By: Jackie Booker, Shareholder, Sutton | Booker | P.C.

On February 7, 2020, HB 20-1290 regarding the failure to cooperate defense was introduced in the House of Representatives of the Colorado General Assembly (“the bill”). The bill addresses the ability of an insurer to use a failure to cooperate defense in an action in which the insured has made a claim for benefits under an insurance policy. The bill bars an insurer from using the failure to cooperate defense unless: 1) the insurer has submitted a request to the insured or the insured’s representative for information the insurer deems necessary for litigation; 2) the information necessary for litigation is not available to the insurer without the assistance of the insured; 3) the request provides the insured 60 days to respond; 4) the request is for information the insurer would be entitled to in litigation; 5) the request cites the specific policy language that entitles the insurer to the information necessary to any lawsuit; 6) the insured’s failure to cooperate has rendered performance by the insurer under the policy impossible; and 7) the insurer gives the insured an opportunity to cure within 60 days after providing a description of the failure to cooperate with particularity within 30 days of the alleged failure to cooperate. In addition and in accordance with current case law regarding failure to cooperate, the alleged failure to cooperate must materially and substantially prejudice the portion of the claim for which the defense is asserted. The insurer is not relieved of its duty to investigate or comply with the Unfair Claims Settlement Practices Act (C.R.S. section 10-3-1104) because of a failure to cooperate and any conflicting policy language in a first party insurance policy will be deemed void as against the Public Policy of the State of Colorado.

The bill was referred to the House Judiciary Committee where it passed by vote of 7-1 on March 10, 2020. From there, the bill would be considered by the entire membership of the House (the so-called “Committee of the Whole.”)

In an unprecedented move, the Colorado General Assembly voted to suspend the General Session due to the COVID-19 pandemic on March 13, 2020. The Colorado Constitution limits the legislative session to 120 “calendar days.” At the time of the adjournment on March 13, 53 days remained in the session. Prior to adjournment, the assembly asked the Colorado Supreme Court to determine whether the constitutional 120 “calendar days” requirement means the days must be consecutive and continuous or whether a declared disaster emergency would permit resumption of the General Session and completion of the remaining 53 days.

On April 1, 2020, the Colorado Supreme Court, in a narrow 4-3 decision, determined that the words “calendar days” are ambiguous and determined the legislature’s interpretation of the words as allowing an interruption in consecutive and continuous days as a reasonable in the midst of a declared disaster emergency. The dissent found the constitutional provision requiring the General Session to last 120 “calendar” days unambiguous and cited numerous statutory and other authorities for this proposition including Black’s Law Dictionary.

The fate of the bill remains uncertain. No date has yet been set to resume the remaining 53 days of the General Session.