Court Opinion

ID: 9795316
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:25:55.527783+00
Date Added: 2024-06-11T08:29:25.071434
License: Public Domain

Judge VOGT
concurring in part and dissenting in part.
The primary issue in this appeal is whether defendants were entitled to summary judgment on the basis that plaintiff Moore's husband's suicide precluded liability on Moore's claim for bad faith adjustment of a workers' compensation claim. I conclude they were not, and therefore respectfully dissent from the majority's affirmance of summary judgment on the bad faith claim. I agree with the majority that summary judgment was proper on the abuse of process claim.
My analysis of the bad faith issue starts with the following principles.
First, workers' compensation insurers, including self-insured employers, and their claims adjusters owe a duty of good faith and fair dealing to injured employees in investigating and processing workers' compensation claims. Scott Wetzel Services, Inc. v. Johnson, 821 P.2d 804, 813 (Colo.1991); Travelers Ins. Co. v. Savio, 706 P.2d 1258, 1275-76 (Colo.1985).
Second, an insured who prevails on a claim for bad faith breach of an insurance contract is entitled to recover damages, based on traditional tort principles of compensation, for injuries actually suffered, including emotional distress. Goodson v. American Standard Ins. Co., 89 P.3d 409, 415 (Colo.2004); Ballow v. PHICO Ins. Co., 878 P.2d 672, 677 (Colo.1994). The Goodson court explained: "Given that insureds purchase insurance policies to obtain financial security and peace of mind, emotional distress is a likely and foreseeable consequence of a bad faith denial of the benefits afforded under the contract." 89 P.3d at 417; see also Savio, 706 P.2d at 1278 ("[Olnee a calamity has befallen an employee covered by workers['] compensation ..., the injured party is particularly vulnerable because of the injury or loss.").
Third, the "traditional tort principles of compensation for injuries actually suffered," Goodson, 89 P.3d at 415 (quoting Ballow, 878 P.2d at 677), include the principle that an injured party is entitled to compensation for its actual losses proximately caused by the tortfeasor's conduct, even though the tortfea-sor did not necessarily foresee the full extent of those losses or the specific injury suffered. Vanderbeek v. Vernon Corp., 50 P.3d 866, 872 (Colo.2002); HealthONE v. Rodriguez, 50 P.3d 879, 889 (Colo.2002).
*441Applying these principles to this case leads me to conclude that, if plaintiff can prove that defendants breached their duty to act in good faith, she would be entitled to all damages proximately resulting from defendants' breach of their duty, including damages flowing from her husband's emotional distress. Where emotional distress is the proximate result of a tortfeasor's intentional or bad faith conduct, the fact that it was so severe as to lead to suicide does not, in my view, preclude either imposition of liability on, or recovery of damages from, the tortfeasor who caused the distress.
In reaching a contrary conclusion, the majority relies on negligence cases holding that suicide is such an extraordinary event that a negligent tortfeasor cannot be held liable for it absent special cireumstances. Here, however, plaintiff is asserting a claim for bad faith adjustment of a workers' compensation claim. In such ciremmstances, I view the negligence analysis relied on by the majority as of limited value.
Our supreme court has recognized that negligence principles do not necessarily apply to bad faith claims against workers' compensation insurers. See Scott Wetzel Services, 821 P.2d at 810 ("In Savio, ... we held that the negligence standard by which the breach of an insurer's duty of good faith is to be determined in the context of a claim by a third party against the insured is not applicable when a claim is asserted by a worker against the workers' compensation insurer."). Consistent with that recognition, courts that have acknowledged the general rule that suicide may preclude liability in a negligence action have similarly recognized that a different standard applies when the tortfeasor's conduct was intentional rather than merely negligent. See Rowe v. Marder, 750 F.Supp. 718, 723-24 (W.D.Pa.1990) (where suicide results from intentional rather than negligent conduct, "the trend of recent cases is toward allowing recovery" (quoting 1 Speiser, Wrongful Death 85 (1975 & 1989 Supp.))), aff'd, 935 F.2d 1282 (3d Cir.1991); Tate v. Canonica, 180 Cal.App.2d 898, 5 Cal.Rptr. 28, 36-37 (1960); Mayer v. Town of Hampton, 127 N.H. 81, 497 A.2d 1206 (N.H.1985); R.D. v. W.H., 875 P.2d 26, 30-31 (Wyo.1994). Under these cases, the tortfeasor may be Hable for the suicide of another if his or her wrongful conduct is a substantial factor in creating the mental condition that led to the decedent's suicide. See R.D., 875 P.2d at 30-31 (collecting cases).
The analysis of the New Hampshire Supreme Court in Mayer is particularly instructive. In that case, the court was called upon to decide "whether New Hampshire recognizes an exception to the general rule that tort actions may not be maintained which seek damages for the suicide of another." 497 A.2d at 1209. In answering that question in the affirmative, the court relied on principles that are consistent with the Colorado case law discussed above:
The law of torts recognizes that a defendant who intentionally causes harm has greater culpability than one who negligently does so.... When the wrong alleged is intentional, the defendant "is responsible for the injuries directly caused even though they may be beyond the limits of foreseeability," proof of which is required in a negligence action.... In most cases of intentional torts "[t] he defendant's Hability for the resulting harm extends ... to consequences which the defendant did not intend, and could not reasonably have foreseen, upon the obvious basis that it is better for unexpected losses to fall upon the intentional wrongdoer than upon the innocent victim." W. Prosser and W. Kee-ton, The Law of Torts § 9, at 40 (5th ed.1984) (footnote omitted)....
Under [the Restatement (Second) of Torts], liability for unintended resulting harm is based upon proof of the tortfea-sor's wrongful intent, and consideration of the degree of moral wrong and the seriousness of the harm which he intended. Consideration of these factors, as opposed to the foreseeability of the harm as in negli-genee actions, is consistent with the policy behind imposing liability for intentional torts: compensating the victim and deterring intentional harm to others.
Id. at 1209-10 (additional citations omitted).
While acknowledging that a first-party bad faith case is "more like an intentional tort action than negligence," the majority never*442theless declines to apply the analysis applicable to intentional torts because Moore did not plead intentional infliction of emotional distress or outrageous conduct and because there is no allegation that defendants intended to ecause Moore's husband's suicide. I do not agree that those facts warrant applying a negligence analysis to the issue.
First, although some courts have specifically required an additional showing of outrageous conduct or intent to cause emotional distress, not all have done so. For example, in R.D., the Wyoming Supreme Court held that one who intentionally commits a tort "will be liable for the result even though he does not intend to cause the emotional or psychiatric illness" that was a substantial factor in bringing about the suicide. 875 P.2d at 81. In my view, that analysis is consistent with the position taken by our supreme court in Vanderbeek and HealthONE, cited above.
Second, although Moore's complaint does not include a separate cause of action for intentional infliction of emotional distress or outrageous conduct, it alleges that defendants acted unreasonably and in "the utmost bad faith," knowing their conduct and position were unreasonable, in adjusting the workers' compensation claim. The complaint further alleges that defendants' conduct was attended by cireumstances of fraud, malice, or willful and wanton conduct sufficient to support recovery of punitive damages. While I am by no means persuaded that plaintiff can establish her allegations, I conclude that her complaint sufficiently alleges the type of conduct that takes this case out of the general rule applicable where a suicide results from negligence.
In regard to causation, the administrative law judge in the workers' compensation proceeding found as a matter of fact that Moore's husband would not have committed suicide but for defendants' claim denial, and that his receipt of the notice of contest was the final event triggering the suicide. The Industrial Claim Appeals Office and this court concluded that that finding was supported by the evidence. I also note that, in the workers' compensation context, divisions of this court have held that a suicide or suicide attempt that is causally related to an industrial injury is compensable. See Dependable Cleaners v. Vasquez, 883 P.2d 583, 585 (Colo.App.1994) ("[I]f the industrial injury causes a severe mental condition, which in turn causes an injured worker to commit an act resulting in the worker|'s] death, then such death may still be compensable."); Jakco Painting Contractors v. Industrial Commission, 702 P.2d 755, 757 (Colo.App.1985). While the holding in these cases was based in part on the "beneficent purposes" of workers' compensation, Jakco, 702 P.2d at 757, whereas this is a tort action, the cases nevertheless support the conclusion that suicide does not invariably cut off the chain of causation between injury and recovery for that injury-particularly where, as here, an expert has opined that denial of the claim resulted in an "uncontrollable impulse to commit suicide."
Finally, I am not persuaded that allowing plaintiff to go forward on her bad faith claim would have the adverse consequences posited in the majority opinion.
The majority reasons that the result urged by plaintiff would place a burden on claims administrators to make judgments about the mental health of insureds, would potentially create an unreasonable risk of liability, and could erode an insurer's right to investigate and contest claims brought by persons who may be unstable.
The first proposition is questionable, in that the supreme court's recognition that insurers and claims adjusters can be liable for emotional distress damages would seem necessarily to assume that such parties would be able to anticipate the mental health consequences of their acts. See Goodson, 89 P.3d at 417 ("emotional distress is a likely and foreseeable consequence of a bad faith denial" of insurance benefits).
More important, the concerns raised by the majority are already adequately addressed under our case law. Because there is no fiduciary or quasi-fiduciary relationship implicated in a first-party insurance context, a first-party bad faith claimant has the additional burden of proving, not only unreasonable conduct, but also that "the insurer either knowingly or recklessly disregarded the va*443lidity of the insured's claim." Id. at 415. This standard of care, the supreme court has held, "reflects a reasonable balance between the right of an insurance carrier to reject a non-compensable claim submitted by its insured and the obligation of such earrier to investigate and ultimately approve a valid claim." Id. (quoting Savio, 706 P.2d at 1275). Because the concerns cited by the majority are already addressed by the showing required to establish a bad faith claim in a first-party context, I perceive no basis for affording insurers the additional protection that they would receive under the majority's holding.
For these reasons, I1 would reverse the summary judgment and remand for further proceedings on plaintiff's bad faith claim.