Pham v. State Farm Court of Appeals Opening Brief

STATEMENT OF ISSUE PRESENTED FOR REVIEW

A. Whether the court of appeals erred in holding that the statute of limitations governing actions or arbitrations for underinsured motorist insurance claims begins to run when insureds receive payment from one insurer liable for the tortfeasor’s actions, even while the insureds seek recovery from a different insurer who may also be liable for the tortfeasor’s actions?

STATEMENT OF CASE

The following facts are undisputed.
On December 3, 1995, Erwin Guerra (“Guerra”), while legally intoxicated, drove his 1985 Volvo station wagon through a red light in Denver and collided with the 1995 Nissan Maxima driven by Diep “Louis” Pham and occupied by five passengers, including Appellants. (R.19). Although all of the occupants were injured in the collision, Louis Pham’s injuries were the most serious, and he died from his injuries four months later. (R.74).
Prior to the accident, Guerra, at his employer’s request, traveled from Virginia to Denver to work on temporary assignment for his employer, Virginia based – OSP Consultants, Inc. (“OSP”), which had contracted to install fiber optic cable throughout Denver. (R.70).
OSP leased apartments in Aurora where its employees lived and which it used as its Denver operations center. (R.71). At the time of the fatal accident, Guerra and a co-worker were returning to the company-provided apartments, where they slept at night, after socializing and eating with other employees at a Denver nightclub. (R.71). Guerra subsequently pleaded guilty to vehicular manslaughter and his liability has never been disputed. (R.19)

Guerra’s vehicle was insured for liability under two separate auto policies –his own Allstate policy, with liability of $25,000.00/$50,000.00, and his employer’s, OSP’s, Hartford commercial auto policy which provided liability coverage for “1. Any Auto,” while used in either the “business or personal affairs” of OSP, with liability limits of $1,000,000.00. (R.126). Hartford’s liability limits exceeded all of the combined UIM coverages, but it denied coverage. (R.83)
The Nissan Louis Pham was driving was owned by Pham Enterprises and insured by State Farm Mutual Insurance Company (hereinafter State Farm) providing Uninsured (UM) and Underinsured (UIM) coverages to Appellants with policy limits of $100,000/$300,000. (R.83). Several of the other passengers, who were also accident victims, had separate UIM policies with State Farm who had issued UIM coverage on their vehicles. Further, Liberty issued a separate UIM policy with limits of $25,000/$50,000 to Appellants Vu Duy Nguyen and Kieu Trang Thi-Do. (R.83-4).
Although Appellants requested arbitration, State Farm took the position that its UIM policy required Appellants to secure a judgment in the action against the at-fault driver in order to be entitled to receive payment of their UIM benefits. (R.21).
By this requirement, the accident victims and Louis Pham’s parents filed separate actions in 1996 against Guerra, his employer, and State Farm to obtain individual awards on behalf of each of State Farm’s and Liberty’s insureds. However, at the request of these UIM carriers, the individual actions brought against the at-fault driver, Guerra, were consolidated into a single action in 96CV765. (R.165).
In April 1998, after Hartford had denied coverage and refused to provide Guerra with a defense, Guerra’s Allstate counsel offered its liability limits in the amount of $50,000 and requested an agreement wherein Guerra stipulated to judgment being entered against him in the amount of $1,558,707.78. (R.23). State Farm and Liberty acquiesced to settlement with Allstate. (R.65). Thus, in May 1998, Allstate tendered its aggregate policy limits of $50,000 to the accident victims.
Appellants thereafter, on May 20, 1998, secured a judgment against the at-fault driver in the amount of $1,558,707.78, with interest accruing at 9% annually, and was entered in Denver District Court in 96CV765 against Guerra, establishing Guerra’s fault and Appellants’ damages. (R.23). State Farm, a party to that action, consented to the settlement and allowed judgment to be entered against Guerra, and the written judgment was provided to State Farm and Liberty without objection. (R.23). Although State Farm allowed the judgment to be entered against the at-fault driver, it later took the position that it may or may not be bound by that judgment, depending on controlling Colorado case law. (R.65;R.67).
Thereafter, in 1998, Guerra and Appellants filed an action against Hartford in the United States District Court (Pham et al v. Hartford), seeking Hartford’s liability policy limits of $1,000,000 to satisfy the judgment against Guerra. (R.69).
Based upon the judgment which was entered on May 20, 1998, against the tortfeasor (R.23), Appellants requested that the UIM carriers pay their UIM benefits and assert a subrogation lien against any liability recovery that Appellants may later obtain against Hartford. (R.256).
However, State Farm, who could collect interest on their insureds’ UIM benefits during the time that the Hartford liability action was being litigated, elected not to pay its benefits even though its policy set forth its rights to subrogate. (R.395). When State Farm refused to pay its UIM benefits, Liberty was allowed by the terms of its UIM policy to rely on State Farm’s denial to also deny payment of its UIM benefits. (Liberty’s UIM policy states, “Any insurance we provide with respect to a vehicle you do not own shall be excess over any collectible insurance providing coverage on a primary basis.”
Although Appellants obtained a judgment against the at-fault driver, establishing both liability and damages and entitling them to payment of their UIM benefits, State Farm asserted that it was not required to tender any UIM benefits until Appellants first fully exhausted their liability claims against Hartford. (R.395).
Appellants disagreed with State Farm’s and Liberty’s position that they could wait to pay their UIM benefits until the liability action against Hartford was fully resolved. Thereafter, in order to protect Appellants’ interests in the event that Appellants were required to file a demand for arbitration or demand for UIM benefits prior to the resolution of the Hartford case or because Hartford had denied coverage, Appellants on December 2, 1998, filed a UIM action and Demand for Arbitration in 98CV9130. (R.256). Appellants later amended this complaint to assert bad faith and willful and wanton claims against the UIM carriers for unreasonably refusing to pay UIM benefits after judgment was entered against Guerra. (R.249).
On April 9, 1999, Honorable Meyer Ordered that the UIM claims in 98CV9130 be transferred to 96CV765: “the claims of Khanh Ba Pham, Bang Le, Minh Ngoc Ha, Vu Duy Nguyen and Kieu Thi-Do are dismissed because they are already being or can be adjudged in case 96CV765.” (R.165).
Because the UIM claims and Bad Faith claims could not be practically brought in 96CV765, Appellants and the UIM carriers agreed that the separate Bad Faith claims should be brought in 98CV9130. (R.256). In December, 1999, Appellants amended their complaint in 98CV9130 asserting that State Farm and Liberty acted unreasonably in refusing to pay any UIM benefits after the judgment was entered with their consent and refusing to seek subrogation in the event any recovery was made against Hartford. (R.249). Thus, Appellants brought bad faith and willful and wanton claims in 98CV9130 against State Farm and Liberty, although the Order to adjudge the UIM claims in 96CV765 remained in effect. (R.34).
In January, 2001, the parties stipulated to the entry of an order staying all UIM claims pending resolution of the action against Hartford. (R.25). Thus, the trial court, on January 4, 2001, ordered, without objection, a “stay of all proceedings…pending disposition of the current matter now pending in the United States District Court case, Pham, et al v. Hartford…”(R.25). Honorable Meyer’s transfer Order that the UIM claims shall be adjudged in 96CV765, remained in effect, as did the stay Order. (R.34;R.25). The only exception to the stay order was that the UIM carriers could file motions for summary judgment on the bad faith and willful and wanton claims in 98CV9130. (R.25).
State Farm and Liberty filed motions for summary judgments regarding the bad faith claims for the failure to pay UIM benefits. These motions were granted before the action against the liability carrier Hartford was fully resolved. (R.64). Appellants appealed the summary judgment order entered in favor of State Farm and Liberty on the bad faith claims. Pham v. State Farm Mut. Auto Ins. Co., 70 P.3d 567, 573-4 (Colo. App. 2003).
In the 2003 Court of Appeals decision, State Farm asserted that “until the Hartford case is resolved, [State Farm’s] obligation to pay UIM benefits remains unknown.” Id. The Appeals Court held that there were “no UIM benefits until the claims against Hartford were fully resolved.” Id. (emphasis added). Thus, contrary to Colorado’s strong public policy, Appellants are still pursuing payment of their UIM benefits through litigation 16 years after the December 3, 1995 automobile collision.
The Court in Pham further found that such position taken by the insurers, that they could wait to pay their UIM benefits because there were no UIM benefits until the Hartford liability claim was resolved, was reasonable. Id. Thus, the dismissal of the bad faith claims was upheld. Id. Thereafter, the only cause of action remaining in 98CV9130 was the negligence of the at-fault driver, which had been admitted by all parties. (R.165); Id. However, no UIM issues were decided in 98CV9130, since the trial judge’s Order that the UIM claims shall be adjudged in 96CV765, remained in effect, as did its stay order. (R.249).
State Farm’s UIM contract also provided that their insureds must exhaust the limits of all liability policies issued on Guerra’s auto before any UIM coverage exists:
“THERE IS NO COVERAGE UNTIL THE LIMITS OF LIABILITY OF ALL BODILY INJURY LIABILITY… POLICIES THAT APPLY HAVE BEEN USED UP BY PAYMENT OF JUDGMENTS OR SETTLEMENTS.” (R.21).

Liberty’s UIM policy issued to Appellants Vu Duy Nguyen and Kieu Trang Thi-Do contained similar language having the same effect as State Farm’s UIM policy. (“We will pay…only if…1. The limits of liability under any applicable bodily injury liability…policies have been exhausted by payment of settlements or judgments.”
Further, Liberty’s obligations to pay its UIM benefits were contingent on State Farm first paying its UIM benefits. Because Liberty’s UIM policy quoted above would only be paid as excess UIM insurance over State Farm’s primary UIM coverage, Liberty’s position was that until State Farm paid all UIM benefits available under the policy insuring the Pham vehicle, Liberty was under no obligation to pay UIM benefits, regardless of why State Farm refused to pay their UIM benefits. See also, Progressive Specialty Ins. Co. v. Hartford Underwriters Ins. Co., 148 P.3d 470, 474 (Colo. App. 2006).
After the court of appeals decided in Pham that there was no UIM coverage available under State Farm’s $100,000 per person/$300,000 per accident UIM policy until the conclusion of the Hartford action, no party knew whether there was UIM coverage under State Farm’s UIM policy until the full resolution of the liability claims against Hartford. (R.28;R.25). If Appellants were successful in their action against Hartford, which offered liability policy limits of $1 million, which exceeded all available UIM limits, then Guerra would not have been an underinsured motorist and Appellants would not be entitled to State Farm’s or Liberty’s UIM benefits. (R.25).
Accordingly, Appellants pursued Hartford while the UIM claims remained stayed. (R.25). On April 4, 2006, the Federal District trial court in Denver ultimately entered judgment in favor of Hartford. (R.28); Pham v. Hartford Fire Ins. Co., Civil Action No. 98-WM-1833(BNB).
No party knew Guerra was underinsured until the Hartford judgment was received on April 4, 2006. (R.28). With the final disposition of the liability action against Hartford, all conditions of State Farm’s UIM policy was satisfied on April 4, 2006. (R.31;R.21;R.394–“We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured[or underinsured] motor vehicle.”). Appellants then requested payment of their UIM benefits. (R.1).
F.R.C.P. 60(b) provides that a “motion under Rule 60(b) must be made…no more than a year after the entry of the judgment or order or the date of the proceeding.” Thus, after the final resolution of the Hartford case on April 4, 2007, Appellants again requested payment of their UIM benefits from State Farm. (R.28).
Although State Farm and Liberty previously argued their obligations to pay UIM benefits could not arise until the Hartford action was resolved, once Hartford was resolved, they reversed their positions, approximately eleven years after the auto accident, and then argued that the time period for bringing a UM/UIM claim began to run on or about May 20, 1998 when Appellants received partial payment of their judgment by Allstate. Pham at 573; (Court of Appeals Decision dated May 27, 2010).
Thus, after the April 4, 2006 judgment was finally entered in favor of Hartford, State Farm in November 2006 moved to dismiss the remaining negligence claim in 98CV9130, although State Farm at that time was under a duty to investigate and adjust Appellants’ UIM claims in good faith. State Farm Mut. Auto. Ins. Co. v. Brekke, 105 P.3d 177, 189-90 (Colo. 2005). Nonetheless, 98CV9130 was subsequently dismissed with prejudice on February 14, 2007. (R.97).
Similarly, on February 7, 2007, State Farm also filed a motion to dismiss the UIM claims in 96CV765 where all of the UIM claims were ordered to be adjudged. On April 20, 2007, the trial court dismissed 96CV765 without prejudice and stated as the basis for her “without prejudice” Order that “(t)he case was justifiably delayed for several reasons, most recently because Plaintiffs were required to exhaust all other claims before pursuing claims against Defendant.”). (R.31).
Appellants also asserted that State Farm and Liberty, by moving to dismiss the litigation, were bound to arbitrate any dispute over the payment of UIM benefits per their UIM policy language, since arbitration was timely demanded in 1996 (96CV765) and again on December 2, 1998. (R.394;R.256).
Accordingly, at the time of the disposition of the liability claims against Hartford and before the dismissal without prejudice of Appellants’ UIM action in 96CV765 (R.31), there was nothing further to do in 98CV9130 or in 96CV765 since 1) the UIM action pending in 96CV765 was stayed by stipulation of the parties and court Order, until the final resolution of the Hartford liability action (R.25;R.28); 2) the UIM claims in 98CV9130 were Ordered to be adjudged in 96CV765, leaving negligence as the only remaining cause of action in 98CV9130, which was admitted by all parties (R.249); and 3) all litigation required for payment of UIM benefits was complete before the February 14, 2007 dismissal with prejudice of the remaining admitted negligence claim in 98CV9130 and before the dismissal on April 20, 2007 without prejudice of the Appellants’ UIM action in 96CV765 on April 20, 2007. (R.97;R.31;R.23).
Based on the holding in Cervi, “it is an abuse of discretion to order a dismissal [when]…[t]he history of the case…discloses a reasonable excuse for the delay,” Appellants then appealed this dismissal without prejudice of 96CV765. (Appendix 10 to Petition for Certiorari); Cervi v. Town of Greenwood Village, 362 P.2d 1050, 1052 (Colo. 1961). In response to the appeals court’s show cause order regarding appeal of 96CV765’s dismissal without prejudice, Appellants stated the “application of statute of limitations would prevent reinstitution of lawsuit.” (Appendix 12 to Petition for Certiorari); See also Golden Lodge No. 13I.O.O.F. v. Easley, 916 P.2d 666, 667 (Colo. App. 1996)(“The dismissal of a complaint without prejudice is generally not appealable unless such dismissal prohibits further proceedings, such as when the applicable statute of limitations would prevent the reinstitution of suit.”).
Nonetheless, the Court of Appeals ruled on July 3, 2007 that “the appeal is dismissed without prejudice for lack of a final, appealable order,” since the April 20, 2007 the UIM claims was entered as a dismissal “without prejudice.” (Appendix 10 to Petition for Certiorari).
State Farm continued to refuse to pay any UIM benefits. Thus, on March 19, 2008, less than two years after the Hartford action resolved, Appellants then filed their “Complaint and Jury Demand or in the Alternative Demand for Arbitration.” (R.1). On March 20, 2008, Appellants then filed their “First Amended Complaint and Jury Demand or in the Alternative Demand for Arbitration,” asserting claims that State Farm was required to pay its UIM benefits on the date of the final disposition of their liability claims against Hartford on April 4, 2006 when the trial judge entered judgment in favor of Hartford on April 4, 2006 or on April 4, 2007 after the appeals deadlines passed under F.R.C.P. 60(b) regarding the dismissal order. (R7;R.31;R.25;R.249;R.28); Pham v. Hartford.
Because State Farm did not pay its UIM benefits after April 4, 2006, Appellants brought the underlying action for payment of UIM benefits on March 19, 2008. (R.1;R.7).
The Complaint filed on March 19, 2008 and the Amended Complaint filed on March 20, 2008, were filed within two years from April 4, 2006, when Appellants learned that the at-fault driver was underinsured. (R.1;R.7). The claims included in the March 20, 2008 Amended Complaint were negligence of the underinsured driver (which has always been admitted); breach of contract for failing to pay UIM benefits; and State Farm’s breach of its duties of good faith and fair dealing for not paying its UIM benefits after April 4, 2006. (R.7)
Notwithstanding that on December 2, 1998; March 19, 2008; and March 20, 2008, Appellants filed actions against State Farm for payment of their UIM benefits and demanded arbitration of their UIM claims (R.249;R.1;R.97), the trial court dismissed the said action on February 26, 2009 based on an expiration of the statute of limitations in §13-80-107.5 (1)(b) and under the doctrine of res judicata based on the previous dismissal of the remaining, admitted claim of negligence in 98CV9130. (R.304).
On March 16, 2009, Appellants filed a motion for reconsideration of the aforementioned order which was deemed to have been denied since the trial court did not rule on the motion. Appellants’ Notice of Appeal was filed on April 10, 2009. (R.312;R.540).
Thereafter, based on the holding in Golden, supra, Appellants appealed the April 20, 2007 dismissal without prejudice of 96CV765. The appeal was dismissed for lack of a final appealable order, since dismissals without prejudice are not “final judgments” nor do they have same effect because the disputes between the parties are unresolved and can be further litigated. People v. Williams, 987 P.2d 232, 237 (Colo. 1999). Appellants also appealed the dismissals of the actions against State Farm in 08CV1985 and 08CV1991and designated the record. The Court of Appeals then ruled that “[t]he Court will not accept any record items from previous related cases including 96CV765…” (Appendix 11 to Petition for Certiorari), even though the appeals court stated (in its decision in the instant action) that it agreed that the UIM action (96CV765) was timely. (Court of Appeals decision dated May 27, 2010, p.8).
The Court of Appeals affirmed the dismissal, ruling that §13-80-107.5(1)(a) and (b) barred Appellants’ UIM claims after May 2000 and State Farm was not required to arbitrate, even though the court of appeals determined that 96CV765 was timely yet prematurely filed and that 08CV1985 and 08CV1991 were filed within the two-year period after the April 4, 2006 judgment was entered in favor of Hartford. Appellants have still not received “payment of the settlement.” (Court of Appeals Decision dated May 27, 2010).

ARGUMENT

This is a UIM action where two liability insurance policies were issued on the tortfeasor’s auto, and one denied coverage. (R.21;R.126).
A. Whether the court of appeals erred in holding that the statute of limitations governing actions or arbitrations for underinsured motorist insurance claims begins to run when insureds receive payment from one insurer liable for the tortfeasor’s actions, even while the insureds seek recovery from a different insurer who may also be liable for the tortfeasor’s actions?
1. Standard of Review
Whether a statute of limitations bars a particular claim is a question of fact. Keller Cattle Co. v. Allison, 55 P.3d 257 (Colo. App. 2002). However, if undisputed facts demonstrate that the plaintiff had the requisite information as of a particular date, then the issue of whether the statute of limitations bars a particular claim may be decided as a matter of law. Salazar v. Am. Sterilizer Co., 5 P.3d 357 (Colo. App. 2000).
2. Law and Analysis
The Court of Appeals erred in affirming the ruling that, under §13-80-107.5, the limitations period begins to run when one liability insurer tenders its liability limits even though it could not be known whether the tortfeasor’s vehicle was underinsured until it was determined whether the tortfeasor’s vehicle was insured under the second liability policy. (Court of Appeals Decision dated May 27, 2010, p.7).
a. The trial court erred in concluding the statute of limitations had
expired since UIM benefits did not exist until the tortfeasor was determined to be underinsured.

Under C.R.S. §10-4-609(5); per the trial court’s stay order (R.25); and as found by the appeals court in Brekke at 573-4, even though Allstate tendered its liability limits on behalf of Guerra, Appellants did not know Guerra was underinsured until April 4, 2006 when judgment was entered in favor of Hartford (R.28), and only then did Appellants’ claim for UIM benefits arise.
Since Guerra’s vehicle was insured under two separate bodily injury liability policies, Appellants first had to establish Guerra was uninsured under the Hartford policy pursuant to §13-80-107.5(1)(a) (established by the April 4, 2006 judgment, R.28) before it could be known that Guerra was underinsured for purposes of bringing a UIM claim pursuant to the time limitations of §13-80-107.5(1)(b).
Under §13-80-107.5(1)(b), no action could be commenced or arbitration demanded until it was known there was an underinsured motorist. The two-year period for bringing an action or demanding arbitration under this statute began after (1) the insured received payment of the settlement; or (2) judgment on the underlying bodily injury liability claim. In other words, the two-year period began to run after resolution of claims against all available liability insurance policies issued on Guerra’s auto.
The Court in Pham held that the parties could not know whether the tortfeasor was underinsured until the final disposition of the liability claims against Hartford. Pham at 573-4. The liability claims against Hartford were not dismissed until April 4, 2006. (R.28).
Under §13-80-107.5(1)(b), Appellants timely filed the underlying action (“Complaint and Jury Demand or in the Alternative Demand for Arbitration”) on March 19, 2008, within two years after receiving final judgment on the underlying liability claim. (R.1).
§13-80-107.5(1)(b) states:
(b) An action or arbitration of an “underinsured motorist” insurance claim… shall be commenced or demanded by arbitration demand within three years after the cause of action accrues; except that, if the underlying bodily injury liability claim against the underinsured motorist is preserved by commencing an action against the underinsured motorist or by payment of either the liability claim settlement or judgment within the time limit specified … then an action or arbitration of an underinsured motorist claim shall be timely if such action is commenced or such arbitration is demanded within two years after the insured received payment of the settlement or judgment on the underlying bodily injury liability claim…”

An insured has two years from the date it is determined the tortfeasor is underinsured to file a claim for UIM benefits, provided an action was brought against the tortfeasor within three years after the cause of action accrued. See §13-80-107.5(1)(b); See also, Trigg v. State Farm Mut. Auto. Ins. Co., 129 P.3d 1099, 1101-2 (Colo. App. 2005).
Here, after obtaining a judgment against the tortfeasor (R.23), and after Hartford denied coverage, Appellants brought an action against the tortfeasor on February 15, 1996 (96CV765) requesting payment of their UIM benefits, less than three years after the motor vehicle accident on December 3, 1995 (R.19), and in compliance with the statute of limitations.
The action in 96CV765 was stayed, as the trial court ruled, and the Court of Appeals affirmed, that there were no UIM benefits until Appellants exhausted all claims against Hartford. Pham at 573-4; (R.25).
Though 96CV765 was later dismissed, it was dismissed without prejudice, entitling Appellants to file another action requesting UIM benefits so long as they complied with §13-80-107.5(1)(b). Since, under the statute, Appellants had two years from the date they received judgment on the underlying bodily injury liability claim, Appellants filed the underlying action, 98CV1992, on March 19, 2008, less than two years after they had received judgment on the final underlying bodily injury liability claim against Hartford on April 4, 2006. (R.1;R.7).
Since Appellants have fully complied with all limitations periods set forth by statute, the underlying action was improperly dismissed for failing to comply with the §13-80-107.5(1)(b) limitations period.
b. §13-80-107.5(1)(b) cannot be construed to undermine the purpose of §10-4-609; or provide unequal protection based on whether an insured is injured by an underinsured driver or an uninsured driver

The Court of Appeals interpreted §13-80-107.5(1)(b) to mean the statute of limitations begins to run upon receipt of any payment made. (Court of Appeals Decision dated May 27, 2010, p.7). However, such a determination fails to consider that, in circumstances where a motor vehicle may be insured by more than one liability insurance policy, a determination cannot be made that the tortfeasor is underinsured (or uninsured) until all potential sources of payments are exhausted. See §10-4-609(4) and (5); (R.21).
Accordingly, where more than one liability policy applies or more than one person or organization may be held legally liable for an injured person’s bodily injury, then under §13-80-107.5(1)(a) and (b), the limitations period under §13-80-107.5(1)(a) could not begin to run until it was known Guerra was uninsured under the Hartford policy, which would render him underinsured for purposes of §13-80-107.5(1)(b). Such a determination was not known until April 4, 2006. (R.28).
Since Appellants have two years to commence an uninsured motorist claim under §13-80-107.5(1)(a), Appellants must also have two years to commence an underinsured motorist claim under §13-80-107.5(1)(b). “It is important that the statute of limitations for claims against an uninsured motorist carrier is identical in every pertinent respect to the statute of limitations for claims against an underinsured motorist carrier.” Sulca v. Allstate Ins. Co., 77 P.3d 897, 902 (Colo. App. 2003)(Roy, J., Dissenting).
There cannot be a different result when there are two liability policies issued on the same vehicle, or when one of the insurers tenders its policy limits and litigation is required to establish coverage under the second policy than when there is only one liability policy, or no insurance at all. Colorado courts have refused to treat UM and UIM coverages differently. Insureds may recover damages caused by an underinsured motorist to the same extent as an insured could recover from an uninsured motorist. Shelter Mut. Ins. Co. v. Thompson, 852 P2d 459 (Colo.1993).
Throughout the underlying action, State Farm has argued its obligation to pay UIM benefits was dependent upon the outcome of the Hartford action, which would determine whether Guerra was underinsured. Pham at 573-4.
However, once Appellants exhausted all liability claims and Guerra became underinsured, State Farm changed its stance, contending Appellants were required to request UIM benefits within two years after receiving payment from Allstate in 1998, and the Hartford action was irrelevant. (Court of Appeals Decision dated May 27, 2010).
The “primary objective in construing a statute is to effectuate the intent of the General Assembly…. Where two statutes address the same subject, the supreme court construes them together to avoid inconsistency and attempts to reconcile them, Colo.Rev.Stat. §2-4-206 (2009).” Board of County Commissioners of the County of Boulder v. Hygiene Fire Protection District, 221 P.3d 1063, 1066 (Colo.2009).
The limitations of §13-80-107.5(1)(a) and (b) must be interpreted in accordance with the stated purpose of Colorado‘s uninsured motorist statute, §10-4-609(4) and (5), and provide the same limitations for UM claims as for UIM claims: two years from the date the insured learns the tortfeasor is underinsured. Further, whether a particular claim is time-barred presents a question of fact and may only be decided as a matter of law when “the undisputed facts clearly show the plaintiff had, or should have had the requisite information as of a particular date.” Sulca at 899. Appellants did not have “the requisite information as of a particular date” in May 2000, the date the Court of Appeals determined the statute had expired, and did not have this information until April 4, 2006. (R.28).

c. The following additional seven reasons show the Court of Appeals erred in determining, on a question of first impression, Colo.Rev.Stat.§13-80-107.5(1) to mean the statute of limitations began to run from the date Appellants received a judgment against the tortfeasor and a partial payment on that judgment from the first liability carrier rather than from the date of judgment on the claim against the second liability carrier, determining the tortfeasor was not covered, and, therefore underinsured.

1) According to State Farm’s UIM Insurance Contract, UIM benefits did not exist until the tortfeasor was determined to be underinsured.

The Court in Pham held that the parties could not know whether the tortfeasor was underinsured until the final disposition of the liability claims against Hartford. Pham at 573-4. The liability claims against Hartford were not dismissed until April 4, 2006. (R.28).
Consistent with §13-80-107.5(1)(b), as analyzed above in Sections 1(a) and (b) of this brief, the State Farm’s insurance contract provides:

“THERE IS NO COVERAGE UNTIL THE LIMITS OF ALL BODILY INJURY…POLICIES THAT APPLY HAVE BEEN USED UP…”).(R.21).

Furthermore, in Trigg this Court held:

“Under [§13-80-107.5(1)(a)], if an insured … only discovers that the tortfeasor is uninsured (or underinsured) sometime after the accident, then the insured has at least two years from the date of that discovery in which to sue.” Citing Sulca v. Allstate Ins. Co., supra, 77 P.3d at 900….

Trigg at 1101-2.
In the present case, it is undisputed that both Allstate and Hartford issued liability policies on Guerra’s auto, and the parties could not know whether there was UIM coverage available to Appellants until the final disposition of Appellants’ liability claims against Hartford. (R.21;R.126); Pham at 573.
It is also undisputed that if the Hartford policy provided liability coverage, then the tortfeasor would not be underinsured and, therefore, State Farm would have no obligation to pay any UIM benefits to the Appellants. Id. Thus, Appellants’ cause of action did not accrue until Appellants knew the Hartford policy did not provide liability coverage to the tortfeasor. (R.28).
Because Appellants did not have a settlement or judgment of all claims related to their bodily injuries until April 4, 2006, Appellants’ action was not barred by §13-80-107.5(1)(b). (R.28); Id. “To determine when plaintiff knew or should have known that his cause of action…accrued, we turn to the insurance policy itself.” Brown v. American Family Ins. Group, 989 P.2d 196, 198 (Colo. App. 1999). Since the State Farm policy states “THERE IS NO COVERAGE UNTIL THE LIMITS OF ALL BODILY INJURY…POLICIES THAT APPLY HAVE BEEN USED UP…” no coverage existed until the conclusion of the Hartford Action. (R.21;R.28).
The Court of Appeals has determined this quoted language from the State Farm policy means there could be no coverage for UIM benefits, and no contractual claim could accrue, until settlement is obtained under the liability policy of the underinsured driver. State Farm Mutual Auto Insurance Co. v. Springle, 870 P.2d 578, 579 (Colo. App. 1993). Since “no coverage” exists until the Hartford claim was concluded, no contractual claim could accrue until the Hartford claim was resolved. Pham at 573-4.
Further, the Court of Appeals found Appellants “timely filed claims for UIM benefits in 96CV765.” (Order of the Court of Appeals dated May 27, 2010). Thereafter, the trial court imposed a continuous “stay of all proceedings…pending disposition…of the…Hartford action.” (R.25). Therefore, by the Stay Order as well, the statute of limitations was tolled and could not accrue until Appellants received the Judgment in the Hartford action and reached the final disposition of that action. See Morrison v. Goff, 91 P.3d 1050 (Colo. 2004).
2) C.R.S. §13-80-107.5(1)(b) is ambiguous and must be construed in favor of coverage.

Ambiguous provisions that are reasonably susceptible to different meanings must be construed against the insurance provider and in favor of providing coverage to the insured. Compass Ins. Co. v. City of Littleton, 984 P.2d 606, 613 (Colo. 1999); Brekke, supra, at 186.
The Court of Appeals did not use the actual language of the statue when interpreting it because it is difficult to make sense of the statute. (Court of Appeals Decision dated May 27, 2010, p.8). By doing so, they clearly demonstrated the statute is ambiguous as written as it is not clear when the two-year time period for filing UIM actions begins to run.
In this action, the Court of Appeals determined the statute to mean the statute of limitations begins to run upon receipt of any payment made, but this does not take into account that there may be multiple sources from which payment must be received before the tortfeasor becomes underinsured. (Court of Appeals Decision dated May 27, 2010, p.8). Thus, one reasonable interpretation of the statute is that the statute begins to run from the payment of all available insurance or sources of payment. See C.R.S. §13-80-107.5(1)(b)
This interpretation also complies with: State Farm’s policy (R.21); State Farm’s arguments made before the Court of Appeals in 2003; §13-80-107.5(1)(a)(from the time the plaintiff knows the tortfeasor is uninsured); and the 2003 Pham decision. Pham at 573-4.
The above interpretation of §13-80-107.5(1)(b) regarding UIM claims also comports to the statute of limitations for UM claims, §13-80-107.5(1)(a). If an insured has two years from the date they learn the tortfeasor is uninsured to request UM benefits under §13-80-107.5(1)(a), it is reasonable for the insured to have two years from the date they learn the tortfeasor is underinsured to request UIM benefits. Sulca at 902.
Throughout the history of the underlying action, as well as all related actions, State Farm has agreed with this interpretation, stating that their obligation to pay UIM benefits to Appellants is dependent upon the outcome of the Hartford action, which would determine whether Guerra was underinsured. Pham at 573.
In 2003, before the Court of Appeals, State Farm argued it “denied UIM benefits based on their understanding that under §10-4-609(5)…the Hartford suit must be resolved before they can determine…if any UIM benefits are owed Plaintiffs.” Pham at 573-4. The Court of Appeals found this argument by State Farm was not unreasonable as a matter of law. Id.
However, in 2006 when Appellants exhausted all liability claims and Guerra became underinsured, State Farm changed its stance, and now argues Appellants were required to request UIM benefits within two years after receiving judgment against the tortfeasor on May 20, 1998, and the Hartford action had no relationship to §13-80-107.5(1). Pham at 573.
C.R.S. §13-80-107.5(3) states “[a]n uninsured or underinsured motorist cause of action accrues after both the existence of the death, injury, or damage giving rise to the claim and the cause of the death, injury, or damage are known or should have been known by the exercise of reasonable diligence.” However, the cause of the injuries or damage is not presumptively the initial automobile accident. See, e.g. Brodeur v. Am. Home Assur. Co., 169 P.3d 139, 147 (Colo. 2007)(holding that an insurance company’s denial of benefits when payment was due was the cause of the injury, and the inability of the plaintiff to obtain proper treatment because of that denial was the injury).
Thus, in the underlying action, the ultimate decision on April 4, 2006 that Hartford was not required to provide liability coverage (R.28) and State Farm’s subsequent refusal to make any efforts to pay UIM benefits after April 4, 2006 was a cause of additional injuries. The actual injury, resulting from the federal court’s determination on April 4, 2006 that Hartford’s liability policy did not provide coverage to Appellants was the inability of Appellants to be fully compensated for their damages under all of the available liability insurance policies. Under the holding in Brodeur, these additional damages did not arise until after the April 4, 2006 judgment in the Hartford action (R.28), because if Hartford had been found liable, Appellants would have been fully compensated for their injuries through the liability policies, and there would be no UIM claims.
That is, it was not only the accident (R.19) that caused injuries in this action, but also the denial of UIM benefits after April 4, 2006. (R.28).
The December 3, 1995 motor vehicle accident gave rise to Appellants’ liability claims only. The UIM claims did not arise until the final resolution of the action against Hartford, the second liability insurance carrier, because it was only then Guerra became underinsured. (R.28).
Though Appellants initially requested UIM benefits in 96CV765, that action was filed prematurely, before Appellants learned Guerra was underinsured, and was then dismissed without prejudice before any judgment entered on the merits. (R.31); C.R.C.P. 41(b)(1). Accordingly, Appellants were entitled to bring their UIM claims against State Farm in the underlying action once the Hartford action was resolved. (R.1;R.7;R.28).
Accordingly, for these sound reasons, §13-80-107.5(1)(b) is ambiguous as written. Appellants assert the statute’s ambiguity must be interpreted or construed in favor coverage to provide the same limitations for UIM claims as §13-80-107.5(1)(a) allows for UM claims: two years from the date the insured learns the tortfeasor is underinsured.
3) Hartford action was a “bodily injury liability claim”

The Court of Appeals erroneously ruled the Hartford action was “not an action for the underlying bodily injury claim,” and thereby avoided the full application of §13-80-107.5(1)(b); (Court of Appeals Decision dated May 27, 2010, p.8). The Court of Appeals omitted the word “liability” from its analysis of §13-80-107.5(1)(b), which provides: A UIM claim is timely if “such action is commenced within two years after the insured received…judgment on the underlying bodily injury liability claim.” (emphasis added).
Contrary to the court of appeals decision in the instant action, the underlying claim against Hartford was clearly a bodily injury liability claim as Appellants were required to establish Hartford owed its liability limits due to the “bodily injury” caused by Guerra’s negligence. See Pham at 573-4. (“Hartford…provided liability coverage of $1,000,000…UIM exposure cannot be ascertained until the total amount paid to plaintiffs by ‘any person…who may be held legally liable’ is determined…If Hartford is found liable…defendants will not have to pay any UIM benefits because their UIM liability is limited to the difference between the amounts plaintiffs receive from Guerra’s liability insurers and the UIM limits.”). Id.
4) Tortfeasor was not underinsured until April 4, 2006.

Neither State Farm nor its insureds knew the tortfeasor was underinsured until the final disposition of the Hartford liability claim. (R.28); Pham at 573-4. In the 2003 Court of Appeals decision, State Farm asserted “the total amount [of UIM benefits] cannot be determined until the Hartford suit is resolved, because Hartford may be found liable.” Id. Thus, until judgment entered against Hartford, Guerra was not known to be underinsured and “no contractual claim could accrue” for UIM benefits until April 4, 2006. Springle at 579; (R.28).
As discussed supra, the issue of timing presents a question of fact and may only be decided as a matter of law when “the undisputed facts clearly show that the plaintiff had, or should have had the requisite information as of a particular date.” Sulca at 899. Since Appellants did not have “the requisite information” until April 4, 2006, the tortfeasor was not know to be underinsured until that date. (R.28). With a liability claim pending against Hartford, Appellants were prevented from obtaining UIM benefits prior to April 4, 2006. Springle at 579.
5) Appellants did not receive “payment of the settlement” or “payment of the judgment”
The UIM claim is timely if such action… is demanded either within “two years after the insured received payment of the settlement or judgment on the underlying bodily injury liability claim.” C.R.S. §13-80-107.5(1)(b).
The Court of Appeals erroneously concluded that under §13-80-107.5(1)(b) the two-year statute of limitations was triggered by the May 20, 1998 “judgment against Guerra and payment pursuant to that judgment from Allstate.” (Court of Appeals Decision dated May 27, 2010, p.8).
However, contrary to the decision of the Court of Appeals, Appellants received only a partial payment of this judgment from Allstate, but have never received “payment of the…judgment” in the amount of $1,558,707.78, as contemplated by §13-80-107.5(1)(b)(A UIM action must be commenced “within two years after the insured received payment of the…judgment.” A partial “payment pursuant to” the $1,558,707.78 judgment does not constitute “payment of the…judgment.” (Court of Appeals Decision dated May 27, 2010, p.8). The remainder of the judgment remains unpaid.
Thus, Appellants’ claims, filed on March 19, 2008 (R.1), and amended on March 20, 2008 (R.7), were timely under §13-80-107.5(1)(b).

6) Appellants met statute of limitations for an Uninsured Motorist Claim.

“An action or arbitration of an uninsured motorist insurance claim shall be commenced… within two years after the insured knows that the particular tortfeasor is not covered by any applicable insurance.” §13-80-107.5(1)(a). (emphasis added.)

Since Hartford issued a liability policy on the tortfeasor’s automobile, it is “applicable insurance.” (R.126). Thus, “Hartford” may reasonably be deemed synonymous with “any” when interpreting §13-80-107.5(1)(a). Accordingly, the statute of limitations begins to run two years after the April 4, 2006 judgment, establishing Guerra was not covered by Hartford’s liability insurance. (R.23).
Further, State Farm’ UIM policy defines uninsured motor vehicle as a “motor vehicle…which is insured…for liability at the time of the accident; but the insuring company denies coverage…” (R.34). Since Hartford had denied coverage, Guerra was deemed uninsured with respect to the Hartford and State Farm’s UM policy.
The Court of Appeals erred in its analysis of §13-80-107.5(1)(a), by construing this statute in favor of State Farm to mean §13-80-107.5(1)(a) “governs ‘uninsured motorist’ claims where the motorist does not have ‘any applicable insurance.’ It is undisputed that Guerra had insurance.”(Court of Appeals Decision dated May 27, 2010, p.9). However, defining uninsured claims as limited to claims where the motorist does not have ‘any applicable insurance’ conflicts with State Farm’s broader definition of uninsured.
The Court of Appeals erroneously interpreted “any” to mean only Allstate when in fact, “any” also includes “Hartford” because there are two “applicable insurance” policies. “A term is ambiguous when it is reasonably susceptible of more than one meaning” and must be construed in favor of coverage” and against State Farm who wrote the policy. Carlisle v. Farmers Ins. Exch., 946 P.2d 555, 556 (Colo. App. 1997).
7) State Farm remains bound by the $1,558,707.78 judgment.

There was nothing further to be litigated or arbitrated since, at the time that State Farm allowed the judgment to be entered against the tortfeasor, establishing the tortfeasor’s liability and Appellants’ damages, State Farm was a party to the action (R.249); the judgment exceeded State Farm’s UIM benefits (R.23); and the trial court, on April 4 2006, determined Guerra was not covered by Hartford. (R.28).
“An insurer will be bound by the resolution of issues in a tort action between the insured and an uninsured motorist as long as the insurer has notice and an opportunity to intervene, even if the insurer fails to seek intervention.” Peterman v. State Farm Mut. Ins. Co., 961 P.2d 487, 494 (Colo. 1998); See also Briggs v. American Family Mutual Insurance Co., 833 P.2d 859, 861-2 (Colo. App. 1992):
“Under the statute, the insurer must pay to the insured… whatever losses the insured proves he or she is “legally entitled to recover” from the uninsured or underinsured motorist…. If the insured meets this burden, then the insurer is under a statutory and contractual duty to compensate the insured.”

Appellants’ right to UIM benefits accrued when Appellants received judgment on April 4, 2006 determining Guerra was underinsured. Therefore, the actions taken by State Farm to dismiss the prematurely filed UIM action (96CV765) had no effect on its continuing obligation to pay its UIM benefits owed. (R.28).
d. The Court of Appeals erred in determining State Farm was not contractually obligated to arbitrate Appellants’ UIM claims, under State Farm’s arbitration provision, within the meaning of C.R.S. §13-80-107.5(1).

The statute of limitations governing arbitrations for underinsured motorist insurance claims provides that a demand for arbitration is timely “if such…arbitration is demanded within two years after the insured received payment of the settlement or judgment on the underlying bodily injury liability claim. §13-80-107.5(1)(b). A demand for arbitration is also timely if the demand for arbitration is made within two years from the date the tortfeasor is determined to be underinsured. C.R.S. §13-80-107.5(1)(a).
Appellants requested arbitration on February 15, 1996 (96CV765), less than two years after the motor vehicle accident; December 2, 1998 (R.256), within two years after State Farm allowed judgment to be entered; March 19, 2008 (R.1); and March 20, 2008 (R.7), less than two years after it was determined the tortfeasor was underinsured (R.28).
State Farm’s arbitration provision states:
A. If we and an “insured” do not agree:
1. Whether that “insured” is legally entitled to recover damages; or
2. As to the amount of damages which are recoverable by that “insured;”

from the owner or operator of an “uninsured (underinsured) motor vehicle,” then the matter may be arbitrated. However, disputes concerning coverage under this Part may not be arbitrated.

Both parties must agree to arbitration. If so agreed, each party will select an arbitrator. The two arbitrators will select a third. If they cannot agree within 30 days, either may request that selection be made by a judge of a court having jurisdiction. (R.460). (emphasis added)

The word “must” requires participation in arbitration. In other words, it means “you [the insured] must agree to arbitrate,” which Appellants clearly did.
The words, “If so agreed, each party will select an arbitrator” is merely connecting language to the next step in the arbitration process—selecting an arbitrator. Because Appellants agreed to arbitrate, State Farm was obligated to arbitrate.
Further, “(t)here is no good reason for including an arbitration provision (requiring mutual consent) if it can be defeated by a unilateral refusal to arbitrate (by State Farm).” D & H Distribution Co., Inc. v. Nat. Union Fire Ins. Co., 817 A.2d 1164 (Pa.Super.Ct.2003).
To the extent that “(both) parties must agree to arbitration” is reasonably susceptible to more than one meaning, it is ambiguous (See Northern Ins. Co. of New York v. Ekstrom, 784 P.2d 320, 322 (Colo. 1989)); and ambiguous terms in a contract must be construed most strongly against the drafter and in favor of Appellants. Union Ins. Co. v. Houtz, 883 P.2d 1057, 1061 (Colo. 1994).
A finding that State Farm’s policy requires arbitration is also consistent with Colorado’s policy supporting arbitration as a favored method of dispute resolution. See Colo. Const. Art XVIII, Sec. 3; §13-22-201 et seq. (The Uniform Arbitration Act of 1975); See also Wales v. State Farm Mut. Auto. Ins. Co., 559 P.2d 255, 257 (Colo. App. 1976)(“[t]he Act thus recognizes a policy encouraging the settlement of disputes through the arbitration process and doubts concerning whether a dispute is subject to arbitration are to be resolved in favor of arbitration.”); (R.460).
Since Appellants’ agreed to arbitrate and timely filed their arbitration demand on December 2, 1998 (R.256), the subsequent dismissal (R.304) of the civil action has no effect on Appellants arbitration demand; and State Farm is required to arbitrate.
Under both §10-4-609 and State Farm’s policy (R.460), State Farm became bound by the stipulated judgment (entered without objection by State Farm) when the Hartford action was finally resolved. See Peterman at 494; Briggs at 861-2; (R.460;R.28).
To the extent Appellants’ initial arbitration demand on December 2, 1998 (R.256) was prematurely filed before State Farm’s obligation to pay UIM benefits arose, and Appellants were required under §10-4-609 and §13-80-107.5 to wait until the Hartford action was resolved (which established Guerra as underinsured)(R.28), then under §13-80-107.5(b), Appellants had the right to demand arbitration within two years after judgment entered on the Hartford underlying bodily injury liability claim (which they did on March 19, 2008 and March 20, 2008). (R.1;R.7).
Furthermore, by moving to dismiss the UIM litigation in 96CV765 (R.56), State Farm made it clear to its insureds that it was not agreeing to litigation and thus required to arbitrate the dispute per its own policy language. (R.460). After State Farm elected not to litigate, State Farm could not refuse to arbitrate the UIM dispute when it knows it owes UIM benefits. Brekke at 196 (Colo. 2004)(arbitration is an economic and efficient means of reducing costs and resolving disputes over the payment of UIM benefits); Goodson v. American Standard Ins. Col, 89 P.3d 409, 414 (Colo. 2004) (“Insureds enter into insurance contracts for financial security…”); Id. at 417 (“An insured purchases insurance in the first place so as not to suffer such anxiety, fear…and uncertainty.”). See also Campbell v. State Farm, 840 P.3d 1134 (Utah 2001).
Thus, the Court of Appeals erred in holding that “section 13-80-107.5 also applies to arbitration demands, and plaintiffs did not timely request arbitration.” (Court of Appeals Decision dated May 27, 2010, p.9).
Appellants had a right to demand arbitration by §10-4-609(5) after it was determined that Guerra was underinsured. (R.28). Thus, Appellants timely demanded arbitration under §13-80-107.5(a) and (b). (R.1;R.7;R.256).
Though Appellants’ request for arbitration was timely, the Court of Appeals erroneously ruled that the request did not comply with the limitations period set forth in §13-80-107.5(1)(b). (Court of Appeals Decision dated May 27, 2010, p.9). Regardless of whether one uses the date of the accident or the date Guerra became underinsured, Appellants’ arbitration request was timely.
e. The statute of limitations was equitably tolled.
A court may resort to equitable tolling when a rigid application of the statute of limitations will lead to an unjust result. Shell Western E&P v. Dolores County Bd. of Comm’rs, 948 P.2d 1002, 1007 (Colo.1997).
In addition to the above arguments, equitable tolling is also appropriate as it applies to “limited situations in which…truly extraordinary circumstances prevented the plaintiff from filing his or her claim despite diligent efforts.” Dean Witter Reynolds, Inc. v. Hartman, 911 P.2d 1094, 1099 (Colo. 1996). In this action, the Court of Appeals had previously ruled that “[t]he coverage issues are complex and debatable,” preventing Appellants from requesting UIM benefits until the conclusion of the Hartford action. Pham at 573.
“Under certain circumstances, knowledge of the plaintiff’s injury may be dependent on a final adjudication in another action.” Brodeur at 148. This is one of those circumstances, since Appellants could not know Guerra was underinsured, and could not know whether they could request UIM benefits, until the final resolution of the litigation against Hartford on April 4, 2006. (R.28).
State Farm’s policy required Appellants to exhaust the limits of all liability policies issued on Guerra’s vehicle before any UIM coverage would exist. (R.21).
A cause of action for debt, obligation, money owed, or performance accrues on the date such debt, obligation, money owed, or performance becomes due, and a claim for UIM benefits represents a claim for money owed. C.R.S. §13-80-108(4).
Since obtaining a judgment in the Hartford action was a requirement of State Farm’s policy, equitable estoppel prevents State Farm from now raising the statute of limitations as a defense after requiring Appellants to exhaust all avenues in an attempt to obtain coverage from Hartford. “Where…a party by its acts or omissions contributes to the running of a statute of limitations, the doctrine of equitable estoppels will prevent its raising that defense.” Strader v. Beneficial Finance Co., 551 P.2d 720, 724 (Colo. 1976).
f. Appellants are entitled to fees and costs incurred
To obtain payment of their UIM benefits, Appellants were first required to litigate to obtain a computation of damages incurred, then required to litigate their claims against the Hartford policy, then required to litigate their claims against State Farm and Liberty Mutual, and finally required to appeal those claims, which has taken 16 years.
Appellants are entitled to fees and costs incurred in seeking payment of their UIM benefits pursuant to the fiduciary exception to the American Rule. The United States Supreme Court has stated that insurance companies owe a “fiduciary duty with respect to…the payment of claims.” Varity Corp. v. Howe, 516 U.S. 489, 512, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996).
Appellants are also entitled to payment of their reasonable attorney fees under Colorado’s Common Fund Doctrine, which allows only for “a sharing of the fees among those benefited by the litigation.” Comte v. Wilson, 172 P.3d 980, 982 (Colo. App. 2007)(emphasis added). The court should “disallow apportionment if the insurer alone will benefit.” Id. Thus, in this circumstance, the insurer should pay all the attorney fees. Neumann v. Am. Family Ins., 563 N.W.2d 791, 797-8 (Neb. App. 1997).
As a result of State Farm’s insistence that the Appellants pursue the Hartford liability policy before it would tender its benefits, Appellants were forced “to traverse undue procedural hurdles and relitigate matters in order to recover under their UIM benefits.” Brekke at 183; See also, Allstate Ins. Co. v. Orban, 855 P.2d 9, 12 (Colo. App. 1992)(“Construing the provision to authorize the award of fees in such instances, therefore, results only in restoring the insured to the position the insured would have occupied had the carrier properly honored the policy provisions in the first instance.”)
The holding in Garceau allows Appellants to obtain payment of the costs incurred since the accident as requiring Appellants to pay their own costs undermines the purpose of §10-4-609. Garceau v. Iowa Kemper Ins. Co., 859 P.2d 243, 245 (Colo. App. 1993).
Furthermore, Appellants are entitled to an award of statutory pre-judgment and post-judgment interest above the UIM policy limits. Pre-judgment interest should be awarded to an insured when the insurer fails to make payments that rightfully belong to the insured, regardless if it exceeds the policy limits. Vasquez v. Lemars Mut. Ins. Co., 477 N.W.2d 404, 411 (Iowa 1991)(emphasis added). The Court held that, despite the policy language restricting payment to policy limits, prejudgment interest must be awarded in excess of the policy limits because it is “not awarded as an element of damages because of bodily injuries sustained by a covered person. Rather the interest is awarded simply because of the insurer’s breach of the policy provisions to pay the underinsured limits. The prejudgment interest constitutes “damages” because of the insurer’s failure to discharge a debt when it should have been paid”. Id. (emphasis added); See also Prudential Ins.Co. v. Goldsmith, 239 Mo. App. 188, 192 (Mo. App. 1945).
Following the Iowa Supreme Court and Missouri Court of Appeals, Colorado should also rule that State Farm’s breach of its UIM contract to pay UIM benefits entitles Appellants to payment of interest above policy limits.
CONCLUSION

Appellants have pursued litigation for sixteen years in order to obtain payment of their UIM benefits. This is a case of first impression in Colorado, addressing the meaning and application of §13-80-107.5(1) when two liability policies were issued on the tortfeasor’s auto. For the above reasons, the Court of Appeals erred in holding that the statute of limitations governing actions or arbitrations for underinsured motorist insurance claims at §13-80-107.5(1)(a) and(b) begins to run when insureds receive payment from one insurer liable for the tortfeasor’s actions, even while the insureds seek recovery from a different insurer who may also be liable for the tortfeasor’s actions.

WHEREFORE, Appellants respectfully request that this Honorable Court grant the following relief:
a. The trial court erred in concluding the statute of limitations had expired since UIM benefits did not exist until the tortfeasor was determined to be underinsured;
b. §13-80-107.5(1)(b) cannot be construed to undermine the purpose of §10-4-609; or provide unequal protection based on whether an insured is injured by an underinsured driver or an uninsured driver;
c. The Court of Appeals erred in determining §13-80-107.5(1) to mean the statute of limitations began to run from the date Appellants received a judgment against the tortfeasor and a partial payment on that judgment from the first liability carrier rather than from the date of judgment on the claim against the second liability carrier, determining the tortfeasor was not covered, and, therefore underinsured;
d. The Court of Appeals erred in determining State Farm was not contractually obligated to arbitrate Appellants’ UIM claims, under State Farm’s arbitration provision, within the meaning of §13-80-107.5(1).
e. The statute of limitations was equitably tolled;
f. State Farm remains bound by the $1,558,707.78 judgment entered against the tortfeasor; and the actions taken by State Farm after April 4, 2006 have no effect on State Farm’s continuing obligations to pay its UIM benefits owed to its insureds arising out of the December 3, 1995 auto accident;
g. The Court of Appeals erred when it determined that, under §13-80-107.5(1)(a) and(b), Appellants could not, on March 20, 2008, re-file the UIM action or file their claim for bad-faith breach of insurance contract for conduct occurring after April 4, 2006 including State Farm’s failure to investigate and adjust Appellants’ UIM claims in good faith;
h. State Farm is obligated to pay reasonable fees and costs incurred by Appellants in obtaining payment of their UIM benefits and statutory interest above its policy limits;
i. State Farm’s UIM policy is primary and Liberty is not obligated to pay its UIM benefits until State Farm’s first exhausts the payment of its UIM benefits;
j. The Judgment of the Colorado Court of Appeals, 09CA768, entered on May 27, 2010, should be reversed.
Dated this 4thth day of August 2011.

Respectfully submitted,

William Muhr, LLP

_____________________
William Muhr (# 018093)