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September 2015

Gordon & Rees Denver Team Secures Partial Summary Judgment in Bad Faith Case

Denver attorneys John Palmeri, Jack Mann, and Greg Hearing recently obtained partial summary judgment on behalf of their insurance company client on an issue of first impression. 

The Plaintiff brought suit against the insurer in state court asserting claims for, inter alia, breach of contract and statutory bad faith pursuant to Colo. Rev. Stat. § 10-3-1116, which authorizes an award of “two times the covered benefit” and attorneys’ fees if the plaintiff can demonstrate that the insurer acted unreasonably in denying a claim.  The claims arose from water damage during the construction of a large library at a university.  The Defendant removed the case to the United States District Court for the District of Colorado. Through discovery, it was revealed that the Plaintiff had been aware of its potential claim for well over a year before filing suit.  Defendant filed a Motion for Partial Summary Judgment arguing that Plaintiff’s statutory bad faith claim was governed by a one-year statute of limitations applicable to penalties, an issue not previously addressed by any Colorado appellate court.

The federal judge issued a ruling siding with Gordon & Rees’ client.  In the order, the judge analyzed Colorado’s bad faith statute and held that it met the qualifications of a penalty statute under Colorado law and was, therefore, subject to the one-year statute of limitation.  The judge went on to hold that Plaintiff had been aware of its potential claim for more than one year prior to filing suit and dismissed the claim accordingly.  As a result, the potential exposure in the case decreased significantly. 

Greg S. Hearing
John R. Mann
John M. Palmeri



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