Brodeur v. American Home Assur. Co.
| Decision Date | 09 October 2007 |
| Docket Number | No. 06SC499.,06SC499. |
| Citation | 169 P.3d 139 |
| Parties | Mary BRODEUR, individually and as personal representative of the Estate of Dennis Brodeur, deceased, Petitioner v. AMERICAN HOME ASSURANCE COMPANY and AIG Claim Services, Inc., Respondents. |
| Court | Colorado Supreme Court |
Pinnacol Assurance, Harvey D. Flewelling, Denver, CO, Attorney for Amicus Curiae Pinnacol Assurance.
This case involves a workers' compensation claim, the handling of which eventually led Petitioner to file a complaint in district court against Respondents alleging bad faith, breach of fiduciary duty, fraud, and violation of the Colorado Consumer Protection Act, sections 6-1-101 to -1120, C.R.S. (2007) ("CCPA"). The trial court dismissed all claims on summary judgment. Petitioner appealed, and the court of appeals determined that: (1) the bad faith tort claims accrued independently of the workers' compensation proceeding and were subsequently barred by the statute of limitations; (2) the breach of fiduciary duty claims were not actionable because a workers' compensation insurer owes no fiduciary duty to an insured; (3) the fraud claims were not actionable because the statement in question was a legal opinion rather than a factual misrepresentation, and it did not qualify for the exception to the legal opinion rule for fraud claims; and (4) the CCPA claims were to be remanded for further discovery on whether Petitioner's claim involved the public impact necessary for a viable claim. We granted certiorari to review the court of appeals' decision on Petitioner's bad faith tort claims, breach of fiduciary claims, and the fraud claims, and to consider whether the public nature of the workers' compensation program satisfies the public impact required for a CCPA claim.
We affirm the judgment of the court of appeals. We hold that bad faith tort claims accrue independently of a workers' compensation proceeding, and that, because a tort action and a workers' compensation proceeding are not part of the same case, the law of the case doctrine does not apply. Further, we find that Petitioner's bad faith tort claims are barred by the statute of limitations and do not find any facts to support equitable tolling of these claims.
We also hold that there is no fiduciary or quasi-fiduciary relationship between a workers' compensation insurer and the insured. Therefore, Petitioner's breach of fiduciary duty claims are not actionable.
We find that Respondents' denial of treatment was a statement of a legal opinion, not a misrepresentation of fact required to support a fraud claim. Further, we find that this statement is not subject to either the superior knowledge exception or the relationship exception to the rule that a statement of a legal opinion is not actionable.
Finally, we hold that the public nature of the workers' compensation program does not satisfy per se the public impact requirement for a CCPA claim, nor do the facts in the record support a finding that the public impact element has been satisfied in this particular case. However, we affirm the court of appeals' decision to remand this issue for further proceedings, including discovery.
Dennis and Mary Brodeur, husband and wife, drove long-haul trucks as a team for Interstate Distributor Company ("Interstate"). Dennis Brodeur ("Brodeur") filed a claim under the Workers' Compensation Act of Colorado, sections 8-40-101 to -47-209, C.R.S. (1997), claiming he had injured his back on the job in December 1997. American Home Assurance Company ("American") provides workers' compensation insurance for Interstate, and AIG Claim Services, Inc. ("AIG") is American's third-party administrator that adjusted Brodeur's claim.
AIG initially denied treatment for Brodeur's injury, questioning whether it was work-related. After a hearing on the matter in December 1998, an administrative law judge ("ALJ") ordered Interstate and American to pay Brodeur's "reasonable and necessary medical expenses from authorized providers."
In May 1999, one of Brodeur's authorized doctors recommended back surgery for Brodeur, which AIG initially approved in June 1999. Before Brodeur underwent surgery, however, the doctor discovered that Brodeur's blood platelet count was low. Because this condition presented a risk of uncontrolled bleeding during the surgery, the doctor referred Brodeur to a hematologist. On August 5, 1999, the hematologist informed Interstate and American that Brodeur needed to be treated with WhinRho, a drug that boosts platelet counts, prior to the surgery.
Under Colorado's then-existing Workers' Compensation Regulations, an insurer was required to issue a written denial of requested treatment within five business days, along with specific supporting information, or the request would be "deemed authoriz[ed]."1 However, it was not until August 20, 1999, eleven business days later, that counsel for Interstate sent a letter denying authorization for the WhinRho treatment on the basis that the WhinRho treatment was unrelated to the industrial injury. Further, the letter did not contain the supporting information required by the regulations. Interstate's counsel also called into question the authorization for the back surgery itself, stating, "[I]t appears that the surgery you intend to perform on this individual is elective in nature."
Brodeur requested a hearing and sought an order for the WhinRho treatment and back surgery. Brodeur also requested penalties under section 8-43-304(1), C.R.S. (1999), based on Interstate's and American's (1) failure to comply with the December 1998 ALJ order, (2) violation of the regulations regarding denial of authorization for the treatment, and (3) violation of section 8-43-503(3), C.R.S. (1999).2 Also, on November 1, 1999, Brodeur's counsel responded to Interstate's counsel, notifying her of the hearing request. In part, the letter stated, "I also advise you by this letter that the insurance carrier is handling this claim in bad faith."
An ALJ heard the matter in February 2000 and issued an order in April 2000 for Interstate and American to pay for the WhinRho treatment and back surgery. However, the ALJ denied Brodeur's request for penalties, finding that (1) Brodeur had not shown a failure to comply with the December 1998 order, (2) even if a violation of the regulations occurred, section 8-43-304(1) penalties were inapplicable, and (3) although Interstate and American erroneously refused to authorize reasonable and necessary care, their conduct did not violate section 8-43-503(3).
On June 15, 2000, before the WhinRho treatment was administered or the back surgery performed, Brodeur was killed in a car accident.
Mary Brodeur ("Petitioner") sought review of the ALJ's denial of penalties from the Industrial Claims Appeals Office ("ICAO"). In a March 2001 order, the ICAO affirmed the ALJ's April 2000 order. As to the violation of the regulations, the ICAO agreed that section 8-43-304(1) penalties were inapplicable. Regarding the alleged violation of section 8-43-503(3), the ICAO concluded that resisting payment for the proposed treatment did not constitute dictating the course of treatment. Instead, Interstate and American merely exercised their right "to challenge the reasonableness and necessity for [sic] proposed medical treatment" and "to contest liability concerning issues on which [Brodeur] had the burden of proof."3 Petitioner appealed the ICAO's decision to the court of appeals.
The court of appeals remanded the ICAO's decision in part and affirmed it in part. Brodeur v. Indus. Claim Appeals Office, No. 01CA0635, slip op. at 7-8 (Colo.App. Dec. 6, 2001) (). Specifically, the court held that penalties for violation of the regulations were available under section 8-43-304(1) and remanded the case to determine if a violation of the regulations had occurred such that penalties were warranted.4 However, the court of appeals agreed with the ALJ and the ICAO that Interstate and American had not violated section 8-43-503(3) since they were merely "exercising their statutory right to contest liability" concerning the requested treatment.5
On remand, by order dated June 21, 2002, the ALJ found that American failed to comply with the regulations when it denied the WhinRho treatment, and that there was no reasonable medical or legal basis for the denial. Thus, the ALJ imposed penalties against Interstate and American under section 8-43-304(1) of seventy-five dollars per day from the date Brodeur filed his application for a hearing until the date of the hearing on the matter.
Subsequent to the ALJ's order on remand, Petitioner filed this lawsuit against American and AIG ("Respondents") in Denver District Court on August 23, 2002. On behalf of Brodeur and for herself individually, Petitioner asserted eight different causes of action (for a total of sixteen claims) arising from Respondents' handling of Brodeur's workers' compensation claim. Specific to the case before us, Petitioner claimed (1) breach of the...
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