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Giampara v. American Family Mutual Insurance Company2/24/2003
JUDGMENT REVERSED
EN BANC
JUSTICE BENDER specially concurs, and JUSTICE KOURLIS joins in the special concurrence.
JUSTICE COATS dissents.
I. INTRODUCTION
This case clarifies the availability of non-economic damages when an insurer has willfully and wantonly breached its insurance contract.
When an insurer has wrongfully refused to pay benefits to an insured, the insured may, under certain circumstances, seek remedies under contract law, tort law, and the Colorado Auto Accident Reparations Act ("No Fault Act" or "Act"). ยงยง 10-4-701 et seq., 3 C.R.S. (2002). In this case, Gioacchino (Jack) Giampapa filed all three types of actions against the American Family Mutual Insurance Company and a jury awarded Giampapa damages under all claims. Under the contract claim specifically, the jury awarded Giampapa $900,000 in economic and non-economic "special damages" for American Family's willful-and-wanton breach of contract. This award did not duplicate any of Giampapa's tort or statutory damages. On appeal today is the issue of whether Giampapa may recover complete non-economic damages under his common law contract claim.
We hold that a complete range of non-economic damages is available when an insurer has willfully and wantonly breached its contract with an insured, so long as the damages are foreseeable at the time of contracting and the damages are a natural and probable result of the breach. We begin our discussion with a summary of the underlying facts of this case and an explanation of its complex procedural history. Next, we address the threshold issue of whether a common law contract claim can coexist with a statutory claim under the No Fault Act, and conclude that the No Fault Act does not preempt a contract claim. We then address contract claims specifically, explaining (1) the background of Colorado's existing "willful-and-wanton" rule; (2) why we retain the rule today; and (3) why the scope of the rule allows an insured to recover complete non-economic damages not limited to "mental anguish." Finally, we apply Colorado's willful-and-wanton rule to Giampapa and find that (1) the "law of the case doctrine" is inapplicable here; (2) his case satisfies the elements of the willful-and-wanton rule; and (3) the full $900,000 award stands because American Family has waived its section 13-21-102.5(3)(a), 5 C.R.S. (2001), statutory cap argument. Accordingly, we reverse the judgment of the court of appeals and reinstate Giampapa's original special damages award in its entirety.
II. FACTS AND PROCEDURAL HISTORY
In 1992, a vehicle traveling at 35-45 miles per hour rear-ended Giampapa while he was stopped at a stop sign. After the initial impact, a second vehicle crashed into the first vehicle, causing another collision. Giampapa suffered numerous serious injuries, including spinal fractures, head and neck injuries, torn knee cartilage, and severe numbness in his arms and legs.
At the time of the accident, the defendant American Family Mutual Insurance Company ("American Family") was Giampapa's automobile insurance carrier. Giampapa was covered under a "deluxe" insurance plan, for which he paid a higher premium and which provided additional benefits beyond the basic personal injury protection ("PIP") coverage required by the No Fault Act. Namely, American Family agreed to pay for medical care provider bills and for reasonable and necessary durable medical equipment.
Following the accident, Giampapa began a physical therapy regimen that included hydrotherapy, treadmill walking, and strengthening exercises. Giampapa's physicians believe that he probably will need to continue this
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