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Zupkus & Angell, P.C.
Denver, Colorado

The landmark decision of Fisher v. State Farm, decided by the Colorado Court of Appeals in May 2015, had a significant impact on bad faith litigation in our state. Now three years later, the Colorado Supreme Court has finally weighed in, ultimately ruling that if a portion of an insured's claim is not in dispute, the undisputed portion must be paid even if other portions of the claim are in dispute. This decision has widespread impact for the insurance industry from the adjusters to the carriers and of course for insureds.

This is important for insurers to understand and abide by since failing to do may result in a bad faith claim.

In State Farm v. Fisher, an underinsured motorist struck Dale Fisher’s car, resulting in injuries requiring $60,000 in medical care. Fisher was not at fault, and he was covered under multiple State Farm underinsured motorist policies, so State Farm agreed to pay his medical bills.

However, State Farm disputed portions of other amounts Fisher sought, including lost wages. State Farm refused to pay Fisher’s medical bills (which were approved and covered) without first resolving his entire claim, including the disputed lost wages.

Fisher filed suit against State Farm, claiming the insurer unreasonably delayed his payment for medical expenses. State Farm argued that it had no duty to make piecemeal payments, even for the approved medical expenses.

Wrong. According to the Colorado Supreme Court, it is clear State Farm failed to uphold its responsibility pursuant to Colorado’s bad-faith statute, C.R.S. § 10-3-1115, which provides that an insurer “shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party [insured] claimant.”

The Supreme Court affirmed the lower court’s judgment and awards to Fisher of the UIM policy limit of $400,000, plus double medical expenses ($122,250).

According to the Colorado Supreme Court, in the first-party insurance context, insurers cannot “unreasonably delay or deny payment of covered benefits, even though other components of an insured’s claim may still be reasonably in dispute.”

Please contact us if you have any questions about this ruling.