Infinity Energy Resources v. St. Paul Fire & Marine Insurance Company et al
MEMORANDUM AND ORDER granting 51 defendant's Motion to Dismiss for Failure to State a Claim; and granting 55 defendant's Motion to Dismiss for Failure to State a Claim. Signed by District Judge J. Thomas Marten on 7/19/2013. (mss)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
INFINITY ENERGY RESOURCES,
Case No. 12-2685-JTM
ST. PAUL FIRE & MARINE
FIREMAN’S FUND INS.
CO. OF CALIFORNIA
MEMORANDUM AND ORDER
The following matter comes to the court on defendants’ motions to dismiss (Dkt.
51, Dkt. 55). Having considered the arguments in the motions, responses and replies,
the court grants the defendants’ Motions to Dismiss pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure.
I. Factual Background
In 2008 and 2009, Infinity Energy Resources (“Infinity”) owned and operated an
oil well in Stephenville, Texas. Infinity insured the oil well through two policies with
Fireman’s Fund Insurance Company of California (“Fireman”) and one policy with St.
Paul Fire and Marine Insurance Company (“St. Paul”).1 On April 27, 2008, lightning
struck the oil well, causing damages and clean-up costs of $259,299.24. Fireman paid
Infinity $218,468.00. On March 13, 2009, Fireman terminated the insurance policy with
is incorporated in Kansas with its principal place of business in Kansas. Fireman is incorporated
in California with its principal place of business in California. St. Paul is incorporated in Minnesota with
its principal place of business in Minnesota.
Infinity because of its failure to pay the premium. On April 24, 2009, Infinity met with
Fireman’s agent and, according to Infinity, the policy was reinstated.
On April 27, 2009, exactly one year after the first incident, lightning struck again.
Infinity estimated the second lightning strike caused $500,000 in damages to the oil
well. Fireman refused to make any further payment. St. Paul paid Infinity $21,825, but
refused to provide any additional payments. Infinity was unable to afford cleaning up
the pollution caused by the second lightning strike. As a result, the Texas Railroad
Commission, the agency responsible for pollution control, shut down Infinity’s
operations. Infinity asserts that it was forced to liquidate its business and sell the oil
well for a nominal price and that the replacement cost of the well is $4,041,500.00.
The first Fireman policy sets a period of limitations on filing suit:
C. Legal Action Against Us
No one may bring us [sic] a legal action against us under this Coverage
1. There has been full compliance with all the terms of this Coverage Part;
2. The action is brought within 2 years After [sic] you first have
knowledge of the direct loss or damage.
(Dkt. 52-2 at 17). The second Fireman policy establishes the same period of limitations:
You agree not to sue us or involve us in another action proceeding after 2
years have past [sic] since you have discovered the occurrence giving rise
to such action. If the state law applicable to this coverage requires a
different time period within which suit may be brought, this provision is
amended to conform to such law.
(Dkt. 52-4 at 8).
Similarly, Infinity’s policy with St. Paul includes the following sections:
Lawsuits Against Us
If your policy provides property or other first-party protection. Any suit
to recover on a loss under any property or other first-party protection
provided by your policy must begin within two years after the date on
which the direct physical loss or damage occurred to the property that’s
required to sustain such loss or damage for the loss to be covered under
How Statutory Or Regulatory Law Affects Your Policy
Any part of your policy that conflicts with any requirement of statutory or
regulatory law which applies is automatically changed to conform to that
(Dkt. 56-1 at 13–14).
Infinity filed this breach of contract suit against defendants Fireman and St. Paul
on October 22, 2012 (Dkt. 1) and filed a Second Amended Complaint on February 14,
2013 (Dkt. 39). Infinity claims that Fireman and St. Paul breached their insurance
agreements with Infinity when they did not fully compensate Infinity for damages to its
oil well caused by two lightning strikes. Infinity also claims that Fireman and St. Paul
committed vexatious refusals to pay for the damages to its oil well, entitling Infinity to
additional statutory relief under KAN. STAT. ANN. § 40-256.
Fireman moves to dismiss for failure to state a claim upon which relief can be
granted. Fireman contends that the policy Infinity’s claim relies upon was not in place
at the time of the second lightning strike. Fireman also contends that even if the policy
was in place, the time to bring this action has run out under the terms of the contract.
Fireman alleges that its agreements with Infinity were finalized in Colorado, making
Colorado substantive law applicable. Fireman argues that under Colorado law, a party,
by contract with another, may limit the time to file suit even though the statute of
limitations has not yet run. Alternatively, Fireman argues that Kansas law allows the
same. Fireman alleges that the insurance contracts require Infinity to file suit within two
years of the date of loss and that because Infinity filed suit beyond this timeframe, the
breach of contract claim should be dismissed. Fireman further argues that the claim of
vexatious refusal to pay may only be granted if the underlying breach of contract claim
survives, and the underlying claim does not survive here.
St. Paul also moves to dismiss for failure to state a claim upon which relief can be
granted, asserting virtually the same contractual period of limitation arguments as
Fireman.2 However, St. Paul also argues that its policy was only in place at the time of
the second lightning strike, therefore, it cannot be held responsible for damages related
to the first strike. Infinity does not contest that the St. Paul policy was only in place at
the time of the second lightning strike.
Infinity asserts that Fireman should be estopped from relying on the contractual
limitation defense. Infinity alleges that Fireman induced Infinity to believe that Fireman
would pay for all damages from the first lightning strike, then refused to pay for
damages from the second lightning strike due to a lapse in policy. Infinity argues that
Fireman did not inform it about the contractual limitations of filing a timely suit.
Likewise, Infinity claims that St. Paul should be estopped from relying on the
Paul does not contend that Colorado law is applicable to its policy with Infinity because the policy
between St. Paul and Infinity was finalized in Kansas. (Dkt. 56). Infinity does not dispute this fact.
contractual limitation defense, arguing that St. Paul’s partial payment induced Infinity
to believe that St. Paul would fully pay for the damages. Additionally, Infinity argues
that St. Paul never told Infinity about the two-year contractual limitation.
II. Standard of Review – Rule 12(b)(6) Motion to Dismiss
Under Rule 12(b)(6), a defendant may move to dismiss any claim asserted by the
plaintiff when the plaintiff has failed to state a claim upon which relief can be granted.
To survive a motion to dismiss, the plaintiff’s complaint, on its face, must contain
sufficient facts to state a plausible claim. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The plaintiff bears the burden of
pleading sufficient facts that, taken as true, suggest he is entitled to relief. Robbins v.
Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (citing Twombly, 550 U.S. 544, 556 (2007)).
These facts must be enough to raise a right to relief above the merely speculative level.
Id. The plaintiff must “nudge his claims across the line from conceivable to plausible.”
Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009) (internal citations omitted). A
claim is facially plausible when its factual content “allows the court to draw the
reasonable inference that the defendant is liable” for the alleged harm. Burnett v.
Mortgage Elec. Registration Sys., Inc., 706 F.3d 1231, 1235 (10th Cir. 2013) (quoting Iqbal,
556 U.S. at 679).
The court must accept all facts in the complaint as true and disregard any legal
conclusions. Id. The court may draw on its judicial experience and common sense to
determine whether the complaint states a plausible claim for relief. Id. at 1236 (citing
Iqbal, 556 U.S. at 679). However, when allegations are so general as to encompass wide5
ranging conduct, much of it innocent, the plaintiff has not met his burden and the claim
will be dismissed. See Robbins, 519 F.3d at 1247 (10th Cir. 2008).
Generally, the court must treat a motion to dismiss under FED. R. CIV. P. 12(b)(6)
as a motion for summary judgment when matters outside of the pleadings are
presented to—and not excluded by—the court. FED. R. CIV. P. 12(d). If a document
central to the plaintiff’s claim was not attached to the complaint, the defendant may
submit an indisputably authentic copy of that document with the motion to dismiss.
GFF Corp. v. Associated Wholesale Grocers, 130 F.3d 1381, 1384 (10th Cir. 1997). In that
instance, the court will not apply summary judgment standards, but instead apply the
standards for a motion to dismiss. Id.
The court holds that Infinity’s claims for breach of contract and vexatious refusal
must be dismissed because Infinity’s contracts with Fireman are subject to Colorado
law, the contracts required Infinity to file suit within two years of the loss, and Infinity
filed this suit beyond that timeframe; Infinity’s contract with St. Paul is subject to
Kansas law, the contract required Infinity to file suit within two years of the loss, and
Infinity filed this suit beyond that timeframe; Infinity does not assert sufficient facts
indicating that either Fireman or St. Paul is subject to estoppel; and the vexatious refusal
claims against Fireman and St. Paul cannot survive when the breach of contract claims
A. Choice of Law
The claims in this case arise under diversity jurisdiction pursuant to 28 U.S.C.
§ 1332. In a diversity action, the court must apply the substantive law of the forum state,
including the forum’s choice of law rules. Pepsi-Cola Bottling Co. of Pittsburg, Inc. v.
PepsiCo, Inc., 431 F.3d 1241, 1255 (10th Cir. 2005). In Kansas, the substantive law of the
state where the insurance contract is made must be applied to the contract. Safeco Ins.
Co. of Am. v. Allen, 941 P.2d 1365, 1372 (Kan. 1997). “For choice of law purposes, a
contract is ‘made’ where the last act necessary to complete the contract occurs.” State
Farm Mut. Auto. Ins. Co. v. Baker, 797 P.2d 168, 171 (Kan. App. 1990). Generally, the last
act for making an insurance policy is where the master policy is delivered. Simms v.
Metro. Life Ins. Co., 685 P.2d 321, 325–26 (Kan. App. 1984) (finding the majority rule to be
that the interpretation of an insurance contract is governed by the law of the state where
the policy is delivered and holding the same for a Tennessee policy).
Although Fireman alleges that its second insurance policy was not in effect,
alternatively, Fireman argues that both policies were delivered to Infinity in Denver,
Colorado. Infinity does not dispute this assertion. The last act necessary to complete the
two contracts occurred in Colorado, so Colorado substantive law governs Infinity’s
agreements with Fireman. See Simms, 685 P.2d at 325–26.
Infinity’s insurance policy with St. Paul arises under Kansas law. St. Paul alleges
that the insurance policy was delivered to Infinity in Overland Park, Kansas. Infinity
does not dispute this matter. The last act necessary to complete the contract occurred in
Kansas, so Kansas substantive law governs Infinity’s agreement with St. Paul. See id.
B. Infinity’s Claims Against Fireman Are Time-Barred
Infinity’s breach of contract claims against Fireman are dismissed because the
parties agreed that suits concerning the policies must be filed no later than two years
from the date of the loss, and Infinity filed this suit well after two years of each
Under Colorado law, “parties to a contract may require that actions founded on
the contract be commenced within a shorter period of time than that prescribed by the
applicable statute of limitations.” Grant Family Farms, Inc. v. Colorado Farm Bureau Mut.
Ins. Co., 155 P.3d 537, 539 (Colo. App. 2006) (finding that COLO. REV. STAT. § 13–80–
101(1)(a) (2003) “contains no language prohibiting contractually shortening the threeyear limitations period,” therefore, a shorter contractual limitations period “is not ‘in
conflict’ with” the statute). Contracts will be enforced as written unless the contract
contains an ambiguity. Cary v. United of Omaha Life Ins. Co., 108 P.3d 288, 290 (Colo.
2005). An insurance policy is considered ambiguous only when it is “susceptible on its
face to more than one” reasonable interpretation. State Farm Mut. Auto. Ins. Co. v. Stein,
940 P.2d 384, 387 (Colo. 1997). To determine whether there is ambiguity in an
agreement, the court must evaluate the insurance policy as a whole. Id.
Disagreement between the parties concerning the interpretation of the document
does not create ambiguity. Id. The court must use the plain and generally accepted
meaning of the words in the agreement, unless the agreement provides an alternative
interpretation. Id. When the insurance policy is unambiguous, the policy “must be given
effect according to the plain and ordinary meaning of its terms.” Id.
The plaintiff in Grant was attempting to recover for damages under an insurance
policy. 155 P.3d at 537. The policy required the party to file suit within two years of loss,
but a secondary clause revised policy terms that were “in conflict” with state statutes to
conform with those statutes. Id. The court in Grant determined that such “conflict” only
arises if a statute prohibits the parties from contracting a shortened time to file suit. Id.
at 538. The court found that COLO. REV. STAT. § 13–80–101(1)(a), the applicable Colorado
statute of limitations, creates no such prohibitions on contracting shorter limitations
periods. Id. at 539. The court in Grant concluded that parties are free to reduce their time
to file suit to a time less than that set out by statute, and that these contractual time
limits are not in conflict with longer statutory periods of limitations. Id.
Here, there are two applicable provisions: one in the first policy and one in the
second policy.3 The first policy states that “[n]o one may bring us [sic] a legal action
against us under this Coverage Part unless . . . [t]he action is brought within 2 years
After [sic] you first have knowledge of the direct loss.” (Dkt. 52–2 at 17). Infinity does
not address the first policy. On its face, this policy advances only one interpretation,
that a suit cannot be filed more than two years after learning of the direct loss. The
language is not ambiguous, so the court gives effect to the plain meaning of these terms.
State Farm Mut. Auto. Ins. Co., 940 P.2d 384, 387 (Colo. 1997). This agreement is not
prohibited by Colorado statute or case law. See Grant Family Farms, Inc., 155 P.3d at 539.
The provision in this first policy bars Infinity’s breach of contract claim on the first
provided copies of both policies to the court. Although not included in Infinity’s Second
Amended Petition, both policies are central to Infinity’s complaint. Infinity has not disputed the
authenticity of the documents submitted by Fireman. The court will consider these policies and proceed
with the standards for a motion to dismiss and not summary judgment. See Smith, 561 F.3d at 1098.
lightning strike because it filed its claim more than four years after Infinity had
knowledge of the damage to its oil well.
The second policy bars suit after two years of “the occurrence giving rise” to the
suit. (Dkt. 52–4 at 8). The policy further provides that “[i]f the state law applicable to
this coverage requires a different time period within which suit may be brought, this
provision is amended to conform to such law.” (Dkt. 52–4 at 8). Infinity argues that the
two-year restriction in this policy is modified by the policy’s succeeding language and
must be voided to meet the requirements of Colorado’s statute of limitations.
Even if this second policy was in place at the time of the second lightning
strike—which Fireman disputes—the two-year limitation is valid under Colorado law.
The language used in this second policy is unambiguous. See State Farm Mut. Auto. Ins.
Co., 940 P.2d 384, 387 (Colo. 1997). The only way that the two-year limitation could be
altered is if Colorado law “requires” a different time period. (Dkt. 52–4 at 8). The
agreement provides no alternative interpretation, so the court uses the plain and
generally accepted meaning of the words in the agreement. See State Farm Mut. Auto.
Ins. Co., 940 P.2d 384, 387 (Colo. 1997)..
The word “require” means “to demand as necessary or essential.” WEBSTER’S
THIRD NEW INTERNATIONAL DICTIONARY, UNABRIDGED 1929 (1981).
When a statute
expressly prohibits such agreements, then a court will invalidate such provisions. See
Wulf v. Farm Bureau Ins. Co. of Nebraska, 205 N.W.2d 640, 642 (Neb. 1973) (citing with
approval to Neb. Rev. Stat. § 44-357 which expressly prohibits insurance companies
from limiting actions to less than the time set out in the statute of limitations).
Colorado’s statute of limitations only requires that a claim on breach of contract be filed
“within three years after the cause of action accrues, and not thereafter.” COLO. REV.
STAT. § 13–80–101(1)(a). The statute does not require all plaintiffs with claims sounding
in contract law be given a minimum of three years to bring suit. As the court in Grant
Family Farms, Inc. held, a two-year period of limitations on a contract claim does not
conflict with the statute. 155 P.3d at 539.
Infinity’s second policy with Fireman, even if it was deemed in force at the time
of the second lightning strike, bars Infinity’s claim of breach of contract beyond two
years from the date of the loss. Infinity’s second breach of contract claim against
Fireman was filed more than three years after the oil well was damaged, and therefore,
that breach of contract claim must also be dismissed.
C. Infinity’s Claim Against St. Paul Is Time-Barred
Infinity’s breach of contract claim against St. Paul is dismissed because the
parties contractually agreed that any suit must be filed no later than two years from the
date of the loss, and the second lightning strike happened more than two years before
Infinity filed this suit. Kansas law does not prohibit contractually shortening the
generally applicable statute of limitations for an action. See Pfeifer v. Fed. Exp. Corp., 2013
WL 2450531 at *2 (Kan. June 7, 2013). If the language in a written contract “is clear and
can be carried out as written, there is no room for rules of construction.” Gore v. Beren,
867 P.2d 330, 337 (Kan. 1994) (internal citation omitted). To be considered ambiguous, a
written contract “must contain provisions or language of doubtful or conflicting
meaning, as gleaned from a natural and reasonable interpretation of its language.” Id.
When reviewing an unambiguous contract, the “words used therein are to be given
their plain, general and common meaning, and a contract of this character is to be
enforced according to its terms.” Bettis v. Hall, 852 F. Supp. 2d 1325, 1334 (D. Kan. 2012)
(internal citations omitted).
Under Kansas law, an action upon a contract “shall be brought within five (5)
years.” KAN. STAT. ANN. § 60-511(1) (2012). However, absent other public policy
considerations, Kansas law allows parties to contractually agree to limit the time in
which to file suit. See Pfeifer, 2013 WL 2450531 at *2 (holding that § 60-501 allows
contractually limiting the time in which to sue, but that public policy invalidated the
provision at issue because it impaired enforcement of workers compensation
On certification from the U.S. Court of Appeals for the Tenth Circuit, the Kansas
Supreme Court recently reviewed a contractual agreement that limited the time the
plaintiff could file suit. Id. at *1. In Pfeifer, the plaintiff was a former employee of
defendant. Id. Plaintiff filed her lawsuit fifteen months after she was terminated,
alleging her termination was in retaliation for exercising her rights under the Kansas
Workers Compensation Act. Id. Such actions have a two year statute of limitations. Id.
The defendant argued that the plaintiff was bound by her employment contract, which
required any suit to be filed within six months of termination. Id. at 2.
The Kansas Supreme Court turned to the history of statutes of limitations in
Kansas. In 1868, Kansas law allowed—and the courts routinely upheld—an agreement
between parties to reduce the time to file suit. Id. at *4; see also, McElroy v. Insurance Co.,
29 P. 478 (Kan. 1892) (holding an insurance contract valid even though it included a
provision requiring action within a shorter period than provided by statute); Insurance
Co. v. Stoffels, 29 P. 479 (Kan. 1892) (determining a 6–month limitation in insurance
policy eliminates all statutes of limitations and binds parties). In 1897, the legislature
enacted a statute that voided provisions in any agreement that reduced a party’s time to
file suit to less than that established by the statutes of limitations. Pfeifer, 2013 WL
2450531 at *4. Thereafter, Kansas courts invalidated agreements that shortened
limitations periods. Id.; see also, Erickson v. Commercial Travelers, 176 P. 989 (Kan. 1918)
(voiding accident insurance contract that required suit within 6 months of injury
because statute provided for longer period); Fair Association v. Casualty Co., 190 P. 592
(Kan. 1920) (invalidating stipulation as contrary to statute when casualty insurance
contract required action to be filed within 90 days of loss); Hornick v. First Catholic Slovak
Union of the United States of Am., 224 P. 486, 489 (Kan. 1924) (noting that contractually
shortened limitations had been invalidated by statute since 1897). However, in 1963, the
legislature repealed that statute. Pfeifer, 2013 WL 2450531 at *4.
Based on prior case law and the repeal of the aforementioned statute, the Kansas
Supreme Court in Pfeifer held contractual limitations on the time to file a suit are
generally valid. Id. at *5–6. The Court in Pfeifer ultimately invalidated the restriction in
the contract at issue in that case because it impaired Kansas’s “strongly held public
policy interest” of worker’s compensation and retaliatory action. Id. at *9. However, the
Kansas Supreme Court noted several cases that would be valid because they did not
trigger underlying public policy concerns. See id. at *7 (finding no public policy
concerns at issue under the insurance policy at issue in Coates v. Metro. Life Ins. Co., 515
F. Supp. 647, 649 (D. Kan. 1981)). Thus, under Kansas law, when a contract does not
violate an articulated public policy, parties may agree by contract to limit the time to file
suit, even if the applicable statute of limitations allows for a greater time period. Pfeifer,
2013 WL 2450531 at *2.
Additionally, the U.S. District Court for the District of Kansas has previously
determined that Kansas law does not prohibit parties from contractually limiting the
timely filing of suits. Sibley v. Sprint Nextel Corp., 2008 WL 2949564 n.7 (D. Kan. July 30,
2008); Hahner, Foreman & Harness, Inc. v. AMCA Int'l Corp., 1995 WL 643814 at *2 (D.
Kan. Oct. 27, 1995); Coates, 515 F. Supp. at 649.
The provisions in Infinity’s contract with St. Paul clearly restrict Infinity’s
window to file suit to two years after the damage to the oil well occurred. St. Paul
provided a copy of the policy to the court.4 The insurance policy requires that any such
suit “must begin within two years after the date . . . damage occurred to the property.”
(Dkt. 56-1 at 13). Although a subsequent clause of the contract modifies the entire
document, it does so only when the policy “conflicts with any requirement of statutory
or regulatory law.” (Dkt. 56–1 at 14). The reasonable interpretation of this language
does not provide for a conflicting meaning. See Gore, 867 P.2d at 337 (Kan. 1994). The
time-restrictive provision of the policy will only be modified when it “conflicts” with
Kansas law. As there is no ambiguity here, the court must use the plain meaning of
with the policies provided by Fireman, this policy is central to Infinity’s complaint, and Infinity has
not disputed the document’s authenticity. The court considers this insurance policy and proceeds with
the standards for a motion to dismiss and not summary judgment. See Smith, 561 F.3d at 1098.
words used. Bettis, 852 F. Supp. 2d at 1334. Conflict means “to show variance,
incompatibility, irreconcilability or opposition.” WEBSTER’S THIRD NEW INTERNATIONAL
DICTIONARY, UNABRIDGED 476–77 (1981).
The policy is not irreconcilable with, or in opposition to, Kansas law. The statute
of limitations does not limit parties’ ability to contract to a time less than that in the
statute. See KAN. STAT. ANN. § 60-511(1) (2012), Pfeifer, 2013 WL 2450531 at *5. Such
agreements are not in opposition to Kansas law because, absent other public policy
concerns, Kansas law allows parties to contractually agree to limit the time for filing
suit. Pfeifer, 2013 WL 2450531 at *2. Here, the workers compensation public policy
concerns present in Pfeifer are not relevant. Infinity’s policy with St. Paul is not
incompatible, irreconcilable, or in opposition with Kansas law, so the two-year
contractual limitation is valid. See id. This policy required Infinity to file suit no later
than two years after the date the damage occurred to its oil well. Infinity brought suit
more than three years after the second lightning strike to the oil well. Accordingly, the
court dismisses Infinity’s breach of contract claim against St. Paul.
D. Infinity’s Estoppel Argument Against Fireman
Infinity argues that Fireman should be estopped from asserting the contractual
limitations within the insurance policies. But the court holds that Infinity has not met its
burden to establish facts for this doctrine. Equitable estoppel arises not out of contract
but from concepts of morality and justice. Toshiba Master Lease, Ltd. v. Ottawa Univ., 927
P.2d 967, 972 (Kan. App. 1996); see also, Computer Associates Int'l, Inc. v. Am. Fundware,
Inc., 831 F. Supp. 1516, 1530 (D. Colo. 1993) (explaining that under Colorado law,
equitable estoppel is only used to prevent manifest injustice). The facts of each case
determine whether the court will apply the doctrine of equitable doctrine. Aimonetto v.
National Union Fire Ins. Co. of Pittsburgh, Pa., 365 F.2d 599, 600 (10th Cir. 1966). Equitable
estoppel is not favored under Colorado law. Nicholls v. Zurich Am. Ins. Grp., 244 F. Supp.
2d 1144, 1157 (D. Colo. 2003). Under the doctrine of equitable estoppel, the plaintiff
must show that (1) the defendant knew the pertinent facts; (2) the defendant intended
his conduct be acted on by the plaintiff or the defendant acted in such a way that it
caused the plaintiff to reasonably believe defendant intended the conduct; (3) the
plaintiff must be ignorant of the pertinent facts; and, (4) the plaintiff’s reliance on
defendant’s conduct resulted in plaintiff’s injury. Dove v. Delgado, 808 P.2d 1270, 1275
(Colo. 1991), Olson v. State Farm Mut. Auto. Ins. Co., 174 P.3d 849, 858 (Colo. Ct. App.
Infinity has not pleaded facts that satisfy the necessary elements of equitable
estoppel. Pleadings include complaints, but not motions; therefore, the court must look
to the pleadings for the facts asserted by Infinity. FED. R. CIV. P. 7(a),(b); see, Sorbo v.
United Parcel Serv., 432 F.3d 1169, 1177 (10th Cir. 2005). Infinity does not assert any facts
that Fireman knew or that Infinity was ignorant of the two-year contractual limitation
on filing suit. Additionally, Infinity provides no facts that indicate Fireman acted
intentionally to prevent Infinity from filing its claims within two years. Infinity also
does not assert facts to show that because of Fireman’s conduct, Infinity reasonably
believed it had more than two years to file suit.
Infinity cites Coates for the proposition that it is entitled to estoppel because
Fireman covered a portion of the claims and allegedly represented that it would cover
the remaining portion of the claims. However, Coates is readily distinguishable from the
current case. In Coates, a federal employee was covered under a group life insurance
policy that required suit to be filed within two years of the date of loss. 515 F. Supp. at
648. Upon the employee’s death, and before the limitations period expired, the
decedents requested a copy of the policy from the defendants. Id. The full copy of the
policy was unavailable due to the policy’s size and location; however, defendants sent a
specimen copy and certificate of insurance to the decedents. Id. at 648–49. Neither
document indicated that the parties were contractually required to file suit within two
years, and defendant did not inform plaintiff about the two-year limitation in any other
manner. Id. at 648–49. Based on those unique circumstances, the court determined that
the defendant owed plaintiffs a duty to inform them of the suit limitation clause. Id. at
651. Finding that duty breached, the court held the defendant estopped from asserting
the limitation clause. Id. However, the court stopped short of finding that insurance
companies have a general duty to inform the insured of contractual limitations on filing
suit. Id. at 650–51.
Here, Infinity has not provided any facts to show it lacked a copy of its insurance
policy with Fireman. Infinity does not allege that it requested a copy of the policy from
Fireman or that Fireman provided a copy sans the contractual limitations at issue.
Infinity does not allege that Fireman represented throughout the limitations period that
it would pay all of the damages from either lightning strike, only to refuse to pay after
the limitations period had run. The court finds Infinity has not established that Fireman
should be estopped from asserting the contract limitation. See Dove v. Delgado, 808 P.2d
1270, 1275 (Colo. 1991).
E. Infinity’s Estoppel Argument Against St. Paul
Likewise, Infinity has not met its burden to show that St. Paul should be
estopped from asserting the contractual limitations within its insurance policy. Under
Kansas law, a court may invoke its authority under equitable estoppel to hold a person
to his prior position or representation when otherwise inequitable consequences would
result to another who relied upon the person’s position in good faith. Hartford
Underwriters Ins. Co. v. Kansas Dept. of Human Resources, 32 P.3d 1146, 1155 (Kan. 2001).
The plaintiff has the burden of alleging sufficient facts to establish that equitable
estoppel is appropriate. United American State Bank & Trust Co. v. Wild West Chrysler
Plymouth, Inc., 561 P.2d 792, 795 (Kan. 1977). The facts cannot be ambiguous or subject
to more than one construction. Fleetwood Enterprises, Inc. v. Coleman Co., Inc., 161 P.3d
765, 777 (Kan. App. 2007). The plaintiff must show that:
(1) he or she was induced to believe certain facts existed by another party's
acts, representations, admissions, or silence when the other party had a
duty to speak, (2) he or she relied and acted upon such belief, and (3) he or
she would now be prejudiced if the other party were allowed to deny the
existence of such facts.
Id. If any essential element is lacking or is not satisfactorily shown, there can be no
equitable estoppel. Gillespie v. Seymour, 823 P.2d 782, 130–31 (Kan. 1991).
Infinity has not shown facts that St. Paul acted in any way to cause Infinity to not
file suit within two years, as the insurance policy requires. See Fleetwood Enterprises, Inc.,
161 P.3d at 777. Infinity has not shown that St. Paul had any duty to affirmatively warn
Infinity about the two-year limitations period within the policy. See id. Likewise,
Infinity has not provided facts that it relied upon, or failed to act because of, St. Paul’s
silence. Infinity does not claim that its access to the terms of the policy was restricted.
Therefore, St. Paul is not estopped from relying upon the two-year contractual
limitation to filing suit.
F. Infinity’s vexatious refusal claims are dismissed because the underlying
claims are dismissed.
Infinity’s vexatious refusal claims against Infinity and St. Paul are dismissed
because the underlying breach-of-contract claims are dismissed. Under Kansas law, the
court must order the insurance company to pay reasonable attorney fees in favor of the
insured when the court renders judgment against the company for refusing, without
just cause, to pay the full amount of loss. KAN. STAT. ANN. § 40–256 (2012). When no
judgment is rendered in favor of the insured, no attorney fees are available. Here, the
court has dismissed the breach of contract claims against the insurance company.
Accordingly, the court also dismisses the remaining vexatious refusal claims.
The court finds that Infinity is barred by the contractual two-year periods of
limitations found in all of the insurance contracts that form the bases for its claims. The
court also holds that applying the doctrine of estoppel against the defendants would be
inappropriate. Finally, Infinity’s claims of vexatious refusal cannot survive without the
underlying breach of contract claims. The court grants the defendants’ motions to
IT IS THEREFORE ORDERED this 19th day of July, 2013, that the defendants’
motions to dismiss (Dkt. 51 and 55) are granted.
s/J. Thomas Marten
J. THOMAS MARTEN, JUDGE
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