Schultz v. GEICO Casualty Company

(Colorado Supreme Court Limits Availability of Independent Medical Examination in UM/UIM Bad Faith Litigation)

(April 2019) - The Colorado Supreme Court's November 5, 2018 decision in Schultz v. GEICO Cas. Co., 429 P.3d 844 (Colo. 2018) may have far-reaching impacts for UM/UIM claims handling and bad faith litigation. The Court held that in bad faith litigation, an insurance company's "conduct must be evaluated based on the evidence before it when it made its coverage decision" and that the insurance company "is not entitled to create new evidence in order to try to support its earlier coverage decision." The Court concluded it was an abuse of discretion for the trial court to order an independent medical examination ("IME") of the plaintiff in a UM/UIM bad faith case because an IME was not requested by the insurance company during its investigation of the UM/UIM claim.