In a latest determination that explains what policyholders should show to prevail on a statutory unhealthy religion declare in Colorado, the Tenth Circuit Court docket of Appeals affirmed abstract judgment in favor of Mid-Century Insurance coverage Firm in El Dueno, LLC v. Mid-Century Insurance coverage Firm. 1 The ruling is a transparent reminder that below Colorado regulation, an insurer’s reliance on a professional, impartial knowledgeable, absent opposite proof, can function an affordable foundation for a declare determination and defeat allegations of unhealthy religion.
The dispute started when El Dueno, the proprietor of a business property in Greeley, Colorado, submitted a hail injury declare following a July 2018 storm. Initially, Mid-Century’s adjuster, Maggie Fields, inspected the property and located indicators of hail injury, main the insurer to situation a cost. Nevertheless, El Dueno later submitted a revised estimate exceeding $340,000. This was considerably greater than the preliminary scope of injury by Mid-Century.
Mid-Century reassigned the file to a large-loss adjuster, who in flip retained Rimkus Engineering to evaluate the roof. Rimkus engineer William Templeton performed an inspection and concluded that the roof injury was not attributable to hail however slightly because of put on, tear, and different non-covered causes. Mid-Century relied on this report in denying additional cost on the roof portion of the declare, whereas nonetheless issuing an extra cost for hail injury to HVAC items as recognized by a separate vendor.
El Dueno filed swimsuit alleging unhealthy religion below Colorado Revised Statutes Sections 10-3-1115 and 10-3-1116. Mid-Century moved for abstract judgment. The federal district court docket granted the movement, holding that the insurer’s reliance on a professional engineering report, unrebutted by any proof of industry-standard violations, was cheap as a matter of regulation. On attraction, the Tenth Circuit agreed.
The appellate court docket emphasised that below Colorado regulation, an insurer’s conduct have to be evaluated primarily based on whether or not it had an affordable foundation for its declare determination and whether or not it violated any relevant {industry} requirements. Importantly, the court docket famous that El Dueno didn’t present a competing engineering opinion on the time of Mid-Century’s protection determination. It by no means took the deposition of Mr. Templeton, the insurer’s roofing knowledgeable, and did not submit any knowledgeable testimony that Mid-Century’s claims dealing with fell beneath {industry} requirements. Whereas El Dueno ultimately, throughout litigation, retained former adjuster Kerry Freeman as an knowledgeable, Freeman was not an engineer, didn’t tackle whether or not Templeton’s report violated any engineering requirements, and supplied no opinion on whether or not Mid-Century acted in unhealthy religion.
In affirming abstract judgment, the Tenth Circuit reiterated that mere disagreement with an insurer’s conclusions or knowledgeable opinions is inadequate to show unhealthy religion. With out proof that Mid-Century ignored related information, failed to research totally, or acted opposite to established norms, the court docket discovered no triable situation of fabric truth. The court docket underscored that policyholders bear the burden of articulating and proving how an insurer’s conduct deviated from acceptable requirements, particularly when counting on the findings of impartial professionals.
The ruling sends a transparent sign to policyholders and their counsel that difficult an insurer’s denial primarily based on a third-party knowledgeable report requires greater than merely disputing the end result. To succeed on a nasty religion declare in Colorado, claimants have to be ready to supply well timed, substantive proof, which is ideally within the type of knowledgeable testimony demonstrating that the insurer’s reliance on its knowledgeable was not solely incorrect, however unreasonable below relevant requirements. With out such a exhibiting, courts are more likely to proceed rejecting unhealthy religion allegations on the abstract judgment stage.
Thought For The Day
“Get your information first, then you’ll be able to distort them as you please.”
—Mark Twain
1 El Dueno v. Mid-Century Ins. Co., No. 24-1110, 2025 WL 1540329 (10th Cir. Could 30, 2025) (The appellate briefs by El Dueno and Mid-Century submitted to the Tenth Circuit are additionally hooked up)