SNR Denton on Sanderson v. American Family Insurance Co.: “Fair Debatability” Not Threshold Defense in Colorado?

SNR Denton on Sanderson v. American Family Insurance Co.: “Fair Debatability” Not Threshold Defense in Colorado?

   By William T. Barker & Ronald D. Kent, Partners, SNR Denton

Sanderson v. American Family Insurance Co.[1] affirmed summary judgment for an insurer on bad faith, but asserted that the fact that the claim was “fairly debatable” was not (as the trial court had thought) a threshold defense.  That “defense” is fundamental to the structure of a bad faith claim, and this commentary concludes that the court only rejected a misunderstood version of the “defense” and is fully consistent with recognition of the properly understood rule.

[1] Sanderson v. American Family Ins. Co., 2010 Colo. App. LEXIS 1665.

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William Barker and Ronald Kent are authors of New Appleman Insurance Bad Faith Litigation, Second Edition.

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