Giampapa v. American Family Mutual Insurance Co.

Summary

The Colorado Supreme Court held that the Colorado Auto Accident Reparations Act does not preempt common-law contract remedies when an insurer wrongfully refuses to pay benefits. It further held that a full range of foreseeable non-economic damages is available for an insurer’s willful-and-wanton breach of an insurance contract, provided the damages are a natural and probable result of the breach. The court reversed the court of appeals and reinstated the insured’s $900,000 special-damages award.

Holdings

1. The No Fault Act does not expressly or implicitly preempt a common-law contract claim or the recovery of nonduplicative special damages for an insurer's wrongful refusal to pay benefits.
2. Colorado retains its longstanding willful-and-wanton rule permitting non-economic damages for a willful-and-wanton breach of contract when the damages satisfy ordinary contract-damages requirements.
3. A complete range of non-economic damages is recoverable for a willful-and-wanton breach of an insurance contract, not merely damages labeled mental anguish, provided the damages were foreseeable at the time of contracting, proven with reasonable certainty, and were a natural and probable result of the breach.
4. The jury findings and instructions sufficiently established foreseeability, reasonable certainty, causation, and willful-and-wanton conduct, and American Family waived its argument that the statutory non-economic-damages cap applied to the $900,000 award.

Questions Presented

1. Whether the No Fault Act preempts a common-law contract claim and remedies for an insurer's wrongful refusal to pay automobile insurance benefits.
2. Whether Colorado's willful-and-wanton rule for contract breaches remains valid.
3. Whether a complete range of foreseeable non-economic damages, rather than only mental-anguish damages, is recoverable for a willful-and-wanton breach of an insurance contract.
4. Whether the law-of-the-case doctrine barred reconsideration of the court of appeals' prior ruling after the precedent on which it relied had been reversed.
5. Whether the insurer waived its argument that the statutory cap on non-economic damages applied to the $900,000 contract award.

Disposition

reversed_and_remanded