State Farm v. Fisher Opens Up a New Theory of Liability: Delay paying undisputed benefits is itself an act of Bad Faith.

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State Farm v. Fisher Opens Up a New Theory of Liability: Delay paying undisputed benefits is itself an act of Bad Faith

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Establishing delay, in both the claims and litigation phase, under this theory was discussed by Nelson Waneka in the firm’s recent webinar on the case:

“In Fisher, the medical payments that State Farm refused to pay were undisputed. In practice, the question becomes, how do you get that established aside from an admission? Brad Levin and I think it starts in the claims stage.

“We think it’s important to get the insurance company to take a position. It’s just our opinion, but we think it’s a good one, that insurance companies must face their statutory duties under 10-4-609 as well as their duties under the policy to ascertain and pay benefits as well as their duty to investigate. We think they have an obligation to determine what the damages are, and that doesn’t just mean general damages. That’s something we see a lot of now. In the UIM claim, you present your claim, your bills and other evidence. Then the insurance company comes back and says, ‘Oh, well, we found $50,000 in general damages.’  What does that mean? Can an insurance company in order to get around Fisher just create a bucket of numbers, say, $50,000? What we do is try to get them to take a position during the claims stage with letters saying, it’s your obligation to tell me, to determine what my damages are, not just general damages but each category of them. And then we try to find where the dispute is and where it isn’t.

“It doesn’t really matter in our mind what the insurance company does.  If they refuse to tell you what your damages are or break it down into categories, we think that then goes into the bad faith theory which is: Why are you not telling your own insurer what their damages are? If they do take a position, I think it is all the more easy to establish that something was not disputed or was disputed.

“So it starts in the claims stage.

“The next stage would be during litigation using written discovery and ideally after that a 30(b)(6) depositions to lock down their position on damages. We notice our 30(b)(6) depositions with each category of damages and what items were disputed or not disputed. We then go in there with each bill or item of evidence and ask – did you dispute this? If you did, why? This makes it easier to really establish for purposes of this theory of liability what was disputed and what wasn’t, and if the insurance company trying to ignore undisputable damages in the hope of just resolving the claim on a global basis. We think that’s the big import of Fisher.”

Colorado: What it Means and Why Your Defense Lawyer Tells You to Hire Personal Counsel

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Whether it’s a personal injury claim over a car accident or a malpractice claim against you as a professional, being served with a lawsuit is never a pleasant experience. Your mind may spin with the possibilities of losing your money, assets or professional license.

Your first step is to notify your insurance company of the lawsuit so it can review your coverage. In some cases you will receive a reservation of rights letter, which states the insurer agrees to defend you, but reserves the right to withdraw as to part or all of the claims, and that your insurer retains a lawyer of its choosing and pays for your legal representation.

Should you also hire personal counsel—your own attorney—to represent your interests when that occurs?

As of early 2018, no Colorado court has ruled on the question of whether an insurance company must provide outside counsel for its insured, but, in many situations—even if it’s not recommended to you—yes, you should consider hiring an attorney for the reasons discussed below.

Note that retaining personal counsel is especially important for professionals such as lawyers, doctors, engineers, accountants, etc. who are fighting malpractice claims. In fact, the Colorado Court of Appeals has held that, in professional malpractice claims, the defense counsel provided to them by their insurer must recommend that the client retain personal counsel.

Why hire personal counsel?

An insurance company’s attorney is paid by the insurer to act on behalf of the company’s financial and legal interests, not those of the insured (you). And although these interests often fully overlap, they can sometimes be at odds. With an attorney you have chosen and paid for, you can be sure someone is working hard to protect only you.

Your personal counsel’s duty is to get the best result for you and only you. Your lawyer can monitor every step of the case and inform you if the insurance company’s planned course of action has diverged from your interests. Personal counsel is particularly advisable if your case involves potentially uncovered claims or the insurance company disagrees as to the amount of available coverage.

Moreover, if you are potentially responsible for a verdict in excess of your policy limits, an amount for which you might be personally liable, hiring an attorney now could mitigate that risk as well. Having personal counsel may alos help you preserve the ability to obtain insurance coverage in the future.

Another situation in which personal counsel is useful is if an insurance company attempts to withdraw from defending you in the middle of case. With your own representation already in place, your attorney can step in immediately.

Above all, personal counsel can help preserve your recourse against the insurance company. This personal attorney may record all negotiations and communications between the plaintiff and the insurance company, document all decisions regarding legal motions filed and so on. If the insurance company has acted in a way that results in an adverse outcome for you, your attorney can help you hold the insurer responsible.

Can your business lawyer serve as personal counsel?

Technically, any lawyer can serve as your personal counsel, but an attorney experienced in insurance litigation can make a big difference in the outcome.

As noted above, for professionals involved in malpractice suits, outside counsel is a must. Having an attorney with experience in the highly specialized area of insurance coverage law is essential. With your assets, reputation, and possibly your entire practice on the line, having someone who knows how to best represent your interests is crucial.

If you’re facing a lawsuit and think you might need to retain personal counsel to protect yourself and your interests, send us a message or give us a call at (303) 575-9390.

Four Levin Sitcoff, PC attorneys named to 2019 Best Lawyers list

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Levin Sitcoff, PC is pleased to announce that four lawyers have been included in the 2019 Edition of The Best Lawyers in America.

We would like to congratulate the following firm attorneys named to 2019 Best Lawyers in America list:

Best Lawyers has published their list for over three decades, earning the respect of the profession, the media, and the public as the most reliable, unbiased source of legal referrals. Its first international list was published in 2006 and since then has grown to provide lists in over 75 countries.

Lawyers on The Best Lawyers in America list are divided by geographic region and practice areas. They are reviewed by their peers on the basis of professional expertise, and undergo an authentication process to make sure they are in current practice and in good standing.

What Is Post-Claim Underwriting in Colorado?

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Having insurance should provide us peace of mind; we know that, should an accident or debilitating illness occur, our losses will be covered. In exchange for this assurance, we pay a premium for business, auto, health, disability —though all the while hoping we’ll never have to make a claim.

Unfortunately, sometimes when we do need to use our insurance, the insurance company refuses to pay out the coverage we have purchased. One of the ways insurers do this is through “post-claim underwriting,” which is when an insurance company issues a policy with little or no investigation into the insured’s relevant background, waits until a claim is filed to gather this information, and then denies coverage based on what they found.

The good news is that you may have recourse if this happens to you, so let’s look more closely at what post-claim underwriting entails.

Good Faith

In Colorado, insurance companies are obligated to act in good faith. That means that they must promptly investigate and pay a claim, regularly communicate with the insured, and offer a reasonable explanation regarding any claim denial or settlement offer.

Despite this statutory obligation, sometimes insurance companies are reluctant to pay claims, and, instead, they engage in post-claim underwriting to attempt to avoid payouts.

Before issuing policies, insurance companies are supposed to weigh or “underwrite” the risk involved. With health insurance policies, for instance, this process would involve gathering information about the applicant’s medical history. Some insurers prefer to skip this vetting, however, because of the expense involved; instead, they do the underwriting after a claim is filed.

While this practice may save insurance companies money, you can see how it can be terribly unfair to individuals and businesses who believed they had insurance—and, in fact, have paid for coverage—only to have their claims denied. This is even more troublesome when you take into account that these same individuals may have been able to secure coverage from an insurance company who did proper underwriting from the start.

Are You in a Post-Claim Underwriting Situation?

If you have been denied coverage or had your coverage rescinded or cancelled, and you think your insurance company might be engaging in post-claim underwriting, you should get in touch with an experienced insurance law  attorney immediately.

At Levin Sitcoff, we can make sure your rights are protected and help you get the coverage your deserve. Send us a message or give us a call at (303) 575-9390 today to get started.

Five Levin Sitcoff, PC attorneys have been named 2018 Colorado Super Lawyers and Rising Stars

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The firm’s Super Lawyers are Brad Levin and Jeremy Sitcoff in the category of insurance coverage; and Barrett Weisz in the category of criminal defense.

Nelson Waneka and Susan Minamizono are listed as Rising Stars in the category of insurance coverage.

In addition to being listed Super Lawyers, Levin appears on the Colorado Top 10 list, and both Levin and Sitcoff appear on the Colorado Top 100 list. Levin and Weisz have been listed Super Lawyers for over 10 years.

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Denver, CO 80202
Phone: 303-575-9390
Fax: 303-575-9385
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Disclaimer: The information contained throughout this site is meant to provide a basic understanding of insurance bad faith law including insurance coverage, bad faith first party, bad faith third party, personal counsel, appellate, expert witness, serious bodily injury, disability, ERISA, and disability, professionals. This information is not meant to be taken as legal advice and does not establish an attorney-client privilege.
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