Am. Family Mut. Ins. Co. v. Barriga

In 2009, a fire started in an apartment building owned by respondents Guillermo and Evelia Barriga and insured by petitioner American Family Mutual Insurance Company (“American Family”). American Family made various payments to the and on behalf of the Barrigas, totaling $209,816.43. However, after a substantial amount of repair work had been completed, the contractor revised its estimate for the cost of the repairs. The revised estimate was higher than American Family’s initial estimate, primarily because of the need for additional repairs and asbestos remediation. In response, American Family initiated a third-party appraisal process outlined in the insurance policy intended to provide an impartial assessment of the needed repair costs. The appraiser fixed the award at $322,141.79. American Family then paid that award, less the $209,816.43 that had been previously paid to the Barrigas, resulting in a payment of $122,325.36. American Family also made an additional payment of $5435.44 for emergency board-up services. The Barrigas sued American Family for breach of contract, common law bad-faith breach of insurance contract, and unreasonable delay and denial of insurance benefits under section 10-3-1116(1), C.R.S. (2017). The jury found for the Barrigas on all claims, awarding damages, as relevant here, of $9270 for breach of contract and $136,930.80 for benefits unreasonably delayed or denied. The issue raised on appeal for the Colorado Supreme Court's review centered on whether an award of damages under section 10-3-1116(1), C.R.S. (2017), had to be reduced by an insurance benefit unreasonably delayed but ultimately recovered by an insured outside of a lawsuit. The Court held that an award under section 10-3-1116(1) must not be reduced by an amount unreasonably delayed but eventually paid by an insurer because the plain text of the statute provided no basis for such a reduction. The Court also concluded that a general rule against double recovery for a single harm did not prohibit a litigant from recovering under claims for both a violation of section 10-3- 1116(1) and breach of contract. View "Am. Family Mut. Ins. Co. v. Barriga" on Justia Law