Court Opinion

ID: 9567689
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:56:45.843701+00
Date Added: 2024-06-11T09:53:13.347079
License: Public Domain

TURSI, Judge,
dissenting.
I respectfully dissent.
As this case was postured before the trial court at the time it entered its summary judgment, there was undisputed evidence permitting off-setting inferences; therefore, plaintiff was entitled to all favorable inferences which might be reasonably drawn from that evidence. O’Herron v. State Farm Mutual Auto Insurance Co., 156 Colo. 164, 397 P.2d 227 (1964). Because that conflicting evidence existed, the *594trial court’s rulings were premature both as to determining material questions of fact and the law applicable to those facts.
The central issue before the trial court was not whether Safeco had a contractual right to arbitrate plaintiff’s claim, but whether, in the exercise thereof, it abused that right by bad faith acts or willful and wanton breach of its concomitant duty of good faith to the plaintiff.
I agree with Safeco that uninsured motorist coverage is not in the first instance a classic example of first party coverage. See 2 A. Widiss, Uninsured & Underin-sured Motorist Insurance § 22.1, et seq. (2d ed 1987). This is true because an insured must initially establish that the party causing injury was uninsured and was the legal cause of the injury. Thus, as to these issues, the insurer and the insured are in adversarial positions. This does not mean, however, that an insurer is relieved of its duty imposed by law to deal fairly and in good faith with its insured, and when an insurer refuses to do so without proper cause, it is liable for damages naturally flowing therefrom. See Rederscheid v. Comprecare, Inc., 667 P.2d 766 (Colo.App.1983). Implied in this duty of good faith is the requirement that the insurer investigate the factual predicates of the claim of liability and not unreasonably persist in defenses that are without foundation in either fact or law.
Plaintiff asserts, and this assertion was verified at the arbitration hearing, that the fact of the third party’s status as an uninsured motorist and as the sole cause of the rear-end collision which resulted in plaintiff’s injury was undisputed. Thus, she argues, once the question of liability is resolved in the insured’s favor, the uninsured motorist’s claim does in fact become in essence a first party claim, and the duty to negotiate fairly and justly the question of damages falls upon both parties. I agree. See Widiss, supra.
She contends that Safeco’s persistence in the denial of the third party’s lack of insurance and affirmative defense of contributory negligence for over two; and one half years with no evidentiary basis therefor is evidence from which a fact finder could infer bad faith or willful and wanton breach of contract. Further, plaintiff contends that the evidence could sustain an inference that by the time Safeco forced her to go through the arbitration hearing there was no longer a fair question that her injuries in fact justified an award of damages well in excess of the policy limits of $100,000. She further contends that, even though the insurer had a bona fide defense, in part, based upon its claimed workmen’s compensation offset, rather than allow that issue alone to go to arbitration, it persisted in its defense to the entire claim and on its original offer of $20,000.
Thus, I agree with plaintiff that under all of the attendant circumstances involved in this claim, Safeco’s actions raise the permissible inference that its refusal to negotiate was at least in part a position taken in bad faith. See J. Van Patten & R. Willard, The Limits of Advocacy: A Proposal for the Tort of Malicious Defense in Civil Litigation, 35 Hastings L.J. 891 (July 1984). See also Travelers Insurance Co. v. Savio, 706 P.2d 1258 (Colo.1985).
Additionally, the trial court erred in its dismissal of plaintiff’s claim for willful and wanton breach of contract. See Mortgage Finance, Inc. v. Podleski, 742 P.2d 900 (Colo.1987); Rederscheid v. Comprecare, Inc., supra. See also Beck v. Farmers Insurance Exchange, 701 P.2d 795 (Utah 1985) (breach by an insurer of its duty of good faith in rejecting an insured’s claim for uninsured motorist may give rise to a claim for willful and wanton breach of contract with resulting liability for consequential damages including but not limited to emotional distress).
I would vacate the summary judgment entered in this matter and remand it to the trial court for reinstatement of plaintiff’s complaint. Further, I would order the trial court to reexamine plaintiff’s motion for discovery, and to exclude therefrom only those matters properly identified as work product.