Bethel v. Berkshire Hathaway Homestate Insurance Company

Filing 145

ORDER Denying 128 , and 129 the parties' renewed Motions for Summary Judgment (Docs. ## 128 , 129 ), That Plaintiff's Motion to Strike Defendant's Motion for Summary Judgment (Doc. # 130 ) is DENIED AS MOOT. The parties are directed to contact chambers by email, [e-mail], to schedule this matter for trial, by Judge Christine M. Arguello on 9/21/2021.(evana, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Christine M. Arguello
Civil Action No. 17-cv-01456-CMA-KLM
MICHAEL BETHEL,
Plaintiff,
v.
BERKSHIRE HATHAWAY HOMESTATE INSURANCE COMPANY,
Defendant.

ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND
DENYING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
This matter is before the Court on remand from the Tenth Circuit Court of
Appeals. The Court of Appeals affirmed in part and reversed in part this Court’s order
granting summary judgment in favor of Defendants. (Doc. # 121). This Court then
directed the parties to file renewed summary judgment motions addressing the issues
identified by the Court of Appeals, and those motions are now fully briefed. (Docs. ##
128, 129). For the following reasons, the Court denies the parties’ renewed motions for
summary judgment.
I.

BACKGROUND

This is an insurance dispute. Plaintiff, Michael Bethel, owned an apartment in
Rocky Ford, Colorado (“the Property”). The Property was insured by Defendant,
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Berkshire Hathaway Homestate Insurance Company (“Berkshire”). In 2016, the
Property was destroyed in a fire, and Bethel filed an insurance claim. Berkshire paid
Bethel the full market value of the Property at the time of the fire: $109,000.
Bethel then sued, claiming that he had been underpaid. According to Bethel, the
proper measure of the amount due under the policy was not the market value of the
property, but the “replacement cost minus depreciation.” By that measure, Bethel
argued, he was entitled to receive $407,000 in insurance benefits under his Berkshire
policy (“the Policy’”).
Both parties moved for summary judgment. The parties agreed that, under the
Policy, Berkshire was obliged to pay Bethel the “actual cash value” (“ACV”) of the
Property. They disagreed, however, as to the meaning of “actual cash value.” Berkshire
argued that “the actual cash value of the building should be calculated based on its
market value as determined by a real estate appraisal.” (Doc. # 63, p. 5). Bethel argued
that “the industry standard definition of ACV in Colorado [is] ‘replacement cost minus
depreciation.’” (Doc. # 55, pp. 1-2). The Court agreed with Berkshire.
The Court reasoned that “‘actual cash value’ stands for a specific concept in
insurance law where the insured is paid only what the asset is worth at the time of loss,
a theory of coverage distinct from ‘replacement cost,’ where the insured receives the
amount to replace the asset.” (Doc. # 101, p. 11 (quoting McFarland v. State Farm Fire
and Casualty Company, No. 17-cv-00291-MSK-STV, 2017 WL 3034623 (D. Colo. July
18, 2017)). Thus, the Court explained, “when an insurance policy does not have a
specific formula on which to base a determination of the value of property according to
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an ACV provision,” courts apply the following principles to determine the meaning of
“actual cash value” in a particular insurance policy: “(1) where market value is easily
determined, actual cash value is market value, (2) if there is no market value,
replacement or reproduction cost may be used, (3) failing the other two tests, any
evidence tending to formulate a correct estimate of value may be used.” (Doc. # 101, p.
12 (quoting 12 COUCH ON INS. 3d § 175:24 (2018) (internal citations omitted)). Because
market value was easily determined in this case, the Court concluded, “Defendant’s
evaluation of Plaintiff’s Covered Property according to its market value did not constitute
a breach of Defendant’s contractual obligations.” (Doc. # 101, p. 12). Accordingly, the
Court granted summary judgment in Berkshire’s favor.
The Court of Appeals reversed. 1 Though the Court of Appeals agreed that “actual
cash value” is distinct from “replacement cost,” it found that, under this particular Policy,
the term “actual cash value” might mean “replacement cost without depreciation.” (Doc.
# 121, p. 9). Therefore, it concluded, “the meaning of ‘actual cash value’ is ambiguous,”
as it is used in this particular Policy. (Doc. # 121, p. 6). The Court of Appeals remanded
the case to this Court “for full consideration of extrinsic evidence bearing on the parties’
intended meaning of ‘actual cash value.’” (Doc. # 121, p. 11).
This Court ordered additional briefing (Doc. # 123), and both parties filed a
renewed motion for summary judgment (Docs. ## 128, 129). The motions are now fully
briefed.

The Court of Appeals affirmed this Court’s decision to grant summary judgment in Berkshire’s
favor on Bethel’s claim regarding his debris-removal benefit.

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II.

LEGAL STANDARD

Summary judgment is warranted 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). A fact is “material” if it is essential to the proper
disposition of the claim under the relevant substantive law. Wright v. Abbot Labs., Inc.,
259 F.3d 1226, 1231-32 (10th Cir. 2001). A dispute 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, Okl., 118 F.3d 837, 839 (10th Cir. 1997). When reviewing motions for
summary judgment, a court may not resolve issues of credibility, and must view the
evidence in the light most favorable to the nonmoving party—including all reasonable
inferences from that evidence. Id. However, conclusory statements based merely on
conjecture, speculation, or subjective belief do not constitute competent summary
judgment evidence. Bones v. Honeywell Int’l, Inc., 366 F.3d 869, 875 (10th Cir. 2004).
III.

ANALYSIS

Upon consideration of the parties’ summary judgment briefing, the exhibits
attached thereto, and the applicable law, the Court finds that there are genuine disputes
of material fact that preclude summary judgment. “Once an ambiguity [in a contract] is
found, it should be resolved by giving effect to the intent of the parties.” Ad Two, Inc. v.
City & Cty. of Denver, 9 P.3d 373, 381 (Colo. 2000). “[T]he determination of the parties’
intent is a question of fact.” Moland v. Indus. Claim Appeals Off. of State, 111 P.3d 507,
510 (Colo. App. 2004). The parties to this case have offered conflicting evidence of
intent, and the Court cannot resolve the conflict without weighing that evidence and
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making credibility determinations, neither of which are appropriate at this stage of the
case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (“Credibility
determinations, the weighing of the evidence, and the drawing of legitimate inferences
from the facts are jury functions, not those of a judge, whether he is ruling on a motion
for summary judgment or for a directed verdict.”). Further, the Court cannot make a
determination as to the reasonableness of Defendant’s conduct without weighing
evidence and evaluating the credibility of witnesses. Therefore, summary judgment is
not appropriate.
IV.

CONCLUSION

For the foregoing reasons, the parties’ renewed Motions for Summary Judgment
(Docs. ## 128, 129) are DENIED. It is
FURTHER ORDERED that Plaintiff’s Motion to Strike Defendant’s Motion for
Summary Judgment (Doc. # 130) is DENIED AS MOOT.
The parties are directed to contact chambers by email,
[e-mail], to schedule this matter for trial.

DATED: September 21, 2021

BY THE COURT:

CHRISTINE M. ARGUELLO
United States District Judge

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