National Farmers Union Property and Casualty Company v. Willard et al

Filing 39

ORDER ON PENDING MOTIONS TO DISMISS. ORDERED: 1. Defendants John, Dana, and Chance Willard's Motion to Dismiss 13 is GRANTED; 2. Defendant Perla Crystal Torres' Motion to Dismiss 25 is GRANTED; 3. The claims brought by Plai ntiff National Farmers Union Property and Casualty Company pursuant to the Declaratory Judgment Act are hereby DISMISSED without prejudice pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction; and 4. The Defendants shall have their costs, by Judge William J. Martinez on 8/15/2017. (dhans, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 16-cv-3163-WJM-MJW
NATIONAL FARMERS UNION PROPERTY AND CASUALTY COMPANY,
Plaintiff,
v.
JOHN WILLARD,
DANA WILLARD,
CHANCE WILLARD,
ESTATE OF JASON TORRES, and
PERLA CRYSTAL TORRES,
Defendants.

ORDER ON PENDING MOTIONS TO DISMISS

This case arises out of an accident on October 25, 2016 in which Jason Torres
was fatally hit by a vehicle driven by Defendant Chance Willard. (ECF No. 1 ¶¶ 20–22.)
At the time of the accident, the vehicle driven by Chance Willard was listed as an
insured vehicle under a policy issued by Plaintiff National Farmers Union Property and
Casualty Company (“NFU”). (Id. ¶¶ 11, 20.) NFU alleges that Chance Willard was
listed as an “excluded driver” under the subject policy, such that any claims related to
the October 25, 2016 accident are not covered. (Id. ¶¶ 19, 28.) Accordingly, NFU
asserts that it owes no duty to defend or indemnify. (Id. ¶ 29.)
Before the Court are two motions to dismiss under Federal Rule of Civil
Procedure 12(b)(1): one motion filed by Defendants John, Dana, and Chance W illard
(the “Willard Defendants”), and the other filed by Defendant Perla Crystal Torres

(“Torres”). (See ECF Nos. 13, 25.) For the reasons set forth below, the Defendants’
respective motions are granted.
I. BACKGROUND
Around 8:30 a.m. on October 25, 2016, Chance W illard was driving the Willard
family pickup in Weld County, Colorado, when he collided with the rear of Jason Torres’
vehicle. (ECF No. 13 at 2; ECF No. 29 at 1; ECF No. 29-1 at 2.) 1 Tragically, Jason
Torres “died at the scene as a result of injuries suffered in the collision.” (ECF No. 29
at 1.) According to NFU, the Willard Defendants have sought coverage under the
subject policy for claims arising from the accident. (ECF No. 1 ¶ 27.) However, neither
the spouse of Jason Torres, nor his estate, have filed an underlying tort action against
the Willard Defendants. (ECF No. 13 at 2; ECF No. 29 at 3.)
In December 2012—almost four years before the accident—Chance Willard was
“charged with driving under the influence, [which resulted] in his driver’s license being
revoked.” (ECF No. 1 ¶ 14.) As a result, in April 2013, “Dana W illard contacted the
insurance agent . . . and asked to have Chance Willard excluded from the policy.” (Id. ¶
15.) “The policy renewal for the period April 23, 2013 to October 23, 2013 w as issued
with declarations listing Chance Willard as ‘EXCLUDED.’” (Id. ¶ 18 (capitalization in the
original).) Each policy renewal, including the renewal for the period October 23, 2016
through April 23, 2017 “lists Chance Willard as ‘EXCLUDED’ in the declarations[.]” (Id.
¶ 19.) Thus, Chance Willard was listed as an excluded driver at the time he collided
with Jason Torres.
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Chance Willard is the son of Defendants John and Dana Willard. (ECF No. 1 ¶ 12.)
Jason Torres is the spouse of Defendant Perla Torres. (Id. ¶ 4.)

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On December 23, 2016, NFU filed the instant action seeking a declaratory
judgment that states: (1) “Chance W illard was an excluded driver under the Policy”;
(2) “the Policy provides no coverage for any claims related to the October 25, 2016
accident”; and (3) “NFU has no duty to defend or indemnify the Willards.” (Id. at 6.)
On January 25, 2017, the Willard Defendants filed their motion to dismiss
pursuant to Federal Rule of Civil Procedure 12(b)(1), stating that “[t]his case must be
dismissed for failure to comply with the most basic tenant[sic] of federal court
jurisdiction: it does not present an actual case or controversy which is ripe for
adjudication.” (ECF No. 13 at 1.) On February 22, 2017, Torres filed her motion to
dismiss adopting “all arguments of law contained in the Willard Defendants’ motion for
lack of subject matter jurisdiction.” (ECF No. 25 at 1.) Shortly thereafter, on February
23, 2017, NFU responded (ECF No. 29), and the W illard Defendants replied on March
9, 2017 (ECF No. 35).
II. LEGAL STANDARD
Under Federal Rule of Civil Procedure 12(b)(1), a defendant may move to
dismiss a case by asserting that the Court lacks subject-matter jurisdiction over the
claims in the operative complaint. See Fed. R. Civ. P. 12(b)(1). “District courts have
limited subject matter jurisdiction and may hear cases when empowered to do so by the
Constitution and by act of Congress.” Randil v. Sanborn W. Camps, Inc., 384 F.3d
1220, 1225 (10th Cir. 2004) (internal quotation marks omitted). “A court lacking
jurisdiction cannot render judgment but must dismiss the case at any stage of the
proceedings in which it becomes apparent that jurisdiction is lacking.” Basso v. Utah

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Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974).
Rule 12(b)(1) motions generally take one of two forms: a facial attack or a factual
attack. When reviewing a facial attack on a complaint pursuant to Rule 12(b)(1), the
Court accepts the allegations of the complaint as true. Holt v. United States, 46 F.3d
1000, 1002 (10th Cir. 1995). A factual attack does not permit the court to presume the
complaint’s factual allegations are true, although the court does have “wide discretion to
allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed
jurisdictional facts under Rule 12(b)(1).” Id. In such circumstances, the court’s
reference to evidence beyond the pleadings will not convert the motion to one under
Rules 56 or 12(b)(6), unless the jurisdictional question is intertwined with the merits of
the case. Id. Here, the parties have offered declarations and other documents in
connection with their respective motions to dismiss, creating a factual attack on the
Court’s subject matter jurisdiction.
III. ANALYSIS
The party seeking to invoke federal jurisdiction bears the burden of proving that
subject matter jurisdiction exists. See Lindstrom v. United States, 510 F.3d 1191, 1193
(10th Cir. 2007) (“The litigant asserting jurisdiction must carry the burden of proving it by
a preponderance of the evidence.”). In addressing this burden, NFU asserts that this
action is properly before the Court because “[t]his action presents an actual controv ersy
appropriate for a Declaratory Judgment.” (ECF No. 29 at 3.)
The Federal Declaratory Judgment Act provides that “[i]n a case of actual
controversy within its jurisdiction, . . . any court of the United States, upon the filing of

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an appropriate pleading, may declare the rights and other legal relations of any
interested party seeking such declaration, whether or not further relief is or could be
sought.” 28 U.S.C. § 2201(a). “The phrase ‘case of actual controversy’ in the Act
refers to the type of ‘Cases’ or “Controversies’ that are justiciable under Article III of the
United States Constitution.” Columbian Fin. Corp. v. BancInsure, Inc., 650 F.3d 1372,
1376 (10th Cir. 2011) (citations omitted). The Tenth Circuit has cautioned that “Article
III has long been interpreted as forbidding federal courts from rendering advisory
opinions.” Id. “It is not the role of federal courts to resolve abstract issues of law.
Rather, they are to review disputes arising out of specific facts when the resolution of
the dispute will have practical consequences to the conduct of the parties.” Id. The
central question in deciding whether a declaratory judgment action satisfies the case or
controversy requirement is “whether the facts alleged, under all the circumstances,
show that there is a substantial controversy, between parties having adverse legal
interests, of sufficient immediacy and reality to warrant the issuance of a declaratory
judgment.” MedImmune, Inc. v. Genetech, Inc., 549 U.S. 118, 127 (2007).
NFU contends that “[r]egardless of whether an underlying lawsuit has been filed,
there is a substantial controversy between the parties of sufficient immediacy and
reality to create a justiciable issue.” (ECF No. 29 at 4.) NFU stresses that “given the
circumstances of the accident and Mr. Torres’ resulting death,” it is a “certainty” that “his
heirs will bring a liability claim against Chance Willard[.]” (Id.) Moreover, NFU asserts
that “there is an actual dispute between the parties regarding coverage under the
policy,” relating to whether Chance Willard was an excluded driver at the time of the

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accident. (Id. at 5.)
The Willard Defendants respond that NFU’s allegation “that Mr. Torres’ estate
may bring an underlying liability action is pure speculation.” (ECF No. 13 at 2–3.) For
this reason, the Willard Defendants maintain that this action “is premature and fails to
present a justiciable controversy that is capable of resolution by this Court.” (Id. at 3.)
Echoing that argument, Torres contends that “NFU has essentially requested an
impermissible advisory opinion as to the scope of coverage provided by an insurance
policy before any claim has been [made] on that policy and before any action has been
filed against the insured[.]” (ECF No. 25 at 2 (emphasis in the original).)
The Court concludes that this anticipatory declaratory judgment action is
premature and is not yet based on a present and actual controversy. In the Court’s
view, this action clearly seeks redress arising out of the “mere possibility of a future
claim.” Constitution Assocs. v. New Hampshire Ins. Co., 930 P.2d 556, 561 (Colo.
1996).
Further, whether the subject policy covers any potential or feasible claims related
to the October 25, 2016 accident is not, at this tim e, a substantial controversy of
“sufficient immediacy and reality” to warrant the issuance of a declaratory judgment
under 28 U.S.C. § 2201. Maryland Cas. v. Pacific Coal & Oil, 312 U.S. 270, 273
(1941); see also Allendale Mut. Ins. Co. v. Kaiser Eng’rs, Div. of Henry J. Kaiser Co.,
804 F.2d 592, 594 (10th Cir. 1986). Thus, the Court agrees with the Defendants’ joint
position that without an underlying lawsuit filed against Chance Willard related to the
accident, “there is ‘no legal or factual basis for this Court to make a final determination’

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that the policy does or does not provide coverage for any potential claims or, in so
doing, that NFU does or does not owe the Willard Defendants a duty to defend on any
such speculative claims.” (ECF No. 35 at 8 (citing United Fire & Cas. Co. v. Contractor
Heating, Inc., 2008 WL 2572124, at *3 (D. Colo. June 24, 2008) (holding that the
declaratory judgment action is premature and not based on a present and actual
controversy when no underlying tort action had been filed)).)
Moreover, Colorado law provides that an insurer’s duty to defend “arises solely
from the complaint in the underlying action.” Cotter Corp. v. Am. Empire Surplus Lines
Ins. Co., 90 P.3d 814, 827 (Colo. 2004). 2 Thus, in order for the Court to determine
whether a duty to defend exists, this Court would need to examine the “four corners” of
a not-yet-filed underlying complaint. See Hecla Min. Co., 811 P.2d at 1089.
Accordingly, “the lack of an underlying complaint in this case—and specific knowledge
of the possible claims alleged in relation to the [October 25, 2016] accident—is f atal to
my ability to render a decision in this action seeking anticipatory declaratory relief on
the issue.” Contractor Heating, 2008 WL 2572124, at *4.
Lastly, and most importantly, this Court’s exercise of jurisdiction to grant
declaratory relief is discretionary rather than mandatory under both federal and
Colorado law. See Kunkel v. Continental Cas. Co., 866 F.2d 1269, 1273 (10th Cir.
1989); see also Constitution Assocs., 930 P.2d at 561 (“[t]he decision about whether to

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Sometimes referred to as the “complaint rule,” “the comparison test,” the “four corners
rule” (referring to the underlying complaint), and the “eight corners rule” (referring to both the
underlying complaint and the policy). See Pompa v. Am. Fam. Mut. Ins. Co., 520 F.3d 1139,
1145 (10th Cir. 2008); see also Hecla Min. Co. v. New Hampshire Ins. Co., 811 P.2d 1083,
1089 (Colo. 1991).

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permit an anticipatory declaratory judgment action falls within the sound discretion of
the trial court”). Thus, in the exercise of its discretion, the Court declines to accept
jurisdiction over this anticipatory declaratory judgment action, which is not based on a
sufficiently immediate controversy.
In sum, the Defendants’ respective motions to dismiss are granted, and this
action is dismissed without prejudice.
IV. CONCLUSION
For the reasons stated, the Court ORDERS as follows:
1.

Defendants John, Dana, and Chance W illard’s Motion to Dismiss (ECF No. 13)
is GRANTED;

2.

Defendant Perla Crystal Torres’ Motion to Dismiss (ECF No. 25) is GRANTED;

3.

The claims brought by Plaintiff National Farmers Union Property and Casualty
Company pursuant to the Declaratory Judgment Act are hereby DISMISSED
without prejudice pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction;
and

4.

The Defendants shall have their costs.
Dated this 15th day of August, 2017.
BY THE COURT:

__________________________
William J. Martínez
United States District Judge

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