Stoesz v. State Farm: What Does The Word “Payment” Really Mean When It Comes To Your Insurance Policy?

Posted by Jeremy Rosenthal | Feb 17, 2016 | 0 Comments

In 2015, the Colorado Court of Appeals made a ruling that will have resounding legal ramifications for car accident victims for years to come. And the decision in Stoesz v. State Farm rested on something as simple as defining the word “payment” in Colorado's uninsured motorists claim insurance statute governing the statute of limitations (time limit within which to pursue legal action).

In Stoesz v. State Farm, the plaintiff (Stoesz) was injured in a car accident and was found not at fault for the collision. The other driver (defendant) had Progressive insurance, and Stoesz had additional uninsured motorist coverage through State Farm. Just nine (9) days prior to the three (3) year statute of limitations had run on Stoesz claim(s) against Progressive insurance, Stoesz agreed to settle her claims against Progressive for $25,000. By settling, Stoesz agreed to resolve all claims against Progressive and the defendant. However, Stoesz still intended to utilize her uninsured motorist coverage policy with State Farm to receive additional compensation. So, Stoesz and Progressive agreed to toll the 3-year statute of limitations until Stoesz' attorney could obtain permission from State Farm to settle Stoesz claim(s) against Progressive. This permission was a requirement under Stoesz' uninsured motorist coverage policy with State Farm.

One (1) month after the 3-year statute of limitations had expired, State Farm finally gave permission for Stoesz to accept the $25,000 settlement with Progressive. Accordingly, Progressive issued Stoesz a check for the settlement amount.

Thereafter, Stoesz sought additional compensation from State Farm under her uninsured motorist insurance policy. However, State Farm refused to pay, citing Section 13-80-107.5(1)(b) of the Colorado Statutes which governs the time limits within which to file a claim for uninsured motorist coverage benefits. This law requires that an action for insured motorist coverage benefits must be commenced within 3 years after the accident occurs, unless the underlying bodily injury claim (in this case, Stoesz claim against Progressive) was filed within 3 years of the accident – or, payment of the settlement amount within 3 years of the accident (the $25,000 settlement reached with Progressive). Under these circumstances, Stoesz would then have an additional two (2) years to seek uninsured motorist coverage benefits.

Pursuant to this statute, State Farm argued that because Stoesz did not receive her $25,000 settlement check from Progressive until 3 years and a month from the time of the accident, Stoesz did not receive payment within the requisite 3-year period required by Section 13-80-107.5(1)(b) and therefore, her claim for uninsured motorists benefits was barred by the statute of limitations.

Stoesz' attorney, on the other hand, argued that because the settlement agreement with Progressive was reached 9 days prior to 3 years from the date of the accident, payment in fact had occurred. Furthermore, Stoesz and Progressive had agreed to extend the statute of limitations until State Farm approved the settlement. This position is not unreasonable, because prior to this case, most personal injury attorneys agreed that the additional 2 years to claim insured motorist coverage benefits began from the date a settlement agreement was reached.

However, the Colorado Court of Appeals disagreed. The Court ruled that “payment” actually means receipt of the settlement money, not simply reaching an agreement to settle. Moreover, the agreement between Stoesz and Progressive to toll the statute of limitations had no legal effect on State Farm, who never agreed to extend the time limits and was not a party to Stoesz and Progressive's agreement. Accordingly, State Farm was not required to pay Stoesz anything under her uninsured motorist coverage policy.

This case demonstrates how a simple technicality can change the course of a lawsuit and cost you thousands of dollars. For this reason, it is always best to hire a knowledgeable personal injury attorney—like those at the Law Office of Jeremy Rosenthal—who knows the law to represent you in your personal injury case. Our experienced attorneys can help you recover after an accident by getting you the compensation you and/or your family need to recover. Contact the Law Office of Jeremy Rosenthal for a free consultation today at (303) 647-4511 or visit us online.

About the Author

Jeremy Rosenthal

Attorney Jeremy Rosenthal is dedicated to helping his clients seek just compensation for their injuries regardless of the lengths he has to go to or the distances he may have to travel in order to get it.


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