Recent Cases
RECENT MUHR FIRM CASES, ARGUED BEFORE THE SUPREME COURT, THAT HAD A MONUMENTAL IMPACT IN FAVOR OF CONSUMERS AND AGAINST THE INSURANCE INDUSTRY
Plaintiffs: CLINTON and LAURA SHAFFER (LUMBAR SPINE DISC HERNIATION). The verdict exceeds $1,000,000.00 which includes interest and costs. The case was decided by the Supreme Court on January 31, 2005.
Case Number: 99CV822
Petitioner: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
v.
Respondent: Gloria J. BREKKE.
Petitioner: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
v.
Respondents: Clinton SHAFFER and Laura Shaffer.
No. 03SC585, 03SC719.
Jan. 31, 2005.
Background: Mr. Shaffer suffered a lower-back disk protrusion from an auto accident. State Farm, however, attributed some of his problems to pre-existing degenerative arthritis. After the Shaffers received an offer of only $6,500 to compensate Mr. Shaffer for a lumbar disc herniation and other injuries sustained in an automobile collision, William Muhr, Esq., as required by the State Farm policy, brought a civil action against the uninsured motorist and State Farm in order to recover uninsured motorists (UM) benefits. The District Court trial judge allowed a full trial to the Court were numerous lay and expert witnesses gave sworn testimony and thereafter the Court entered a judgment against the uninsured motorist. The judgment now exceeds $1,000,000.00 which includes all interest and costs. State Farm appealed to the Court of Appeals and lost the case. State Farm then appealed to the Supreme Court which held in favor of the Shaffer's as follows:
Holdings: In sustaining the judgment, and ruling in favor of the Shaffers, the Supreme Court, Martinez, J., held that:
(1) State Farm's "actual trial" requirement stated in its policy for establishing the tortfeasor's liability was unenforceable as a violation of public policy;
(2) as a matter of first impression, in determining the extent of State Farm's participation, the district court must balance the insurer's quasi-fiduciary duty and the insured's right to undiluted UM recovery against the interest of the insurer in receiving a fair hearing on its legitimate defenses; and
(3) State Farm was not entitled to a jury trial to determine the amount of uninsured motorist benefits owed to its insured.
Judgment Affirmed.
William Muhr, Attorneys & Conselor at Law, LLP for Clinton & Laura Shaffer
Petitioner: DAWN MICHELLE GOODSON. BAD FAITH INSURANCE PRACTICES. INSURANCE COMPANY WILLFULLY FAILED TO TIMELY PAY DOCTOR’S BILLS OF ABOUT $9,000.00. VERDICT EXCEEDS $300,000.00 WHICH INCLUDES INTEREST AND COSTS. The case was favorably decided by the Supreme Court.
Case No. 02SC388
Supreme Court of Colorado,
En Banc.
Dawn Michelle GOODSON, et al, Petitioner,
v.
AMERICAN STANDARD INSURANCE COMPANY OF WISCONSIN, Respondent.
No. 02SC388.
May 3, 2004.
Background: William Muhr, LLP, on behalf of Dawn Goodson, brought a bad faith breach of insurance contract action against American Standard Insurance Company for delay in payment of medical bills owed by American Standard to a treating doctor.
First, American Standard (a.k.a. American Family Insurance Company) denied that an automobile insurance policy existed and, therefore, denied payment of the doctor's treatment bills. Next, American Standard issued a false, sworn affidavit providing that payment of Dawn Goodson's medical bills were denied for failure to timely pay the automobile insurance premiums. Next, American Standard took the unreasonable position that it would not pay Ms. Goodson's medical bills because Ms. Goodson failed to treat with PPO providers on the American Standard Insurance Company approved list.
Ms. Goodson was offended by American Standard's last position to deny her claim for failure to treat with its approved PPO providers, since American Family had previously told her that an insurance policy did not exist and secondly that there was no coverage available under the American Standard policy. Hence, if American Family advised her that no policy existed, it was unreasonable to then require that she treat with PPO providers under the language of the policy that American Standard stated did not exist.
Next, American Family refused to pay the medical bills until Ms. Goodson submitted to an independent medical examiner. Finally, after submitting to three separate independent medical examiners who all issued written reports stating that the bills incurred were reasonable and were caused by the car accident, American Standard finally paid the treating doctor about $9,000 that was owed.
After William Muhr, LLP brought a bad faith breach of insurance action, American Standard offered Ms. Goodson only $5,000 to settle her claim for emotional distress arising out of American Family's bad-faith conduct. William Muhr, Esq. tried the case before a jury and ultimately received a jury award of approximately $300,000.00, which included all interest and costs. The District Court, Honorable Richard V. Hall, then entered judgment on the jury verdict in favor of Ms. Goodson, et al. The Court of Appeals reversed the judgment. The Supreme Court granted certiorari.
Holding: The Supreme Court, en banc, Hobbs, J., held that as matter of first impression, Ms. Goodson could recover damages for emotional distress without proving substantial property or economic loss; overruling Farmers Group, Inc. v. Trimble, 768 P.2d 1243.
In insurance bad faith cases, compensatory damages for economic and non-economic losses are available to make insured whole, and where appropriate, punitive damages are available to punish an insurance company and to deter wrongful conduct by other insurers. Restatement (Second) of Torts §§ 901-909.
Emotional distress damages are available in insurance bad faith actions. Given that insureds purchase insurance policies to obtain financial security and peace of mind, emotional distress is a likely and foreseeable consequence of a bad-faith denial of benefits afforded under the insurance contract.
The fact that American Standard finally paid the medical bills in full prior to the filing of the lawsuit did not erase the mental distress caused by American Standard's bad faith conduct.
As a result of this Supreme Court decision argued by William Muhr, Esq. damages for emotional distress arising out of an insurance company's failure to timely pay a doctor's bills, are now available in actions for bad-faith breach of insurance contracts.
Prior to this Goodson ruling, it was not uncommon for insurance companies to routinely deny or significantly delay payment of our clients' medial bills, since there was no remedy available to our clients for bad-faith conduct as long as the bills were eventually paid.
Notwithstanding the unfavorable laws existing at the time Dawn Goodson contacted the Muhr firm, the case was accepted by William Muhr, Esq. to make a substantial change in the existing law. The firm labored many nights and weekends to take this case through the jury trial, through the Court of Appeals and up to the Supreme Court in order to make a difference in the way that doctors were paid and the way that our clients have been so commonly and unfairly treated by insurance companies. After all, doctors should be paid by our consumers' auto insurance companies for the reasonable services doctors render arising out of an auto accident.
After about 8 years of consistent hard work, our firm ultimately obtained an excellent result for consumers and their treating doctors. Insurance companies will no longer be inclined to engage in the type of bad-faith conduct that occurred in the Goodson case; and insurance companies now have a major incentive to timely pay doctor's bills incurred for reasonable services rendered as a result of an auto accident.
William Muhr, Attorneys & Counselors at Law, LLP for Dawn Goodson.
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