and imply covenant of good faith and fair dealing however insurance policies are treated differently then commercial policies because of the special relationship between the insured and the insurance company with the courts in colorado have found is that the that the apply come to good faith and fair dealing gives rise to a separate distinct claim in tort separate apart from the contract claim what the courts have said is that that separate claim is one which is it the parameters of what that duty involves or outside the terms of the contract itself it provides that the insurance company for example needs to act reasonably in defending a case settling a case investigating a cases require that the other side act reasonably and furnish him with the information th request your honor there are duties under the policy duties of cooperation the question of whether or not there is what your honor is now talking about which is potentially reciprocal duty of good faith is one which really hasn't been firmly decided by the appellate courts in colorado but the answer is yes there are duties that are set forth in the policy itself like i say for cooperation but the important point here is that you can have a claim under for breach of contract and of course then you're looking at the terms and conditions of that can't contract are but with respect to bad faith claim those duties are separate they're outside their distinct demand well our position your honor is is that the claim is not confined just to that thirty day time frame but it is a failure on the part as i'm sure your instruction and that is with the journal struction ultimately said and that's what the jury was called on to decide right correct with respect to the breach of contract claim the problem here though is is that what under instruction upper twelve what the court said is that unless you fin you have to find that there was a breach of contract as a predicate before you could consider whether or not there is a violation of the obligations of good faith and fair deal i assume that's where you're going but yes if it is in fact the case that essence of the breach of contract is the failure to tender the full policy limits within the thirty days i don't question for a moment that colorado toward would conceivably contemplate a whole array of things other than that ok other conduct it would be unreasonable five the insurer but it seems to me the question is whether in this case you have created a situation where the theory under which you proceeded is one coterminous with the breach of contract and if that's the case then the breach of contract if there is no breach of contract there is no better tort i mean that is if you look at your pretrial order i don't see anything else except for the failure to tender within the thirty days but your honor i appreciate it when you talk about as far as when you talk about a theory and you're talking about timeframes you're talking about facts you have to look at the obligations and what recognizes the viability of a claim of bad faith even if the expressed terms of the contract have been on or by the ensure that doesn't answer the question do you not accept the premise that you could define the contours of your if we accept the notion as you say under the pretrial order if we accept the notion that what you're talking about is that thirty day timeframe the difficulty is and what really sort of highlights it is that defense counsel m in his closing argument got up in front of the jury in set that because of the terms of the contract it says that the duty the responsibility to defend or settle is discretionary in other words it's up to us and he emphasized the discretionary nature of the difficulty is is that as far as the bad faith claim is that that's not the discretionary duty well what armory argued in closing argument doesn't affect what the jury talk about the factual predicates ok so even if we accept that notion that all we're talking about is that thirty day timeframe ok yes the the problem has to do with the from is has to do with the legal duties in other words and that's what the the goods in case that's what these cases talk about is that you can comply with the contract here it is it says it's discretionary it's up to you and that's what counsel emphasized and that's would again instruction number twelve allowed him to say i guess and this is where you can correct me i'm sure whatever counsel ultimately is irrelevant if it is not the law is what the law is if if the law as charged to the jury said that the essence if you fine you this is what you need to find in order to determine there was a breach of contract that they put they essence of a going towards the question of failing to tender policy limits within the thirty days you were asked jerry would that constitute a breach of contract and if they said no whatever he says will doesn't matter if it goes towards the essence of the breach of contract because the court the that what these other cases talk about you can have the same act the failure to have tendered this this money right to settle this case within thirty day time frame if we're going to accept that as the factual predicate that we're talking about if you're if you're saying is that it's really it's just up to you insurance company that's what the insurance could be that's what owners did is reserve under its policy the right to be able to do that the obligations of good faith and fair dealing have a different parameters what they say is that you have to act reasonably in assessing you have to act reasonably in you know a value weighting you have to communicate your insured that's what our bad faith experts talked about ok then let me ask you this  in any other pleading would there be a statement of the conduct that you allege to be the basis for bad faith apart from the breach of contract in i respectfully disagree i don't think we have again you can have the same conduct you could be looking at exactly the same conduct but have that conduct because of the legal parameters of it could be compliant with the contract this contract says it's just he said it was discretionary right as we deem appropriate is what the policy says but you're not answering judge holmes's question what is the conduct not settle within that time frame mr fragment more talked about in his expert testimony he talked about the requirement that you go up the ladder that they should've communicated with people internally within the company as far as this demand goes they should have told their club their ensure that there was this policy limit demand they should have set what he called with an excess letter there are all these parameters of you know of common law of regulatory law  industry standards that have to do with this bar is a bad faith claim and that's separate and apart it's just stinks it's all part of the same package your honor the package here what we're talking about is we've got insurance policy that have steamed duties i mean they talk about that you we have this again discretionary authority that has nothing to do with it when i say nothing to do with you've got these extra contractual that's what they are the extra contracts goes in and they sign a contract to have some medical treatment done that somebody could comply with that treatment in other words they can render the treatment but if that treatment falls below the standard there may be a medical malpractise claims  follow because i think there may be a little bit of a disconnect i don't i don't hear judge holmes or judge kelly suggesting anything contrary to the basic principle that you're espousing and that is that there can be extra contractual duties that give rise to a claim for breach of the implied covenant of good faith and fair dealing the question this case as i see it is that the district judge said that these extra contractual theories for is we typically would give an abuse of discretion standard to the district judges interpretation of his or her own preet final pretrial order so where so so what's wrong with that thinking in other words that there can theoretically be extra contractual duties that give rise to a bad faith claim even if there is no breach of contract but the problem is that those are not in the as the district judge understood it what's wrong with that no your honor again we're talking about a couple different things i would beg to say that in the the final pretrial order was very explicit in terms of that they were setting forth claims both for breach of contract and the bad faith sure the parameters in terms of you know getting into the whole details those are all based upon you know the evidence that came out during trial the expert testimony and so on so there can be at amendment of the final pretrial order by virtue of the way that it was tried but is there anything in the final creature all order that gives rise to that would support a bad faith lying for some duty outside the contract sure let me refer you refer to your brief i think you the claims that were being made both for breach of contract as well as bad faith there was not any attempt to sort delineate the two to go into ok these are breach of contract these the responsibilities because that's not what the pretrial or even calls for the upshot of it though is basis for those for that three day time frame but this is a different issues will do a sickly except that the notion that is long as you do if you don't have a breach of contract you don't have a bad faith claim and that's just not the law in the state of colorado as that has to do with again the factual predicate had does have to do with time now and i've had this has to do is this has the legal responsibilities that this jury was not allowed to consider whether or not there violations of these other exit contract additional thirty seconds but let's hear from the other side please and you know i take it  good morning may it please the cork my name is gregory jim eddie and i represented owners insurance company throughout this entire case it's our position that the district court correctly instructed the jury that it had to case not in some hypothetical case but as in this particular case the factual basis of the two claims set forth in the final pretrial order and even in the amended final pretrial order was that the failure to settle within the thirty days of the two of the february st two thousand and fourteen demand letter was the breach of contract and was the bad faith conduct there is nothing else set forth in either the final pretrial order or the amended final pretrial order that defines what the bad faith and breach of contract claims are other than those two items and as this court has made clear in numerous cases the final pretrial order is what defines what goes to what goes to trial and what is decided by the jury at trial and the in the mon five i think i'm pronouncing it correctly the mo for case that was decided by judge gorsuch he's specifically pointed out that the purpose of the final pretrial order is to whittle down the the case to the essence of what is going to be tried to the jury and in this particular case it was the responsibility of bismarck simms and her counsel to define what they wanted to present as their case and what they presented as their case was that there was a breach of contract for failing to pay the policy limits within the twenty one dollars within the thirty days of the february st demand letter but let me ask you a question about disposition and how the disposition might look in this case and i'm going to hear validas argument out i'm just going hypothetical here let's assume that we were defined as i see it there like five issues in this case is that j m o l the issue is this issue of link is whether the breach of contract the court erred in saying that if you found really have to reach any of those other issues because all of those other issues will lead to bad yes they do and the answer to that question is no i don't believe you have to because even if there were air or in any of those other areas that would all be harmless because the dispositive issue in this case from the standpoint of how it was actually resolved was that the jury did not find a breach of contract and since the in finding in favor of owners on the breach of contract issue it didn't the jury didn't have to address any of the bad faith issues in which they're for not called upon to do any sort of decision making as relates to bat faith in those other three issues relate to whether there would have been some sims in the reply brief which goes to the theoretical aspect of a bad faith claim and they say on page eleven of the reply brief quote a bad faith claim for feeder to settle cannot be predicated on a breach of contract and because the implied extra contractual duty to settle exists precisely because the express terms of the insurance contract impose no such duty on the insurer but what they're really arguing in in making that argument is a hypothetical case that was not actually presented to the district court here because here in this case in the pretrial order of course they asserted that the nichols based on the same facts and throughout the discussions with the parties counsel the district court recognized that ms murphy sems claims were that owners breached the contract and acted in bad faith by failing to settle within the thirty day time period and interesting lee in the in discussing the breach of contract claim during the jury instruction conference there were all sorts of the it was quite a long long discussion like the discussion it was mr levine conceded that quote the failure to tender the maximum amount within thirty days of the february  and forty seven dollars other as further discussions progressed mr levine stated quote so the premise here is that the failure to settle is a breach of the contract and so they not only did they set forth that theory in the final pretrial order but mr levin conceded that the breach of contract claim was the failure to settle but that was that was part of the claim now at that point though the point being that that would be damages for bad faith and it seems to me that would by reading the various documents transcripts passages in relative to that issue that the court was somewhat confused on how it  have created error on both sides well why didn't it create error because i mean it seems to me that it you can argue about whether it should have been the none approach or the d c ten approach but it seems to me it should have been one of them  getting back to the point of the court made earlier though if there were error it would be on not talking about that now i'm not contemplating that we may not find that there is errors all right so getting to that point i think that really the the case that is controlling here is the non case and in the none case the supreme court specifically held that it is the burden of the point if in a case arising out of and that case it was a stipulated judgement and in the case of a a pretrial resolution which is reached by agreement between the parties that the burden remains plaintiff to prove his or her damages and that would be the word that turns on this agreement of the parties the argument would be under d c ten that's a distinction with a difference and then when you had an arbitrary judgement if that's not an agreement of the parties where there was nobody who had an interest in how with that judgement contours would be right well that was the in the d c ten case if the court looks at that there's very little explanation as to how the court reached that conclusion it was just pretty much a conclusion that stated and in the d c ten case the court cited the goodson case and it cited a case out of i think it's the metcalf case out of nebraska for the proposition that the burden shifts to the insurance company to prove that the arbitration award was unreasonable and it was is our position that the d c ten case does not overturn or contradict or supersede the nun case couldn't overturned on the colorado supreme court case right question like dan would be what prediction do we have as to what colorado law is and it may well be that there are other jurisdictions that have adopted exactly the same view that when you have an arbitrary judgment it has a layer of impartiality that you wouldn't have where parties agree on on a sudden run well i think that the district court actually addressed that it went backward and forward on that it it not it did it did go backward and forward but the district court fundamentally decided that the the outcome of that arbitration was not binding upon owners and that was the st major legal issue that was discussed in the case both sides filed motions for summary judgment and the plaintiff was arguing that owners was bound by the outcome of the arbitration award and the district court ultimately concluded number of reasons that owners was not bound and so i think that the i think we again go back to the issue of the nun case and that is that none held that in this type of situation it's the burden of the plaintiff to prove his or her damages and that's consistent with other colorado law so just the goodson case and so if the court if this court were forced to predict whether or not the colorado supreme court would follow the d c ten case i would suggest that the court wouldn't follow the d c ten of the case because it fundamentally contradicts naan and all the other precedents that the burden of proof of damages is on the plaintiff and then maybe true but the d c nine talks about did but still so it says this is what i'm going to do i may be creating error on both sides well that's the point i mean it is not like the court chose between d c ten and nine it chose other and wise other but effect in effect the court was allowing the the the jury to decide if the jury ever caught their it was allowing the jury to decide the reasonableness of the arbitration award because the jury instruction which was instruction number fifteen stated that jury the parties in gauged in this arbitration and the arbitration or the ward was one million three hundred and one thousand two hundred and seventy dollars and ninety seven cents and you are able to consider that as evidence of ms murphy sims damages so there is a number that the jury is given and they're told that they can consider that as the amount for damages then the court i think correctly allowed the owners to present evidence and both sides presented evidence to show what ms murphy sims injuries and damages were but the court correctly allowed owners to present evidence to show that no those really work her injuries and damages caused by the accident this was a minor car accident she had degenerative conditions these injuries that were being claimed were not related to the accident so i think so yes think the jury instruction that was actually given is a distinction with a difference from nine as even though none would essentially at least conceivably would nine contemplates is the target it says is the figure you this is you the jury the plaintiff has to prove this figure is reasonable and it's a target that's it seems to me that different than what the effect of the court's instruction would be which would be to say basically it's up in the air you can use this is one piece of evidence as to what's you know what the jury what the damages are but you jury can do whatever you want but in none the court specifically said that the stip in that case it was a stipulated judge yes it was only to in essence in this case the instruction and essentially encompassed everything that the nun court directed and so it would be our position that there was no error in  in that and just to go back to the final point i'd like to make and can junction with my argument about the identity of the breach of contract claim of the bad faith claim i think logically in this case because the jury had to for they specifically allege that it was a breach of contract to fail to pay the policy limits within the thirty dollars days if the jury and apparently it did find that there was no breach of contract it found there was no breach of contract but a finding of no breach of contract meant that no owners had no explicit obligation to do that to pay that money and logically it follows that if owners had no explicit obligation to do that it can't have acted on reasonably by have failing to done something that that it had no obligation to do in the st place and so that's why the the jury instruction was correct in these circumstances times a thank you your the last statement by counsel discloses the real problem here which is it's not logically and it's not a logical conclusion and the reason is is because counsel pursuant to the terms of the contract got up and said that the obligation to settle is discretionary that's not true under bad faith law and in fact your honor judge