Hicks v. State Farm Mutual Automobile Insurance Company

Filing 64

ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT. The Court ORDERS as follows: 1. State Farm's Motion for Partial Summary Judgment on Hicks's statutory and common law bad faith claims is GRANTED; 2. State Farm will be ent itled to judgment in its favor against Hicks on Claim 3 (statutory bad faith) and Claim 4 (common law bad faith) at such time as the Clerk enters final judgment on all claims of all parties in this action; and 3. This case remains SET for a Final Trial Preparation Conference on January 29, 2025, and a five-day jury trial to begin on February 10, 2025 (ECF No. 61 ). by Judge William J. Martinez on 09/24/2024.(jrobe, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 22-cv-2762-WJM-NRN
MARILYN HICKS,
Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
Defendant.
ORDER GRANTING DEFENDANT’S
MOTION FOR PARTIAL SUMMARY JUDGMENT
Before the Court is Defendant State Farm Mutual Automobile Insurance
Company’s (“State Farm”) Motion for Partial Summary Judgment on Plaintiff Marilyn
Hicks’s statutory and common law bad faith claims (“Motion”). (ECF No. 53.) Hicks
filed a response (ECF No. 54), to which State Farm filed a reply (ECF No. 55). For the
following reasons, the Motion is granted.
I. STANDARD OF REVIEW
Summary judgment is warranted under Federal Rule of Civil Procedure 56 “if 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 also Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248–50 (1986). A 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). An issue is “genuine” if
the evidence is such that it might lead a reasonable trier of fact to return a verdict for the

nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir. 1997).
In analyzing a motion for summary judgment, a court must view the evidence and
all reasonable inferences therefrom in the light most favorable to the nonmoving party.
Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Matsushita
Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). In addition, the
Court must resolve factual ambiguities against the moving party, thus favoring the right
to a trial. See Houston v. Nat’l Gen. Ins. Co., 817 F.2d 83, 85 (10th Cir. 1987).
II. MATERIAL FACTS
In June 2019, Hicks was rear-ended while stopped at a red light. (ECF No. 54 at
1.) In September 2020, she received the available liability limits from the tortfeasor’s
insurance provider in the amount of $30,055. (Id.) Hicks filed an underinsured
motorized (“UIM”) claim with State Farm, asserting that she had incurred $59,918 in
medical bills. (Id.) State Farm reviewed Hicks’s medical records and hired an expert,
Dr. Philip Stull, who opined that she “likely sustained a neck and low back strain
following the accident in question” but maintained that “[a]ny other diagnoses are
chronic and unrelated to the accident.” (ECF No. 53 at 17.) Hicks hired her own
expert, 1 Dr. Barry Ogin, who opined that she sustained whiplash from the accident and
that the treatment she received “for her neck and shoulder was reasonable, medically
necessary, and directly related to the collision.” (ECF No. 54 at 32.) After reviewing
these medical records and expert reports, among other documents, State Farm offered
to settle Hicks’s UIM claim for $1,500. (ECF No. 53 at 2.) But Hicks filed suit, alleging

Hicks also mentions hiring another expert, Dr. Gronseth, but she primarily relies on the
opinions of Dr. Ogin in her response. (See generally ECF No. 54.)
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claims for UIM, breach of contract, statutory bad faith, and common law bad faith. (ECF
No. 6 at 6–10.)
III. PERTINENT PRINCIPLES
Colorado law provides for two types of bad faith claims arising out of a breach of
an insurance contract: (1) common law bad faith and (2) statutory bad faith. Dowgiallo v.
Allstate Ins. Co., 2020 WL 1890668, at *2 (D. Colo. Apr. 16, 2020). The two claims are
similar but nevertheless distinct. “[B]oth common law and statutory bad faith claims
require a showing of unreasonable conduct.” McKinney v. State Farm Mut. Auto. Ins.
Co., 2021 WL 4472921, at *4 (D. Colo. Sept. 30, 2021). A statutory bad faith claim
primarily concerns whether an insurer denied or delayed the payment of insurance
benefits without a reasonable basis. State Farm Mut. Auto. Ins. Co. v. Fisher, 418 P.3d
501, 506 (Colo. 2018). To succeed on a claim of unreasonable delay or denial, an
insured must establish that (1) the insurer delayed or denied payment of benefits to the
insured, and (2) the delay or denial was without a reasonable basis. Am. Family Mut.
Ins. Co. v. Barriga, 418 P.3d 1181, 1185–86 (Colo. 2018).
Along with an insurer’s statutory duties, an insurer has a simultaneous common
law duty to deal in good faith with its insured. Am. Family Mut. Ins. Co. v. Allen, 102
P.3d 333, 342 (Colo. 2004). “Due to the ‘special nature of the insurance contract and
the relationship which exists between the insurer and the insured,’ an insurer’s breach
of the duty of good faith and fair dealing gives rise to a separate cause of action arising
in tort.” Goodson v. Am. Standard Ins. Co., 89 P.3d 409, 414 (Colo. 2004) (quoting
Cary v. United of Omaha Life Ins. Co., 68 P.3d 462, 466 (Colo. 2003)). “The
requirements of a common law bad faith claim under Colorado law are heightened in

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comparison to those of a statutory bad faith claim.” Butman Fam. Inv. Ltd. P’ship v.
Owners Ins. Co., 2020 WL 1470801, at *8 (D. Colo. Mar. 25, 2020). In addition to
demonstrating that the insurer delayed or denied the payment of benefits without a
reasonable basis, “a common law insurance bad faith claim requires the insured to
[prove] . . . that the insurer knowingly or recklessly disregarded the validity of the
insured’s claim.” Id. (quoting Fisher v. State Farm Mut. Auto. Ins. Co., 419 P.3d 985,
990 (Colo. App. 2015)).
“What constitutes reasonableness under the circumstances is ordinarily a
question of fact for the jury.” Vaccaro v. Am. Family Ins. Grp., 275 P.3d 750, 759 (Colo.
App. 2012); Zolman v. Pinnacol Assurance, 261 P.3d 490, 497 (Colo. App. 2011). But
“in appropriate circumstances, as when there are no genuine issues of material fact,
reasonableness may be decided as a matter of law.” Id. “The reasonableness of the
insurer’s conduct is determined objectively and is ‘based on proof of industry
standards.’” Schultz v. GEICO Cas. Co., 429 P.3d 844, 847 (Colo. 2018) (quoting
Goodson v. Am. Standard Ins. Co. of Wis., 89 P.3d 409, 415 (Colo. 2004)); Bankr.
Estate of Morris v. COPIC Ins. Co., 192 P.3d 519, 523 (Colo. App. 2008) (“[T]he
question is whether a reasonable insurer under the circumstances would have denied or
delayed payment of the claim.”).
IV. ANALYSIS
State Farm moves for summary judgment on Hicks’s statutory and common law
bad faith claims, arguing that “the fact that the parties do not agree as to the value of
Ms. Hicks’s claim cannot support her” unreasonable delay/denial theories. 2 (See ECF
State Farm posits that, despite calculating Hicks’s total damages as being
approximately $20,000—i.e., approximately $10,000 less than the amount she received from
2

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No. 53 at 9.) Because State Farm has shown that there are no facts upon which a
reasonable jury could find its conduct to be unreasonable—let alone knowingly or
recklessly unreasonable—the Court grants the Motion.
Hicks contends that State Farm acted unreasonably in denying her claim
because it
•

“had information in its claim file from treating doctors indicating [she] had
suffered from a neck and shoulder injury which caused permanent
impairment”;

•

“never requested [Hicks] to undergo [its] own full Independent Medical
Examination despite Dr. Ogin’s report directly contradicting Dr. Stull’s
record review”;

•

ignored its internal registered nurse “who opined that typical treatment for
[Hicks’s] injuries could be long-lasting or conservative”; and

•

failed to “follow its own internal company policies as to when the company
should seek an independent medical exam.”

(ECF No. 54 at 4, 7, 10.) Based on this, she argues, a reasonable jury could find “that
the claims handling in this case was arbitrary and that the claims handling was basically
a sham purported ‘investigation’ that resulted in an unreasonable denial of UIM benefits
to [her].” (Id. at 7.)
Distilled down, however, this purported evidence amounts to nothing more than a
disagreement as to whether State Farm reasonably denied her UIM claim. See Yale

the tortfeasor’s insurance provider—it nonetheless offered to settle her UIM claim for $1,500.
(ECF No. 53 at 3.)

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Condos. Homeowner’s Ass’n, Inc. v. Am. Fam. Mut. Ins. Co., S.I., 2021 WL 1222518, at
*7 (D. Colo. Apr. 1, 2021) (“Unreasonable conduct cannot be established by virtue of a
mere disagreement of value between the insured and insurer.”). Although Hicks
emphasizes that she takes issue with how State Farm handled her UIM claim (see ECF
No. 54 at 11), in reality, she focuses on the weight State Farm attributed to the opinions
of her retained experts and the figures on her medical bills.
For instance, Hicks argues that State Farm denied her UIM claim despite Dr.
Ogin’s favorable opinions of her claim, which necessarily means that it must not have
“in fact consider[ed] the totality of the claim file.” (Id. at 10.) Similarly, she argues that
State Farm acted unreasonably by failing to consider the medical opinions of its inhouse registered nurse. (Id.) In other words, Hicks challenges the decision State Farm
reached and infers therefrom that it must not have actually considered the totality of the
evidence in the claims file. (See id. (“Based on the evidence cited above, a reasonable
jury certainly could conclude that [State Farm’s handler’s] claims ring ‘hollow’ due to the
fact that State Farm had conflicting doctor opinions in the claims file, gave no value in
the evaluation for the permanency of [her] injuries, and ignored the opinions of State
Farm’s in-house nurse who cautioned that typical treatment for an older person could be
more length than otherwise expected.”).)
But, in the Court’s view, this argument is just that—attorney argument. It is not
evidence from which a reasonable jury could find statutory bad faith handling of a claim.
See Wallace v. State Farm Mut. Auto. Ins. Co., 2023 WL 6962091, at *5 (D. Colo. Oct.
20, 2023) (wherein the undersigned concluded that plaintiff failed to show evidence of
unreasonableness where she merely argued “that State Farm should have valued her

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claim higher than zero based on voluminous bills”); The Green Earth Wellness Center v.
Atain Specialty Ins. Co., 163 F. Supp. 3d 821, 836 (D. Colo. 2016) (“[W]ere the Court to
hold that a mere disagreement between parties as to the valuation of a claim created a
triable bad faith claim, essentially every insurance dispute would proceed to trial on
such a claim, as disputes between the insurer and insured over the proper valuation of
the loss are routine.”).
Notably, Hicks points to no authority providing that such attorney argument alone
can establish unreasonable conduct by an insurer. Aside from this argument, Hicks
does not point to any evidence demonstrating that State Farm neglected to properly
consider her claim. She does not, for example, point to facts showing that State Farm
completely ignored the opinions of Dr. Ogin or any other document in the claim file. On
the contrary, she explicitly acknowledges that State Farm considered such information
in reaching its decision. (ECF No. 54 at 9 (“There is no dispute that Ms. Springer
considered [various medical records] in her claims evaluation.”).) To the Court’s mind,
Hicks is more dissatisfied with State Farm’s denial of her UIM claim than the process by
which it reached that decision.
Nor is the Court persuaded by Hicks’s argument that a jury could find that State
Farm unreasonably handled the claim by failing to ask her to undergo an Independent
Medical Examination by its own physician (and violating its own policies by failing to do
so). (Id. at 11 (“Here, there is no dispute that State Farm did not seek clarification from
any of Plaintiff’s treating providers before seeking the record review from its hired
expert, Dr. Stull.”).) For one, State Farm points out that “Dr. Stull did perform an
[Independent Medical Examination] (although that was done after additional information

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was provided by plaintiff during the course of litigation).” (ECF No. 55 at 2.) In any
event, the Court is unaware of any caselaw—and Hicks cites none—indicating that the
absence of such an examination suggests bad faith by an insurer. See Wallace, 2023
WL 6962091, at *5.
Hence, the Court finds that the undisputed facts show that State Farm is entitled
to summary judgment on Hicks’s statutory bad faith claim.
The Court’s conclusion is the same with respect to Hick’s common law bad faith
claim. Hicks likewise fails to demonstrate that State Farm knew or recklessly
disregarded the validity of her claim. To reiterate, she merely disagrees with the
evaluation, which is insufficient to create a triable bad faith claim. The Green Earth
Wellness Center, 163 F. Supp. 3d at 836.
Accordingly, the Court grants summary judgment in State Farm’s favor on
Hicks’s statutory and common law bad faith claims.
V.

FINAL THOUGHTS

In her response, Hicks asserts that her medical bills are approximately $60,000.
(ECF No. 54 at 1.) And it is undisputed that she received approximately $30,000 from
the liability insurer. (Id.)
Given the nominal amount of damages at issue in the case, the Court has every
expectation that the parties will successfully resolve this matter before trial. Proceeding
to a five-day jury trial in federal court to resolve this minimal (in terms of the amount in
controversy) dispute would be a colossal misuse of the Court’s limited resources, not to
mention the significant time and expense such an undertaking would require of the
parties.

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VI. CONCLUSION
Accordingly, the Court ORDERS as follows:
1.

State Farm’s Motion for Partial Summary Judgment on Hicks’s statutory and
common law bad faith claims is GRANTED;

2.

State Farm will be entitled to judgment in its favor against Hicks on Claim 3
(statutory bad faith) and Claim 4 (common law bad faith) at such time as the
Clerk enters final judgment on all claims of all parties in this action; and

3.

This case remains SET for a Final Trial Preparation Conference on January 29,
2025, and a five-day jury trial to begin on February 10, 2025 (ECF No. 61).
Dated this 24th day of September, 2024.
BY THE COURT:

______________________
William J. Martínez
Senior United States District Judge

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