Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Dawson v. The Continental Insurance Co.

United States District Court, D. Colorado

January 8, 2015

DAVID DAWSON, Plaintiff,
v.
THE CONTINENTAL INSURANCE COMPANY, Defendant.

ORDER

PHILIP A. BRIMMER, District Judge.

This matter is before the Court on the Recommendation of United States Magistrate Judge [Docket No. 31] (the "Recommendation") filed on July 23, 2014. The magistrate judge recommends that Plaintiff's Motion for Leave to Amend his Complaint and Jury Demand [Docket No. 21] filed by plaintiff David Dawson be denied. Docket No. 31 at 7. Plaintiff filed timely objections. Docket No. 33. Thus, the Court will "determine de novo any part of the magistrate judge's disposition that has been properly objected to" by plaintiff. Fed.R.Civ.P. 72(b)(3).

I. BACKGROUND

In 2007, plaintiff David Dawson was severely burned while working as a civilian contractor in Baghdad, Iraq. Docket No. 21-1 at 4-5, ¶ 13. After receiving treatment in Iraq and Germany, he was transferred to the University of Colorado Medical Center Burn Unit for ongoing care. Id. Plaintiff's employer, Stanley Baker Hill had a workers compensation insurance policy issued by defendant Continental Insurance Company. Id. at 2, ¶ 3. In April 2010, plaintiff, defendant, and Stanley Baker Hill settled plaintiff's workers compensation claim pursuant to 33 U.S.C. § 908(i) ("§ 8(i)") and executed a § 8(i) settlement agreement (the "settlement"). Id. at 5, ¶ 15; see also id. at 19-26.

Plaintiff filed a lawsuit against the underlying tortfeasor, Fluor Intercontinental Inc. ("Fluor"), in Texas state court (the "state case"). Docket No. 25-1 at 2. According to plaintiff's proposed amended complaint, defendant has on two occasions sought to unlawfully claim a right of subrogation against plaintiff's recovery from Fluor, whereas defendant contends that it asserts its subrogation rights in order to provide reimbursement for medical expenses paid on plaintiff's behalf. Docket No. 21-1 at 9-11, ¶ 28-29, 31. First, defendant and Aetna Life Insurance Company, of Hartford Connecticut ("Aetna") intervened in the state case asserting their rights of subrogation and reimbursement "pursuant to equitable as well [as] contractual rights pursuant to the Group Coverage Plan." Docket No. 21-1 at 31-33, 36-37. On June 4, 2012, the jury in the state case rendered a verdict in plaintiff's favor for more than $18 million. Docket No. 25-1 at 2. It appears that Aetna assigned its claims in intervention to defendant, [1] who, on October 14, 2013, voluntarily dismissed all claims in intervention (the "state case claims"). Docket No. 25-2 at 2-4.

Second, on October 14, 2013, defendant filed a separate action against plaintiff in the United States District Court for the Northern District of Texas (the "federal case"), bringing a claim for reimbursement under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(3) and, in the alternative, a claim for breach of contract (collectively, the "federal case claims"). Docket No. 21-1 at 60-63; see also Continental v. Dawson, No. 13-cv-04150-M (N.D. Tex. 2013) (Docket No. 1). The federal case remains pending. See Continental, No. 13-cv-04150-M (Docket No. 45 (setting hearing on motions for January 14, 2015)).

On December 30, 2013, plaintiff filed the Complaint and Jury Demand. Docket No. 1. The complaint asserts claims against defendant for breach of contract, violation of Colo. Rev. Stat. § 10-3-1115 and § 10-3-1116, and violation of the covenant of good faith and fair dealing (collectively, the "existing claims"). Docket No. 1 at 6. On February 28, 2014, defendant filed a motion to dismiss. Docket No. 15. On April 4, 2014, plaintiff filed the present motion to amend, seeking to delete all three existing claims and add new claims against defendant and Aetna for abuse of process, malicious prosecution, and civil conspiracy (collectively, the "proposed claims"). Docket No. 21 at 2. Plaintiff attached to his motion to amend a proposed amended complaint. Docket No. 21-1 at 1-16. On September 24, 2014, the Court denied defendant's motion to dismiss as moot, noting that, "[b]ecause plaintiff seeks to withdraw the original claims by amendment pursuant to Fed.R.Civ.P. 15(a), the question of whether plaintiff's withdrawal of the original claims warrants dismissal of such claims with prejudice is best addressed in resolving plaintiff's motion for leave to amend." Docket No. 36 at 2.

Plaintiff's abuse of process and malicious prosecution claims allege that, because the settlement between plaintiff and defendant waived defendant's right to medical expenses reimbursement, defendant's actions in Texas to enforce its rights of subrogation are improper. Id. at 12-13, ¶¶ 36, 38, 43. Plaintiff claims that the state case has been resolved in its favor and that it is awaiting a ruling on the federal case. Id. at 13-14, ¶ 44. Plaintiff's civil conspiracy claim alleges that the object of the conspiracy between defendant and Aetna was the recovery of more than $280, 000 from plaintiff. Id. at 14, ¶ 50.

II. ANALYSIS

A. Existing Claims

The Court first turns to plaintiff's request to withdraw his existing claims for relief. In defendant's reply to its motion to dismiss, defendant asserted that, by failing to argue otherwise, plaintiff had implicitly conceded that his existing claims were preempted such that the existing claims should be dismissed with prejudice. Docket No. 24 at 1-2. Defendant's response to plaintiff's motion to amend, however, does not argue that plaintiff's amendments should be conditioned on dismissal of the existing claims with prejudice. See Docket No. 25 at 1. Given the fact that the existing claims did not proceed past the motion to dismiss stage, defendant does not establish that it would be prejudiced if plaintiff is permitted to unconditionally withdraw the existing claims. See Kent v. S. Star Cent. Gas Pipeline, Inc., 2008 WL 4489791, *1-*2 (D. Kan. Oct. 3, 2008) (finding that, where defendant failed to show that it would suffer actual legal prejudice, motion to amend should not be conditioned on dismissal of deleted claims with prejudice); Bibbs v. Newman, 997 F.Supp. 1174, 1177 (S.D. Ind. 1998) (citing 6 Charles Alan Wright et al., Federal Practice and Procedure § 1486 (2d ed. 1990) (recognizing court's power under Rule 15 to exercise discretion in imposing conditions on the allowance of a proposed amendment)). Thus, the Court will grant plaintiff's motion to amend to the extent he seeks to delete the existing claims. Plaintiff's claims for breach of contract, violation of Colo. Rev. Stat. § 10-3-1115 and § 10-3-1116, and violation of the covenant of good faith and fair dealing will be dismissed without prejudice.

B. Proposed Claims

The Recommendation concluded that plaintiff's proposed claims were subject to dismissal and, as such, that the proposed amendments would be futile. Docket No. 31 at 7. Although Fed.R.Civ.P. 15 provides that leave to amend shall be freely given when justice so requires, "a district court may refuse to allow amendment if it would be futile." Full Life Hospice, LLC v. Sebelius, 709 F.3d 1012, 1018 (10th Cir. 2013). Ordinarily, a court may deny a motion for leave to amend as futile when the proposed amended complaint would be subject to dismissal for failure to state a claim. See id. ; Fields v. City of Tulsa, 753 F.3d 1000, 1012-13 (10th Cir. 2014). However, a court may find that a proposed amended complaint is futile when it "would be subject to ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.