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On January 26, 2016, T. Thomas Metier posted the article below regarding the time limitation to file a Colorado Underinsured Motorist Claim.  This is a clarification to the 2-year statute of limitations for underinsured motorist claims specifically under C.R.S. 10-3-1115 and 10-3-1116, Colorado’s bad faith statutes.

On August 27, 2015, United States District Court Judge, Philip A. Brimmer, for D. Colorado, signed an order ruling that C.R.S. 10-3-1115 and 10-3-1116 are both penalty statutes and subject to a one-year statute of limitations.[1] In order to determine if a statutory claim is a penalty claim, the following elements must be met: “1) the statute asserted a new and distinct cause of action; 2) the claim would allow recovery without proof of actual damages; and 3) the claim would allow an award in excess of actual damages.” [2]

In Phipps, Plaintiff Phipps agreed that Colorado’s insurance bad faith statute satisfied both elements one and three of the Kruse test, however, Plaintiff Phipps tried to argue that the second element was not satisfied, and tried to establish the statute as a remedy rather than a penalty. The court disagreed and held that all three elements were satisfied, thus holding that the claims were subject to the one-year statute of limitations.

Since August 27, 2015, other District of Colorado judges have followed Judge Brimmer’s lead and ruled in favor of the C.R.S. 10-3-1115 and 10-3-1116 being considered penalty statutes and limited to the one-year statute of limitations.[3] Colorado trial courts have ruled on the issue both ways.[4]

As of February 8, 2017, Judge William J. Martinez of the United States District Court, D. Colorado, submitted a certified question to the Colorado Supreme Court, pursuant to Colorado Appellate rules, of whether actions under C.R.S. 10-3-1115 and 10-3-1116 are penal such that the one-year statute of limitation applies.

[1] Gerald H. Phipps, Inc. d/b/a GH Phipps Constructions Company v. Travelers Property Casualty Company of America, A Connecticut corporation, 2015 WL 5047640, August 27, 2015 (Colo. U.S. Dist. Ct.).  In the Phipps case, Defendant Travelers moved for summary judgment on Plaintiff Phipps’ statutory insurance bad faith claim on the grounds that Colorado’s insurance bad faith statute C.R.S. 10-3-1115 is a penalty statute and subject to the one year statute of limitations per Colorado law. Pursuant to C.R.S. 13-80-103(d) ‘“any penalty or forfeiture of any penal statutes’ must be brought within one year after the cause of action accrues.” ID. at Analysis.

[2] Kruse v. McKenna, 178 P.3d 1198, 1201 (Colo. 2008).

[3] Ermentraut v. State Farm Fire and Casualty Company, 2016 WL 9735723 (Colo. U.S. Dist. Ct.) – order signed by Raymond P. Moore, U.S. District Court Judge, September 26, 2016. It is important to note that no Colorado appellate court has decided the issue of whether the statutory bad faith claims are for a penalty, but several trial courts at the state and federal level have done so.

[4] Davis v. American Family Mut. Ins. Co., No. 15CV30020 (Jefferson Cty. Dist. Ct. July 9, 2015) determined it was a penalty statute versus Hanson v. State Farm Mut. Auto. Ins. Co., No 2012 CV198 (Boulder Cty. Dist. Ct. May 15, 2013) which determined it was not a penalty statute. See Ermentraut for analysis.


The statute of limitations for filing an underinsured motorist claim in Colorado became the subject of an appellate court case in Stoesz v. State Farm, No. 14CA0956, Court of Appeals of Colorado, Division IV (June 18, 2015).

Section 13-80-107.5(1)(b) provides a three-year statute of limitations to file an underinsured motorist claim. However, if an action is commenced against the underinsured motorist or if a payment is made for the underlying bodily injury claim within three years, then the underinsured claim can be filed up to two years after the insured received the payment (emphasis added).

The statute offers these extra two years so that people have time to file the underinsured motorist claim once they become aware of the uncompensated loss—which may only become apparent after the underlying bodily injury claim is finalized.

So what was the issue in this case? The Court of Appeals had to determine the meaning of “payment” in the statute. Plaintiff Stoesz had settled her underlying claim with the underinsured motorist’s liability carrier, Progressive, prior to the three-year statute of limitations. However, her insurance carrier, State Farm, did not approve the settlement until after the three years were up. Progressive only cut the check to Stoesz after the three years had run, as well.

Stoesz then sought to file an underinsured claim against State Farm, alleging that the settlement agreement itself constituted a “payment” that would extend the deadline by two years.

The trial court entered Summary Judgment for State Farm, reasoning that a settlement agreement was not a “payment” as required by the statute.

The Court of Appeals confirmed. Although “payment” was not defined in the statute, the ordinary meaning and dictionary definitions of payment focused on the delivery of money to the person owed. In this case, the payment clearly took place after the three-year deadline.

(Stoesz also argued that Progressive agreed to toll the statute in the settlement, but State Farm claimed that such agreement did not affect its rights. The court agreed with State Farm.)

So does this case seem like Stoesz was treated unfairly? After all, Progressive agreed to the settlement amount before the three years was up, but State Farm only approved the settlement after three years. However, plaintiffs take note: In a situation where time is running out, Stoesz could have simply filed a complaint against the motorist to preserve her underinsured claim against State Farm for another two years. When the deadline was approaching and she had not yet received the payment, she should have filed suit. The Court of Appeals noted that filing the complaint would not have even required service of process to receive the two-year extension.

The Metier Law Firm is committed to assisting people with personal injury claims throughout Colorado, Wyoming and Nebraska, and we frequently serve as co-counsel to law firms nationwide.

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