Karyn Gregory v. Safeco Insurance Company of America

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.

SUMMARY
April 21, 2022

2022COA45

No. 20CA1694, Gregory v. Safeco Ins. Co. of America —
Insurance — Property and Casualty Insurance — Homeowners’
Insurance — Late Notice — Notice-Prejudice Rule

A division of the court of appeals considers whether Colorado’s

notice-prejudice rule applies to a notice-of-loss provision in a

homeowners’ insurance policy. This rule excuses an insured’s late

filing of a claim when the insurer is unable to demonstrate that its

interests were prejudiced by the late notice. Concluding that the

supreme court has not yet extended the notice-prejudice rule to

first-party claims under homeowners’ policies — or authorized the

court of appeals to do so — the division instead holds that the

older, traditional rule still applies to such policies.

The division also considers whether a provision of an

insurance policy requiring an insurer to give notice within 365 days
of a covered loss is invalid under section 10-4-110.8(12)(a), C.R.S.

2021, of the Colorado Homeowner’s Reform Act of 2013. This

provision provides that homeowners may still file suit against their

insurer within the applicable statute of limitations notwithstanding

any provision in their insurance policy that requires homeowners to

file suit within a shorter time period. The division concludes that

the 365-day notice provision in question does not contravene this

statute.
COLORADO COURT OF APPEALS 2022COA45

Court of Appeals No. 20CA1694
City and County of Denver District Court No. 19CV34856
Honorable Michael A. Martinez, Judge

Karyn Gregory,

Plaintiff-Appellant,

v.

Safeco Insurance Company of America,

Defendant-Appellee.

JUDGMENT AFFIRMED

Division II
Opinion by JUDGE KUHN
Furman and Pawar, JJ., concur

Announced April 21, 2022

Roth Milne, David Roth, Jennifer A. Milne, Denver, Colorado, for Plaintiff-
Appellant

Lewis Roca Rothgerber Christie LLP, Brian J. Spano, Holly C. White, Aurora
Temple Barnes, Denver, Colorado, for Defendant-Appellee

MoGo LLC, Rodney J. Monheit, Katherine E. Goodrich, Denver, Colorado, for
Amicus Curiae Colorado Trial Lawyers Association

Waltz Reeves, Christopher R. Reeves, Denver, Colorado, for Amicus Curiae
Colorado Defense Lawyers Association
¶1 In this late-notice insurance coverage dispute, Karyn Gregory

brought suit against her insurer, Safeco Insurance Company of

America, after Safeco denied her first-party insurance claim for

property damage as untimely under her homeowners’ insurance

policy. Gregory appeals the district court’s grant of summary

judgment to Safeco rejecting the applicability of Colorado’s notice-

prejudice rule to policies like hers.

¶2 Our appellate courts have not yet considered this issue, and

there appears to be uncertainty surrounding it in federal courts

applying Colorado law. Gregory asks us to resolve this uncertainty.

We conclude that only the supreme court may decide whether to

replace the traditional rule with the notice-prejudice rule for first-

party claims under homeowners’ insurance policies. We therefore

affirm the judgment of dismissal, but we note that this case may

present an opportunity for our supreme court to provide clarity on

this question.

I. Background

¶3 The facts of this case are undisputed. Gregory procured a

homeowners’ insurance policy (the Policy) from Safeco that covered

specified direct physical damage to her home that “occurs during

1
the policy period.” The Policy ran from February 15, 2017, to

February 15, 2018, and in May 2017, a hailstorm damaged

Gregory’s roof — a type of loss covered under the Policy.

¶4 But Gregory did not notify Safeco or file a claim for the loss

until roughly eighteen months later, shortly after a contractor

informed her of the hail damage. Safeco did not initially investigate

the damage to Gregory’s home, but its initial review determined that

the May 2017 hailstorm was the most recent one to occur near

Gregory’s property.1 Based on this determination, Safeco

summarily denied her claim as untimely, citing the eighteen-month

delay and a notice provision in the Policy specific to hail damage:

In case of a loss to which this insurance may
apply, you must perform the following duties:

...

give immediate notice to us or our agent. With
respect to loss caused by the peril of . . . Hail,

1 Safeco did not inspect the damage to Gregory’s roof until after she
filed suit in December 2019. Gregory filed an affidavit by a licensed
public adjuster who inspected her home in February 2020 — more
than thirty-three months after the hailstorm. He believed her roof
had visible and prevalent hail damage from the May 2017 hailstorm
that could still have been inspected more than a year after the
damage occurred.

2
the notice must be within 365 days after the
date of the loss . . . .

Under the same section, the Policy provides that “[n]o action shall

be brought against [Safeco] unless there has been compliance with

the policy provisions . . . .” And at the very beginning of the Policy,

it states that Safeco “will pay claims and provide coverage as

described in this policy if [Gregory] . . . compl[ies] with all the

applicable provisions outlined in this policy.”

¶5 More than two years after Safeco denied her claim, Gregory

filed suit, claiming that Safeco’s denial was a breach of contract and

a bad-faith breach of an insurance policy, and that Safeco

unreasonably delayed and denied payment of her claim under

sections 10-3-1115 and -1116, C.R.S. 2021.

¶6 Safeco filed a motion for summary judgment under C.R.C.P.

56(b), and Gregory responded with a motion for determination of a

question of law under C.R.C.P. 56(h). Both motions addressed the

same two issues Gregory appeals here:

(1) whether Colorado’s notice-prejudice rule applies, which

would require Safeco to demonstrate it was prejudiced by

3
Gregory’s late notice before denying her benefits for an

untimely claim; and

(2) whether the Policy’s 365-day notice provision is invalid

under section 10-4-110.8(12)(a), C.R.S. 2021, which

limits insurers’ ability to contractually shorten the

applicable statute of limitations for insureds to file suits

like Gregory’s against them.

¶7 The district court ruled in favor of Safeco. It concluded that

the 365-day notice requirement did not contravene the statute-of-

limitations provision, that Gregory’s claim was untimely under the

plain terms of the Policy, that her delay was unexcused as a matter

of law, and that Safeco was therefore relieved of its obligation to

provide coverage benefits for her claim.

¶8 In so concluding, the court reasoned that the supreme court

has not extended Colorado’s notice-prejudice rule to first-party

claims under homeowners’ insurance policies like Gregory’s, and, in

this absence, the supreme court’s precedent regarding the

“traditional approach” required the court to strictly apply Gregory’s

failure to abide by the Policy’s notice provision against her. The

4
court thus determined it did not need to reach the question of

whether Safeco was prejudiced by Gregory’s late notice.

II. Analysis

¶9 We review the court’s order granting summary judgment de

novo. MarkWest Energy Partners, L.P. v. Zurich Am. Ins. Co., 2016

COA 110, ¶ 11. Summary judgment is proper if there is no genuine

issue as to any material fact and Safeco is entitled to judgment as a

matter of law. Id.

¶ 10 We agree with the district court on both issues and therefore

conclude that the court properly granted summary judgment to

Safeco.

A. Notice-Prejudice Rule

¶ 11 Gregory does not contend that the terms of the Policy do

anything other than unambiguously bar coverage benefits for a

hail-damage claim unless she provides notice to Safeco within 365

days of her loss. Travelers Prop. Cas. Co. v. Stresscon Corp., 2016

CO 22M, ¶ 12 (“[A]n insurance policy is a contract, the

unambiguous terms of which must be enforced as written . . . .”).

Nor does she contend that her delay in giving notice of her claim

was justified. E.g., Clementi v. Nationwide Mut. Fire Ins. Co., 16

5
P.3d 223, 226-27 (Colo. 2001) (recognizing that, in certain

circumstances, an insured may be excused for untimely notice if

their delay in giving notice was justified).

¶ 12 Instead, Gregory argues the district court erred by not

applying Colorado’s notice-prejudice rule to the notice-of-loss

provision in her homeowners’ insurance policy. This rule “allow[s]

insureds to avoid strict enforcement of a notice provision for public

policy reasons.” Craft v. Phila. Indem. Ins. Co., 2015 CO 11, ¶ 34.

Under it, “an insured who gives late notice of a claim to his or her

insurer does not lose coverage benefits unless the insurer proves by

a preponderance of the evidence that the late notice prejudiced its

interests.” Id. at ¶ 2. If the insurer cannot show prejudice, the

insured is “excuse[d] . . . from fulfilling a straightforward

contractual condition — the notice requirement.” Id. at ¶ 39.

¶ 13 The supreme court has applied the notice-prejudice rule to

notice provisions in underinsured motorist (UIM) and

comprehensive general liability insurance policies. Clementi, 16

P.3d at 224 (UIM policy); Friedland v. Travelers Indem. Co., 105 P.3d

639, 641-42 (Colo. 2005) (liability policy). Gregory acknowledges

that no Colorado court has explicitly applied this rule to

6
homeowners’ policies like hers. Nonetheless, she argues that —

regardless of the type of insurance policy involved — supreme court

precedent allows us to extend this rule to new types of coverage if

we are satisfied by the public policy considerations enumerated in

Clementi.

¶ 14 We disagree. We note the supreme court’s acknowledgement

of the “modern trend” to extend the notice-prejudice rule to late-

notice cases, Clementi, 16 P.3d at 229-30, but the court has been

careful in applying and extending the rule — and indeed in the

associated weighing of public policy considerations. In our view,

applying the notice-prejudice rule to an entirely new class of

insurance policies would still require departure from our supreme

court’s precedent, an undertaking exclusively reserved to that

court. See People v. Novotny, 2014 CO 18, ¶ 26. For this reason,

we conclude the district court properly applied Colorado’s

traditional approach to Gregory’s late-filed insurance claim.

1. The Backdrop: Colorado’s Traditional Approach

¶ 15 Traditionally, Colorado courts did not consider insurer

prejudice in late-notice cases, no matter the type of insurance

policy involved. See Clementi, 16 P.3d at 226. Rather, Colorado law

7
has held that “an unexcused delay in giving notice relieves the

insurer of its obligations under an insurance policy, regardless of

whether the insurer was prejudiced by the delay.” Id. at 227. This

traditional approach is “grounded upon a strict contractual

interpretation of insurance policies under which delayed notice was

viewed as constituting a breach of contract, making the issue of

insurer prejudice immaterial.” Id. at 226.

¶ 16 Yet, the traditional approach did not leave an insured without

recourse in all circumstances when their insurer denied a late claim

as untimely. Rather, Colorado law held that an insured could be

excused for a delay in providing notice if the insured demonstrated

“justifiable excuse or extenuating circumstances explaining the

delay.” E.g., Certified Indem. Co. v. Thun, 165 Colo. 354, 360, 439

P.2d 28, 30 (1968).

¶ 17 Colorado adhered to the traditional approach for nearly a

century following the supreme court’s landmark 1909 case, Barclay

v. London Guarantee & Accident Co., 46 Colo. 558, 105 P. 865

(1909). Marez v. Dairyland Ins. Co., 638 P.2d 286, 288-89 (Colo.

1981) (collecting cases and tracing the traditional approach to

Barclay), overruled in part by Friedland, 105 P.3d 639. Indeed,

8
since Barclay, Colorado courts have applied the traditional

approach to notice provisions for first-party claims under insurance

policies covering property and other personal loss. See Capitol

Fixture & Supply Co. v. Nat’l Fire Ins. Co., 279 P.2d 435, 437 (Colo.

1955) (fire insurance policy for late proof of loss); Circle C Beef Co. v.

Home Ins. Co., 654 P.2d 869, 870 (Colo. App. 1982) (fire insurance

policy for late proof of loss); Jennings v. Bhd. Accident Co., 44 Colo.

68, 73-76, 96 P. 982, 984 (1908) (disability insurance policy for late

proof of loss); Ord. of United Com. Travelers v. Boaz, 27 Colo. App.

423, 425-28, 150 P. 822, 824 (1915) (accidental death insurance

policy for late notice of loss), rev’d on other grounds, 69 Colo. 44,

168 P. 1178 (1917); see also Conn. Fire Ins. Co. v. Colo. Leasing,

Min. & Milling Co., 50 Colo. 424, 435-43, 116 P. 154, 160 (1911)

(refusing to apply traditional approach to notice-of-loss provision in

fire insurance policy based on court’s conclusion that the policy at

issue did not make timely notice a condition precedent to coverage);

Preferred Accident Ins. Co. v. Fielding, 35 Colo. 19, 22-28, 83 P.

1013, 1015-16 (1905) (same outcome for notice-of-loss provision in

accidental injury insurance case).

9
¶ 18 In the 1981 case Marez v. Dairyland Insurance Co., the

supreme court considered for the first time whether to abandon the

traditional approach and adopt the notice-prejudice rule in the

context of an automobile liability insurance case in which the

insured failed to provide any notice to his insurer of an otherwise

covered liability claim made against him. 638 P.2d at 290. In this

no-notice context, the supreme court concluded that the “salutary

purposes of the notice provisions should not be set aside without

substantial justification,” and the insured’s complete lack of notice

“did not provide a factual context compelling a departure from the

traditional approach.” Clementi, 16 P.3d at 227 (citing Marez, 638

P.2d at 290-91). The court thus “refused to depart” from the

approach it traced back to Barclay, id., concluding that the

insured’s failure to abide by the policy’s notice provision

constituted, as a matter of law, a breach of the policy relieving the

insurer of its obligation to cover the claim, Marez, 638 P.2d at 286,

288-89.

¶ 19 Gregory contends that, though the traditional approach was

alive and well in Colorado going into the twenty-first century, the

supreme court’s modern precedent permits this court to reject the

10
traditional approach’s application to her first-party claim under a

homeowners’ insurance policy.

2. Modern Cases: Adopting Notice-Prejudice
in Limited Circumstances

¶ 20 In 2001, the supreme court in Clementi again reviewed

whether to abandon the traditional approach — this time in the

context of a late-notice case under a UIM insurance policy. 16 P.3d

at 224-25. In its analysis, the court observed that it “ha[d] not

previously considered whether the notice-prejudice rule applies in

UIM cases,” and that the modern trend in the majority of states has

been to apply the notice-prejudice rule “in the context of a UIM

case.” Id. at 225, 228. The court decided to bring Colorado in line

with that modern trend and “expressly adopt the notice-prejudice

rule in Colorado, as it applies to UIM cases.” Id. at 232.

¶ 21 To get to this ruling, Clementi distinguished Marez, concluding

that “because Marez involved a no-notice liability case, we find that

Marez is inapplicable in determining whether insurer prejudice

should be considered in the UIM late-notice case at bar.” Id. at

228; see also Friedland, 105 P.3d at 644 n.2. Clementi, in other

11
words, “limited [itself] to the particular context of [its] case, a UIM

policy.” Friedland, 105 P.3d at 645.

¶ 22 In support of its adoption of the notice-prejudice rule for late-

notice UIM cases, Clementi identified three public policies that other

states had offered for justifying a departure from the traditional

approach: (1) the adhesive nature of UIM insurance contracts,

(2) the public policy objective of compensating innocent tort victims,

and (3) the inequity of the insurer reaping a windfall by invoking a

technicality to deny coverage. Clementi, 16 P.3d at 229; see also

Craft, ¶ 26. Reasoning that all three policy justifications had been

recognized in Colorado law — at least in the particular context of

UIM insurance — the court adopted the notice-prejudice rule for

UIM policies, concluding that “insurer prejudice should now be

considered when determining whether noncompliance with a UIM

policy’s notice requirements vitiates coverage.” Clementi, 16 P.3d at

229-30.

¶ 23 Five years later, the supreme court in Friedland again revisited

the notice-prejudice rule in a late-notice liability case, granting

certiorari “to determine whether the notice-prejudice rule

announced in Clementi . . . applies to liability policies” and

12
answering that question in the affirmative. Friedland, 105 P.3d at

641.

¶ 24 The parties in Friedland argued whether Clementi’s adoption of

the notice-prejudice rule should be limited to UIM cases. Id. at 644

n.2. The court recognized a trend in other states to apply this rule

to liability policies, and again it reasoned that the same public

policy justifications outlined in Clementi — this time analyzed in the

liability insurance context — supported the extension of the notice-

prejudice rule to liability policies. Id. at 646-47; see also Marez,

638 P.2d at 293 (Quinn, J., dissenting) (analyzing public policies in

automobile liability context). In so ruling, the supreme court

“overrule[d] Marez to the extent it applies to late-notice liability

cases.” Friedland, 105 P.3d at 643, 645.

¶ 25 Ten years later, the supreme court again revisited the notice-

prejudice rule in two liability insurance cases — Craft and

Stresscon. In Craft, the supreme court declined to extend the

notice-prejudice rule to a date-certain notice requirement in a

“claims-made” policy — that is, a policy which “covers only those

claims brought against the insured during the policy period and

reported to the insurer by a date certain, typically within a brief

13
window following expiration of the policy period.”2 Craft, ¶¶ 3, 4, 7,

32. And in Stresscon, the supreme court again declined to extend

the rule to a different type of policy provision — a “no voluntary

payments” clause that excluded from coverage certain payments the

insured voluntarily made to a tort victim without the consent of

their insurer. Stresscon, ¶¶ 2-3, 23.

¶ 26 In both cases, the supreme court noted that it had not

previously addressed whether the notice-prejudice rule should

apply in these contexts. Craft, ¶ 2; see Stresscon, ¶¶ 17-21. And

for each context, the court reasoned that the public policies

recognized in Clementi did not support the extension of the rule.

Craft, ¶¶ 7, 43-45; Stresscon, ¶¶ 11-15.

3. The Traditional Approach Still
Applies to Gregory’s Policy

¶ 27 Gregory contends that the Clementi line of cases requires us to

determine if the public policies recognized in Clementi support

extension of the notice-prejudice rule to policies like hers. Amicus

2 The court distinguished Friedland as involving an occurrence
liability policy as opposed to a claims-made liability policy. Craft v.
Phila. Indem. Ins. Co., 2015 CO 11, ¶¶ 40-45. Gregory’s policy
covered losses occurring during, not claims made in, the policy
period.

14
in support of Gregory argues that this line of cases establishes

notice-prejudice as the default rule in late-notice cases that applies

unless the Clementi policies are not satisfied.

¶ 28 We disagree with both readings of these cases. We see the

supreme court as taking a case-by-case approach that extends the

notice-prejudice rule to only the particular type of insurance policy

before it. Cf. Stresscon, ¶¶ 8-9 (Clementi and Friedland’s notice

holdings “did not . . . also implicitly extend our newly minted

notice-prejudice rule to no-voluntary-payments or consent-to-settle

provisions.”). The supreme court has not yet unequivocally applied

the notice-prejudice rule to all late-notice cases.

¶ 29 To the contrary, it has specifically limited its notice-prejudice

holdings to UIM and liability insurance policies. In Clementi and

Friedland, it expressly said so. Craft, ¶ 21 (“Although we limited

our holding in Clementi to late notice in the UIM context, our

analysis in that case laid the groundwork for our later decision in

Friedland.”); Friedland, 105 P.3d at 643 (“In this case, we apply the

notice-prejudice rule to liability policies.”). Moreover, both cases

explicitly relied on public policy justifications specific to UIM and

liability policies, respectively. Craft even noted on multiple

15
occasions that Clementi first adopted the notice-prejudice rule “for

UIM cases” and Friedland later “extended” it to liability policies.

Craft, ¶¶ 7, 16, 23, 25, 26.

¶ 30 Against the historical backdrop of the traditional approach in

Colorado, these limited holdings — and their treatment of Marez in

particular — do not persuade us that the court has implicitly

overruled its traditional approach for all insurance policies. As

noted, Friedland overruled Marez “to the extent it applies to

late-notice liability cases.” Friedland, 105 P.3d at 643, 645. And in

Clementi, the court distinguished Marez on the basis that Clementi

involved a UIM rather than liability policy. Id. at 645. Together,

these cases show that the court cabined Marez’s refusal to depart

from the traditional approach to the no-notice liability context —

not the no-notice context for any type of insurance policy.3 In any

3 While the supreme court in Clementi explicitly disapproved of this
court’s extension of Marez to “non-liability late-notice cases,” this
statement came in the context of the supreme court’s discussion of
this court’s application of Marez to both UIM and liability policies.
Clementi v. Nationwide Mut. Fire Ins. Co., 16 P.3d 223, 227-28 & n.5
(Colo. 2001) (citing court of appeals cases applying Marez to UIM
policies). In this context, we do not read “non-liability” to mean “all
types of policies that aren’t liability policies” but rather only the
type before the Clementi court — a UIM policy. See Friedland v.
Travelers Indem. Co., 105 P.3d 639, 644 n.2 (Colo. 2005) (“We

16
event, Marez didn’t announce the traditional approach; it merely

applied it. Id.; Marez, 638 P.2d at 286, 288. We thus disagree that

the supreme court has jettisoned the traditional approach for all

but no-notice cases.

¶ 31 Further, contrary to Gregory’s assertion, this court has never

ruled that the supreme court has given us authority to use the

Clementi justifications to extend the reach of the notice-prejudice

rule to policies other than liability or UIM. In MarkWest, on which

Gregory relies for this assertion, the division held that “Colorado’s

notice-prejudice rule applies even where . . . the notice requirement

is a condition precedent to coverage under an occurrence liability

policy.” MarkWest, ¶ 31. But to reach this conclusion, MarkWest

did not analyze or otherwise rely on the Clementi policies, and,

notably, MarkWest involved the same type of policy as that in

Friedland. See id. at ¶¶ 16, 21-31. Additionally, the supreme court

has seemingly disapproved of this court using the Clementi policies

recognize that [Clementi] might be read as reaffirming the Marez
rule as to all cases other than UIM cases. We clarify that we did not
intend to make a holding to this effect; rather, we were
distinguishing Marez at that time and chose to leave the potential
applicability of our Clementi rationale to a liability policy case to
some future time.”).

17
to extend the notice-prejudice rule to new types of provisions in

UIM and liability policies. Compare Lauric v. USAA Cas. Ins. Co.,

209 P.3d 190, 193 (Colo. App. 2009) (“Although the decision in

Clementi involved a late notice of claim, we conclude that the

supreme court, as evidenced by the decision in Friedland and its

disapproval of the Hawkeye decision in Clementi, would apply the

notice-prejudice rule to an insured's failure to notify the insurer of,

and obtain its consent to, a settlement with a tortfeasor in a UIM

case.”), with Stresscon, ¶¶ 8-9 (“We did not [in Friedland] also

implicitly extend our newly minted notice-prejudice rule to no-

voluntary-payments or consent-to-settle provisions.”).

¶ 32 In our view, given its decision to carefully circumscribe its

holdings rather than announce a broad rule, the supreme court has

not yet indicated that the notice-prejudice rule should apply to all

types of insurance policies. We therefore conclude that the task of

deciding whether to extend the notice-prejudice rule to a new type

of insurance policy is not one we may undertake.

¶ 33 In concluding this, we note that federal district courts

applying Colorado law have split, under facts nearly identical to

those here, on whether the notice-prejudice rule applies to first-

18
party claims under homeowners’ insurance policies. Compare

Cherry Grove E. II Condo. Ass’n v. Phila. Indem. Ins. Co., No.

16-cv-02687-CMA-KHR, 2017 WL 6945038, at *4-5 (D. Colo. Dec.

20, 2017) (in late-notice hail-damage case, concluding the Clementi

policy justifications do not support extension of the notice-prejudice

rule to “first-party insurance coverage”), with Hiland Hills

Townhouse Owners Ass’n v. Owners Ins. Co., No. 17-cv-1773-MSK-

MEH, 2018 WL 4537192, at *4-6 (D. Colo. Sept. 20, 2018)

(concluding the opposite). But even Hiland Hills seemed to

recognize that its conclusion might not be based on controlling

Colorado precedent, but rather on a prediction about what the

supreme court would do with its existing precedent if faced with

this issue. See Hiland Hills, 2018 WL 4537192, at *6 (“[T]o the

extent that Friedland does not already control the outcome here,

this Court is persuaded that the Colorado Supreme Court’s analysis

in that case would yield the conclusion that the notice/prejudice

rule is applicable in the first-party casualty insurance context as

well.”); see also Rocky Mountain Prestress, LLC v. Liberty Mut. Fire

Ins. Co., 960 F.3d 1255, 1259 (10th Cir. 2020) (when Colorado law

has not addressed a specific issue, the federal court will predict

19
what the Colorado supreme court would hold). And, while both

cases analyzed the Clementi policy justifications to reach their

respective conclusions, a third federal case concluded that even

undertaking this Clementi analysis would be improper, as it would

be premised on a prediction that the supreme court would overrule

its existing precedent with respect to the traditional approach. 656

Logan St. Condo. Ass’n v. Owners Ins. Co., 389 F. Supp. 3d 946,

952-56 (D. Colo. 2019); see also 6 W. Apartments, LLC v. Ohio Cas.

Ins. Co., No. 1:20-cv-02243-RBJ, 2021 WL 4949154, at *7 (D. Colo.

Oct. 25, 2021) (agreeing with the analysis in 656 Logan Street and

stating that “[t]he cases establishing notice-prejudice regimes for

some insurance contracts contain policy justifications and broad

language that makes their applicability to other insurance regimes

unclear”).

¶ 34 We also acknowledge that the supreme court has, at times,

spoken more broadly about the implications of its holdings in

Clementi and Friedland. See Stresscon, ¶ 24 (Márquez, J.,

dissenting) (“[O]ur own precedent recogniz[es] that, where a

provision of an insurance contract does not fundamentally define

the scope of coverage, but instead protects the insurer’s opportunity

20
to investigate and defend or settle claims, the insured’s violation of

that provision should not present an absolute bar to recovery.”);

Friedland, 105 P.3d at 645 (“Because of its reasoning and departure

from the Barclay and Marez line of cases in favor of the notice-

prejudice rule adopted by the majority of jurisdictions throughout

the United States, we find that Clementi, not Marez, is the

applicable stare decisis precedent.”); Friedland, 105 P.3d at 647

(“[W]e recognize that our decision today leaves little, if any, vitality

to Marez because disputes will likely arise only in the context of late

notice by an insured . . . .”). Moreover, at least two states that have

considered this issue have extended the notice-prejudice rule to

notice provisions for first-party claims for coverage. Pitzer Coll. v.

Indian Harbor Ins. Co., 447 P.3d 669 (Cal. 2019) (notice-of-loss

provision in policy covering remediation for discovered pollution

conditions); Estate of Gleason v. Cent. United Life Ins. Co., 2015 MT

140, 350 P.3d 349 (notice-of-loss provision in cancer benefit

insurance policy); see also Ridglea Estate Condo. Ass’n v. Lexington

Ins. Co., 415 F.3d 474, 479-80 (5th Cir. 2005) (predicting that

Texas law would apply the notice-prejudice rule to notice-of-loss

provision in property insurance policy); but see GuideOne Mut. Ins.

21
Co. v. First Baptist Church of Brownfield, 495 F. Supp. 3d 428,

435-37 (N.D. Tex. 2020) (predicting that Texas law would not apply

the notice-prejudice rule to proof-of-loss provision in property

insurance policy).

¶ 35 But fundamentally, the purpose of the notice-prejudice rule is

to allow the insured to avoid a forfeiture for reasons of public

policy.4 Craft, ¶ 34. And in Clementi and Friedland, the supreme

court concluded that such reasons warranted the extension of the

rule to the insurance policies before it. But the traditional

approach itself serves its own public policies — policies that might

counsel in favor of forfeiture in this instance. E.g., id. at ¶ 35;

Marez, 638 P.2d at 291; Stresscon, ¶ 12. Gregory, in essence, asks

us to predict that the supreme court would conclude that the public

policies it identified in Clementi would override the policies it has

identified as underpinning the traditional approach.

¶ 36 For her part, Gregory argues that the three Clementi policy

justifications provide good reasons for extending the notice-

4We note that, ordinarily, this court may examine whether a
provision of an insurance contract is void as against public policy.
But “the notice-prejudice rule does not render a notice provision
void,” but rather only excuses late notice. Craft, ¶ 34.

22
prejudice rule to her policy. See Friedland, 105 P.3d at 645 (“We

have a heightened responsibility to scrutinize insurance policies for

provisions that unduly compromise the insured’s interests . . . .”).

First, she argues that, like in the UIM or automobile liability

context, homeowners’ insurance contracts are adhesive, as insureds

enter into them “for the financial security obtained by protecting

themselves from unforeseen calamities and for peace of mind,

rather than to secure commercial advantage as with a negotiated

business contract,” and they are “typically provided with form

contracts promulgated by the insurer” in which there is a disparity

of bargaining power. Friedland, 105 P.3d at 646. Second, she

continues, like in the UIM context, the Policy protects the

homeowner who invokes it for damages and who should be made

whole within the limits of the coverage. While insured homeowners

are not technically victims of a tort, Gregory notes that such

insureds have suffered a loss — they are victims, in essence, of

“acts of god” rather than a human tortfeasor — and coverage for

this loss is a “fundamental purpose” of homeowners’ insurance.

See id. And third, Gregory argues that insured homeowners pay

premiums for this coverage, and whether an insurer’s interests

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would suffer because of technical late notice is exactly what the

notice-prejudice rule is intended to determine.

¶ 37 Gregory argues that these policy reasons warrant extension of

the notice-prejudice rule to first-party claims in the homeowners’

insurance context. Maybe so, but we do not see this policy

judgment as ours to make. See Novotny, ¶ 26 (“If a precedent of

this Court has direct application in a case, yet appears to rest on

reasons rejected in some other line of decisions, the Court of

Appeals should follow the case which directly controls, leaving to

this Court the prerogative of overruling its own decisions.” (quoting

Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477,

484 (1989))). The traditional approach already has its own built-in

safety valve for late-filing insureds — the above-discussed doctrine

of “justifiable excuse.” We think that only the supreme court may

add the notice-prejudice rule to this framework.

¶ 38 This leaves us with older supreme court cases applying the

traditional approach to similar notice provisions in policies covering

property loss. E.g., Capitol Fixture & Supply Co., 279 P.2d at 435

(fire insurance case applying traditional approach to a late-filed

proof of loss). Gregory’s policy included a requirement that she

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report hail damage within 365 days, and coverage benefits under

the Policy were conditioned on complying with its terms. Under this

approach, then, Gregory’s timely notice of loss was a condition

precedent for her contractual right to recover for the hail damage to

her home. See MarkWest, ¶ 13 (“[P]rinciples of contract

interpretation . . . would ordinarily lead us to conclude that timely

notice of [an incident triggering coverage] was a condition precedent

that had to be satisfied before coverage under the policy would be

extended to [that] incident[].”); Fielding, 35 Colo. at 25, 83 P. at

1015-16 (“[W]hile notice is a condition precedent to maintaining an

action, a failure on the part of the insured or beneficiary under a

policy of insurance to comply with its terms with respect to notice

after loss, will not result in a forfeiture of the policy unless, by the

express terms thereof, or by necessary implication, such was the

contract of the parties.”). Gregory’s unexcused late notice therefore

relieved Safeco of its obligation to cover this loss. See Clementi, 16

P.3d at 227.

¶ 39 For these reasons, we conclude that the traditional approach

still applies to the notice provision in Gregory’s homeowners’

insurance policy. The district court thus did not err in declining to

25
determine whether Safeco was prejudiced by Gregory’s untimely

notice. See id. at 226-27 (Under the traditional approach, “delayed

notice [is] viewed as constituting a breach of contract, making the

issue of insurer prejudice immaterial.”).

B. Statute of Limitations

¶ 40 Next, Gregory contends that the 365-day notice provision in

the Policy violates section 10-4-110.8(12)(a) of the Colorado

Homeowner’s Reform Act of 2013. This provision states:

Notwithstanding any provision of a
homeowner’s insurance policy that requires
the policyholder to file suit against the insurer,
in the case of any dispute, within a period of
time that is shorter than required by the
applicable statute of limitations provided by
law, a homeowner may file such a suit within
the period of time allowed by the applicable
statute of limitations . . . .

§ 10-4-110.8(12)(a).

¶ 41 Gregory argues that the 365-day notice provision contravenes

this statute because it effectively shortens the applicable statute of

limitations to 365 days — shorter than that for her legal claims. We

agree with the district court that a policy requirement to file a

timely claim with an insurer has no bearing on the insured’s ability

to file a timely lawsuit for the insurer’s alleged violations of that

26
policy.5 We base this conclusion on principles of accrual and a

plain reading of the 365-day notice provision in question. See

MarkWest, ¶ 13 (“We construe insurance policies according to

principles of contract interpretation.”).

¶ 42 First, “[i]ntegral to any statute of limitations is the time of

accrual: the time when the proverbial clock starts ticking and the

statute of limitations begins to run.” Rooftop Restoration, Inc. v. Am.

Fam. Mut. Ins. Co., 2018 CO 44, ¶ 13. The basis of each of

Gregory’s legal claims is Safeco’s allegedly wrongful handling of her

insurance claim for coverage benefits. See Emenyonu v. State Farm

Fire & Cas. Co., 885 P.2d 320, 324 (Colo. App. 1994). Gregory’s

legal claims did not begin to accrue, then, until at the earliest she

knew or should have known that Safeco wronged her in handling

her insurance claim. See § 13-80-108(1), (6), C.R.S. 2021;

Daugherty v. Allstate Ins. Co., 55 P.3d 224, 226 (Colo. App. 2002),

superseded by statute as stated in Brodeur v. Am. Home Assurance

5 Because we conclude this, we reach neither Safeco’s contention
that Gregory’s motion for a determination of a question of law was,
in fact, a motion for summary judgment filed after the deadline for
dispositive motions, nor Gregory’s responses that her motion was
rather a timely filed cross-motion for summary judgment and that,
either way, Safeco did not preserve its contention.

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Co., 169 P.3d 139 (Colo. 2007). And by definition, Safeco could not

even begin handling her insurance claim — much less handle it

wrongfully — until Safeco received notice of it. Emenyonu, 885 P.2d

at 324. Notice of Gregory’s insurance claim was thus a prerequisite

to accrual of her legal claims based on Safeco’s wrongful handling

of that insurance claim.

¶ 43 Second, the 365-day notice provision on its face does not bar

Gregory from bringing suit against Safeco — either within 365 days

or beyond. “[A]n insurance policy is a contract, the unambiguous

terms of which must be enforced as written,” Stresscon, ¶ 12, and

this notice provision only purports to define one of Gregory’s duties

under the contract. Far from limiting Gregory’s window to file suit,

this provision instead defines a circumstance in which Gregory —

not Safeco — breaches the contract and forfeits entitlement to

coverage benefits for an otherwise covered loss.

¶ 44 The duration, or even the existence, of a provision requiring

Gregory to notify Safeco of covered losses within a certain window

thus has no bearing on her window to file suit for Safeco’s alleged

wrongdoing under that contract. We therefore conclude that the

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365-day notice provision in Gregory’s Policy does not contravene

section 10-4-110.8(12)(a).

III. Conclusion

¶ 45 The judgment is affirmed.

JUDGE FURMAN and JUDGE PAWAR concur.

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