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Grahn v. Truck Insurance Exchange9/26/1991
The plaintiff, Bonnie Grahn, appeals the summary judgment entered in favor of the defendant, Truck Insurance Exchange, the insurer. She contends the trial court erred in ruling that she failed to provide adequate proof of her wage loss claim under the Colorado Automobile Accident Reparations Act, § 10-4-701, et seq., C.R.S. (1987 Repl. Vol. 4A) (No Fault Act). The plaintiff also asserts the court erred in dismissing her claims for attorney fees, interest, and treble damages under the statute and for bad faith breach of an insurance contract. We conclude that the proof of wage loss submitted was sufficient to raise an issue of fact. Therefore, we reverse and remand for further proceedings.
On April 14, 1987, the plaintiff was injured in an automobile accident. The car she was driving was covered by a policy issued by the insurer. Before the accident, the plaintiff assisted her husband in a custom farming operation. After the accident, however, she was unable to work, and a worker was hired to help with the farm duties.
In May 1988, the plaintiff requested payment from the insurer for wage loss benefits. As proof of loss, she submitted copies of canceled checks paid to a replacement employee whom she claimed did the work she had previously done as well as heavy labor which she had not performed. The plaintiff estimated that the replacement employee did 50% more work than she had; therefore, she requested wage loss benefits in an amount equal to one-half of his salary. In response to this request, the insurer requested copies of the plaintiff's income tax returns for the years 1986 and 1987. The plaintiff was unable to provide the tax returns at that time.
The plaintiff again requested wage loss benefits in November 1988. When the insurer did not respond, she filed this action seeking damages under the No Fault Act. In addition to the wage loss benefits, the plaintiff sought treble damages, interest, and attorney fees. She also filed claims for bad faith breach of the insurance contract and punitive damages.
The insurer filed a motion for summary judgment which the trial court partially granted, dismissing all the plaintiff's claims except the wage loss benefit claim. On that claim, it concluded there existed a question of fact. However, after the insurer received the plaintiff's tax returns, which showed the farming operation had earned substantially more in the years following the plaintiff's accident than it had in prior years, it filed a second motion for summary judgment. The trial court then dismissed the wage loss claim, finding that the plaintiff had failed to submit reasonable proof of her claim.
In its order granting partial summary judgment, the trial court acknowledged that "one of the primary purposes of the no-fault statute is to provide adequate compensation to victims of motor vehicle accidents" and that "it was the intent of the legislature that self-employed injured parties . . . should be compensated for their loss of income." In granting the insurer's second motion for summary judgment, however, the court found that neither the plaintiff's submission of evidence of the cost of a replacement worker nor her tax return provided adequate proof of loss of income under the No Fault Act. We disagree with that conclusion.
Section 10-4-708, C.R.S. (1987 Repl. Vol. 4A) requires insurers to pay benefits for loss of gross income and for expenses reasonably incurred for essential services. Before an insurer is required to pay a claim under the No Fault Act, an insured must submit "reasonable proof of the fact and amount" of compensable expenses.
As to wage loss benefits, the ins
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