## Facts

- Donna J. Peiffer was injured in an automobile collision on December 24, 1990.
- Peiffer was insured by State Farm under an automobile policy providing personal injury protection (PIP) benefits under Colorado’s Auto Accident Reparations Act (No-Fault Act).
- The policy required State Farm to pay up to $50,000 for medical and rehabilitation expenses that were reasonable, necessary, and causally related to the accident.
- Peiffer received ongoing treatment from multiple providers, who considered continued care necessary.
- State Farm required Peiffer to submit to independent medical examinations (IMEs) by various specialists, who opined that some or all ongoing treatment was no longer necessary or accident-related and that she had reached maximum medical improvement.
- Relying on the IMEs, State Farm declined to pay for further treatment (except pool therapy).
- Peiffer sued State Farm for breach of contract (unpaid PIP benefits) and bad faith breach of an insurance contract.
- At trial, State Farm emphasized Peiffer’s pre-accident chiropractic history to argue her post-accident treatment was unrelated or overstated.
- Over State Farm’s objection, the trial court instructed the jury under the thin-skull doctrine that damages could not be reduced due to a plaintiff’s frailty or preexisting condition that made her more susceptible to injury.
- The jury awarded Peiffer $10,068 for breach of contract and $10,000 for bad faith; the court of appeals affirmed.

## Issues

1. Whether, and under what circumstances, a thin-skull (eggshell plaintiff) jury instruction may be given in an action for breach of an automobile insurance contract seeking PIP benefits under the Colorado No-Fault Act.

## Decision

- The Colorado Supreme Court affirmed.
- The court held that, in appropriate circumstances, a trial court may give a thin-skull instruction in a breach-of-contract action for PIP benefits.
- The court concluded the instruction was permissible where the insurer relies on the insured’s preexisting condition to limit or deny benefits and the jury may otherwise discount causation or damages because the insured is unusually susceptible to injury.
- The matter was remanded for further proceedings consistent with the court’s opinion.

## Legal Principles

- The thin-skull doctrine bars reducing recovery because a claimant’s preexisting vulnerability made the accident-related injury or consequences more severe than in an average person.
- In PIP cases under the No-Fault Act, contractual causation (“causally related to the automobile accident”) may be evaluated using concepts similar to tort causation where the claim involves accident-caused injury and medical expenses.
- A thin-skull instruction may be proper in a PIP breach-of-contract trial when the evidence and arguments risk an improper reduction of benefits based on the insured’s susceptibility rather than a correct causation analysis.
- The No-Fault Act and standard PIP policy language do not, without express terms, exclude coverage for accident-related aggravation of preexisting conditions.
- Using the instruction does not enlarge coverage beyond the policy; it guides the jury’s assessment of causation and damages within the policy’s benefit framework.

## Conclusion

Colorado law permits a thin-skull jury instruction in a PIP breach-of-contract action when the insurer highlights a preexisting condition to contest accident-related causation or expenses, so the jury does not reduce benefits solely because the insured was unusually vulnerable to injury.


State Farm Mut. Auto. Ins. Co. v. Peiffer, 955 P.2d 1008 (Colo. 1998)