of her standing to assert claims on behalf of the Estate of Rose Fujisaki.

At trial, The Honorable Judge Martin F. Egelhoff ruled on State Farm’s oral motion for directed verdict after Plaintiff rested her case-in-chief. Judge Egelhoff held that, viewing the evidence in the light most favorable to the nonmoving party, Plaintiff had not presented any evidence that she had legal authority to pursue a claim of unreasonable delay/denial under C.R.S. §§ 10-3-1115 and 10-3-1116 on behalf of the Estate of Rose Fujisaki. Therefore, Plaintiff lacked standing and her remaining claim was dismissed pursuant to C.R.C.P. 50.

April – 2018

June 4, 2018

On April 30, 2018, Brian D. Kennedy tried and won case number 2017CV30697 in front of the Honorable Martin F. Egelhoff, in a three-day jury trial in Denver District Court.

Plaintiff alleged that Defendant attacked him without warning or provocation while he was walking down Larimer Street near a nightclub called the Retro Room, punching Plaintiff in the back of the head and tackling him. Defendant denied Plaintiff’s allegations and claimed that Plaintiff came up behind Defendant’s wife and groped her buttocks. When Defendant approached Plaintiff and began speaking to him about the incident, Defendant alleged that Plaintiff charged him and that, in the ensuing scuffle, Plaintiff fell to the ground, injuring himself.

PLAINTIFF’S ATTORNEY: Michael L. Glaser, Law Office of Michael L. Glaser, LLC

TYPE OF CLAIMS: Assault, Battery, and Outrageous Conduct.

DIRECTED VERDICTS: The Court directed verdicts in favor of the Defendant on Plaintiff’s claim of assault and on all of Plaintiff’s claims for economic damages.

INJURIES AND/OR DAMAGES ALLEGED: Facial bruising, abrasions and laceration, corneal abrasion, concussion, post-concussive syndrome, depression, anxiety, PTSD, headaches, tinnitus, panic attacks, and ED. Plaintiff also claimed to have wage loss from missed work as well as diminished earning capacity because of his inability to continue a career in the Air force.

SPECIALS: $24,000 in medical expenses, $1,700 in past wage loss and an estimated $750,000 in future income loss.

FINAL DEMAND BEFORE TRIAL: $395,000
FINAL OFFER BEFORE TRIAL: Statutory offer of $65,000.01

PLAINTIFF’S EXPERT WITNESSES: Laur M. Birlea, M.D.
DEFENDANT’S EXPERT WITNESSES: None.

VERDICT: For the defendant on the Plaintiff’s claims of battery and outrageous conduct.

OTHER COMMENTS: The Court excluded evidence of diagnoseable mental health conditions and treatment, as well as evidence of diminished earning capacity as a sanction for discovery violations. The Court also limited the testimony of Plaintiff’s physicians based upon inadequate disclosures. Defendant is seeking costs, as well as an award of attorney’s fees for discovery violations.

January – 2018

January 30, 2018

Frank Patterson and Lindsay Dunn won a defense verdict in an important bad faith “set-up” case in El Paso County with exposure of almost $10 million. The jury found for defendant State Farm on all claims after a 7-day jury trial.

Plaintiff Melanie Rountree was insured through State Farm for auto insurance liability policies totaling $1,250,000. She was 100% at fault in causing an auto accident on January 19, 2013. Rountree, while extremely intoxicated, drove her vehicle through a red light and collided with Patrick Kirchhofer’s vehicle, causing serious and permanent injuries to Mr. Kirchhofer, including partial paralysis. Ms. Rountree claimed that State Farm unreasonably failed to timely make an offer to settle, causing a judgment to be entered against Ms. Rountree in the amount of $4,102,526.05. State Farm paid its policy limits plus interest and costs after judgment was entered, leaving an unpaid judgment balance of $3,469,598.25 as of the second trial. Rountree entered into a Bashor Agreement with Kirchhofer and was represented at the bad faith trial by the same lawyers who had represented Kirchhofer. She sought the unpaid amount of the judgment, plus two times the insurance limits (a total of $2.5 million) for unreasonable delay under C.R.S. § 10-3-1115 and 1116, punitive damages of $3,469,598.25, and attorney fees. In closing, the total requested by her attorneys was $9,439,196.50, plus attorney fees in excess of $500,000.00.

State Farm provided Rountree a defense to the Kirchhofer suit and Rountree later hired personal counsel. During the underlying litigation, Kirchhofer’s attorneys sent a letter demanding a settlement offer from State Farm. The letter purposely did not say State Farm’s limits would be accepted as a full and final settlement. Rountree and her attorneys advised State Farm not to offer its policy limits because that would immediately expose Rountree’s personal assets for further negotiations. They still hoped to convince Kirchhofer’s attorneys to accept policy limits for a full release. State Farm agreed to Rountree’s request. When State Farm’s policy limits were not offered by the deadline Kirchhofer’s attorneys revoked their “demand”, claimed it was bad faith and argued State Farm was now exposed to the full damages suffered by Kirchhofer. They demanded $12 million at mediation and $27 million at the injury trial. After the injury trial Rountree entered into the Bashor Agreement, assigning her bad faith claim proceeds to Kirchhofer.

During the bad faith trial, Frank Patterson and Lindsay Dunn convinced the jury that State Farm never had a reasonable opportunity to settle the case for several reasons. First, it was following the request of its insured in not making the policy limits offer. Second, Kirchhofer and his lawyers had no intent to settle for the State Farm policy limits. The lawyers were trying to create a “set-up”, a way to claim bad faith and open the policy limits.

This case is important for insurers because there is a surge of “set-up” cases in Colorado as a result of the punitive provisions of C.R.S. § 10-3-1115 and 1116. This case shows that juries will consider the question whether the insurer had a reasonable chance to settle, and that set-up cases raise real doubts about the plaintiff’s intent to settle.

October – 2017

October 20, 2017

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.

Colorado Supreme Court Oral Arguments