Free Response to Motion - District Court of Colorado - Colorado

Case 1:00-cv-02098-REB-MJW

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 00-cv-02098-REB-MJW

KELLY FINCHER, by her guardian, JAMES FINCHER, on behalf of herself and all others similarly situated, Plaintiffs, v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant.

PLAINTIFF'S RESPONSE TO DEFENDANT'S MOTION AND MEMORANDUM IN LIMINE TO EXCLUDE EVIDENCE OF PRE-BRENNAN EVENTS

COMES NOW the Plaintiff, by and through her undersigned counsel, and in response to Defendant's Motion and Memorandum in Limine to exclude Evidence of Pre-Brennan Events, states as follows: Defendant Prudential has moved for an in limine order of this court, asking that it restrict evidence relating to events prior to the Colorado Supreme Court's denial of certiorari in Brennan. Brennan v. Farmers Alliance Mut. Ins. Co., 961 P.2d 550 (Colo. Ct. App. 1998) is a seminal case involving the affirmation that extended PIP benefits under C.R.S. 10-4-710 should have been offered to all categories of eligible injured persons under C.R.S. 10-4-707, and in cases where those benefits

Case 1:00-cv-02098-REB-MJW

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were not included within the available coverages contained in a company's policy, extended PIP should be included by way of judicial reformation, and without regard to the subjective desires of the named insured who purchased the policy. The rationale employed by the Brennan court is similarly well-known, and has been referenced again and again in countless cases since that date, including by this court in its Findings of Fact, Conclusions of Law, & Orders dated February 28, 2006. Ignoring whether the motion in limine is the proper manner in which to address this issue, the question of whether Fincher can reference the facts supporting her bad faith claims against Prudential that predate Brennan is a nonissue from the outset. First, this court established the date of loss of May 8, 1994, as the date of reformation. From that date all of the additional damages can and have become available. As this court noted in its February 28, 2006, ruling: "On balance, each of the relevant factors weighs in favor of an earlier reformation date.... Because the relevant law was clear at all times, an early reformation date will not upset past practices or reasonable reliance of Prudential.... Prudential still had more than a year before Fincher's accident to get its forms...in compliance with the requirements of Colorado law." Findings of Fact, Conclusions of Law, & Orders dated February 28, 2006 p. 22. Most significantly, this Court stated: "Prudential's inability to anticipate Brennan carried little weight in determining an equitable reformation date in this case. The holding in Brennan is not directly relevant to the key flaw in the Prudential policy...even if Prudential reasonably did not anticipate the Brennan rule, the change wrought by Brennan did not update Prudential's past practices because Prudential had planned for the inclusion of pedestrians in its APIP coverage." Id. at 12.

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It is, therefore, surprising that Prudential wants to argue to this court for a second time that Brennan creates a limitation rather than yet another signpost between the date of loss and the much-belated date of providing any extended PIP benefits. The Tenth Circuit, in Clark v. State Farm Mut. Auto. Ins. Co., 319 F.3d 1234 (10th Cir. 2003), reiterated the reasons for the establishment of the date of reformation: "The viability of Clark's breach of contract, breach of the duty of good faith and fair dealing, and willful and wanton breach of contract claims depends on the effective date of reformation. These contract, tort, and statutory claims, however, will remain viable only if the district court in the exercise of its equitable power determines that reformation should occur as of a date preceding its order of reformation. Only under those circumstances would there be an extant contract, tort, or statutory duty to be breached." Id. at 1244. Prudential attempts to create three discrete reasons why there should be such a restriction, but none seem to be linked to anything other than a re-argument of that which was presented at the reformation hearing, and attempts to do so under the guise, seemingly, of arguing that Fincher has never taken the position that Prudential erred until after Brennan was decided. Of course, the hearing in 2005 fully addressed the issue of Prudential's handling of its policy revisions, and any issue with the scope of the pleadings should have been addressed at that time. Prudential, as this court noted at the time, was aware of its obligation to provide the opportunity to purchase a policy that contained the requisite coverages, including $200,000 in aggregate extended PIP coverage. The hearing itself outlined a litany of missteps by Prudential in failing repeatedly to create and offer the necessary coverages. Moreover, Thompson v. Budget Rent-A-Car, 940 P.2d 987 (Colo. Ct.

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App. 1996) was decided in 1996, two years before Brennan, and has greater application here: that if the proper offer wasn't made, the policy has to be reformed. To that end, Brennan becomes irrelevant. Combining this court's explanation of how the date of reformation was established (which becomes the law of the case) with the fact that the breach of contract and tort damages are based upon the date of reformation, it is absurd to argue that now the Brennan case has any relevance whatsoever here. It has been over two years since the hearing, and one year and a half since this court determined that the date of reformation was May of 1994. To now restrict the receipt of evidence to yet a different date would make this court's establishment of a date of reformation a worthless exercise. WHEREFORE, Plaintiff Kelly Fincher opposes the Motion to Exclude Evidence of Pre-Brennan Events, for the reasons stated herein. Respectfully submitted this October 9, 2007.

s/Leif Garrison Robert B. Carey Leif Garrison The Carey Law Firm 2301 East Pikes Peak Ave. Colorado Springs, Colorado 80909 Phone: (719) 635-0377 Fax: (719) 635-2920 Email: [email protected] Steve W. Berman, WSBA #12536 HAGENS BERMAN, L.L.P. 1301 Fifth Avenue, Suite 2900 Seattle, WA 98101

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L. Dan Rector
FRANKLIN D. AZAR & ASSOCIATES, PC

5536 Library Lane Colorado Springs, CO 80918 Attorneys for Plaintiffs

CERTIFICATE OF SERVICE I hereby certify that on this October 9, 2007, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF System, which will send notification to the following email addresses: [email protected]

s/Leif Garrison Robert B. Carey Leif Garrison The Carey Law Firm 2301 East Pikes Peak Ave. Colorado Springs, Colorado 80909 Phone: (719) 635-0377 Fax: (719) 635-2920 Email: [email protected]

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