Free Proposed Jury Instructions - District Court of Colorado - Colorado

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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, Plaintiff, v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, a New Jersey Corporation, Defendant.

PLAINTIFF'S SUBMISSION OF COMPETING AND NON-STIPULATED JURY INSTRUCTIONS

Pursuant to Fed.R.Civ.P. 51 and REB Civ. Practice Standard IV.E.4.a., Plaintiff, through counsel, submits the following competing and non-stipulated jury instructions (all designations CJI 4th, per REB Civ. Practice Standard IV.E.4.d., unless otherwise noted): I. Introduction Although Plaintiff's list of non-stipulated and competing instructions in this matter may seem somewhat lengthy, in many cases the dispute between the parties relates to issues pending before this court on the Defendant's Motion for Partial Summary Judgment, namely the continued viability of the Plaintiff's claims for breach of contract and bad-faith breach of contract. Plaintiff will restate her arguments on these issues only briefly in this motion, and relies on (and

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incorporates herein) her Response to Defendant's Motion for Partial Summary Judgment to fully state her arguments on those issues. II. Competing Instructions The first set of competing instructions, Comp. 01, concerns the definition of willful and wanton conduct. Plaintiff's statement is preferable because it is the Supreme Court of Colorado's definition of "willful and wanton" as used in the NoFault Act. Dale v. Guaranty Nat'l Ins. Co., 948 P.2d 545, 551 (Colo. 1997). The definition is tailored to precisely this type of claim, and is a more clear statement than the stock instruction as applied to insurance. Because Plaintiff's Comp. P01 is a more accurate statement of the law as applied to this case, it should be given. Plaintiff's version of CJI 25:2, Comp. 02, on bad faith is also a clearer more easily understood instruction in this context. In addition, the Defendant's language in its element 2 is overly narrow in describing the basis for Plaintiff's claim for bad faith. The issue in this case is not only the failure to reform the contract and advise her of the availability of APIP benefits, but the entire course of Prudential's conduct in delaying making any payment for years even after it knew of its obligation. Therefore, Plaintiff's language that Defendant "acted

unreasonably in its handling of Plaintiff's claim for extended PIP coverage" is preferable. Finally, Defendant's statements of affirmative defenses should not be given to the jury. As argued more fully below, Fincher is not subject to the defense of laches as she was a minor at the time of the accident and at the time the case was filed.

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Defendant's Comp. D-03 attempts to omit the definition of unreasonable conduct from the stock instruction on unreasonable conduct and unreasonable position. This is inappropriate in this situation, where the Plaintiff's claim for bad faith breach of contract encompasses the entire course of Defendant's conduct in handling Plaintiff's claim for extended PIP benefits. Dale, 948 P.2d at 552.

Therefore, Plaintiff's Comp. P-03, which includes both definitions, must be given. The same argument is true with regard to Comp. D-04, which omits the reference to the Defendant's conduct in the definition of Reckless Disregard. This is

inappropriate as the Defendant's conduct is at issue in this case, and Plaintiff's Comp. P-04 should be given. The set of Comp. 05 instructions concerns the statutory provisions of when PIP benefits are overdue. Plaintiff's version is preferable because it is more clear and eliminates unnecessary verbiage concerning the accumulation of claims. In this case, it is undisputed that the Prudential made no payments on any of bills for many years, and therefore the language on accumulation for a month is completely irrelevant and would serve only to confuse the jury. Plaintiff's version also eliminates unexplained cross references to other statutes and is a simpler statement of what was required. In the Comp. 06 set, the Defendant has proposed in its instruction to inform the jury that the Plaintiff will receive treble damages if the jury finds a willful and wanton violation. This is inappropriate, as the question for the jury is a simple question of fact that should not be influenced by their desire to award higher or lower amounts of damages. The statutory provision for treble damages

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is an automatic penalty imposed by the legislature for willful and wanton breaches, and it is not for the jury to second guess the legislature's determination. The question for the jury is only whether the Defendant's conduct rises to that level given the definition of willful and wanton conduct; providing the information concerning the trebling simply invites the jury to consider issues that are irrelevant to the definition of willful and wanton conduct. In the seventh competing set, the Defendant's version seeks to eliminate the reference to unreasonably delaying payment. As already stated, the claim of bad faith encompasses the entire course of conduct, including the multiple-year delay in making any payment, and the jury should be instructed accordingly. Plaintiff's proposed Comp P-07, CJI 25:6, including the references to delayed payments as well as denied payments, is applicable to the facts of this case. Defendant's contention that this case involves only the denial of benefits, and not the twelve-year delay in paying them, is contrary to Colorado law. As established in Dale v. Guaranty National Insurance Co., 948 P.2d 545, 552 (Colo. 1997), "the tort of bad faith breach of insurance contract encompasses an entire course of conduct," including during litigation and even after an entry of judgment. In this case, the question of Prudential's good or bad faith spans the entire course of its handling of Fincher's claim and its failures to pay benefits promptly at multiple junctures. Therefore, the language in Plaintiff's Comp. P-07 concerning

unreasonable delay is appropriate and accurate, and should be given. The final competing set are the special verdict forms. The Plaintiff's

special verdict form more accurately captures the claims that are at issue in the

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case, and more clearly states the questions that jurors are required to answer in regard to each of those claims. III. Plaintiff's Non-Stipulated Instructions A. Plaintiffs' Pattern Instructions

Plaintiff has submitted a non-stipulated 2:1 statement of claims and defenses as Non-Stip P-04. Plaintiff included in this instruction language

informing the jury that this Court has already determined that the contract contained coverage for extended PIP benefits, including medical and wage-loss benefits unlimited in time and amount subject only to a $200,000 cap as of the date of the accident. This order is the law of the case and forms part of the basis for Plaintiff's claims for breach of contract, bad faith breach of contract, and willful and wanton conduct. The jury should be informed by the Court of the fact that the contract contained that coverage as a matter of law. The CJI 4th pattern instructions submitted by Plaintiffs are all appropriate in this case and well supported by Colorado law. Plaintiff's first two non-

stipulated instructions are relevant to all claims at trial. Non-Stip P-1, CJI 3:6 concerning a person's knowledge of a fact where he or she had information that would have led to a reasonable person to inquire further is relevant here to the issue of Prudential's knowledge of their obligation to pay additional benefits and/or interest at various points in time. Similarly, Non-Stip P-2, CJI 8:2

concerning the fact that company representatives were acting on behalf of Prudential is appropriate given that the trial will involve the testimony of multiple company representatives and claims agents and adjustors, and the jury should

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therefore be instructed that their acts and omissions are to be considered the acts and omissions of the defendant. Plaintiff's pattern instructions concerning breach of contract are

appropriate because Plaintiff's claim for breach of contract remains valid. As Plaintiff argued in her response to Defendant's Motion for Partial Summary Judgment, Prudential's belated payments of some portion of damages did not render Plaintiff's claim for breach of contract moot, because the claims were not paid within thirty days of being due as required by the statute, and because under Colo. Rev. Stat. § 10-4-708(1.7)(b), a partial payment by the insurer that does not resolve all claims is not binding and does not prevent the plaintiff's claims from going to trial. As Goodson v. American Standard Ins. Co., 89 P.3d 409, 414 (Colo. Ct. App. 2004) clearly states, a payment by the insurer at the last minute "will not prevent the insured from filing suit against the insurer based on its conduct prior to the time of payment." Plaintiff's proposed Non-Stip P-6, CJI 30.1 on breach of contract and Non-Stip P-7, CJI 30.33 on damages for breach of contract are must therefore be given to the jury. Plaintiff's proposed pattern instructions on bad faith breach of contract are relevant and accurate statements of the law. Non-Stip P-5, CJI 25:7 on damages for bad faith should be given. Plaintiff adequately stated a claim for bad faith breach of insurance contract and sought compensatory damages, which includes non-economic damages. Giampapa v. American Family Mut. Ins. Co., 64 P.3d 230, 238-39 (Colo. 2003). Federal Rule of Civil Procedure 8(a) requires only "a short and plain statement of the claim showing that pleader is entitled to relief, in

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order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, __ U.S. __, 127 S. Ct. 1955, 1964 (2007) (citing Conley v. Gibson, 355 U.S. 41, 47 (1957)) (internal quotation marks omitted). Here, Plaintiff's complaint gave the Defendant fair notice that she would be seeking compensatory damages, which includes non-economic damages, on her claim for bad faith breach of contract; therefore the instruction on non-economic damages is appropriate. Finally, Plaintiff's Non-Stip P-3, CJI 25.4 on unreasonable

conduct/statutory violation, is an appropriate statement of the law and applies to the facts of this case. While the unfair claims practices listed in Colo. Rev. Stat. § 10-3-1104(1)(h) do not establish a standard of care actionable in tort, they may be used as evidence of industry standards in bad faith cases. American Family Mut. Ins. Co. v. Allen, 102 P.3d 333, 344 (Colo. 2004). Each of the standards given in Plaintiff's proposed Non-Stip P-3 instruction relates to the conduct of Prudential over the course of its handling of Fincher's claims for benefits and is a relevant and appropriate guide by which to judge the reasonableness of Prudential's conduct in handling Fincher's claims. B. Plaintiff's Non-Pattern Instructions

Because the claims in this case are so closely related to the No-Fault Act, Plaintiffs have submitted a series of instructions based on the relevant statutes and regulations. These instructions are appropriate to inform the jury of the legal standards that governed Prudential's handling of Fincher's claims and PIP claims generally. NonStip P-9 and Non-Stip P-10 provide the statutory definitions of medical benefits and

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wage loss, both of which are necessary for the jury to understand what benefits Fincher was entitled to and should be awarded. The definition of medical benefits is relevant as the jury should must still consider and award damages on Fincher's breach of contract claim. Although Prudential eventually tendered some payment, that payment was not within thirty days and there is no indication or stipulation as to which bills that payment covers. Fincher is entitled to present all of her unpaid bills and have the jury determine whether the contract was breached as to payment of those bills. Similarly, because Prudential has not stipulated that Fincher has reasonable, necessary and accidentrelated medical bills that reach the cap, even with the application of the cap, Fincher is entitled to present all of her damages ­ including future wage loss ­ and have the jury determine her damages for breach.1 Fincher's statement of the definition of wage-loss benefits in Non-Stip P-10 is an accurate quotation of the statutory definition. Although some courts have required a plaintiff to show a sum certain for wage losses occurring under the time-limited basic PIP, Bondi v. Liberty Mut. Ins. Co., 757 P.2d 1101, 1102 (Colo. Ct. App. 1988), that requirement does not bar Fincher from presenting her future damages under the extended PIP benefits which are unlimited in time. The Colorado Court of Appeals held in Bailey v. Mid-Century Ins. Co., 902 P.2d 411, 412 (Colo. Ct. App. 1995), that a plaintiff who was unemployed at the time of the accident is not precluded from making a wage loss claim if she received an offer of employment during the coverage period
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Even if the parties eventually reach a stipulation on medical damages, Fincher should still present all damages in this trial in order to prevent the necessity of a new trial on damages in the event she prevails on her appeal on the applicability of the $200,000

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and could not do the work because of injuries incurred in the accident. Here, unlike in Bondi, the wage-loss benefits would have been unlimited in time. Therefore, had

Prudential not breached the contract, and Kelly Fincher eventually was offered employment but was unable to complete it because of her injuries, she would have been entitled to make a claim under the policy for wage loss. Bailey, 902 P.2d at 412. However, due to Prudential's breach, Fincher is entitled to claim and attempt to prove those damages today. Pomeranz v. McDonald's Corp., 843 P.2d 1378, 1381 (Colo. 1993). Therefore, the statutory definition of wage-loss should be given to the jury as in Non-Stip P-10. Plaintiff's proposed Non-Stip P-12 is relevant because it relates to Prudential's actions in handling Fincher's claim for enhanced PIP benefits and whether Prudential conformed to the legal standards of the No-Fault Act when it failed to pay Fincher's claims on a timely basis. Similarly, Non-Stip P-8, based on Colo. Rev. Stat. § 10-31104 describes standards of reasonableness that are relevant to for the jury to consider in judging Prudential's actions. Plaintiff's Non-Stip P-11 should also be given to the jury because it explains that Prudential's belated payment of a portion of the money it owed does not affect Plaintiff's claim for damages on her breach of contract claim or any other claim. Under the

statute, that payment does not get applied to any one specific claim or moot any particular claims; it is a credit against the entire judgment that is eventually awarded. If the jury receives evidence of the payments made by Prudential, it is essential that the

cap. 9

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jury be instructed that those payments do not apply to eliminate the damages with regard to any individual claims but will be considered as a credit against the overall judgment. Finally, Plaintiff has submitted several instructions based on governing case-law that are relevant to the resolution of her claims. Non-Stip P-13 addresses the fact that because Prudential breached the contract and specifically informed Fincher that it would not pay any further benefits, she was not required to comply with any further notice obligations before making this claim. This instruction is relevant and accurate as

applied to this case. In each of the cases cited, the courts determined that the insured was not obligated to file additional notices or proofs of loss once the insurer had affirmatively indicated that it would not pay additional benefits. See, e.g. Dupre v.

Allstate Ins. Co, 62 P.3d 1024, 1032 (Colo Ct. App. 2002) (filing additional proofs of loss following the insurer's statement that it would not pay above a certain amount would have been futile and was not necessary to recover on claims); Colard v. Am. Family Mut. Ins. Co., 709 P.2d 11, 15 (Colo. Ct. App. 1985) (where insurer informed insured that there would be no coverage, insured's failure to comply with timely notice provisions did not bar claims). Here, Prudential advised Fincher that it would not pay additional benefits, and it would have been a futile act for Fincher to continue submitting bills and provider notices; therefore, she was not obligated to continue doing so. Non-Stip P-14 concerning the waiver of claims not stated at the time of denial is also relevant and accurate, and relates to Non-Stip P-12 concerning the requirements of the No-Fault Act. The general rule, stated in the case law, that an insurer must state all

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bases for denial or they are waived is consistent with the No-Fault Act's requirement that an insurer who denies payment must explain all reasons. Colo. Rev. Stat. § 10-4708; D.O.I. Reg. 5-2-8. This requirement is essential to allow insureds to understand the insurer's position and be able to assess the legitimacy of the insurer's decision without having to deal with a constantly moving target. An insurer may not simply continue to search for other grounds on which to justify its decision in order to keep an insured from receiving payment. In this case, Prudential's conduct must be judged based on the reasons it gave and the investigation it performed at the time it failed to pay. Plaintiff's Non-Stip P-15 concerning litigation conduct is relevant to this case. Although Tait specifically addressed a judge's decision to increase punitive damages after the jury's verdict, the principle that the tort of bad faith breach of conduct spans the insurer's entire course of conduct, including after the filing of the complaint, is supported in other case law. See, e.g. Dale v. Guaranty National Insurance Co., 948 P.2d 545, 552 (Colo. 1997). This is particularly relevant in this case where Prudential continued to delay payment even following rulings by the Tenth Circuit and this Court concerning its obligation to pay. Finally, Plaintiff's Non-Stip P-16 concerning the standard of proof for contract damages and future damages is relevant as the Plaintiff's claim for breach of contract has not been mooted and she is entitled to seek her future damages due to Defendant's breach. Pomeranz, 843 P.2d at 1381. IV. Defendant's Non-Stipulated Instructions

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Plaintiff objects to Defendant's Non-Stip D-01 on laches because, as the Defendant has previously argued and admitted, Kelly Fincher is not subject to the defense of laches because she was a minor. Kelly Fincher was ten years old at the time of the accident and seventeen years old at the time the complaint was filed. Laches cannot be imputed to a minor, even one under the care of a guardian. Defendant itself argued that Fincher was not subject to laches in its opposition to class certification (Def.'s Mem. in Opp. to Pl.'s Amended Mot. for Class Certification at 9), and it cannot now reverse itself and argue to the contrary. In addition, Defendant's

statement is an incomplete statement of the law, as it does not explain that that the defendant must show that the unconscionable delay undermined the Defendant's ability to defend the suit; lesser forms of prejudice such as inconvenience and increased expense will not suffice. See Cullen v. Phillips, 30 P.3d 828, 833 (Colo. Ct. App. 2001); Union Ins. Co. v. Kjeldgaard, 820 P.2d 1183, 1186 (Colo. Ct. App. 1991). Plaintiff objects to Defendant's Non-Stip D-02 on the grounds that it is not supported by the case law. As more fully explained in Plaintiff's Response to

Defendant's Motion for Partial Summary Judgment, none of the cases cited support Defendant's argument that it is inoculated against a claim of bad faith simply because it either ignored or misinterpreted the statute's requirements. In addition, it is contrary to facts of this case. As this court found in determining the effective date of reformation, it is clear that defendant understood that its policy did not comply with the requirements of Colorado law for many years and still refused to pay benefits, and Defendant cannot claim that such an understanding and position was reasonable.

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Plaintiff objects to Defendant's Non-Stip D-03 on the grounds that it is irrelevant. The instruction is essentially a negligence instruction, and this is not a negligence case. There are specific definitions of reasonableness that apply to bad faith claims, and the requirement of foreseeability is not part of those definitions. Therefore, the instruction is inappropriate. Plaintiff objects to Defendant's Non-Stip D-04 on the grounds that it is unnecessary, as the statement concerning sympathy and bias is included in this court's stock instruction which the parties have already stipulated to. Plaintiff objects to Defendant's Non-Stip D-05 as an inaccurate statement and irrelevant and confusing. Plaintiffs do not seek the same damages on any claims.

Plaintiff seeks her economic damages in form of unpaid benefits for breach of contract; non-economic damages for bad-faith breach of contract; and punitive damages. In addition, Plaintiff will seek treble damages on the claim for statutory willful and wanton conduct. These are all separate and distinct forms of damages to which Plaintiff is entitled. See Dale and Giampapa, supra. Therefore, it is incorrect to state that the Plaintiff is seeking the same damages; and the instruction is also unnecessary. Plaintiff objects to Defendant's Non-Stip D-06 on the grounds of relevance. First, Plaintiff was not required to continue submitting notices following Prudential's breach and failure to pay extended benefits. In addition, the notice requirements of Colo. Rev. Stat. § 10-4-708.5 are irrelevant in this case because they were intended to prevent providers from accruing large bills over a period of months without notifying the insurer, and therefore only require a notice within thirty days from the initial visit. This is not a point of dispute between the parties and the instruction is irrelevant.

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V.

Conclusion Because the non-stipulated and competing instructions tendered by Plaintiffs are

more consistent with the law that applies to this case and the claims that are at issue, they are appropriate instructions for the jury, and should be adopted for use by the Court.

Respectfully submitted this September 14, 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 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 September 14, 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]

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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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