The litigation stems from a February 2019 motor vehicle collision between Kollmann and Taylor Bonello. Bonello was insured by Progressive with a $100,000 per person bodily injury policy. Kollmann held an underinsured motorist (UIM) policy with State Farm, also carrying $100,000 in limits.
Kollmann settled with Bonello for the full $100,000 Progressive policy limits with State Farm’s consent. She subsequently submitted a policy limits demand to State Farm on June 16, 2021. State Farm denied the claim on July 14, 2021, arguing that her injuries were already covered by the $100,000 she received from Progressive.
State Farm issued a second denial on December 7, 2022, maintaining that its evaluation of damages fell within the underlying liability limits. Kollmann disagreed and requested a breakdown of the evaluation, which State Farm provided the same day. Kollmann filed suit in Colorado state court in September 2023, which State Farm removed to federal court.
In its answer, State Farm raised the affirmative defenses of failure to cooperate and failure to mitigate damages. Kollmann moved for summary judgment on these defenses, arguing State Farm failed to comply with statutory prerequisites for the cooperation defense and lacked evidence for the mitigation defense.
Judge Gallagher held that State Farm failed to satisfy the requirements of C.R.S. § 10-3-1118(1) to assert the failure to cooperate defense. The statute requires an insurer to inform the insured in writing that it needs information unavailable without the insured’s assistance, provide sixty days to respond, and offer an opportunity to cure any alleged failure.
The court found that while State Farm requested medical authorizations and status updates between 2019 and 2022, none of the correspondence stated that the information was unavailable without Kollmann’s assistance. Furthermore, the record contained no evidence that State Farm ever sent the specific written notice of alleged failure to cooperate required by the statute.
Regarding the failure to mitigate damages defense, the court ruled that State Farm did not meet its burden of production. State Farm pointed to multi-month gaps in Kollmann’s medical treatment, such as a six-month gap from August 2019 to February 2020.
However, the court noted that gaps in treatment, standing alone, are evidence of nothing. To present the defense to a jury, State Farm needed evidence, such as expert testimony, showing that the treatment gaps resulted in exacerbation or worsening of the injuries. State Farm provided no such evidence.
The court also rejected State Farm’s argument that Kollmann missed more days of work than necessary, noting that this issue relates to the calculation of damages rather than the legal defense of failure to mitigate.
Accordingly, the court granted Kollmann’s partial motion for summary judgment, eliminating both affirmative defenses from the case.