Colorado's highest court just sent a clear message to auto insurers: if you want to fight your own customer over uninsured-motorist benefits, you need to show your cards early and in detail. On Monday, the Colorado Supreme Court refused to relax long-standing pleading rules, leaving Progressive Direct Insurance Company on the hook in a Denver crash case where a jury later awarded the policyholder more than $216,000.
High Court Keeps Brekke Standard
In an opinion released Monday, Justice Maria E. Berkenkotter reaffirmed that an insurer "must - as soon as practicable - plead its legitimate defenses specifically," and declined to disturb the 2004 Brekke framework that governs how carriers can participate in uninsured-motorist cases, according to the Colorado Judicial Branch. The court also clarified that Colorado Rule of Civil Procedure 9(b) applies only when an insurer alleges fraud or mistake, and that vague, boilerplate defenses do not satisfy the standard.
How Ortiz Wound Up Before The Justices
Andrew Ortiz sued an uninsured driver and his own insurer after a Denver crash in January 2020. The alleged at-fault driver never showed up, and the court entered a default judgment. Progressive then waited months before arguing it should be allowed to relitigate liability, a delay that would come back to haunt the company, as reported by the Denver Gazette. Trial Judge Alex C. Myers limited Progressive to the damages phase and barred the carrier from contesting liability at the default hearing.
Verdict And Earlier Payments
A jury later found Progressive liable for bad-faith conduct and for unreasonably delaying or denying benefits. Jurors awarded Ortiz $76,493.53 on a statutory claim and $140,000 on a common-law bad-faith claim, for a total of more than $216,000. The district court also recorded that Progressive had paid $86,958.66 following the default judgment hearing. The Supreme Court concluded that those results flowed from Progressive's failure to make a timely, particularized showing that it needed to contest liability, per the Colorado Judicial Branch's opinion.
Appeals Judges Split On Fairness
A three-judge Court of Appeals panel had already backed the trial court's handling of the case, finding that Progressive did not make the specific showing required to participate in the liability determination. One appellate judge, Lino S. Lipinsky de Orlov, wrote separately to warn that the Brekke framework can lead to unfair outcomes when an at-fault driver simply fails to appear, according to Justia. Progressive urged the Supreme Court to revisit Brekke, arguing that technical defaults against third parties can create procedural oddities that prejudice insurers, but the justices declined to take that step.
What It Means For Insurers And Policyholders
Practically speaking, the ruling keeps judges firmly in charge of forcing insurers to identify, early and with precision, the defenses they plan to press in third-party liability proceedings. Plaintiffs' lawyers say that approach helps prevent insureds' uninsured-motorist recoveries from being quietly chipped away. Legal commentary has highlighted the court's procedural clarifications and its narrow reading of Rule 9(b), as reported by Law360. Industry coverage has also unpacked the ruling and its likely effect on carrier pleading practices, according to Insurance Business.
For Colorado drivers, the bottom line is that insurers who want to argue their own customers were at fault now have to put specific defenses on the record quickly or risk being shut out of the liability fight altogether. For carriers, the takeaway is more procedural: generic denials and catch-all defenses may not cut it in future uninsured-motorist disputes. The case, Progressive Direct Insurance Company v. Ortiz, leaves Brekke intact while sharpening several procedural rules that lower courts and litigants in Colorado will be watching very closely.
