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Adams v. Farmers Insurance Group11/13/1997
Appeal from the District Court of the City and County of Denver
Honorable Connie L. Peterson, Judge
No. 94CV1710
ORDER REVERSED
Opinion by JUDGE ROTHENBERG
Criswell and Davidson, JJ., concur
Defendant, Farmers Insurance Group (Farmers), appeals the trial court's order awarding plaintiffs their attorney fees incurred in prosecuting this action to recover personal injury protection (PIP) benefits. We reverse.
Plaintiffs were insured under an automobile insurance policy issued by Farmers. In 1992, they were injured in a motor vehicle accident. They brought suit against Farmers alleging, inter alia, a statutory claim for PIP benefits under the Colorado Auto Accident Reparations Act, Section10-4-701 et seq., C.R.S. 1997 (the NoFault Act), bad faith breach of insurance contract, negligent misrepresentation, outrageous conduct and willful and wanton conduct. They also requested attorney fees as permitted by the No-Fault Act. See Section10-4-708(1.7)(c), C.R.S. 1997.
Following a two-week trial, the jury found for Farmers on all claims except the one arising under the No-Fault Act. As to that one claim, the jury determined plaintiffs had proven past and future PIP benefits in the amount of $22,000, representing 38% of the total PIP benefits plaintiffs sought. However, in response to a specific interrogatory asking whether Farmers had failed to pay any PIP benefits when due, the jury answered in the negative.
Following a separate hearing, the trial court awarded plaintiffs approximately $99,000 in attorney fees pursuant to Section10-4-708, C.R.S. l997, representing 38% of the fees incurred in connection with the No-Fault Act claim.
Farmers does not appeal the judgment entered pursuant to the jury verdict, but bases its appeal solely upon the propriety of the attorney fees award. Specifically, Farmers contends the trial court was not authorized to award attorney fees pursuant to Section10-4-708 without a finding that the insurer had failed to pay PIP benefits when due. We agree.
In the absence of a statute, court rule, or private contract to the contrary, attorney fees are not recoverable by a prevailing party in either a contract or tort action. Bernhard v. Farmers Insurance Exchange, 915 P.2d 1285 (Colo. 1996).
A threshold determination must be made regarding the circumstances under which Section10-4-708 authorizes a court to award attorney fees. Because this determination involves a matter of statutory interpretation and is a question of law, the trial court's determination is subject to de novo review. See Fogg v. Macaluso, 892 P.2d 271 (Colo. 1995); M.S. v. People, 812 P.2d 632 (Colo. 1991) (trial court's interpretation of statute is not an exercise of discretion, and reviewing court need not defer to its decision).
As relevant here, Section10-4-708(1), C.R.S. 1997, provides that:
In the event that the insurer fails to pay such benefits when due, the person entitled to such benefits may bring an action in contract to recover the same. (emphasis added)
Section 10-4-708(1.7)(c)(I), C.R.S. l997, also provides that:
In determining the amount of attorney fees, if any, to be awarded to the insured the . . . court shall consider . . . the degree by which the insured was successful in the proceeding. (emphasis added)
Based on this statutory language, we conclude that an essential element of a statutory claim for PIP benefits is that the insurer failed to pay such benefits when due. Without this predicate act, the statutory claim fails and, with it, the court's authority to award fees to the
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