Last week the Colorado Supreme Court, in Goodson v. American Standard Insurance Co. of Wisconsin, held that the insurer could be held liable for emotional distress in an insurance bad faith case without having to first prove substantial property or economic loss. The Court specifically overruled State Farm Insurance Company v. Trimble, 768 P. 2d 1243 (Colo. App. 1988) which set forth the substantial property or economic loss prerequisite.
The trial court in Goodson refused to give the Trimble instruction asserting that it essentially gutted the point of insurance company bad faith claims, if the insurance company could just pay and avoid liability after its misconduct. Here a mother and her minor children eschewed treatment because of concerns that they would not be able to pay for it. The insurance company finally paid after a approximately a year and a half. The Colorado Court of Appeals following Trimble reversed the lower court decision only to be itself reversed. This decision is a significant advance for insureds who a pressured by delay and other tactics by their insurance companies to settle for less than they are entitled. The case can be found at http://www.courts.state.co.us/supct/supctcaseannctsindex.htm
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