United States District Court, D. Colorado
BRIAN WOODS, individually, and d/b/a LOG AND TIMBER HOMES OF SOUTHERN COLORADO, Plaintiff,
NATIONBUILDERS INSURANCE SERVICES, INC. d/b/a NBIS, and PROBUILDERS SPECIALITY INSURANCE COMPANY, Defendants.
ORDER GRANTING MOTION IN LIMINE
CHRISTINE M. ARGUELLO, District Judge.
This matter is before the Court on the Motion in Limine Regarding Underlying Defense and Arbitration filed by Brian Woods d/b/a Log and Timber Homes of Southern Colorado ("Woods"). (Doc. # 162.) Defendants Nationbuilders Insurance Services, Inc. d/b/a NBIS, and Probuilders Specialty Insurance Company (collectively "ProBuilders") responded to the motion on March 21, 2014. (Doc. # 170.) For the following reasons, Plaintiffs' motion is granted.
In April of 2007, Plaintiff contracted with Arthur Thilquist Construction LLC ("Thilquist Construction") to provide services related to the construction of a log and timber single-family home, on a property owned by Haythem and Melissa Dawlett ("the Dawletts"). (Doc. # 2, & 10; Doc. # 47-1 at 1.) On June 5, 2007, Arthur Thilquist ("Thilquist") passed away from injuries he sustained the day before while working on construction on the Dawletts' home. (Doc # 16 at 3, & 1.) On June 3, 2009, Thilquist's estate filed a complaint against Woods, Mailly, et al. v. Brian Woods, et al., Case No. 2009CV99, in the District Court, Gunnison County, Colorado. (Doc. # 16-3.) By letter dated July 8, 2009, ProBuilders denied coverage to Woods of any claim relating to Thilquist's death. (Doc. # 16-5 at 1-2.) In approximately June of 2011, Woods entered into a settlement agreement with Thilquist's estate in the underlying case, whereby Woods agreed to arbitrate the issue of damages in the underlying case and enter the arbitrator's award as a judgment in the lawsuit. (Doc. # 16 at 5, & 12.) After the arbitrator awarded Thilquist's estate $2, 085, 953.25, the state court confirmed the award and entered it as a judgment on August 2, 2011. (Doc. # 16-8 at 2.)
Meanwhile, on July 5, 2011, Woods initiated the instant lawsuit, claiming that ProBuilders breached its contract with Woods by failing to defend him in the state suit. Woods also asserted claims of bad faith breach of insurance contract and unreasonable delay or denial of payment of a claim for benefits owed. (Doc. # 2.) On September 27, 2012, this Court granted Wood's motion for partial summary judgment, finding that ProBuilders had a duty to defend Woods. (Doc. # 60.)
As a threshold matter, ProBuilders ask that Woods's motion in limine be construed as a motion for summary judgment and denied as untimely. The Court disagrees that the relief requested in Woods's motion is inappropriate for a motion in limine.
Woods argues that ProBuilders waived their right to challenge Woods's defense of the underlying case and seeks to limit evidence pertaining to his defense. ProBuilders argues that it may submit evidence consistent with its affirmative defenses that the underlying judgment was unreasonable or a product of collusion. The Court acknowledges that Colorado courts allow an insurer to contest a stipulated judgment as unreasonable and the product of collusion or fraud. See, e.g., Nunn v. Mid-Century Ins. Co., 244 P.3d 116, 123 (Colo. 2010). DC-10 Entm't, LLC v. Manor Ins. Agency, Inc., 308 P.3d 1223, 1227 (Colo.App. 2013); Flatiron Co. of Boulder v. Great Southwest Fire Ins. Co., 812 P.2d 668, 671 (Colo.App. 1990).
However, this does not end the Court's inquiry. Woods also alleges that ProBuilders "refused to provide factual basis for the collusion defense" (Doc. # 162, at 19) and "refused to provide the factual basis for its reasonableness challenge" ( id., at 17) during discovery. To learn the grounds for this defense, Woods propounded a 30(b)(6) deposition requiring ProBuilders to produce a witness with knowledge of the facts and circumstances underlying this defense. In response, ProBuilders produced Sherrianne Hanavan for a Rule 30(b)(6) deposition in which she, on behalf of ProBuilders, refused to provide the requested information by invoking the attorney-client privilege when asked about the basis for these defenses:
Q: Does ProBuilders contend that this damages award is unreasonable?
A: Those reasons were discussed with counsel.
Mr. Patterson: Okay. Then I'll interpose the ...