Toy v. American Family Mutual Insurance Company

Filing 217

ORDER. Plaintiff's 86 Motion for Partial Summary Judgment is granted in part and denied in part as indicated in this order. Defendant's 109 Motion for Summary Judgment is denied. Plaintiff's 125 Motion for Leave to File Surreply is denied as moot. By Judge Philip A. Brimmer on 1/29/14.(mfiel, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 12-cv-01683-PAB-MJW
GREGORY TOY,
Plaintiff,
v.
AMERICAN FAMILY MUTUAL INSURANCE COMPANY,
Defendant.

ORDER

This matter is before the Court on Plaintiff’s Motion for Partial Summary
Judgment [Docket No. 86] filed by plaintiff Gregory Toy and Defendant’s Motion for
Summary Judgment [Docket No. 109] filed by defendant American Family Mutual
Insurance Company. The Court has subject matter jurisdiction pursuant to 18 U.S.C.
§ 1332.
I. BACKGROUND1
This action arises out of an insurance coverage dispute between defendant and
plaintiff Gregory Toy. At all times relevant, Mr. Toy was insured by defendant under
policy number 05XF9988-01. Docket No. 86 at 3, ¶ 1. The policy’s Underinsured
Motorist (“UIM”) endorsement limited coverage to $1,000,000 for any single accident.
Id.; see Docket No. 109-1 at 3. The UIM endorsement was subject to multiple
exclusions, including “[t]he direct or indirect benefit of any insurer or self-insurer under

1

The following facts are undisputed unless otherwise indicated.

any workers’ compensation, disability benefits or similar law.” Id. at 2. The
endorsement also stated:
No one will be entitled to receive duplicate payments for the same elements
of “loss” under this Coverage Form and any Liability Coverage Form or
Medical Payments Coverage Endorsement attached to this Coverage Part.
We will not pay for any element of “loss” if a person is entitled to receive
payment for the same element of “loss” under any workers’ compensation,
disability benefits or similar law.
Id. at 3. The UIM endorsement’s arbitration clause stated, in relevant part:
If we and an “insured” disagree whether the “insured” is legally entitled to
recover damages from the owner or driver of an “uninsured motor vehicle”
or do not agree as to the amount of damages that are recoverable by that
“insured,” then the matter may be arbitrated. However, disputes concerning
coverage under this endorsement may not be arbitrated. Both parties must
agree to arbitration.
Id. at 4.
On August 26, 2008, Mr. Toy was injured in a motor vehicle collision caused by
Ceaser Barriga-Nino. Docket No. 143 at 6, ¶ 1. Mr. Barriga-Nino’s insurance policy
limit was $25,000. Docket No. 86 at 3, ¶ 3. Mr. Barriga-Nino offered to settle with Mr.
Toy for $25,000 and, on November 2, 2009, defendant provided Mr. Toy written
consent to accept the $25,000 settlement. Docket No. Docket No. 143 at 6, ¶¶ 2-3.
On December 29, 2009, Mr. Toy settled his workers’ compensation claims with his
workers’ compensation carrier for $80,000. Docket No. 109-6.
On December 16, 2010, Mr. Toy submitted his claim to defendant for evaluation
under the UIM endorsement. Docket No. 143 at 6, ¶ 4. On May 26, 2011, defendant
offered to settle Mr. Toy’s claim for $75,000. Docket No. 109-2 at 2. In a letter to Mr.
Toy, Vicki Mrowiec, defendant’s Commercial F/R Claim Desk Senior Adjuster,
2

explained that defendant’s settlement offer took into account, among other things, the
$43,443.87 for medical expenses and additional compensation for lost wages paid by
Mr. Toy’s workers compensation carrier. Docket No. 109-2 at 1-2. Defendant’s Fed. R.
Civ. P. 30(b)(6) deponent stated that its adjusters offset the amount of workers’
compensation benefits received by an insured pursuant to an UIM endorsement’s
exclusions. Docket No. 113-1 at 3-4, pp. 17:20-18:6 (Defendant’s Rule 30(b)(6) Dep.).
In response to defendant’s settlement offer of $75,000, Mr. Toy asked defendant for a
written evaluation of his claim. Docket No. 109-3 at 2. On June 2, 2011, defendant
made Mr. Toy a final settlement offer of $100,000. Docket No. 109-4 at 1.
On July 1, 2011, plaintiff’s counsel sent defendant’s counsel a letter asking if
defendant would “agree to arbitrate the value of Mr. Toy’s underlying underinsured
motorist claim?” Docket No. 101-1. Mr. Toy claims that defendant did not immediately
respond to his July 1, 2011 letter. Docket No. 113 at 5, ¶ 1. On August 4, 2011, Mr.
Toy filed an action against defendant in the District Court for the City and County of
Denver, Colorado bringing claims for breach of contract, bad faith breach of contract,
and a statutory claim under Colo. Rev. Stat. §§ 10-3-1115 and 10-3-1116. Docket No.
113-5 at 3-5. On August 10, 2011, defendant advised Mr. Toy that it would not formally
respond to a request for arbitration until such time as Mr. Toy provided a formal
demand for arbitration. Docket No. 86-4 at 1. On August 15, 2011, Mr. Toy served a
Demand for Arbitration on defendant. Docket No. 86-3. Mr. Toy dismissed his state
court action against defendant without prejudice, which defendant acknowledged.
Docket No. 113 at 5, ¶ 1; Docket No. 113-6 at 2.
On August 29, 2011, the parties entered into an Arbitration Agreement, which
3

provided that “[t]he sole issue to be determined through this arbitration is the nature and
extent of Claimant’s damages arising from the aforementioned August 26, 2008
collision.” Docket No. 98-1 at 2. The agreement also provided that “the arbitrator does
not have authority to resolve any disputes concerning coverage under the underinsured
motorist policy provisions.” Id. at 3. On April 9 and 10, 2012, an arbitration hearing was
held before arbiter William G. Meyer. Docket No. 86 at 4, ¶ 9. On April 12, 2012, the
arbiter determined the damages to be $2,067,005.30, which consisted of $275,000 in
noneconomic damages, $964,557 in economic damages, and $300,000 in physical
impairment damages, plus interest and costs. Docket No. 86 at 4, ¶ 10; Docket No. 865. The parties agreed to reduce the award to $1,000,000, the UIM policy limit, and, on
April 19, 2012, defendant paid Mr. Toy $1,000,000 plus costs and interest. Docket No.
113-8 at 2. Defendant did not appeal or request any setoff from the arbitration award.
Docket No. 86 at 4, ¶ 12.
On June 1, 2012, Mr. Toy filed the instant case in the District Court for the City
and County of Denver, Colorado, claiming that defendant unreasonably delayed or
denied payment of insurance benefits pursuant to Colo. Rev. Stat. § 10-3-1115 and
§ 10-3-1116. Docket No. 1-3 at 4. On June 27, 2012, defendant removed the case to
this Court. Docket No. 1. Mr. Toy later amended his complaint to add a claim against
defendant for bad faith breach of insurance contract. Docket No. 42 at 7; see Docket
No. 15.
Mr. Toy moves for partial summary judgment asking the Court to find as a matter
of law that the arbiter’s calculation of his actual damages has preclusive effect in this
proceeding and that the “covered benefit” for purposes of § 10-3-1116 is equal to the
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$1,000,000 UIM policy limit. Docket No. 86 at 2. Defendant moves for summary
judgment arguing that Mr. Toy’s bad faith and statutory claims are barred by the
doctrine of claim preclusion, that defendant acted reasonably by offsetting its settlement
offers by the amount Mr. Toy’s received from his workers’ compensation carrier, and
that § 10-3-1116(1) does not permit Mr. Toy to recover attorneys’ fees accrued in
pursuing this action. Docket No. 109 at 2.
II. STANDARD OF REVIEW
Summary judgment is warranted under Federal Rule of Civil Procedure 56 when
the “movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986). A disputed fact is “material” if
under the relevant substantive law it is essential to proper disposition of the claim.
Wright v. Abbott Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). Only disputes
over material facts can create a genuine issue for trial and preclude summary
judgment. Faustin v. City & Cnty. of Denver, 423 F.3d 1192, 1198 (10th Cir. 2005). An
issue is “genuine” if the evidence is such that it might lead a reasonable jury to return a
verdict for the nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir.
1997).
III. PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
A. Issue Preclusion
Mr. Toy argues that the arbiter’s calculation of his actual damages from the
August 26, 2008 collision in the amount of $2,067,005.30 should be given preclusive

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effect in this action. Docket No. 86 at 4. Issue preclusion, or collateral estoppel is an
“equitable doctrine that operates to bar relitigation of an issue that has been finally
decided by a court in a prior action.” Sunny Acres Villa, Inc. v. Cooper, 25 P.3d 44, 47
(Colo. 2001); see Bebo Constr. Co. v. Mattox & O’Brien, P.C., 990 P.2d 78, 84 (Colo.
1999).2 “Its purpose is to promote judicial economy, to conserve private resources, and
to protect parties from unnecessary or vexatious litigation.” Byrd v. People, 58 P.3d 50,
53 (Colo. 2002). Under Colorado law, issue preclusion applies when the moving party
can show that: (1) the issue presented in the current case is identical to an issue
actually litigated and necessarily adjudicated in the prior proceedings; (2) the prior
action reached a final adjudication on the merits; (3) the party against whom the
doctrine is raised was a party, or in privity with a party, to the prior adjudication, and (4)
the party against whom the doctrine is raised had a full and fair opportunity to litigate
the issue in the prior action. Bebo Constr. Co., 990 P.2d at 84-85; see Dodge v. Cotter
Corp., 203 F.3d 1190, 1198 (10th Cir. 2000) (identifying the elements for federal
common law collateral estoppel).3 The offensive use of issue preclusion occurs where,
as here, “‘a plaintiff seeks to foreclose a defendant from relitigating an issue the
defendant has previously litigated unsuccessfully in another action against the same

2

Although the Colorado Supreme Court has expressed a preference for the term
“issue preclusion,” the parties in this case use the terms “issue preclusion” and
“collateral estoppel” interchangeably. See Argus Real Estate, Inc. v. E-470 Public
Highway Authority, 109 P.3d 604, 608 (Colo. 2005)
3

Neither side addresses the choice of law issue and the record does not indicate
whether the insurance policy contained a choice of law provision. However, both
parties cite to Colorado law and appear to be under the assumption that Colorado law
applies. Finding no compelling reason to apply the law of another jurisdiction, the Court
will apply Colorado law.
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. . . party.’” Harrell v. U.S. Postal Service, 445 F.3d 913, 921 (7th Cir. 2006) (quoting
United States v. Mendoza, 464 U.S. 154, 159 n.4 (1984)). Trial courts have broad
discretion to determine when nonmutual offensive issue preclusion applies. Parklane
Hosiery Co., Inc. v. Shore, 439 U.S. 322, 331 (1979).
As a threshold matter, Mr. Toy does not clearly indicate how the arbiter’s
calculation of his actual damages is relevant to damages in the instant case. There is
no dispute that defendant paid Mr. Toy the policy limit of $1,000,000 shortly after the
arbitration concluded and Mr. Toy does not seek additional actual damages. See
Docket No. 113-8 at 2; Docket No. 42 at 7-9. Mr. Toy provides no other indication of
how the damages amount determined by the arbiter is relevant to determining bad faith
and statutory damages. Thus, Mr. Toy seeks summary judgment on an issue (the
amount of damages being $2,067,005.30) that he does not demonstrate the relevance
of. In this situation, the Court will deny partial summary judgment on this issue. See
Powell v. Radkins, 506 F.2d 763, 765 (5th Cir. 1975) (“A court, in its discretion in
shaping the case for trial, may deny summary judgment as to portions of the case that
are ripe therefor, for the purpose of achieving a more orderly or expeditious handling of
the entire litigation.”); 10B Charles Alan Wright et al., Federal Practice & Procedure
§ 2737 (3d ed. 2013) (“if the court determines that entering a partial summary judgment
by identifying the facts that no longer may be disputed would not materially expedite the
adjudication, it may decline to do so”).
Mr. Toy suggests the award of $2,067,005.30 is relevant for other purposes,
namely, that the “jury should evaluate American Family’s conduct in light of, among

7

other things, the amount of Mr. Toy’s damages as determined by a neutral arbitrator.”
Docket No. 86 at 5. Mr. Toy further argues that, in determining the reasonableness of
defendant’s conduct, defendant’s settlement offers should be viewed in light of the
actual value of his damages. Docket No. 102 at 5. In Colorado, the Unfair Claims
Practices Act may be used as “valid, but not conclusive, evidence of industry
standards.” Am. Family Mut. Ins. Co. v. Allen, 102 P.3d 333, 344 (Colo. 2004) (citing
Colo. Rev. Stat. § 10-3-1104(1)(h)). “Compelling insureds to institute litigation to
recover amounts due under an insurance policy by offering substantially less than the
amounts ultimately recovered in actions brought by such insureds” is considered an
unfair claim settlement practice. Colo. Rev. Stat. § 10-3-1104(1)(h)(VII).
However, to the extent Mr. Toy argues that the arbiter’s calculation of damages
is relevant to the reasonableness of defendant’s conduct, Mr. Toy fails to meet the
identity of issue requirement. In order to have preclusive effect, the issue precluded
must be “identical to an issue actually litigated and necessarily adjudicated in the prior
proceeding.” Bebo Constr., 990 P.2d at 85. An issue is actually litigated when it was
raised by the parties in the prior action and necessarily adjudicated when “a
determination on that issue was necessary to a judgment.” Id. at 85-86. Mr. Toy fails
to show that defendant’s conduct was placed at issue in the arbitration proceeding.
Moreover, in this case the jury will be required to evaluate defendant’s offers and other
conduct in light of what defendant knew at the time. “It is the insured’s burden to
establish the insurer’s knowledge or reckless disregard of the fact that a valid claim has
been submitted.” Pham v. State Farm Mut. Auto. Ins. Co., 70 P.3d 567, 572-73 (Colo.
App. 2003) (“the issue before us is whether defendants had a reasonable belief that
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they were not obligated to pay UIM benefits” during the time that litigation against the
tortfeasor was pending); see also Farmers Grp., Inc. v. Trimble, 691 P.2d 1138, 1142
(Colo. 1984) (“would a reasonable insurer under the circumstances have denied or
delayed payment of the claim under facts and circumstances” (internal quotation marks
omitted)). Thus, an arbiter’s calculation of damages, based on facts available in April
2012, does not necessarily reflect the unreasonableness of defendant’s conduct, based
on the facts available to defendant in May and June 2011. See B-S Steel of Kan., Inc.
v. Tex. Indus., Inc., 439 F.3d 653, 663 (10th Cir. 2006) (recognizing “the principle that
matters adjudged as to one time period are not necessarily an estoppel to other time
periods” (internal quotation marks omitted)). Plaintiff has not submitted any evidence to
explain the information in defendant’s possession at the time defendant made its
settlement offers. Moreover, there is no indication that defendant’s knowledge of the
facts and circumstances concerning Mr. Toy’s actual damages was ever determined
during the arbitration. See Bebo Constr. Co., 990 P.2d at 85. Thus, it is not clear how
a determination by the arbiter as of April 12, 2012 is relevant to the facts and
circumstances defendant knew or should have known at prior points during its handling
of Mr. Toy’s claim and, as such, Mr. Toy has failed to meet the identity of issue
element. The Court will deny plaintiff’s motion for partial summary judgment on this
issue.
B. “Covered Benefit”
Mr. Toy moves for summary judgment on the amount of his “covered benefit” as
it relates to Colo. Rev. Stat. § 10-3-1116(1). Docket No. 86 at 7. Mr. Toy argues that,

9

because the UIM policy limit was $1,000,000 and because defendant paid Mr. Toy
$1,000,000, the covered benefit is $1,000,000 for the purposes of calculating damages
under § 10-3-1116(1). Id. Defendant argues that it is liable only for those benefits
unreasonably delayed or denied up to July 1, 2011, the date when Mr. Toy first
mentioned the possibility of arbitration. Docket No. 98 at 10.
Colo. Rev. Stat. § 10-3-1116(1) 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.
In construing a statute, Colorado courts “aim to ascertain and give effect to the intent of
the General Assembly.” Dubois v. People, 211 P.3d 41, 43 (Colo. 2009). “If the
language in the statute is clear and the intent of the General Assembly may be
discerned with reasonable certainty, it is not necessary to resort to other rules of
statutory interpretation.” McKinney v. Kautzky, 801 P.2d 508, 509 (Colo. 1990). “If,
however, the language of the statute is ambiguous, or in conflict with other provisions,
[courts] then look to legislative history, prior law, the consequences of a given
construction, and the goal of the statutory scheme, to ascertain the correct meaning of
a statute.” People v. Luther, 58 P.3d 1013, 1015 (Colo. 2002).
The Colorado Court of Appeals has recently held that, “[a]lthough ‘delay
damages’ are awardable under the common law claim, the measure of recovery for the
statutory claim is the ‘covered benefit’ the payment of which was unreasonably delayed
or denied.” Hansen v. Am. Fam. Mut. Ins. Co., —P.3d—, 2013 WL 6673066, at *9

10

(Colo. App. Dec. 19, 2013).4 As a result, there is no requirement under § 10-3-1115
that the insured “suffer and prove damages attributable to any unreasonable delay or
denial in the payment of the “‘covered benefit.’” Id. Moreover, § 10-3-1116 is a penalty
statute, see Kisselman v. Am. Family, 292 P.3d 964, 972 (Colo. App. 2011) (analyzing
the legislative history of §§ 10-3-1115 and 1116), and therefore the fact that calculation
of the “covered benefit” may be divorced from actual damages is not inconsistent with
the legislative scheme. The Court therefore rejects defendant’s interpretation of the
statute.5
The next question is whether Mr. Toy is entitled to summary judgment as to the
amount of the “covered benefit” at issue. In the UIM context, calculation of the covered
benefit is based on “(1) the damages, if any, suffered by the insured in the covered
accident; (2) the amounts, if any, recovered from, or on behalf of, the third-party
tortfeasor(s); and (3) the UIM policy limit of liability.” Hansen, 2013 WL 6673066, at *9
(construing similar UIM policy). In making this calculation, the amount of actual
4

Defendant represents that it will file a Petition for Certiorari in Hansen and
further argues that a decision of the Colorado Court of Appeals is not binding on this
Court. Docket No. 184 at 5. In diversity cases, the Court is not “bound by decisions of
state intermediate appellate courts” when applying state law. Grynberg v. Total S.A.,
538 F.3d 1336, 1354 (10th Cir. 2008). Nonetheless, the Court finds the Colorado Court
of Appeals’ reasoning in Hansen is persuasive and not contrary to any Colorado
Supreme Court decision. See id.
5

In Hansen, the jury found that the insurer delayed or denied payment of the
covered benefit without a reasonable basis. 2013 WL 6673066, at *8. The jury was
then asked to decide, “What is the amount, if any, of [plaintiff’s] underinsured insurance
benefit claim for which payment was delayed or denied without a reasonable basis,” but
returned a verdict of “0.” Id. Nevertheless, the court held that, where the elements
necessary to calculating the covered benefit had already been determined, the
interrogatory was unnecessary and, despite the jury’s finding, upheld an award of two
times the covered benefit. Id. at *10.
11

damages suffered by an insured “must first be determined by a statutory claim action,
by agreement[,] by arbitration if the insurance policy so provides[,] by litigation between
the insured and the third party tortfeasor[,] or in some other proceeding unique to the
circumstances.” Id. at *9 n.4.
In applying this formula to this case, the Court first turns to the UIM policy.
Under the UIM endorsement, Mr. Toy is entitled to the lesser of:
a. The Limit of Insurance for Uninsured Motorists Coverage shown in the
Declarations;
b. The difference between the limit of this insurance and all amounts paid
to an “insured” by or for anyone legally liable for damages resulting from
“bodily injury,” including all sums paid under this Coverage Form’s Liability
Coverage; or
c. The amount of damages sustained but not recovered.
Docket No. 109-1 at 3. The amount contemplated by paragraph (a) is the UIM policy
limit of $1,000,000. It is undisputed that Mr. Toy settled for $25,000 with Mr. BarrigaNino’s insurance company. Thus, the amount contemplated by paragraph (b) is
$975,000. With respect to the amount contemplated by paragraph (c), the parties
agreed to reduce the amount of the arbitration award to $1,000,000, the policy limit.
Thus, the amount of Mr. Toy’s actual damages was equal to or exceeded the policy
limit. See Hansen, 2013 WL 6673066, at *9.6 The lesser of the amounts contemplated
6

Defendant incorrectly argues that the parties in Hansen, unlike the instant case,
agreed on the amount of the covered benefit. Docket No. 184 at 2. In Hansen, the
parties entered mediation only on the insured’s breach of contract claim. Hansen, 2013
WL 6673066, *1-2 n.1. The insurer agreed to pay the maximum policy benefit of
$75,000 – the policy limit of $100,000 minus $25,000 recovered from the tortfeasor.
Id.; accord Colo. Rev. Stat. § 10-4-409. Although the insured’s damages were not
independently calculated, the mediation served to determine that the insured’s actual
damages were equal to or exceeded the policy limit and “[b]y doing so, the parties
12

by paragraphs (a), (b), and (c) is $975,000. Thus, pursuant to the UIM endorsement’s
terms, the Court finds that the covered benefit in this case is $975,000. The Court will
grant plaintiff’s motion for partial summary judgment on this issue, but not in the amount
Mr. Toy requests, namely, $1,000,000.
IV. DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
A. Claim Preclusion
Defendant argues that Mr. Toy’s claims are barred under the doctrine of claim
preclusion. Docket No. 109 at 5. Specifically, defendant asserts that Mr. Toy’s failure
to raise bad faith and statutory claims during arbitration has preclusive effect over his
claims in this case. Id. “The doctrine of res judicata, or claim preclusion, will prevent a
party from relitigating a legal claim that was or could have been the subject of a
previously issued final judgment.” MACTEC, Inc. v. Gorelick, 427 F.3d 821, 831 (10th
Cir. 2005) (internal citations omitted). As a threshold matter, the parties do not appear
to agree on whether this issue should be decided under Colorado or federal law.7 See

defined the covered benefit and disposed of the claimant’s contract claim.” Id. at *9.
Thus, where “the covered benefit had been previously determined . . . the jury should
not [be] instructed to determine the amount of the covered benefit.” Id. at *10.
7

The claim preclusive effect of a federal court judgment in a federal question
case is governed by federal law. Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S.
497, 507 (2001). Conversely, federal common law dictates that the claim preclusive
effect of a federal court judgment in a diversity case is determined by “the law that
would be applied by the state court in the State in which the federal diversity court sits.”
Id. at 508. “In the case of a state court judgment, the state [claim preclusion] law where
the judgment was entered . . . applies.” Hatch v. Boulder Town Council, 471 F.3d 1142,
1146 (10th Cir. 2006). None of these situations is entirely analogous where the Court in
this diversity case must determine the claim preclusive effect of an arbitration
proceeding. The Tenth Circuit in Lewis v. Circuit City Stores, Inc., 500 F.3d 1140, 1147
(10th Cir. 2007), was confronted with a similar issue where, in a diversity case, the
parties failed to address the choice of law provisions in the arbitration agreement. The
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Docket No. 109 at 6; Docket No. 113 at 6. Nonetheless, the Court need not decide
whether the Colorado or federal claim preclusion law applies because the result is the
same under either doctrine. See, e.g., Lewis v. Circuit City Stores, Inc., 500 F.3d 1140,
1147 (10th Cir. 2007) (holding that claim was barred under both Virginia and Kansas
claim preclusion law).
Under Colorado law, collateral estoppel applies when four elements exist: “(1)
the first judgment is final, (2) there is identity of subject matter, (3) there is identity of
claims for relief, and (4) there are identical parties or there is privity between parties to
the two actions.” Burlington Ditch Reservoir & Land Co. v. Metro Wastewater
Reclamation Dist., 256 P.3d 645, 668 (Colo. 2011). The Tenth Circuit test has three
elements: “(1) a final judgment on the merits in an earlier action; (2) identity of the
parties in the two suits; and (3) identity of the cause of action in both suits.” MACTEC,
427 F.3d at 831. Where these three requirements are met, the claim is precluded
“unless the party seeking to avoid preclusion did not have a ‘full and fair opportunity’ to
litigate the claim in the prior suit.” Id. (quoting Yapp v. Excel Corp., 186 F.3d 1222,
1226 n.4 (10th Cir. 1999)).
The Court first turns to the identity of claims/cause of action element, which is
present in both doctrines. Colorado courts and the Tenth Circuit use the “transactional

court applied state law in determining that plaintiff’s claim was precluded by an earlier
arbitration award. Id. Conversely, in MACTEC, the Tenth Circuit applied federal claim
preclusion law and determined that an arbitration award precluded plaintiff’s
subsequently-filed declaratory judgment action. 427 F.3d at 831. As in Lewis, neither
party in the instant case has pointed to a choice of law provision in the UIM policy or the
Arbitration Agreement, although both the UIM policy and the Arbitration Agreement
reference Colorado law. See Docket No. 98-1.
14

approach” to determine what constitutes a “cause of action” for preclusion purposes.
See Salazar v. State Farm Mut. Auto. Ins. Co., 148 P.3d 278, 280-81 (Colo. App. 2006);
MACTEC, 427 F.3d at 832. “Under this approach, a cause of action includes all claims
or legal theories of recovery that arise from the same transaction.” MACTEC, 427 F.3d
at 832. “What constitutes the same transaction or series of transactions is ‘to be
determined pragmatically, giving weight to such considerations as whether the facts are
related in time, space, origin, or motivation, whether they form a convenient trial unit,
and whether their treatment as a unit conforms to the parties expectations or business
understanding or usage.’” Yapp, 186 F.3d at 1227 (quoting Restatement (Second) of
Judgments § 24 (1982)); accord Salazar, 148 P.3d at 281 (quoting Restatement
(Second) of Judgments § 24 (1982)). A new action is permitted “only where it raises
new and independent claims, not part of the previous transaction, based on the new
facts.” Hatch, 471 F.3d at 1150 (emphasis in original). A contract is generally
considered to be a transaction such that “all claims of contractual breach not brought in
an original action would be subject to bar of claim preclusion, so long as the breaches
antedated the original action.” Petromanagement Corp. v. Acme-Thomas Joint
Venture, 835 F.2d 1329, 1336 (10th Cir. 1988) (holding that contract claims based on
separate transactions were sufficiently similar so as to create a “series of connected
transactions”); cf. Driver Music Co., Inc. v. Comm. Union Ins. Cos., 94 F.3d 1428, 143536 (10th Cir. 1996) (insurer’s set-off claim not identical to insured’s contract and bad
faith claims for the purposes of claim preclusion); Azar v. Hayter, 874 F. Supp. 1314,
1317 (N.D. Fla. 1995) (“Plaintiff’s FDCPA claim has nothing to do with whether the

15

underlying debt is valid. An FDCPA claim concerns the method of collecting the debt.
It does not arise out of the transaction creating the debt, and thus was not a compulsory
counterclaim under state law in the action to collect the debt.”).
The parties do not appear to dispute that issues of bad faith and statutory
damages with respect to defendant’s conduct were not actually arbitrated. The
Arbitration Agreement states that “[t]he sole issue to be determined through this
arbitration is the nature and extent of Claimant’s damages arising from the
aforementioned August 26, 2008 collision.” Docket No. 98-1 at 2. The arbiter did not
have the authority to resolve any disputes concerning coverage under the UIM policy.
Id. at 3. Neither party discusses the scope of evidence presented at the arbitration
hearing, but the Arbitration Award states, in relevant part, “The parties stipulated to
liability, and agreed that the only issue the Arbiter was to determine was the value of
the injuries, damages and losses caused by the August 26, 2008 automobile accident.”
Docket No. 86-5 at 1. The award’s damages breakdown does not indicate that bad
faith or statutory damages were contemplated by the arbiter. Id. Thus, the Court finds
no basis upon which to conclude that plaintiff’s bad faith and statutory claims against
defendant were actually arbitrated.
The Court next turns to the issue of whether Mr. Toy could have brought his bad
faith and statutory claims at the arbitration proceeding. See MACTEC, 427 F.3d at 831.
Unlike federal and state courts, where a litigant with standing can unilaterally bring a
claim, the scope of an arbitration proceeding is generally determined by the parties’
arbitration clause and arbitration agreement. Wolf v. Gruntal & Co., Inc., 45 F.3d 524,
528 (1st Cir. 1995). In instances where the arbitration clause mandates arbitration for
16

all claims, “either party may compel arbitration simply by submitting a unilateral
‘demand for arbitration,’” whereupon the arbitration clause is “the sole source of arbitral
authority.” Id. (emphasis in original). In this circumstance, a party may forfeit claims
not brought in the original arbitration proceeding. See Pike v. Freeman, 266 F.3d 78,
91 (2d Cir. 2001) (applying transactional approach). However, it is equally the case that
if “the applicable procedural rules did not permit assertion of the claim in question in the
first action . . . the claim is not barred in the second action.” Id. (emphasis original).
Here, the UIM endorsement arbitration clause provided:
If we and an “insured” disagree whether the “insured” is legally entitled to
recover damages from the owner or driver of an “uninsured motor vehicle”
or do not agree as to the amount of damages that are recoverable by that
“insured,” then the matter may be arbitrated. However, disputes concerning
coverage under this endorsement may not be arbitrated. Both parties must
agree to arbitration.
Docket No. 109-1 at 4. Where both parties must consent to arbitration, the arbitration
clause does not provide for the mandatory arbitration of all claims. Thus, a failure to
raise additional claims is not automatically preclusive. See Pike, 266 F.3d at 91.
The Court next turns to the issue of whether the arbitration clause permitted the
parties to arbitrate bad faith and statutory claims. Defendant argues that bad faith and
statutory claims are “damages that are recoverable by that ‘insured’” and, as such, are
subject to arbitration. Docket No. 124 at 3-4. Mr. Toy argues that the clause does not
provide for the arbitration of claims brought directly against defendant. Docket No. 113
at 7. The Court need not resolve this question of contract interpretation. Even if the
arbitration clause permitted Mr. Toy to arbitrate claims based upon defendant’s
conduct, the clause permitted arbitration only upon the consent of both parties. As
17

discussed below, because the Arbitration Agreement did not contemplate Mr. Toy’s bad
faith and statutory claims, such claims are not precluded in this proceeding.
The Colorado Supreme Court and the Tenth Circuit have not expressly
addressed a party’s obligation to raise claims where, as here, an arbitration clause
limits the claims subject to arbitration and requires the consent of both parties. Where
the arbitration clause provides for the arbitration of less than all claims or requires the
consent of both parties, the parties may “agree in writing to arbitrate any or all such
otherwise nonarbitrable claims” by entering into a separate arbitration agreement. Wolf,
45 F.3d at 528. In this instance, an arbiter could not exercise authority over claims that
are not covered by an agreement between the parties; to do so would be to exceed the
arbiter’s authority. Id.; see also 18B Charles Alan Wright et al., Federal Practice &
Procedure Jurisdiction § 4475.1 (2d ed. 2013) (“If the arbiter lacked authority to
entertain the matters advanced in the later litigation, claim preclusion does not apply.”).
As such, “arbitration cannot be raised as a bar to claims falling outside the arbitration
agreement.” Williams v. E.F. Hutton & Co., Inc., 753 F.2d 117, 119 (D.C. Cir. 1985).
Even if it is possible to arbitrate a claim under the arbitration clause but the claim is “not
actually raised in the arbitration proceeding[, t]here is no duty to arbitrate matters not
subject to the arbitration agreement.” Id. Thus, the analysis turns on whether, under
the arbitration agreement, the plaintiff’s bad faith and statutory claims should have been
considered. Id.; see also Pike, 266 F.3d at 91 (“the question is whether the claim was
sufficiently related [such] that it should have been in that proceeding”); cf. Autotrol Corp.
v. J-F Equip. Co., 820 F. Supp. 293, 298 (N.D. Tex. 1993) (finding that, because

18

defendant willingly consented to have a contract interpreted by the arbiter, defendant
was precluded from raising a counterclaim requiring the district court to re-interpret the
agreement).
Defendant’s argument that Mr. Toy made no attempt to request arbitration of his
bad faith and statutory claims is unavailing where the UIM policy did not permit a
unilateral demand for arbitration of claims. Defendant cites no authority requiring Mr.
Toy to request to arbitrate claims or risk preclusion where the parties were governed by
a non-mandatory arbitration clause. Moreover, defendant’s argument is premised on
the assumption that it would have agreed to arbitrate claims based on its own conduct.
See Wolf, 45 F.3d at 529. Defendant also fails to show that Mr. Toy’s bad faith and
statutory claims should have been considered under the Arbitration Agreement. As
noted above, the Arbitration Agreement states that “[t]he sole issue to be determined
through this arbitration is the nature and extent of Claimant’s damages arising from the
aforementioned August 26, 2008 collision.” Docket No. 98-1 at 2. Both of Mr. Toy’s
claims in the instant case are based on defendant’s conduct, but defendant provides no
indication that its conduct was ever at issue during the arbitration or even that a single
piece of evidence was presented concerning its actions towards Mr. Toy. Because
defendant fails to make a contrary showing, the Court finds that the Arbitration
Agreement did not grant the arbiter the authority to decide defendant’s liability for bad
faith or statutory claims.8
8

Requiring an insured to raise all potential claims related to the insurance
contract prior to arbitration, or risk preclusion, could make insureds less willing to
submit claims to arbitration and thereby frustrate the general federal policy favoring
arbitration. See Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 23
19

The cases defendant cites are distinguishable. In MACTEC, the Tenth Circuit
found that the arbitration award necessarily would have required the arbiter to interpret
the contract at issue, such that plaintiff’s later claim for declaratory judgment was
precluded since it involved interpretation of the same contract. 427 F.3d at 826-27.
Salazar is distinguishable for two reasons. First, the plaintiff in Salazar brought both her
initial breach of contract claim and subsequent suit for bad faith breach of contract in a
state court of general jurisdiction and could have unilaterally asserted a bad faith claim
in the initial proceeding. 148 P.3d at 279. That is not the case here. Second, the court
relied, in part, on a finding that plaintiff’s two complaints outlined the insurance
company’s refusal to pay. Id. at 281. Here, defendant provided no indication that its
conduct was ever placed at issue during the arbitration.
For the above-stated reasons, the Court finds that defendant has failed to satisfy
the identity of claims element. Accordingly, the Court need not consider the remaining
elements of claim preclusion. Thus, the arbitration proceeding does not preclude Mr.
Toy’s bad faith and statutory claims in the instant case and the Court will deny
defendant’s motion for summary judgment on this issue.9
B. Workers’ Compensation Offset
Defendant does not dispute that its initial settlement offer took into account
additional compensation for lost wages paid by Mr. Toy’s workers’ compensation carrier

(1983) (noting policy favoring arbitration of claims).
9

In resolving this issue, the Court did not find it necessary to consider the
arguments advanced in Mr. Toy’s surreply brief [Docket No. 125-1]. Thus, Plaintiff’s
Motion for Leave to File Surreply [Docket No. 125] is denied as moot.
20

and that its adjusters offset the amount of workers’ compensation benefits received by
Mr. Toy pursuant to the UIM endorsement’s exclusion language. Docket No. 109-2 at
1-2; Docket No. 113-1 at 3-4, pp. 17:20-18:6 (Defendant’s Rule 30(b)(6) Dep.).
However, defendant did not offset its actual payment of the policy limit by the amount of
workers’ compensation benefits paid to Mr. Toy. Docket No. 113-8 at 2; Docket No. 86
at 4, ¶ 12. Defendant argues it did not act unreasonably by offsetting its settlement
offers by the amount of workers’ compensation benefits Mr. Toy received. Docket No.
109 at 10. Plaintiff argues that offsetting settlement offers in that manner is evidence
defendant acted unreasonably. See Docket No. 143 at 2-3; Docket No. 109-5 at 7.
Thus, in effect, defendant asks the Court to find that offsetting Mr. Toy’s workers’
compensation benefits from Mr. Toy’s UIM benefits in the course of making a
settlement offer was reasonable as a matter of law.
Colorado UIM coverage is governed by statute:
[C]overage . . . shall be in addition to any legal liability coverage and shall
cover the difference, if any between the amount of the limits of any legal
liability coverage and the amount of the damages sustained . . . The amount
of the coverage available pursuant to this section shall not be reduced by a
setoff from any other coverage, including, but not limited to, legal liability
insurance, medical payments coverage, health insurance, or other uninsured
or underinsured motor vehicle insurance.
§ 10-4-609(1)(c) (emphasis added). The language prohibiting a setoff from any other
coverage took effect on January 1, 2008.10 See S.B. 07-256, 66th Gen. Assemb., 1st
10

Defendant does not argue that the relevant statutory language is inapplicable to
the UIM endorsement. S.B. 07-256 states: “This act shall take effect January 1, 2008,
and shall apply to policies issued or renewed on or after the applicable effective date of
this act.” Id. Neither party has provided the complete insurance policy or otherwise
indicated the date the policy was issued or renewed. In the absence of any argument
or evidence to the contrary, the Court will apply the relevant statutory language to the
21

Reg. Sess. (Colo. 2007). The Colorado Supreme Court has not explicitly held that
§ 10-4-609(1)(c) prohibits a setoff from workers’ compensation insurance. However,
defendant does not argue that the statute should be interpreted to permit a setoff from
workers’ compensation coverage. Defendant instead argues that the Court should
make a distinction between its offers to settle, which admittedly were reduced by the
amount Mr. Toy received from his workers’ compensation carrier, and its ultimate
payment of the policy limit, which was not similarly reduced. Docket No. 124 at 7. The
Court finds this argument unpersuasive given that an insurer’s “duty of good faith and
fair dealing continues unabated during the life of an insurer-insured relationship,
including through a lawsuit or arbitration between the insured and the insurer.”
Sanderson, 251 P.3d at 1217. Defendant’s settlement offers are relevant to issues of
bad faith and unreasonable delay or denial.
Defendant next argues the UIM endorsement’s language permits it to offset its
UIM coverage by the amount an insured receives from workers’ compensation
coverage. Docket No. 109 at 11. Under section C.2, the UIM endorsement provides:
“This insurance does not apply to . . . [t]he direct or indirect benefit of any insurer or
self-insurer under any workers’ compensation, disability benefits or similar law.” Docket
No. 109-1 at 2. To the extent the UIM endorsement can be interpreted as permitting
defendant to offset UIM coverage by the amount Mr. Toy received from workers’
compensation insurance, “[i]nsurance policy clauses that are contrary to a provision of a
statute are void as against public policy.” Aetna Cas. & Sur. Co. v. McMichael, 906

UIM endorsement in this case.
22

P.2d 92, 100 (Colo. 1995). To the extent defendant relied on a policy provision that
was contrary to § 10-4-609(1)(c), the Court cannot find defendant acted reasonably as
a matter of law in incorporating offsets into its settlement offers.11 Because the
reasonableness of defendant’s conduct is the only issue now before the Court, the
Court finds defendant provides an insufficient basis under § 10-4-609(1)(c) upon which
to conclude that defendant’s conduct in offsetting its settlement offers by the amounts
Mr. Toy received from workers’ compensation insurance was reasonable as a matter of
law.
In further arguing that its actions were reasonable, defendant asserts that the
UIM provisions providing for the offset of workers’ compensation payments are not void
in violation of public policy. Docket No. 109 at 10-11. An insurance policy provision “is
void and unenforceable if it violates public policy by attempting to ‘dilute, condition, or
limit statutorily mandated coverage.’” McMichael, 906 P.2d at 100 (quoting Meyer v.
State Farm Mut. Auto. Ins. Co., 689 P.2d 585, 589 (Colo. 1984)). An insurer is not
entitled to “full indemnification of losses suffered by an UM/UIM insured under all
circumstances.” Carlisle v. Farmers Ins. Exch., 946 P.2d 555, 557 (Colo. App. 1997).
A UIM insurer is permitted “to aggregate all amounts received by the insured from all

11

The parties disagree as to whether, in offsetting Mr. Toy’s workers’
compensation benefits, defendant’s adjusters relied upon section C.2 or D.2 of the UIM
endorsement. Compare Docket No. 109 at 3, ¶ 3, with Docket No. 113 at 2-3, ¶ 3.
Defendant’s Rule 30(b)(6) witness testified that section C.2 was “the provision” its
adjusters relied upon. Docket No. 113-1 at 3-4, pp. 17:20-18:6. Defendant produces
no evidence to contradict this testimony and no evidence indicating that its adjusters
relied upon section D.2 in offsetting workers’ compensation benefits. Thus, the Court
finds no basis upon which to conclude that defendant relied upon section D.2 in
calculating its settlement offers.
23

parties liable for her injuries,” including amounts received from the tortfeasor’s insurer.
Id. However, UIM insurers are not entitled to offset coverage amounts an insured
receives from “‘separate and distinct’ types of insurance coverages or agreements,
such as Social Security disability insurance benefits, release-trust agreements, or
personal injury protection benefits.” Id. at 558; accord Farmers Ins. Exch. v. Walther,
902 P.2d 930, 935 (Colo. App. 1995). In Nationwide Mut. Ins. Co. v. Hillyer, 509 P.2d
810, 811 (Colo. App. 1973), the insured’s policy included a provision providing that the
insurer would reduce the amount payable under the policy by the value of any recovery
under workmen’s compensation law. The court held that an insurance carrier is
prohibited from “reducing its liability to a victim of an uninsured motorist by the amount
of any workmen’s compensation award.” Id. Hillyer has been interpreted as prohibiting
an insurer from using a setoff to reduce benefits below the statutorily mandated
minimum coverage. See Continental Divide Ins. Co. v. Dickinson, 179 P.3d 202, 206
(Colo. App. 2007).
In Barnett v. Am. Fam. Mut. Ins. Co., 843 P.2d 1302, 1303 (Colo. 1993), the
plaintiff’s UIM policy contained a provision stating that amounts payable to the insured
would be reduced by a “payment made or amount payable because of bodily injury
under any workers’ compensation or disability benefits law or any similar law.” The
plaintiff was awarded Social Security Disability Insurance benefits after she was injured
in an automobile accident. Id. American Family argued that, pursuant to the policy, it
was entitled to set off plaintiff’s social security benefits from the UIM benefits. Id. at
1304. The Colorado Supreme Court held that the setoff clause in plaintiff’s policy was

24

void in violation of public policy because “insurers may not absolve their liability under
UM/UIM provisions by reducing the amount of UM/UIM coverage they contracted to
provide by payments received for separate and distinct insurance benefits.” Id. at 1307.
American Family argued, as here, that an insured would then be permitted double
recovery. Id. at 1308. Although social security benefits “overlap to some extent,” the
court held that social security benefits and UIM benefits were not duplicative because
they compensated the insured for different losses. Id. at 1309.
Defendant relies on Levy v. Am. Family Mut. Ins. Co., 293 P.3d 40 (Colo. App.
2011), for its argument that the UIM exclusions prevent double recovery. Defendant is
correct inasmuch as Colorado courts have upheld setoffs used to prevent double
recovery. Id. at 48 (interpreting Barnett). However, in Levy, the insurer paid $18,838
for plaintiff’s medical expenses and, in a subsequent arbitration proceeding, sought to
reduce its UIM benefit by the $18,838 it had already paid for plaintiff’s medical
expenses. Id. at 43. Defendant here does not argue that it sought an offset for benefits
it already paid and does not argue that workers’ compensation benefits and UIM
coverage were intended to compensate the insured for the same loss. Cf. Barnett, 843
P.2d at 1309 (determining that social security benefits are designed to compensate the
insured for lost income whereas UIM benefits are intended to compensate the insured
for any loss arising from death or bodily injury). As such, Levy is distinguishable. Even
if the UIM endorsement’s exclusions are interpreted as only prohibiting double recovery
for the same benefit, defendant fails to meet its burden of showing that Mr. Toy’s
workers’ compensation settlement was duplicative, rather than simply overlapping. See

25

id. Defendant cites the Workers’ Compensation Claim(s) Settlement Agreement, which
states that Mr. Toy settled all workers’ compensation claims for $80,000, but makes no
effort to indicate the specific duplicative effect of the settlement award. See Docket No.
109 at 11. Mr. Toy argues that, due to the statutory caps on workers’ compensation
awards, his UIM benefits would merely overlap in some instances.12 In light of the
public policy articulated by Colorado courts and because defendant has failed to make
a specific evidentiary showing that Mr. Toy stood to recover duplicative damages for the
same injury, the Court cannot find that defendant’s conduct during settlement
negotiations to offset UIM benefits by the amount Mr. Toy received in workers’
compensation benefits was reasonable as a matter of law. The Court will deny
defendant’s motion for summary judgment on this issue.
C. Real Party in Interest
Defendant further argues that its conduct with respect to offsets during
settlement negotiations was reasonable because Mr. Toy was not entitled to recover
from defendant any amounts paid by his workers’ compensation carrier. Docket No.
109 at 13. Specifically, defendant argues that “to the extent that Plaintiff was
compensated for his accident-related economic damages by his workers’ compensation
carrier, the claim to recover those damages are ‘owned’ by the workers’ compensation
carrier” and, as such, Mr. Toy was not the real party in interest with respect to those
12

Defendant’s citation to Colorado trial court decisions from 2012 and 2013 is not
relevant where the precise issue on summary judgment is the reasonableness of
defendant’s conduct in forming its settlement offers in 2011. See Gleason v. Farmers
Ins. Exch., 2012 WL 2090719 (Denver Dist. Ct. Jan. 25, 2012); Docket No. 124-1
(Plush v. Emp’rs Ins. Co. of Wausau, Case No. 2012CV692 (Weld Cnty. Dist. Ct. June
18, 2013)).
26

amounts. Id. at 17. Colo. Rev. Stat. § 8-41-203(1)(b) provides that a workers’
compensation carrier is assigned a cause of action to recover from the liable party any
amounts paid to the injured party. However, as noted above, defendant fails to explain
to what extent the workers’ compensation settlement and UIM benefits compensated
Mr. Toy for the same damages, which is, by itself, a sufficient basis for the Court to
reject defendant’s argument. Defendant’s argument also fails because, to any extent
Mr. Toy sought duplicative benefits, “[he] must reimburse the [workers’ compensation]
insurer for any benefits paid.” Tate v. Indus. Claim Appeals Office, 815 P.2d 15, 17
(Colo. 1991). Section 8-41-203 does not “create an outright assignment upon payment
of compensation benefits” because “such an assignment would leave the injured
employee with no rights remaining to which the insurer could become subrogated.”
Harms v. Williamson, 956 P.2d 649, 651 (Colo. App. 1998). Defendant’s attempts to
distinguish Harms are unavailing. Thus, the Court finds that defendant has provided no
basis, under § 8-41-203(1)(b), upon which to conclude that defendant’s attempt to
offset its settlement offers by the amounts Mr. Toy received from workers’
compensation insurance was reasonable as a matter of law. The Court will deny
defendant’s motion for summary judgment on this issue.
D. Attorney Fees Under Colo. Rev. Stat. § 10-3-1116(1)
Defendant argues that, because Mr. Toy received payment of the policy limit
prior to filing this case, Colo. Rev. Stat. § 10-3-1116(1) does not permit him to recover
attorney fees from the prosecution of this action. Docket No. 109 at 18. Defendant
claims that Mr. Toy’s attorney fees in this matter are unrelated to any attempt to recover

27

an unreasonably delayed or denied benefit and as such cannot be awarded under § 103-1116(1). Id. at 19. Defendant’s argument is devoid of support.
As noted above, the Court construes the language of Colorado statutes to give
effect to the intent of the General Assembly. See Dubois, 211 P.3d at 43. Section 103-1116(1) allows for a claimant whose insurance payment was unreasonably delayed or
denied to recover “reasonable attorney fees and court costs and two times the covered
benefit.” “Damages awarded pursuant to this section shall not be recoverable in any
other action or claim.” § 10-3-1116(4). The statute contains no language limiting a
claimant’s ability to recover attorney fees and the statute does not differentiate the
attorney fees, court costs, and covered benefit penalties available to a claimant. Thus,
the plain language of the statute does not suggest that the award of attorney fees under
the statute is dependant upon attorney fees accrued during the process of recovering
the original covered benefit due the insured. Defendant’s interpretation would require
that the Court interpret the statute to permit recovery of attorney fees only if the insurer
had not paid the covered benefit as of the commencement of litigation. Defendant’s
observation that statutory claims are often brought in conjunction with breach of
contract claims does not suggest an alternative interpretation. See Docket No. 109 at
19. Moreover, defendant’s interpretation is inconsistent with the purpose of § 10-31115 and § 10-3-1116 as penalty statutes. See Kisselman, 292 P.3d at 972. The
Court will deny defendant’s motion for summary judgment on this issue.
V. CONCLUSION
For the foregoing reasons, it is

28

ORDERED that Plaintiff’s Motion for Partial Summary Judgment [Docket No. 86]
is GRANTED in part and DENIED in part as indicated in this order. It is further
ORDERED that Defendant’s Motion for Summary Judgment [Docket No. 109] is
DENIED. It is further
ORDERED that Plaintiff’s Motion for Leave to File Surreply [Docket No. 125] is
DENIED as moot.

DATED January 29, 2014.
BY THE COURT:

s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

29