Bad Faith Insurance Complaint - Colorado

COMPLAINT FOR BAD FAITH BREACH OF INSURANCE CONTRACT — COLORADO

TABLE OF CONTENTS

1. Caption
2. Parties, Jurisdiction, and Venue
3. General Allegations
4. Count I — Breach of Contract
5. Count II — Common-Law Bad Faith Breach of Insurance Contract (Savio)
6. Count III — Statutory Unreasonable Delay/Denial (C.R.S. §§ 10-3-1115/-1116)
7. Count IV — Violations of the Colorado Unfair Claims Settlement Practices Act
8. Damages
9. Prayer for Relief
10. Demand for Trial by Jury
11. Reservation of Rights
12. Signature Block
13. Verification
14. Certificate of Service
15. Colorado Practice Notes
16. Sources and References

1. CAPTION

DISTRICT COURT, [COUNTY] COUNTY, STATE OF COLORADO

[COURT ADDRESS]

Case No.: [________________________________]

Division: [____] Courtroom: [____]

COMPLAINT AND JURY DEMAND

Plaintiff [PLAINTIFF NAME], by and through undersigned counsel, files this Complaint against Defendant [INSURER NAME] ("Defendant" or "Insurer") and alleges as follows:

2. PARTIES, JURISDICTION, AND VENUE

2.1. Plaintiff [PLAINTIFF NAME] is, and at all relevant times was, a citizen and resident of [COUNTY] County, Colorado.

2.2. Defendant [INSURER NAME] is a [domestic/foreign] insurance company organized under the laws of [STATE] with its principal place of business at [ADDRESS], and is authorized to transact insurance business in the State of Colorado.

2.3. This Court has subject-matter jurisdiction under C.R.S. § 13-1-124 and Colo. Const. art. VI, § 9, the amount in controversy exceeding $25,000.00 exclusive of interest and costs.

2.4. Venue is proper in this County under Colo. R. Civ. P. 98(c) because the insured property and/or insured event was located in [COUNTY] County, Plaintiff resides in [COUNTY] County, and/or the breach and tortious conduct occurred in [COUNTY] County.

2.5. Defendant transacts business throughout Colorado and is subject to personal jurisdiction in this State pursuant to C.R.S. § 13-1-124 and the general appearance contemplated by issuing the Policy in Colorado.

3. GENERAL ALLEGATIONS

3.1. The Policy. On or about [__/__/____], Defendant issued to Plaintiff insurance policy number [POLICY NUMBER] (the "Policy"), providing coverage for [DESCRIBE COVERAGE — e.g., homeowners, auto, UM/UIM, commercial property, disability] with effective dates [__/__/____] through [__/__/____]. Plaintiff timely paid all premiums and complied with all conditions precedent.

3.2. The Loss. On or about [__/__/____], Plaintiff sustained a covered loss when [DESCRIBE LOSS EVENT IN DETAIL] (the "Loss"). The Loss falls squarely within the insuring agreement of the Policy and is not subject to any applicable exclusion or limitation.

3.3. Notice and Cooperation. Plaintiff timely reported the Loss to Defendant on or about [__/__/____], was assigned claim number [CLAIM NUMBER], and fully cooperated with Defendant's investigation, including by [describe — submitting proof of loss, sitting for examinations under oath, producing documents, attending IMEs, etc.].

3.4. Defendant's Conduct. Despite Plaintiff's full compliance and the absence of a reasonable basis to dispute coverage or amount, Defendant has [delayed/denied/underpaid] the claim by, among other things:

• Failing to conduct a reasonable, prompt, and thorough investigation;
• [Refusing to pay/Underpaying] the claim despite liability being reasonably clear;
• Misrepresenting policy provisions and coverage terms;
• Demanding documentation already provided or not required by the Policy;
• Relying on biased or result-oriented retained experts;
• Failing to communicate timely about the status of the claim;
• [Other specific conduct].

3.5. Damages. As a direct and proximate result of Defendant's conduct, Plaintiff has suffered economic and non-economic damages, including unpaid policy benefits, consequential damages, attorney fees, court costs, and emotional distress.

4. COUNT I — BREACH OF CONTRACT

4.1. Plaintiff incorporates Paragraphs 2.1 through 3.5 as though fully set forth.

4.2. The Policy is a valid and enforceable contract between Plaintiff and Defendant.

4.3. Plaintiff performed all conditions precedent under the Policy, or such performance was waived or excused.

4.4. Defendant materially breached the Policy by [failing to pay/underpaying/wrongfully denying] covered benefits owed to Plaintiff for the Loss.

4.5. As a direct and proximate result, Plaintiff has been damaged in an amount equal to the unpaid covered benefit, plus consequential damages, in a sum to be proven at trial but in any event in excess of $25,000.00.

5. COUNT II — COMMON-LAW BAD FAITH BREACH OF INSURANCE CONTRACT (SAVIO)

5.1. Plaintiff incorporates Paragraphs 2.1 through 4.5 as though fully set forth.

5.2. Under Colorado law, an insurer owes its insured a duty of good faith and fair dealing implied in every insurance contract. Travelers Ins. Co. v. Savio, 706 P.2d 1258 (Colo. 1985); Goodson v. American Standard Ins. Co., 89 P.3d 409 (Colo. 2004).

5.3. To prevail, Plaintiff must show (a) Defendant's conduct was unreasonable under the circumstances and (b) Defendant knew its conduct was unreasonable or recklessly disregarded the fact that its conduct was unreasonable.

5.4. Defendant acted unreasonably in handling Plaintiff's first-party claim by, among other things, the conduct described in Paragraph 3.4 and by failing to comply with the claims-handling standards of the Colorado insurance industry.

5.5. Defendant knew, or recklessly disregarded the fact, that its conduct was unreasonable. Defendant's claim file, the experience and training of its adjusters, and the lack of any reasonable basis for its position demonstrate the requisite culpable mental state.

5.6. As a direct and proximate result, Plaintiff has suffered economic damages, consequential damages, and non-economic damages including emotional distress, anxiety, and inconvenience.

5.7. Defendant's conduct was attended by circumstances of fraud, malice, or willful and wanton conduct within the meaning of C.R.S. § 13-21-102, entitling Plaintiff to exemplary damages on this common-law claim.

6. COUNT III — STATUTORY UNREASONABLE DELAY/DENIAL (C.R.S. §§ 10-3-1115/-1116)

6.1. Plaintiff incorporates Paragraphs 2.1 through 5.7 as though fully set forth.

6.2. Plaintiff is a "first-party claimant" within the meaning of C.R.S. § 10-3-1115(1)(b)(I) because Plaintiff is asserting an entitlement to benefits owed directly to or on behalf of an insured under an insurance policy.

6.3. C.R.S. § 10-3-1115(1)(a) prohibits an insurer from unreasonably delaying or denying payment of a claim for benefits owed to or on behalf of any first-party claimant.

6.4. An insurer's delay or denial is "unreasonable" if it acts without a reasonable basis. C.R.S. § 10-3-1115(2). The standard does not require proof of a culpable mental state.

6.5. Defendant unreasonably delayed and/or denied payment of covered benefits owed to Plaintiff without a reasonable basis, as set forth above.

6.6. Pursuant to C.R.S. § 10-3-1116(1), Plaintiff is entitled to recover (i) reasonable attorney fees and court costs and (ii) two (2) times the covered benefit.

6.7. The "covered benefit" unreasonably delayed or denied is approximately $[AMOUNT], entitling Plaintiff to a statutory recovery of $[2x AMOUNT] plus fees and costs.

7. COUNT IV — VIOLATIONS OF THE COLORADO UNFAIR CLAIMS SETTLEMENT PRACTICES ACT

7.1. Plaintiff incorporates Paragraphs 2.1 through 6.7 as though fully set forth.

7.2. C.R.S. § 10-3-1104(1)(h) identifies as unfair claim settlement practices, when committed flagrantly and in conscious disregard of the statute or with such frequency as to indicate a general business practice, the following acts which Defendant committed in handling Plaintiff's claim:

• Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue (§ 10-3-1104(1)(h)(I));
• Failing to acknowledge and act reasonably promptly upon communications (§ 10-3-1104(1)(h)(II));
• Failing to adopt and implement reasonable standards for the prompt investigation of claims (§ 10-3-1104(1)(h)(III));
• Refusing to pay claims without conducting a reasonable investigation based upon all available information (§ 10-3-1104(1)(h)(IV));
• Failing to affirm or deny coverage of claims within a reasonable time after proof-of-loss statements have been completed (§ 10-3-1104(1)(h)(V));
• Not attempting in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear (§ 10-3-1104(1)(h)(VI));
• Compelling insureds to institute litigation to recover amounts due under the Policy by offering substantially less than amounts ultimately recovered (§ 10-3-1104(1)(h)(VII)).

7.3. Defendant's violations of § 10-3-1104 supply evidentiary support for the unreasonableness element of the common-law and statutory bad faith claims and demonstrate Defendant's failure to conform to industry standards.

8. DAMAGES

8.1. Contract damages: unpaid policy benefits of approximately $[AMOUNT].

8.2. Consequential damages: including but not limited to [describe — additional living expenses, lost income, financing costs, mitigation costs, costs of repair escalation].

8.3. Statutory damages: twice the covered benefit ($[2x AMOUNT]), plus reasonable attorney fees and court costs under C.R.S. § 10-3-1116.

8.4. Non-economic damages: emotional distress, anxiety, inconvenience, loss of enjoyment of life — recoverable on the common-law bad faith count.

8.5. Exemplary damages under C.R.S. § 13-21-102, in an amount up to the actual damages awarded (or up to three times that amount where § 13-21-102(3) circumstances are present).

8.6. Pre- and post-judgment interest at the statutory rate.

9. PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully requests that the Court:

• A. Enter judgment in favor of Plaintiff and against Defendant on all Counts;
• B. Award contract damages in an amount to be proven at trial in excess of $25,000.00;
• C. Award consequential and non-economic damages on Count II;
• D. Award statutory damages of two times the covered benefit on Count III, plus reasonable attorney fees and court costs under C.R.S. § 10-3-1116(1);
• E. Award exemplary damages on Count II under C.R.S. § 13-21-102, upon timely amendment or proof at trial;
• F. Award pre-judgment and post-judgment interest at the highest lawful rate;
• G. Award costs and any other relief the Court deems just and proper.

10. DEMAND FOR TRIAL BY JURY

Plaintiff demands a trial by jury on all issues so triable pursuant to Colo. R. Civ. P. 38 and C.R.S. § 10-3-1116(2).

11. RESERVATION OF RIGHTS

Plaintiff reserves the right to amend this Complaint to add additional claims, parties, theories of liability, or to seek exemplary damages under C.R.S. § 13-21-102(1.5) upon establishment of prima facie proof.

12. SIGNATURE BLOCK

Date: [__/__/____]

Respectfully submitted,

[LAW FIRM NAME]

By: [________________________________]

[ATTORNEY NAME], Atty. Reg. No. [####]

Counsel for Plaintiff

[STREET ADDRESS]

[CITY, COLORADO ZIP]

Telephone: [NUMBER]

E-mail: [EMAIL]

13. VERIFICATION

STATE OF COLORADO

COUNTY OF [COUNTY]

I, [PLAINTIFF NAME], being first duly sworn upon oath, depose and state: I am the Plaintiff in the foregoing action; I have read the foregoing Complaint; and the matters stated therein are true to my own knowledge except as to those matters stated upon information and belief, and as to those, I believe them to be true.

[________________________________]

[PLAINTIFF NAME]

Subscribed and sworn to before me this [____] day of [_______________], 20[____].

[________________________________]

Notary Public

(My Commission Expires: [__/__/____])

14. CERTIFICATE OF SERVICE

I hereby certify that on this [____] day of [_______________], 20[____], a true and correct copy of the foregoing COMPLAINT AND JURY DEMAND was served via [Colorado Courts E-Filing (CCEF/ICCES) / U.S. Mail / personal service] upon:

[DEFENDANT REGISTERED AGENT NAME]

[REGISTERED AGENT ADDRESS]

[________________________________]

[ATTORNEY NAME]

15. COLORADO PRACTICE NOTES

• Pleading the statutory and common-law claims together. Plaintiffs routinely plead both Savio common-law bad faith and § 10-3-1116 statutory bad faith. The statutory claim is easier to prove (no scienter element) but does not allow exemplary damages; the common-law claim allows exemplary damages but requires the additional "knowing or reckless" element.
• Adjuster liability. Individual claims adjusters are NOT personally liable under § 10-3-1116. Skillett v. Allstate Fire & Cas. Ins. Co., 505 P.3d 664 (Colo. 2022). Sue the insurer entity. Some practitioners still join the adjuster on a common-law theory; verify current case law.
• Statute of limitations. Common-law bad faith may be pled as either contract (3-year, C.R.S. § 13-80-101) or tort (2-year, § 13-80-102). For § 10-3-1116, courts have applied both 1-year (§ 13-80-103(1)(d), penalty provision) and 2-year limitations periods. Rooftop Restoration, Inc. v. American Family Mut. Ins. Co., 418 P.3d 1173 (Colo. 2018), rejected a 1-year penalty limitations period in favor of the general 2-year period in some contexts. File at the earliest applicable date.
• "Fairly debatable" defense. Colorado does NOT recognize a strict "fairly debatable" defense. Sanderson v. American Family Mut. Ins. Co., 251 P.3d 1213 (Colo. App. 2010). A genuine coverage dispute is one factor in reasonableness but does not, alone, preclude bad faith liability.
• Discoverability of claim files. Reserves, supervisor notes, and training materials are generally discoverable in first-party bad faith cases. Silva v. Basin Western, Inc., 47 P.3d 1184 (Colo. 2002).
• Exemplary damages procedure. Under C.R.S. § 13-21-102(1.5)(a), exemplary damages may not be claimed in the initial pleading; they must be added by amendment after the plaintiff establishes prima facie proof. Reserve the prayer in the original complaint and move to amend after early discovery.
• Settlement-related setups. Be cautious of "short-fused" time-limited demands; Colorado courts (e.g., Miel v. State Farm) have allowed evidence of plaintiff motivation to be considered in determining reasonableness.
• Pre-suit DOI complaint. A complaint filed with the Colorado Division of Insurance (DORA) is not a prerequisite to suit but can produce useful evidence (insurer's written response) and document delay.

16. SOURCES AND REFERENCES

• C.R.S. § 10-3-1104 (Unfair methods of competition / unfair or deceptive practices) — https://leg.colorado.gov/
• C.R.S. § 10-3-1115 (Improper denial of claims) — https://colorado.public.law/statutes/crs_10-3-1115
• C.R.S. § 10-3-1116 (Remedies for unreasonable delay or denial) — https://colorado.public.law/statutes/crs_10-3-1116
• C.R.S. § 13-21-102 (Exemplary damages) — https://leg.colorado.gov/
• Travelers Ins. Co. v. Savio, 706 P.2d 1258 (Colo. 1985) — https://law.justia.com/cases/colorado/supreme-court/1985/83sc316-0.html
• Goodson v. American Standard Ins. Co. of Wis., 89 P.3d 409 (Colo. 2004)
• Kisselman v. American Family Mut. Ins. Co., 292 P.3d 964 (Colo. App. 2011)
• Skillett v. Allstate Fire & Cas. Ins. Co., 505 P.3d 664 (Colo. 2022)
• Rooftop Restoration, Inc. v. American Family Mut. Ins. Co., 418 P.3d 1173 (Colo. 2018)
• Colorado Civil Jury Instructions — Chapter 25 (Bad Faith Breach of Insurance Contract) — https://www.courts.state.co.us/
• Colorado Division of Insurance — https://doi.colorado.gov/

Disclaimer: This template is provided for informational purposes only and does not constitute legal advice. An attorney licensed in Colorado must review and customize this document before filing. Laws, citations, and court rules change frequently; verify all authorities before use.