United States District Court, D. Colorado
KRISTEN L. MIX, Magistrate Judge.
This matter is before the Court on Defendant's Motion for Protective Order Regarding Appraiser and Umpire Discovery and Testimony and in Limine to Preclude Admission of Any Materials Created After Appraisal was Demanded at Trial [#26] (the "Motion"). On January 31, 2014, Plaintiff filed a Response [#28]. On February 18, 2014, Defendant filed a Reply [#29]. Pursuant to 28 U.S.C. § 636 (b)(1) and D.C.COLO.LCivR 72.1(c), the Motion has been referred to this Court for disposition [#27]. The Court has reviewed the Motion, the Response, the Reply, the entire docket, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Motion [#26] in GRANTED in part and DENIED in part.
A. Procedural Background
In this case, Plaintiff brings claims against an insurer relating to damages to a commercial property. Compl. [#4] at ¶¶ 6-9. Specifically, Plaintiff brings three claims against Defendant: (1) improper denial of an insurance claim pursuant to Colo. Rev. Stat. § 10-3-1115, (2) breach of contract, and (3) improper denial of an insurance claim pursuant to Colo. Rev. Stat. § 10-3-1113. Plaintiff initially filed suit in state court on June 24, 2013. Id. at 1; Notice of Removal [#1] at 1. Defendant removed the case to this Court based on diversity jurisdiction pursuant to 28 U.S.C. § 1332.
B. The Appraisal
Certain background information is crucial to understanding the arguments made by the parties regarding the instant Motion. The insurance policy invoked by Plaintiff when seeking coverage for damage to the property includes a clause that allows either the insured or the insurer to "make a written demand for an appraisal of the loss." Motion, Ex. I [#26-9] at § E(2). Specifically, the clause states:
If we and you disagree on the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will
a. Pay its chosen appraiser; and
b. Bear the other expenses of the appraisal and umpire equally.
If there is an appraisal, we will still retain our right to deny the claim.
Id. While the full policy was not provided to the Court, the parties seem to agree that "we" in this clause refers to the insurer, Defendant, and "you" refers to the insured, Plaintiff. See Response [#28] at 3 (defining "we" to mean Defendant and "you" to mean Plaintiff); Reply [#29] at 5 (noting that the "we" in the last sentence of the clause refers to Defendant). Plaintiff invoked this clause. Motion, Ex. G [#26-7] at 1; see also Motion [#26] at 2. Accordingly, "each party selected an appraiser and the appraisers agreed on an umpire." Sched. Order [#18] at § 4(9). The umpire and Plaintiff's appointed appraiser signed an appraisal award in the amount of $260, 567.16 on December 21, 2012. Id .; Motion, Ex. L [#26-12] at 1 (a total award of $219, 909.95 after subtracting depreciation). Defendant admits that the appraisal award was binding on the parties. Motion [#26] at 2. As a result, Defendant paid Plaintiff "the difference between the payment made in connection with its original estimate and revised estimate pursuant to the reinspection and the appraisal award." Id. Defendant alleges and Plaintiff does not dispute that Defendant has paid Plaintiff the full appraisal amount of $260, 567.16. Id .; see generally Response [#28].
C. The Motion
In the Motion, Defendant asks the Court to: (1) enter a protective order pursuant to Fed.R.Civ.P. 26(c)(1)(A) and (D) holding that the appraisers and umpire are "arbitrators" pursuant to the Colorado Uniform Arbitration Act (the "CUAA") and, therefore, cannot be deposed or otherwise subjected to discovery in this case, Motion [#26] at 7-12; (2) enter an order excluding the appraisal award from admission into evidence pursuant to Fed.R.Evid. 401, 402, and 403, id. at 12-13; and (3) enter an order precluding discovery of any ...