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Borrego v. American Family Mutual Insurance Co.

United States District Court, D. Colorado

January 6, 2016

JESUS BORREGO and JOANNE BORREGO, Plaintiffs,
v.
AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant.

ORDER ON MOTION FOR PARTIAL SUMMARY JUDGMENT

Wiley Y. Daniel Senior United States District Judge

I. INTRODUCTION

THIS MATTER is before the Court on Defendant’s Motion for Partial Summary Judgment filed July 24, 2015. A response was filed on August 14, 2015, and a reply was filed on August 28, 2015. For the reasons stated below, Defendant’s Motion for Partial Summary Judgment is denied.

By way of background, this action arises out of Plaintiffs’ claim to American Family Mutual Insurance Company [“American Family”], under their insurance policy after their home allegedly sustained damage on June 26, 2012 due to the Waldo Canyon Fire. Plaintiffs Jesus and Joanne Borrego [“the Borregos”] assert three claims for relief: (1) breach of the implied covenant of good faith and fair dealing; (2) breach of contract; and (3) violation of Colo. Rev. Stat. § 10-3-1115 and 1116. American Family seeks summary judgment on the second and third claims for relief on the basis that the Borregos did not file suit within the one-year contractual limitation period.

II. FACTS

The Borregos had a Homeowners Policy with American Family that provided coverage for certain losses to property located at 5511 Vantage Vista Drive, Colorado Springs, CO 80919 [the “Property”]. The Policy was in force on the date of the loss and was in existence from April 3, 2012 through March 6, 2013.[1]

The Borregos allege that the property was damaged by the Waldo Canyon Fire which began on June 23, 2012 and damaged their home on June 26, 2012. They opened a claim with American Family under the Homeowner’s Policy in June of 2012 and there was a dispute with respect to the extent of the damage. This claim was first reported to American Family by Mrs. Borrego on June 27, 2012. American Family reported the date of loss to be June 23, 2012.[2] The Borregos filed suit on June 20, 2014, six days before the two year anniversary of the purported loss or damage.

American Family asserts that pursuant to the policy, suit must be brought within one-year of the date of loss. The Borregos deny this as a legal conclusion, stating this is the very issue in dispute in regard to American Family’s motion.

Specifically, the policy provides as follows:

CONDITIONS - SECTION I

. . . 18. Suit Against Us. We may not be sued unless there is full compliance with all the terms of this policy. Suit must be brought within one year after the loss or damage occurs.

While the Borregos admit that this provision is contained within the policy, they do not admit that this limitation controls, nor do they admit that “suit must be brought within one year of the date of loss”. They contend that this language is superseded by statute pursuant to Colo. Rev. Stat. 10-4-110.8(12)(a)(I)-(II), as discussed in the next section.

Assuming the June 23, 2012 loss date, the one year period ended on June 23, 2013. The policy expired on March 3, 2013.

It is undisputed that American Family’s adjustment of the claim continued well past the one-year deadline for suit under the policy, and well past the expiration of the policy. Further, American Family issued three payments to the Borregos, months after this one year deadline, and months after the expiration date. Finally, American Family admits that, upon the Borregos’ request and after the one year date of loss, it brought a Senior Adjuster to conduct an ...


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