NAII Says Colo. Mandated Retroactive Changes in Contracts Are Unconstitutional

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Colorado court decisions that allowed retroactive mental anguish damages in private contract disputes are unconstitutional and should be overruled, the National Association of Independent Insurers (NAII) maintains.

“Any government mandate that retroactively imposes additional responsibilities on parties to a contract is void if it changes the obligations or substantial rights of anyone who signed the contract,” said NAII Counsel Ann Weber in commenting on a friend of the court brief that NAII filed with the Colorado Supreme Court in the case of Giocchino (Jack) Giampapa v. American Family Mutual Insurance. “People must have the right to enter into a contract knowing what they are obligated to do.

“If these rulings remain unchanged, there is a real threat that parties to a contract will face a myriad of new and unprecedented claims for which there is no constitutionally mandated prior notice. Governmental and judicial intermeddling with business essentially private in nature is contrary to the fundamental concept of free enterprise.”

The case at hand stems from a lawsuit that Giampapa brought against his auto insurer, American Family, for not reportedly paying all the expenses he claimed following an auto accident. Those expenses included a hot tub, treadmill, weight machine, special equipment for his car and a specific type of office chair.

Several court rulings and appeals have ensued dealing with various aspect of the case. NAII limited its brief to the issue of whether allowing mental anguish damages retroactively in private contract disputes conflicts with notice and procedural due process requirements in the U.S. and Colorado Constitutions.

“When Colorado courts expanded the remedies available to aggrieved parties in cases involving willful and wanton breaches of contract, they ignored the comprehensive statutory framework developed by the Colorado Legislature which is the law of Colorado today,” NAII said in its brief. “The Colorado General Assembly enacted these and similar statutes to protect consumers and parties entering into certain contracts.

“This case presents the ideal opportunity for this Court to return the decision regarding what damages are recoverable in breach of contract cases to the Colorado Legislature. Doing so will ensure consistency in the law and will ensure that individual constitutional guarantees are also protected.”


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