Colorado’s second-highest court split with its own prior decision earlier this month and concluded injured motorists have two years, not one, to sue insurance companies for withholding relevant information about an at-fault driver’s policy.

In 2019, Colorado lawmakers enacted a measure to help motorists determine which insurance coverage is available in the event of an injury. To facilitate “accurate and reliable information,” the law mandates that auto insurance companies disclose policies within 30 days of a request from a claimant, so long as the policy is or may be relevant to the claim. There is a $100-per-day penalty for companies that withhold information beyond the deadline.

In September 2023, a three-judge Court of Appeals panel concluded that plaintiffs have one year from the date of the violation to sue, under the statute of limitations that applies to “any penalty.“

However, on March 12, a different panel disagreed with that finding. Although the policy disclosure law uses the word “penalty,” Judge Elizabeth L. Harris wrote that the $ 100 per day imposed on violators does not have the legal hallmarks of a penalty.

The “damages are not a fine imposed by the state, suggesting that the provision does not amount to a penalty,” she wrote. More importantly, there is no “determination of overpayment or delinquency for which such penalties are assessed.”

As a result, plaintiffs Joshua and Wendy Weatherill may pursue their lawsuit against State Farm for withholding an alleged at-fault driver’s policy for excess coverage for more than 1.5 years after the Weatherills’ attorney requested it.

The opinion also sets the stage for potential intervention by the state Supreme Court, which considers the existence of conflicting Court of Appeals decisions when deciding whether to weigh in on a legal question.

A driver collided with the Weatherills in December 2020. The next month, the Weatherills’ attorney sought the driver’s insurance policy and other details through State Farm, pursuant to Colorado law. Eight days later, State Farm disclosed the driver’s policy.

On Feb. 16, 2021, the Weatherills’ attorney made a similar request to State Farm’s legal representative. There was no response.

The following year, the plaintiffs sued the at-fault driver. Only then, in October 2022, did they learn that the driver had a second policy with much higher limits than the policy State Farm disclosed in January 2021. The Weatherills sued State Farm, noting they originally requested disclosure of known policies, “including excess or umbrella insurance,” and they had no reason to believe State Farm was withholding information until the belated discovery.

State Farm moved to dismiss the lawsuit, arguing the Weatherills sued outside of the one-year statute of limitations that applies to penalties. Denver District Court Judge Jill D. Dorancy agreed with the company, while acknowledging the Weatherills were in the dark about the existence of a second policy.

“The argument is logical and would have been stronger if Plaintiffs had demanded a response to their February 16, 2021 letter,” she wrote. But “because Plaintiffs failed to follow up regarding their own request for a response, they contributed to the running of the statute of limitation in this matter.”

While the Weatherills appealed, the Court of Appeals issued a decision in Reynolds v. Great Northern Insurance Company, confirming that plaintiffs have one year to sue because of the statute of limitations for penalties.

Although the Weatherills and State Farm did not explicitly dispute the one-year timeline to sue, some members of the appellate panel signaled they were reconsidering the question.

“Wouldn’t (the penalty provision) apply where a governmental entity imposes a penalty and then you have, like, an appeal process through an administrative authority?” asked Judge David H. Yun during oral arguments in 2024. “It just doesn’t seem to apply to me in this situation.”

Ultimately, the panel determined the typical two-year window to sue applied to the Weatherills’ case.

If the panel had accepted the one-year deadline from the Reynolds decision, a plaintiff’s claim against an insurer “could be barred by the one-year statute of limitations even though the claimant did not know, and could not reasonably discover, that an insurer had violated its obligation under the statute. Such an interpretation appears incongruous with the legislature’s purpose,” wrote Harris.

Because the Weatherills filed suit against State Farm within two years of the original violation, the Court of Appeals reinstated their claim.

The case is Weatherill et al. v. State Farm Mutual Automobile Insurance Company.