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Building On Our Best LLC v. Sentinel Insurance Co. Limited

United States District Court, D. Colorado

November 12, 2015

BUILDING ON OUR BEST LLC and SOULSTICE, LTD, Plaintiffs,
v.
SENTINEL INSURANCE COMPANY LIMITED and DONAN ENGINEERING CO., INC., Defendants.

ORDER

R. BROOKE JACKSON UNITED STATES DISTRICT JUDGE.

The case is before the Court on Donan Engineering Co., Inc.’s Rule 12(b)(6) motion to dismiss plaintiffs’ Fourth and Fifth Claims as to Donan. The motion is granted.

FACTS

In 2014 plaintiffs’ building in Englewood, Colorado was insured under a commercial property insurance policy issued by the Sentinel Insurance Company, Ltd. Plaintiffs allege that on June 15, 2014 the roof and other parts of the building were damaged by a hail and wind storm. After they submitted a claim under the policy, Sentinel’s adjuster hired Donan Engineering Co. to inspect and report on the claimed damage. Donan’s report concluded that the roof exhibited minimum evidence of damage. Based on the report Sentinel denied the claim.

Plaintiffs then hired a “public adjuster” to assist them with their insurance claim. Plaintiffs and the public adjuster determined that Donan’s inspection was inadequate and asked Sentinel to have Donan re-inspect the property. Although Sentinel’s adjuster agreed, Donan refused. Amended Complaint [ECF No. 17] at ¶11.

Plaintiffs’ public adjuster determined that plaintiffs had sustained property damage in the amount of $47, 795.50, and plaintiffs submitted a proof of loss in that amount to Sentinel together with additional evidence of the claimed damage. The public adjuster also informed Sentinel that State Farm, which insured another tenant’s portion of the same building, had determined that the June 15, 2014 hail storm had caused enough damage to the roof to require its replacement. Sentinel continued to deny the claim.

Plaintiffs therefore filed this lawsuit. The First, Second and Third Claims assert breach of contract, common law insurance bad faith, and statutory bad faith pursuant to C.R.S. § 10-3-1115 and 1116. Those claims are asserted against Sentinel and are not the subject of the pending motion. Rather, the motion addresses plaintiffs’ Fourth Claim (violation of the Colorado Consumer Protection Act) and Fifth Claim (civil conspiracy) insofar as those claims are asserted against Donan.

The Amended Complaint contains the following allegations of “fact” with respect to Donan:

• “Plaintiffs believe that [Sentinel] hired Donan because they are biased for insurers and will give insurers result-oriented reports to assist [Sentinel] in either low-balling or denying an insured’s storm damage insurance claim.” Amended Complaint at ¶8.
• “True to form, the [Donan] Report concluded that the roof exhibited minimum evidence of windstorm damage to the wood shakes and metal fixtures on the roof of the Property and that replacement was not warranted.” Id. at ¶9.
• “In the Report, Donan makes only conclusions and cites no test or other physical evidence to support its findings.” Id.
• “Based on this biased and unsubstantiated report, in a letter also dated September 18, 2014, [Sentinel’s] adjuster, citing the Donan report and ‘test’ that never occurred, denied the claim, determining that Plaintiffs had only sustained minor windstorm damages not covered by [Sentinel’s] Policy.” Id.
• “In late November 2014 [Sentinel’s adjuster] informed Plaintiffs’ public adjuster that she agreed with the requests for an inspection, but was frustrated by Donan’s refusal to reevaluate its findings.” Id. at ¶11.
• “In response to all of the information provided by Plaintiffs and their representative, [Sentinel] thereafter orally denied Plaintiffs’ November 24, 2014 proof of loss again relying on the biased and result ...

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