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Allstate Insurance Company v. Huizar6/10/2002
JUDGMENT REVERSED AND CASE REMANDED
EN BANC
Allstate Insurance Company petitioned for review of the judgment of the court of appeals in Huizar v. Allstate Insurance Co., 32 P.3d 540 (Colo. App. 2001) (Huizar II), affirming an award of attorney fees in favor of Gloria Huizar. The district court awarded attorney fees for Huizar's successful challenge to a provision of the insurance contract that allowed Allstate to litigate de novo the same issues that had already been resolved by arbitration. The court of appeals found that an award of attorney fees was permitted by the express terms of the contract and, in any event, by the public policy considerations articulated by this court in declaring the de novo trial provision of the insurance contract void as against public policy. See Huizar v. Allstate Ins Co., 952 P.2d 342 (Colo. 1998) (Huizar I). Because we find that the contract cannot be construed to permit an award of attorney fees under the circumstances of this case and neither the statutes nor policy considerations upon which we relied in Huizar I create a new exception to the rule that each party must bear its own attorney fees, the judgment of the court of appeals is reversed and the case is remanded for further proceedings.
I.
The dispute resulting in the attorney fees award at issue in this case grew out of a one-car accident in which Gloria Huizar was injured. Ms. Huizar suffered head and neck injuries when the automobile in which she was being driven by her neighbor crashed into a curb. Allstate Insurance Company, which was Huizar's insurer, paid her medical expenses pursuant to the personal injury protection coverage of her policy. Because her neighbor was uninsured, however, Huizar also looked to Allstate for additional coverage under the uninsured motorist provisions of her policy.
When the parties were unable to agree on the amount of benefits she should receive, Huizar invoked a provision in the policy that allowed either party to call for arbitration of claim disputes. The arbiter awarded Huizar $30,000, plus interest and costs. Allstate then sought a trial de novo, permitted by the policy whenever an arbitration award exceeded the $25,000 minimum liability coverage required by section 10-4-609, 3 C.R.S. (1997)(incorporating the minimum limits as set forth in the Financial Responsibility Act, ยง 42-7-103, 11 C.R.S. (1997)). In response, Huizar moved to dismiss the action and requested that the trial court docket the arbiter's award.
The trial court concluded that the provision permitting a trial de novo violated public policy and was void. It therefore confirmed the arbitration award and entered judgment for Ms. Huizar for the $30,000, interest, and costs. On appeal, the court of appeals reversed. Huizar v. Allstate Ins. Co., 932 P.2d 839 (Colo. App. 1996). This court granted Huizar's petition for writ of certiorari and reversed the judgment of the court of appeals, holding that while no single statement of public policy contained in any statutory or constitutional law directly prohibited the trial de novo clause, by invalidating arbitration, which had already been completed, it needlessly increased costs, diluted uninsured motorist coverage, impeded timely resolution of claims, unreasonably burdened the right of access to the courts, and rendered arbitration a less effective means of dispute resolution, violating the public policy of Colorado favoring fair, adequate, and timely resolution of uninsured motorist claims. Huizar I, 952 P.2d at 345.
On remand, although the trial court substantially reduced Huizar's request as unreasonable, it awarded her attorney fees of $35,000 for successfully challenging the val
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