Rabin v. Fidelity National Insuance Company et al
ORDER. Plaintiffs Motion to Assert Punitive Damages Pursuant to Colo. Rev. Stat. § 13-21-102(1.5)(a) 64 is DENIED with prejudice. Plaintiffs Motion for Partial Summary Judgement Re Failure to Satisfy Appraisal Award 65 is DENIED. By Judge Lewis T. Babcock on 2/17/2012.(sah, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
LEWIS T. BABCOCK, JUDGE
Civil Case No. 10-cv-01645-LTB-KLM
FIDELITY NATIONAL PROPERTY AND CASUALTY INSURANCE COMPANY,
This matter is before me on two motions by Plaintiff Keith Rabin. The first is his Motion
to Assert Punitive Damages Pursuant to Colo. Rev. Stat. § 13-21-102(1.5)(a) [Doc #64], against
Defendant Fidelity National Property and Casualty Insurance Company. The second is his Motion
for Partial Summary Judgement Re Failure to Satisfy Appraisal Award [Doc #65]. After considering
the parties’ arguments, and for the reasons herein, I DENY Plaintiff’s first motion with prejudice,
and I DENY his second motion.
Only an abbreviated recitation of the facts is necessary. Plaintiff had a homeowner’s
insurance policy issued by Defendant. On February 19, 2009, a fire occurred at Plaintiff’s home,
damaging his real and personal property. Plaintiff submitted a claim for his loss to Defendant, and
Defendant began its claim review and adjustment process.
Shortly after the fire, Defendant began making payments to Plaintiff for, inter alia, some of
his personal property losses. Between February 25, 2009, and January 19, 2010, Defendant made
various payments to Plaintiff totaling $34,403.89 for his personal property claim.
For numerous reasons, but primarily because Plaintiff expressed dissatisfaction with
Defendant’s handling of his claim and the valuation process, Defendant requested an appraisal of
the loss for Plaintiff’s entire claim. Plaintiff’s insurance policy permitted this action. Pursuant to
Defendant’s request, James Espinoza of Disaster Restoration, Inc., and Jeffrey Mercer of Vericlaim,
Inc., appraised Plaintiff’s personal property loss. On July 13, 2010, the two appraisers concluded
that the actual cash value for Plaintiff’s personal property loss was $52,376.74. (Under the terms of
the insurance policy, the “actual cash value” was the pertinent value.) Accordingly, the appraisers
issued an appraisal award reflecting their conclusion and this amount (the “Award”).
Per the terms of Plaintiff’s insurance policy, the Award represented the entire amount of his
personal property loss. As a result, before paying Plaintiff the Award, Defendant deducted the
$34,403.89 it had previously paid Plaintiff for his personal property claim (the “Deduction”). The
Deduction encompassed four items that are the subject of Plaintiff’s motion for summary judgment.
Without waiving its right or ability to challenge the Award, Defendant then satisfied the Award by
paying Plaintiff the remainder via two payments made on July 21 and 22, 2010, respectively.
Plaintiff ultimately became disenchanted with how Defendant handled his claim. On June
11, 2010, he filed suit in state court. Among other things, he alleges that Defendant grossly
mistreated him, failed to properly communicate with him, and improperly denied aspects of his
claim. The suit levies three causes of action: (1) breach of contract; (2) bad faith breach of an
insurance contract; and (3) a violation of Colo. Rev. Stat. § 10-3-1116. Defendant removed the case
to this Court on diversity grounds pursuant to 28 U.S.C. §§ 1332 and 1441.
II. Motion to Assert Punitive Damages
In this motion, Plaintiff requests leave to amend his complaint to assert a claim for punitive
damages pursuant to Colo. Rev. Stat. § 13-21-102(1.5)(a). That statute provides the following:
A claim for exemplary damages in an action governed by this section may not be
included in any initial claim for relief. A claim for exemplary damages in an action
governed by this section may be allowed by amendment to the pleadings only after
the exchange of initial disclosures pursuant to rule 26 of the Colorado rules of civil
procedure and the plaintiff establishes prima facie proof of a triable issue. After the
plaintiff establishes the existence of a triable issue of exemplary damages, the court
may, in its discretion, allow additional discovery on the issue of exemplary damages
as the court deems appropriate.
Colo. Rev. Stat. § 13-21-102(1.5)(a).
Defendant argues that the motion should be denied as untimely. It refers the Court to this
case’s Scheduling Order. See Doc # 12 (the “Scheduling Order”). The Scheduling Order set
February 7, 2011, as the deadline for amending the pleadings; Plaintiff filed this motion nearly nine
months after that deadline. As a result, Defendant argues that Plaintiff must satisfy both Fed. R. Civ.
P. 15(a)(2) and 16(b)(4) and that Plaintiff fails to do so.
I begin by surveying the landscape of Rules 15(a) and 16(b)(4). Rule 15(a) governs the
amendment of pleadings before trial. See Fed. R. Civ. P. 15(a). Under the rule, “[e]xcept when an
amendment is pleaded ‘as a matter of course, . . a party may amend its pleading only with the
opposing party’s written consent or the court’s leave.’ ” Bylin v. Billings, 568 F.3d 1224, 1229 (10th
Cir. 2009). Courts “should freely grant leave when justice so requires.” Id. The rule’s purpose “is
to provide litigants the maximum opportunity for each claim to be decided on its merits rather than
on procedural niceties.” Minter v. Prime Equip., 451 F.3d 1196, 1204 (10th Cir. 2006) (internal
quotations omitted). Therefore, “[r]efusing leave to amend is generally only justified upon a
showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure
to cure deficiencies by amendments previously allowed, or futility of amendment.” Frank v. U.S.
West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993); accord Foman v. Davis, 371 U.S. 178, 182 (1962).
Whether to grant leave to amend the pleadings pursuant to Rule 15(a) is within the court’s wide
discretion. See Minter, 451 F.3d at 1204; see also Calderon v. Kan. Dep’t of Soc. & Rehab. Servs.,
181 F.3d 1180, 1187 (10th Cir. 1999). Consequently, the trial court’s decision will not be reversed
“absent an abuse of discretion,” which is when the decision was “arbitrary, capricious, whimsical,
or manifestly unreasonable.” Bylin, 536 F.3d at 1229.
Rule 16 governs amendments to pretrial scheduling orders. See Fed. R. Civ. P. 16(b). The
rule “gives district courts wide latitude in entering scheduling orders.” Burks v. Okla. Publ’g Co.,
81 F.3d 975, 978 (10th Cir.) A scheduling order sets a deadline for amending the pleadings. After
a scheduling order is entered, it may be amended only upon a showing of “good cause and with the
judge’s consent.” Fed. R. Civ. P. 16(b)(4). The Scheduling Order here so stated. See Scheduling
Order § 13. “Demonstrating good cause under the rule ‘requires the moving party to show that it
has been diligent in attempting to meet the deadlines, which means it must provide an adequate
explanation for delay.’ ” Strope v. Collins, 315 Fed. App’x 57, 61, 2009 WL 465073, *3 (10th Cir.
Feb. 25, 2009). A district court’s refusal to modify a scheduling order will be reviewed for an abuse
of discretion. Burks, 81 F.3d at 978.
Because “[r]ule 15(a) does not restrict a party’s ability to amend its pleadings to a particular
stage in the action,” Minter, 451 F.3d at 1205, the rules overlap when a party seeks to amend a
pleading after the scheduling order’s deadline. To be sure, a party seeking to amend an existing
pleading after the scheduling order’s deadline must meet Rule 15(a)(2). See, e.g., U.S. ex rel.
Ritchie v. Lockheed Martin Corp., 558 F.3d 1161, 1166 (10th Cir. 2009); see also Martinez v. Target
Corp., 384 Fed. App’x 840, 847 n.5, 2010 WL 2616651, *4 (10th Cir. July 1, 2010).
By contrast, it is unclear whether a plaintiff seeking to amend an existing pleading after a
scheduling order’s deadline must also meet Rule 16(b)(4)’s “good cause” requirement. “Most
circuits have held that when a party amends a pleading after a deadline set by a scheduling order,
Rule 16 and its ‘good cause’ requirement are implicated.” Bylin, 568 F.3d at 1231 n.9 (citing cases
from other jurisdictions for that proposition). The Tenth Circuit, however, “has not ruled on that
question in the context of an existing pleading.” Id.; accord Lockheed Martin Corp., 558 F.3d at
1166 (explaining that the Tenth Circuit “has not yet considered whether Rule 16(b)(4) must be met
when motions to amend pleadings would necessitate a corresponding amendment of scheduling
orders”) (citing Minter, 451 F.3d at 1205 n.4). (I note parenthetically that there is precedent from
this Court that the moving party must meet both rules in this situation. See, e.g., Pumpco, Inc. v.
Schenker Int’l, Inc., 204 F.R.D. 667, 668 (D. Colo. 2001), Nicastle v. Adams Cnty. Sheriff’s Office,
2011 WL 1465586 (D. Colo. Mar. 14, 2011).)
This matters because Rule 16(b)(4) imposes “an arguably more stringent standard than the
standards for amending a pleading under Rule 15.” Bylin, 568 F.3d at 1231; accord Martinez, 384
Fed. App’x at 847 n.5 (stating that Rule 15(a)(2) is “more lenient” than Rule 16(b)(4)). Thus, if a
plaintiff must meet both rules, it is entirely conceivable that he could satisfy Rule 15(a)(2) but fail
Rule 16(b)(4) and would therefore be precluded from amending his complaint. Conversely, if he
must meet only Rule 15(a)(2), whether he can show “good cause” under Rule 16(b)(4) is irrelevant.
With that survey, I turn to Plaintiff’s motion. I note that cases from this Court begin with
Rule 16(b)(4). See, e.g., Nicastle, 2011 WL 1465586, at *1 (“Because Plaintiff filed his motion after
the deadline for amending the pleadings, the court employs a two-step analysis, first determining
whether Plaintiff has shown good cause to modify the scheduling order under [Rule 16(b)], then
evaluating whether Plaintiff has satisfied the standard for amendment under [Rule 15(a)].”); and
Pumpco, supra. But when the Tenth Circuit has held that Rule 15(a)(2) is unsatisfied, it does not
address Rule 16(b)(4). See, e.g., Lockheed Martin Corp., 558 F.3d at 1166 (“Because the motion
cannot meet the Rule 15(a)(2) standard, however, this court does not address whether compliance
with Rule 16(b)(4) is also required.”); see also Martinez, 384 Fed. App’x 840, 847 n.5 (“We need
not address Target’s argument that Rule 16(b)(4)’s ‘good cause’ standard applies in this case
because [the plaintiff] cannot satisfy the more lenient standard of Rule 15(a)(2).”). I hew to this
approach and begin with Rule 15(a)(2).
The first issue is whether the Plaintiff’s motion is subject to Rule 15(a). I conclude that it
is. Rule 15(a) applies to “amendments.” See Fed. R. Civ. P. 15(a). Plaintiff’s first amended
complaint does not seek punitive damages. See 1st Am. Compl. at 3. This motion seeks leave to
assert them. This is an “amendment” under the Federal Rules of Civil Procedure. See, e.g., Doelle
v. Mountain States Tel. & Tel., 872 F.2d 942, 947-48 (10th Cir. 1989) (“The plaintiff’s original
complaint did not seek punitive damages, exemplary damages, or damages for mental distress.
Because the plaintiff did not seek such damages in his original complaint, the district court could
not award them without permitting the plaintiff to amend”) (emphasis added); see also Wessel v.
City of Albuquerque, 299 F.3d 1186, 1196-97 (10th Cir. 2002). Section 102(1.5)(a) bolsters my
conclusion. It prescribes that “[a] claim for exemplary damages in an action governed by this
section may be allowed by amendment of the pleadings . . . .” Colo. Rev. Stat. § 13-21-102(1.5)(a)
(emphasis added). Even Plaintiff’s first amended complaint states that he needs to assert punitive
damages “by way of property amendment.” See 1st Am. Compl. at 3 (emphasis added). His request
to amend comes after the Scheduling Order deadline. See Scheduling Order § 9(a) (“Deadline for
Joinder of Parties and Amendment of Pleadings: February 7, 2011). Thus, Rule 15(a)(2) patently
applies. See, e.g., Lockheed Martin Corp., 558 F.3d at 1166.
In his reply, Plaintiff contends that neither Rule 15(a) nor Rule 16(b)(4) applies. This
explains why his motion does not quote, reference, or otherwise rely on either rule. Plaintiff heavily
relies upon Fernandez v. Bridgestone/Firestone, Inc., 105 F. Supp. 2d 1194 (D. Colo. 1994), and
Ambraziunas v. Bank of Boulder, 846 F. Supp. 1459, 1466 (D. Colo. 1994), for the proposition that
“asserting a claim for punitive damages pursuant to [section 102(1.5)(a)] does not involve an
amendment of the pleadings pursuant to [Rule 15].” Those cases do not stand for that proposition.
In Fernandez, supra, the plaintiff moved for leave to amend his complaint to assert a claim
for punitive damages prior to the scheduling order’s amendment deadline. The court held that a
request for punitive damages does not constitute a separate and distinct cause of action. Id. at 1196.
It instead concluded that it is a request for relief. Id. Therefore, the court stated, “[i]t would be
futile to allow the plaintiffs to amend to assert a claim for punitive damages, because any such claim
would be subject to dismissal as a matter of law.” Id. (emphasis added). The court did, however,
grant the plaintiff’s motion in so far as it sought to request punitive damages under an existing claim.
But, in rendering its decision, the court explicitly stated that “the plaintiff’s Motion to Amend is
governed . . . by Fed. R. Civ. P. 15(a).” Id. at 1195; accord at 1196 (“The defendant’s acknowledge
. . . that [p]laintiffs may be permitted to add a request for punitive damages to their prayer for relief
under the liberal standard of Rule 15(a).”) (emphasis added). Thus, Fernandez does not stand for
the proposition that a motion for leave to assert punitive damages is excepted from Rule 15(a). To
the contrary, it posited that Rule 15(a) applies. Plaintiff’s reliance on this case is also misplaced
because the plaintiff in Fernandez moved to amend to assert punitive damages before the scheduling
Plaintiff also distorts Ambraziunas, supra. In that case, a plaintiff similarly attempted to
assert a claim for punitive damages. 846 F. Supp. at 1466. The court held that in Colorado, “[a]
request for exemplary damages does not constitute a separate and distinct cause of action but is a
request for relief, auxiliary to an underlying claim for actual damages.” Id. It thus dismissed the
claim but granted the plaintiff “permission to replead this element of damages in connection with
those claims in which they are appropriately recoverable, but not as a separate claim for relief.” The
court did not hold that a motion for leave to assert punitive damages is excepted from Rule 15(a).
It instead treated that particular amendment as all others, to which Rule 15(a) applies. See id.
Plaintiff also conclusorily asserts that the motion does not implicate the Scheduling Order
deadline. See Pl.’s Reply In Support of Mot. to Assert Punitive Damages ¶ 6. This is problematic.
As Plaintiff would have it, then, nothing establishes a time by which he must assert punitive
damages. In that system, a plaintiff could move to assert punitive damages on the eve of trial. This
cannot be so.
For these reasons, I conclude that Rule 15(a)(2) applies to Plaintiff’s motion. Hence, the
next issue is whether Plaintiff actually satisfies the rule. Defendant argues that Plaintiff does not
because the motion is untimely. I agree with Defendant.
In Foman, the Supreme Court listed “undue delay” as a justification for denying a motion
to amend. 371 U.S. at 182. It is true that “[l]ateness does not of itself justify the denial of the
amendment.” Minter, 451 F.3d at 1205 (quoting R.E.B., Inc. v. Ralston Purina Co., 525 F.2d 749,
751 (10th Cir. 1975)). “However, ‘[a] party who delays in seeking an amendment is acting contrary
to the spirit of the rule and runs the risk of the court denying permission because of the passage of
time.’ ” Id. (quoting R.E.B., Inc.,525 F.2d at 751). And the longer the delay, “the more likely the
motion to amend will be denied, . . .” Id. (quoting Steir v. Girl Scouts of the USA, 383 F.3d 7, 12
(1st Cir. 2004)). Although there is no deadline for moving to amend under Rule 15(a)(2), the Tenth
Circuit has affirmed a district court denying a plaintiff’s motion to amend his complaint on grounds
that it was filed three months after a scheduling order’s deadline. See Doelle, 872 F.2d at 947.
With respect to establishing “undue delay,” the Tenth Circuit “focuses primarily on the
reasons for the delay.” Minter, 451 F.3d at 1206. It has held that denial of leave to amend is
appropriate “when the party filing the motion has no adequate explanation for the delay.” Frank,
3 F.3d at 1365-66; accord Durham v. Xerox Corp., 18 F.3d 836, 840 (10th Cir. 1994)
(“[U]nexplained delay alone justifies the district court's discretionary decision.”). Importantly, I
need not find prejudice to deny the motion. See Minter, 451 F.3d at 1205-06, nn. 5 & 6.
The deadline for amending the pleadings was February 7, 2011. See Scheduling Order §
9(a). Plaintiff filed this motion on October 31, 2011–nearly nine months after the amendment
deadline. The motion is devoid of explanation for this delay. Nor does Plaintiff proffer an
explanation is his reply; he instead argues that Rules 15(a) and 16(b)(4) simply do not apply. Under
Tenth Circuit jurisprudence, this lack of explanation alone justifies denying the motion. See Frank,
supra; and Durham, supra.
The unexplained delay is exacerbated by a number of other considerations. First, Plaintiff
concedes that, from the time he filed his complaint on June 11, 2010–nearly seven months prior to
the amendment deadline and 16.5 months prior to the motion–he intended to assert punitive
damages. This makes his failure to adhere to the Scheduling Order deadline even more troubling.
Second, Plaintiff intimates that section 102(1.5)(a) somehow precluded him from adhering
to the Scheduling Order deadline. This is not the case. Section 102(1.5)(a) states that “[a] claim for
exemplary damages in an action governed by this section may be allowed by amendment to the
pleadings only after the exchange of initial disclosures pursuant to rule 26 of the Colorado rules of
civil procedure and the plaintiff establishes prima facie proof of a triable issue.” The parties
exchanged initial disclosures on October 19, 2010. This was 111 days before the deadline to amend
the pleadings. True, the section also requires the plaintiff to establish prima facie proof of a triable
issue, but Plaintiff does not explain that this proof was procured only after the deadline passed.
Instead, he essentially argues that the deadline did not even apply because asserting punitive
damages was not an amendment, which I explained is incorrect.
Third, assuming, arguendo, that the evidence needed to make the showing above was
obtained after the February 7 deadline, two problems remain. Plaintiff could have filed a motion
requesting an extension prior to the deadline. Furthermore, discovery ended September 1, 2011.
See Scheduling Order § 9(b). This motion could have been filed during discovery or immediately
thereafter. It was not; it was filed approximately two months after discovery ended. I am not
commenting upon whether I would have granted the motion had it been filed during or immediately
after discovery. I am simply stating that filing it at that time would have behooved Plaintiff more
than filing it when he did.
Plaintiff would have me disregard the Scheduling Order, the Federal Rules of Civil
Procedure, and established case law to grant his motion. I decline to do so. For the reasons above,
I find that the motion is untimely. It therefore does not meet Rule 15(a)(2). Consequently, I need
not and do not address whether compliance with Rule 16(b)(4) is also required and, if so, whether
Plaintiff complies. See Lockheed Martin Corp., 558 F.3d at 1166; see also Martinez, 384 Fed. App’x
at 847 n.5. Accordingly, I deny Plaintiff’s motion with prejudice.
III. Motion for Partial Summary Judgement
A. Standard of Review
“Summary judgment is appropriate ‘if there is no genuine dispute as to any material fact and
. . . the movant is entitled to judgment as a matter of law.’ ” Fowler v. U.S., 647 F.3d 1232, 1237
(10th Cir. 2011) (quoting Fed. R. Civ. P. 56(c)). When applying this standard, I view the evidence
and draw reasonable inferences therefrom in the light most favorable to the nonmoving party. See
Simms v. Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th
Cir. 1999). “Summary judgment is inappropriate if a rationale factfinder could find in favor of the
nonmoving party based on the evidence presented.” Fowler, 647 F.3d at 1237.
In this motion, Plaintiff argues two things. The first is that Defendant undisputably owes him
an additional $12,073 pursuant to the Award. Plaintiff contends that this is because $12,073 of the
Deduction was improper. To that end, he explains that both appraisers agreed that they did not
intend for the Deduction to include the following four things, the sum of which is $12,073: (1) a
$6,250 subtraction for prior payment by Defendant to the Colorado Art Restoration for cleaning
activities; (2) a $4,801 subtraction for additional payments by Defendant to Colorado Art
Restoration; (3) a $460 subtraction for prior payment for dog kennel-related items; and (4) a $562
subtraction for prior payment for the replacement cost of a television and camera. Put differently,
Plaintiff asserts that it is uncontested that both appraisers intended for Defendant to compensate
Plaintiff for these four items under the Award. And because Defendant instead subtracted them, it
owes him an additional $12,073.
Plaintiff’s second argument is predicated upon his first. He argues that Colo. Rev. Stat. §
10-3-1116 applies to his claim for $12,073. That section provides that “[a] first party claimant as
defined in section 10-3-1115 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.” Colo. Rev. Stat. § 10-3-1116(1). Plaintiff’s position is that
section 1116 requires me to award him $24,146 (two times his claimed covered benefit of $12,073)
in addition to the $12,073 to which his first argument claims he is entitled to as a matter of law.
Defendant opposes both parts of the motion. It first counters that material factual disputes
exist that preclude summary judgment. While Defendant does not dispute what the two appraisers
intended with respect to the four subtractions Plaintiff enumerates, its position is that this “is not
outcome determinative for purposes of summary judgment.” This is because Defendant will present
facts at trial showing that Defendant actually overpaid Plaintiff for his personal property claim, such
that it is entitled to setoff and that Plaintiff is not entitled to payments for the four items at issue
I conclude that there is a disputed issue of material fact precluding summary judgment.
Defendant intends to call expert Mitchell Sweet, whose report is attached to Defendant’s response.
See Def.’s Resp. Ex. 6 (“Sweet Report”). Sweet analyzed the insurance policy, the Award,
depositions, and other relevant evidence and determined that even with the Deduction, Defendant
overpaid Plaintiff for his personal property claim by $3,189.63. Sweet Report at 15-17. (Sweet also
determines that Defendant overpaid Plaintiff for his entire insurance claim by $41,459.78. Id. at 20.)
In making this determination, Sweet analyzed the four items at issue. He concludes that Defendant
overpaid Plaintiff for the first two items because of a limit of liability in Plaintiff’s insurance policy.
Id. at 15. He likewise concludes that Defendant overpaid Plaintiff for the fourth item and that
Defendant’s subtraction related thereto was proper. Id. at 15-16. With respect to the third item,
Sweet determined that Defendant’s subtraction was proper. Id. at 19. Sweet also found that
Defendant’s conduct comported with industry standards–contrary to expected testimony by
Plaintiff’s expert. Id. at 4-24.
Reviewing Sweet’s report, as well as the rest of the evidence, and drawing the reasonable
inferences therefrom in Defendant’s favor leads me to find that there is a genuine issue of material
fact as to whether Defendant owes Plaintiff the claimed $12,073. From a micro perspective, looking
only at the four items individually, Sweet’s report concludes that Defendant either overpaid Plaintiff
for the item, that its inclusion in the Deduction was appropriate, or both. This alone creates a
dispute over material issues of fact. Moreover, from a macro perspective, even if Defendant indeed
owes Plaintiff $12,073 for the four items, Sweet’s report raises the issue as to whether that amount
should be setoff as a result of overpaying Plaintiff for his entire claim. With this evidence, a
rationale factfinder could find that Defendant does not owe Plaintiff the claimed $12,073. Summary
judgment is therefore unwarranted. See Fowler, 647 F.3d at 1237.
Plaintiff marshals a host of arguments to thwart the factual dispute Defendant raises. He
begins by reiterating that the two appraisers agree that, in effect, Defendant should have paid him
$12,073 more than he did pursuant to the Award. This is not dispositive here. The fact that the two
appraisers did not intend for Defendant to subtract $12,073 from the Award does not ineluctably
establish that Plaintiff is entitled to that sum if indeed Defendant overpaid Plaintiff for those items,
his property claim, and his whole insurance claim. The Award and the appraisers’ intent cannot be
examined in a vacuum. They must be examined in light of all the facts and claims before me. That
includes the insurance policy’s terms and whether Defendant overpaid Plaintiff. Sweet’s report and
expected testimony raise a genuine dispute of material fact.
Plaintiff next argues that Defendant never pleaded setoff, characterizing the issue as “nonexistent” and “fictitious;” thus, Plaintiff contends, Defendant’s effort to raise setoff now is
prohibited. The problem with this argument is manifest: Defendant pleaded setoff. In both its
answer and amended answer, under “Additional Defenses,” Defendant asserts that it “is entitled to
a setoff for all amounts paid or which will be paid regarding Defendant’s processing of Plaintiff’s
claim.” See Answer and Am. Answer at ¶ 40. Defendant also included the defense of “set of for
all amounts paid” in the Scheduling Order’s “Statement of Claims and Defenses.” See Scheduling
Order at §3(b). (Therein, Defendant also asserted the related defense that Plaintiff’s claims are
subject to the insurance policy’s provisions. Some of Sweet’s conclusions also invoke this defense.)
Next, Plaintiff contends that, because of its prior actions, Defendant either waived the setoff
issue or should be estopped from raising it now. In support, Plaintiff proffers three examples of past
action. See Pl.’s Reply Ex. A, B, and C. I need not decide whether the waiver or estoppel argument
has merit because assuming each does, they raise factual issues that preclude summary judgment.
Furthermore, Plaintiff does not explicate how waiver or estoppel as to the four specific items in
question would be excepted from possible offset as a result of Defendant’s alleged overpayment.
For these reasons, this argument is unavailing.
Plaintiff also points me to the timing of relevant events. He explains that Defendant filed
its answer on April 16, 2010. The answer asserted “setoff for all amounts” paid as a defense.
Defendant therefore claimed setoff before the July 21 and 22 payments that included payment for
the four items at issue here. Plaintiff’s position is that this chronology precludes the setoff
argument. This position is problematic. First, in both the answer and amended answer, Defendant
actually states that it “is entitled to a setoff for all amounts paid or which will be paid regarding
Defendant’s processing of Plaintiff’s claim.” See Answer ¶ 40; accord Am. Answer ¶ 40.
Second, even if this prospective assertion of setoff was somehow ineffective, Defendant
reasserted setoff in the amended answer, which it filed on July 23, after the July 21 and 22 payments.
Third, Plaintiff does not cite any legal authority supporting his position. The July 23 amended
answer also disturbs Plaintiff. He states that
[i]t is absolutely inconceivable and beyond belief that this insurance company could
take the position that it was issuing a check to the insured on July 22, 2010 in a given
amount, and then contend the very next day that the company was indeed asserting
some type of set off with regard to the amount which had been paid the day before.
They would have stopped payment on the check if there was a good faith belief that
overpayment had occurred.
See Pl.’s Resp. to Notice of Supplemental Authority and Request for Fees Per F.R.C.P. 11 at 3 [Doc
# 78]. This position is untenable. Plaintiff again fails to cite any legal authority. It also assumes
that Defendant knew on July 23 that it had overpaid Plaintiff for the items in question. This is an
unresolved issue of fact. Plaintiff puts Defendant in a precarious position. On one hand he claims
that Defendant could not plead setoff for antecedent payments; on the other, he states that that
Defendant could not plead setoff prospectively. Yet he argues that Defendant must have pleaded
setoff. As a practical matter, those rules assembled would extinguish the defense.
Plaintiff’s final argument relates to Defendant’s disclosures. He states that Defendant “failed
and refused to provide any disclosures of its records surrounding activities which took place in July
of 2010 which would describe or record how or why the company elected to pay the appraisal award
as it did.” Assuming this is true, it does not nullify that Defendant’s response raises contested issues
of material fact that preclude summary judgment.
I have not decided that Defendant is in fact entitled to setoff. For the foregoing reasons, I
simply conclude that Defendant presents a genuine dispute over material facts with respect to
whether it owes Plaintiff $12,073 for the four items discussed. Plaintiff is therefore not entitled to
judgment as a matter of law. Consequently, I need not and do not consider whether section 1116
applies. Accordingly, I deny Plaintiff’s motion.
For the reasons set forth above, IT IS ORDERED that:
1) Plaintiff’s Motion to Assert Punitive Damages Pursuant to Colo. Rev. Stat. § 13-21102(1.5)(a) [Doc #64] is DENIED with prejudice; and
2) Plaintiff’s Motion for Partial Summary Judgement Re Failure to Satisfy Appraisal
Award [Doc #65] is DENIED.
Date: February 17, 2012 in Denver, Colorado.
BY THE COURT:
s/ Lewis T. Babcock
LEWIS T. BABCOCK, JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?