Clementi v. Nationwide Mutual Fire Insurance Company

16 P.3d 223 (2001)

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Nature of the Case

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Facts

D, a Colorado state trooper, was injured in an automobile accident while acting within the course and scope of his employment. In August 1994, D was notified by State Farm that the other driver's policy was limited to $50,000. The following spring, D's physician determined that he had reached maximum medical improvement and had sustained a seventeen percent impairment rating. In March 1995, D was awarded workers' compensation benefits of approximately $43,000. D gave notice to P of his UIM (uninsured motorist) claim for damages exceeding the State Farm and workers' compensation benefits in August 1995, seventeen months after the accident. In April 1996, P received $50,000 from State Farm, pursuant to a settlement agreement. P filed suit, seeking a declaratory judgment voiding D's coverage because of the alleged failure to give timely notice of the claim as required by the policy. The trial court determined that the latest date for notice under the policy was March 1995, when Clementi learned that he had a seventeen percent disability and knew that his actual damages were already approaching the other driver's policy limits. The court found that the unexplained failure to notify P until five months after this date was unreasonable. The policy required that notice be provided 'as soon as practicable' was not ambiguous within the context of Colorado case law. The policy reason for enforcing notice requirements is to allow insurers to investigate and protect against false claims. The court rejected the argument that P should be required to show prejudice from their late notice in order to void their UIM benefits. P got a summary judgment. The court of appeals affirmed. D appealed.