Settlement of underlying Underinsured Motorist Benefits was a key issue in Download Dumpert v. State Farm Fire & Casualty Co. (D. Colo. Case No. 10cv02320, Order Dismissing Second and Third Claims for Relief, Filed June 29, 2011) PUBLIC ACCESS, also published as 2011 WL 2581398 (D. Colo. June 29, 2011)(authorized password required to access Westlaw).
Following a tragic accident which resulted in the death of one Justin Dumpert, there was a prior settlement for $850,000.00, an amount less than the tortfeasor's $1,100,000.00 Liability limits. Then and thereafter Mr. Dumpert's parents sued State Farm which had issued their son a UIM Policy. Counsel representing the Plaintiffs-parents refused to allow Deposition questions asking why the underlying settlement was for an amount less than the tortfeasor's Liability limits.
The Policyholder-Plaintiff alleged Claims for Insurance Bad Faith (under Colorado and Arizona Law) and Statutory Claims for alleged wrongful Denial of Coverage by the UIM Carrier Defendant. Among other things, the UIM Carrier's Counsel argued that Summary Judgment of Dismissal on this record was warranted on the extracontractual claims "because the plaintiffs have failed to show any basis for contending that the denial of the claim in excess of the settlement amount was unreasonable or in bad faith." Dumpert v. State Farm Fire & Casualty Co., 2011 WL 2581398 at *2.
The Federal Senior District Judge agreed. The Court in this case dismissed the Claims for alleged Insurer Bad Faith under Colorado or Arizona Law both, and also dismissed the Statutory Claim for Denial of Coverage under a Colorado Statute.
The Federal Judge did not overlook the Plaintiffs' refusal to answer questions about their underlying settlement for less than the tortfeasor's Liability Limits. The Court ruled that "the plaintiffs will not be permitted to explain their acceptance of that amount on the grounds stated in the scheduling order [which declared the Plaintiffs' representation that their underlying settlement reflected their assessment of the emotional toll of going through Trial and moreover their lawyer in the underlying case did not advise them of the Statute of Limitations] ...." Id.
I must be in a "Colorado State of Mind," you might say. Here are some more news reports involving Colorado: Jim Rutenberg and Jeff Zeleny, "Perry's Rift With Bush Could Hold Peril in a Presidential Race" p. A11, col. 1 (New York Times Nat'l ed., Wed., July 6, 2011)(reporting that governor Rick Perry of Texas "went to Colorado last week" to join other wealthy people at a gathering of Kochs) and Kirk Johnson, "Steamboat Springs Journal / Family Still a Vital Part of a Colorado Town's Fabric" p. A11, col. 2 (New York Times Nat'l ed., Wed., July 6, 2011).
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