JUDGE BERNARD, dissenting.
¶ 31 Aristotle wrote that, [i]f you would understand anything, observe its beginning and its development. It is my view that the key to this case is found in the origins of sections 10-3-1115 and - 1116, C.R.S. 2017, which the legislature enacted in 2008. Ch. 422, sec. 5, §§ 10-3-1115, -1116, 2008 Colo. Sess. Laws 2172-74. After reviewing the ancestry of those two sections, I conclude that subsection 1116(3) does not void the arbitration clause in the policy in this case because the legislature did not intend that it should apply to arbitration clauses. I therefore respectfully dissent.
¶ 32 As is pertinent to my analysis, section 10-3-1115 creates a duty. Subsection 1115(1) prohibits an insurer from unreasonably delay[ing] or deny[ing] ... a claim for benefits owed to or on behalf of a first-party claimant. Subsection 1115(2) states that a delay or denial of a claim is unreasonable if there was no reasonable basis for [the] action.
¶ 33 Section 10-3-1116 provides the remedy for a breach of the duty established by subsection 1115(1). Subsection 1116(1) provides that an insured whose claim for payment of benefits has been unreasonably delayed or denied may bring an action in a district court to recover reasonable attorney fees and court costs and two times the covered benefit. Subsection 1116(2) prohibits an insurance policy from contain[ing] a provision purporting to reserve discretion to the insurer ... to interpret the terms of the policy ... or to determine eligibility for benefits.
¶ 34 Subsection 1116(3) concerns insurance policies that provide health, life, or disability benefits. It states that, if an insurer has partially or completely denied a claim for such benefits, then those policies shall provide that an insured (1) who has exhausted his or her administrative remedies; (2) is entitled to have his or her claim reviewed de novo in any court with jurisdiction and to a trial by jury. Id.
¶ 35 Where did these two statutes come from? I think that the answer to this question can be found in an ongoing controversy about something called a discretionary clause.
¶ 36 Discretionary clauses often read something like this: Insurer has full discretion and authority to determine the benefits and amounts payable [as well as] to construe and interpret all terms and provisions of the plan. John Morrison & Jonathan McDonald, Exorcising Discretion: The Death of Caprice in ERISA ClaimsHandling , 56 S.D. L. Rev. 482, 483 (2011). These clauses became common in the early 1990s, id. at 482, after the United States Supreme Court decided Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), see Shawn McDermott, CRS § 10-3-1116, ERISA Preemption, and the Standard of Review , 39 Colo. Law. 75 (July 2010).
¶ 37 Firestone Tire addressed the following issue concerning health, life, or disability policies that were governed by the Employee Retirement Income Security Act, which is known as ERISA: What standard of review should a federal district court use when deciding whether an insurer had improperly denied benefits? The Supreme Court held that de novo review was the proper standard, unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan. Firestone Tire , 489 U.S. at 115, 109 S.Ct. 948. But, if a health plans language gives its administrator such discretionary authority, then federal district courts reviewing ERISA claims must apply the abuse of discretion standard to the administrators decision to deny benefits. Metro. Life Ins. Co. v. Glenn , 554 U.S. 105, 111, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008) ; Firestone Tire , 489 U.S. at 109, 115, 109 S.Ct. 948. The difference between de novo review and deferential arbitrary and capricious review is meaningful. See King v. Hartford Life & Accident Ins. Co. , 414 F.3d 994, 998-1000 (8th Cir. 2005) (comparing de novo and abuse of discretion review of an administrators decision).
¶ 38 The proliferation of discretionary clauses caught the attention of the National Association of Insurance Commissioners. The Commissioners were bothered by what they perceived as a conflict of interest that arose when the claims adjudicator[-who is often the plans administrator-]is also the insurer that pays the benefit. McDermott, 39 Colo. Law. at 75. So, in 2002, they drafted a model act, which was entitled Prohibition on the Use of Discretionary Clauses Model Act. Joshua Foster, Note, ERISA, Trust Law, and the Appropriate Standard of Review: A De Novo Review of Why the Elimination of Discretionary Clauses Would Be an Abuse of Discretion , 82 St. Johns L. Rev. 735, 744-45 (Spring 2008). The model act showed state legislatures how to pass laws that prohibited discretionary clauses in health insurance contracts. Id.
¶ 39 As of 2015, almost twenty-five states had either banned or limited discretionary clauses in health insurance policies governed by ERISA, or they were in the process of doing so. Owens v. Liberty Life Assurance Co. , 184 F.Supp.3d 580, 584 (W.D. Ky. 2016). The means to effect the ban or the limitation varied, including statutes, administrative rules, or interpretations issued by a states insurance commissioner. McDermott, 39 Colo. Law. at 76.
¶ 40 Colorado was one of those twenty-five states. Id. ; Radha A. Pathak, Discretionary Clause Bans & ERISA Preemption , 56 S.D. L. Rev. 500, 504 n.30 (2011) ; Morrison & McDonald, 56 S.D. L. Rev. at 488 nn.44-45. The means that it chose to ban discretionary clauses was statutory, in the form of subsections 1116(2) and 1116(3). McDermott, 39 Colo. Law. at 76. More specifically, subsection 1116(2) banned the discretionary clauses, and subsection 1116(3) made it clear that a court reviewing an insurers decision to deny an insureds benefits must apply the de novo standard.
¶ 41 But what about the reference to a right to a jury trial in subsection 1116(3)? At least eight federal circuit courts of appeal, including the Tenth Circuit, have held that insureds who file claims for ERISA benefits are not entitled to jury trials because their claims are equitable in nature. Graham v. Hartford Life & Accident Ins. Co. , 589 F.3d 1345, 1355-57 n.5 (10th Cir. 2009) (collecting cases); see also McDermott, 39 Colo. Law. at 79 ([Federal] [t]rials to the court in ERISA cases are rare. Jury trials do not exist.). It is therefore obvious to me that subsection 1116(3) was designed to avoid the federal prohibition of jury trials. It instead gave an insured a right to a jury trial in state court when he or she filed a claim under subsection 1116(1), which alleged that the plan administrator had unreasonably denied or delayed a claim for benefits. See McDermott, 39 Colo. Law. at 79 (Subsection 1116(3) specifically included the right of an ERISA claimant to a jury trial.).
¶ 42 (I note that there is an open question whether ERISA preempts subsection 1116(3)s jury trial right. See Shafer v. Metro. Life Ins. Co. , 80 F.Supp.3d 1244, 1255-57 (D. Colo. 2015) (concluding that ERISA preempted subsection 1116(3) in its entirety because the statutory jury trial right undermine[d] ERISA by inhibit[ing] prompt adjudication by the judiciary.). But I do not need to cross this bridge to conclude that subsection 1116(3) did not void the arbitration clause in this case.)
¶ 43 Based on this background, I think that our legislature intended subsections 1116(2) and (3) to change the standard of reviewing an insurers decision to deny benefits from abuse of discretion review to de novo review and the identity of the entity reviewing that decision from a court to a jury. See Lewis v. Taylor , 2016 CO 48, ¶ 20, 375 P.3d 1205 (The primary goal of statutory interpretation is to ascertain and give effect to the legislatures intent.); 2A Norman J. Singer & Shambie Singer, Sutherland Statutes and Statutory Construction §§ 48.3 (7th ed. 2014) (Courts look to a statutes contemporary history and historical background as aids to interpretation. ... [C]ourts generally turn to a laws pre-enactment history to discover its purpose, or object, or the mischief at which it was aimed, when the statutes language is inadequate to reveal legislative intent. ... Courts discussing an acts legal history usually are speaking more specifically about prior statutes on the same subject, and recent statutes on similar subjects, and the case law interpreting such legislation. (footnotes omitted) ). The subsections did not have anything to do with voiding arbitration clauses.
¶ 44 For the following reasons, I conclude that the plain language of subsections 1116(2) and (3) supports my view of the legislatures intent. See Lewis , ¶ 20 (To determine the legislatures intent, we look to the plain meaning of the statutory language and consider it within the context of the statute as a whole.).
¶ 45 First, neither subsection includes the words arbitrate or arbitration. And courts do not add language to statutes when interpreting them. See Spahmer v. Gullette , 113 P.3d 158, 162 (Colo. 2005) (We will not create an addition to a statute that the plain language does not suggest or demand.); Carruthers v. Carrier Access Corp. , 251 P.3d 1199, 1204 (Colo. App. 2010) ([W]e will not interpret a statute to mean that which it does not express.).
¶ 46 The legislature knows how to modify or invalidate arbitration clauses if it wants to do so. See § 13-64-403(1), C.R.S. 2017 (It is the intent of the general assembly that ... no medical malpractice insurer shall require a health care provider to utilize arbitration agreements as a condition of providing medical malpractice insurance....); see also Allen v. Pacheco , 71 P.3d 375, 384 (Colo. 2003) (Because the agreement here does not comply with sections 13-64-403(3) and (4)... the agreement is unenforceable and [the plaintiff] is not required to submit her wrongful death claim to binding arbitration.). The legislatures silence about arbitration in subsection 1116(3) is therefore more than deafening; it is clear proof that the legislature did not intend the subsection to void arbitration clauses.
¶ 47 Second, Colorado favors arbitration. See Meister v. Stout , 2015 COA 60, ¶ 10, 353 P.3d 916 ; BFN-Greeley, LLC v. Adair Grp., Inc. , 141 P.3d 937, 940 (Colo. App. 2006). And a broad or unrestricted arbitration clause, such as the one in this case, gives greater force to the presumption in favor of arbitration. See Meister , ¶ 10.
¶ 48 Third, the phrase has exhausted his or her administrative remedies that appears in subsection 1116(3) indicates to me that an insured must go through whatever arbitration process the policy requires before he or she may even consider filing a lawsuit. In Timm v. Prudential Insurance Co. of America , 259 P.3d 521, 529 (Colo. App. 2011), the division stated that [a]n ERISA cause of action generally accrues when a plan administrator denies a claim for benefits. A participant must therefore generally exhaust administrative remedies before seeking judicial relief. (Citation omitted.) This statement was based on a citation to Held v. Manufacturers Hanover Leasing Corp. , 912 F.2d 1197, 1206 (10th Cir. 1990), which referred to a [p]lans administrative remedies. (Emphasis added.)
¶ 49 Federal courts have included arbitration within the class of administrative remedies that must be exhausted. [I]f the plan contains an arbitration clause, the plaintiff must arbitrate the dispute in accordance with the clause in order to exhaust his administrative remedies before filing suit in federal court. Chappel v. Lab. Corp. of Am. , 232 F.3d 719, 724 (9th Cir. 2000) ; accord Kilkenny v. Guy C. Long, Inc. , 288 F.3d 116, 122 (3d Cir. 2002) (Under ERISA, internal administrative remedies like the arbitration procedures mandated in ... labor agreements must be exhausted prior to bringing suit in federal court.); Intl Molders & Allied Workers Union, AFL-CIO, CLC v. Aquarius Shoe Corp. , 511 F.Supp. 361, 363 (E.D. Mo. 1981) ; 15 Steven Plitt, Daniel Maldonado, Joshua D. Rogers, & Jordan R. Plitt, Couch on Insurance § 210:22, Westlaw (3d ed. database updated Dec. 2017)(In keeping with the general ERISA requirement of exhaustion of administrative remedies, the litigation to date has favored enforcement of arbitration agreements pertinent to ERISA-governed welfare benefit plans ... in the context of agreements ... appearing in employer-sponsored plans.) (footnote omitted).
¶ 50 The policy in this case describes three levels of administrative remedies: negotiation, mediation, and binding arbitration. The first two administrative remedies do not bar a subsequent lawsuit. As a result, if those were the only two administrative remedies in the policy, Ms. Meardon would be entitled, under subsection 1116(3), to have ... her claim reviewed de novo in any court with jurisdiction and to a trial by jury.
¶ 51 But those are not the only administrative remedies. I conclude that, not only do the policy and subsection 1116(3) require Ms. Meardon to submit to binding arbitration, but Ms. Meardon cannot file a lawsuit after the arbitral process is over because the arbitration is binding arbitration.
¶ 52 In other words, subsection 1116(3) is conditional, rather than categorical. If insureds are able to file lawsuits concerning the insurers decisions to deny benefits after exhausting the policys administrative remedies, then juries will review their claims de novo. But they might be unable to file lawsuits because of binding arbitration clauses in their policies.
¶ 53 This reading of subsections 1116(2) and (3) renders the policys conformity clause irrelevant for the purposes of this discussion. Because the legislature did not intend subsection 1116(3) to void arbitration clauses, the conformity clause cannot void the arbitration clause in this case. See Grant Farms, Inc. v. Colo. Farm Bureau Mut. Ins. Co. , 155 P.3d 537, 538 (Colo. App. 2006) (A statute and [a] policy provision are not in conflict merely because they are different from one another.).
¶ 54 The majority rejects the preceding analysis of subsection 1116(3) for three reasons. I respectfully disagree with each of them.
¶ 55 Reason one: I should not consider the ancestry of subsection 1116(3) because there is nothing ambiguous about the subsection and because neither party has asserted that there is.
¶ 56 The majority and I reach different conclusions about what subsection 1116(3) means. For example, the majority concludes that the plain words of [subsection 1116(3) ] conflict with the mandatory arbitration clause. Supra ¶19. I conclude that subsection 1116(3) does not apply to arbitration clauses at all. Part of my analysis is based on the absence of any reference to arbitration in subsection 1116(3), and I think that this lacuna is outcome determinative.
¶ 57 Making the fair assumption that both the majoritys interpretation and my interpretation of subsection 1116(3) are reasonable, the difference between them starkly illustrates the ambiguity that the majority concludes does not exist. See Vensor v. People , 151 P.3d 1274, 1277 (Colo. 2007) (If statutory language is susceptible of more than one reasonable interpretation, it is considered ambiguous and subject to construction according to well-accepted aids for determining legislative intent.).
¶ 58 Two well-accepted tools for construing ambiguous statutes are examining the legislative intent[ ] [and] the circumstances surrounding [the statutes] adoption .... Coffman v. Williamson , 2015 CO 35, ¶ 23, 348 P.3d 929 (quoting Williams v. Kunau , 147 P.3d 33, 36 (Colo. 2006) ). Decisions from courts in other jurisdictions may assist in determining legislative intent when they discuss similar statutes. See Mosley v. Indus. Claim Appeals Office , 119 P.3d 576, 579 (Colo. App. 2005) (Courts from other states have almost uniformly concluded that the language and purpose of their states [statute], which are identical to Colorados, demonstrate the legislatures intent ....). More specifically, when dealing with an adaptation of a model act, as we are in this case, we can look to the intent of the drafters of the model act when trying to ascertain the intent of our legislature. See Copper Mountain, Inc. v. Poma of Am., Inc. , 890 P.2d 100, 106 (Colo. 1995). And we may consider the object that the statute seeks to attain, its legislative history, the common law, and the consequences of a particular construction of the statute. § 2-4-203(1)(a), (c)-(e), C.R.S. 2017.
¶ 59 Reason two: The discussion of ERISA cases is irrelevant because this is not an ERISA case.
¶ 60 It does not matter that this case is not an ERISA case. As I have already explained, subsection 1116(3) arose out of ERISA cases. Those cases are therefore helpful in deciding what subsection 1116(3) means, and that meaning spills over to non-ERISA cases.
¶ 61 More particularly, the ERISA precedent is especially instructive because insureds may file cases involving specified ERISA issues in Colorado state courts concerning their health, life, or disability policies. State courts ... and district courts of the United States shall have concurrent jurisdiction over lawsuits filed by a participant or beneficiary in a qualifying plan to recover benefits due ... under the terms of [a] plan, to enforce ... rights under the terms of the plan, or to clarify ... rights to future benefits under the terms of the plan.... 29 U.S.C. § 1132(a)(1)(B), (e)(1) (2012) ; see also Menhorn v. Firestone Tire & Rubber Co. , 738 F.2d 1496, 1500 n.2 (9th Cir. 1984) (Jurisdiction over actions ... to recover benefits or enforce rights under a plan ... is vested concurrently in state and federal courts.).
¶ 62 Reason three: My analysis transcends [the divisions] obligation to decide the issues presented to us by the parties.
¶ 63 The question whether subsection 1116(3) voids arbitration clauses in certain insurance policies has always been front and center in this case. The trial court concluded that,
by requiring health insurance policies issued in Colorado to provide for litigation of claim denials, [subsection 1116(3) ] effectively forbids mandatory arbitration clauses in such policies, and confers specifically upon life, health, and disability policyholders the statutory right to pursue denial of benefits claims in court before a jury. The arbitration clause in [Ms. Meardons] policy is in conflict with [subsection 1116(3) ]. It is, therefore, unenforceable and automatically amended by its own terms" [in the policys conformity clause].
¶ 64 What the reader has already encountered in this dissent responds directly to the trial courts ruling by explaining why subsection 1116(3) does not effectively forbid[ ] mandatory arbitration clauses.... See Melat, Pressman & Higbie, L.L.P. v. Hannon Law Firm, L.L.C. , 2012 CO 61, ¶ 18, 287 P.3d 842 (It is axiomatic that issues not raised in or decided by a lower court will not be addressed for the first time on appeal.) (emphasis added).
¶ 65 In conclusion, I do not think that subsection 1116(3) voided the arbitration clause in this case because (1) the subsections language does not refer to arbitration; and (2) the legislature did not intend that it would have such an effect. I would therefore reverse the trial courts order denying Freedom Lifes motion to compel arbitration, and I would remand this case to the trial court to grant that motion and then to dismiss this case.