United States District Court, D. Colorado
MEMORANDUM OPINION AND ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANTS' MOTIONS TO DISMISS
Y. Wang United States Magistrate Judge.
matter comes before the court on Defendant Allstate Fire and
Casualty Insurance Company's (“Defendant” or
“Allstate”) Partial Motion to Dismiss Pursuant to
Fed.R.Civ.P. 12(b)(6) (the “Motion to Dismiss”).
[#8, filed June 16, 2016]. This motion is before the
undersigned Magistrate Judge pursuant to 28 U.S.C. §
636(c) and the Order Referring Case dated July 27, 2016,
[#26]. The court concludes that oral argument would not
materially assist in disposing of this matter. Accordingly,
after carefully considering the partial Motion to Dismiss and
associated briefing, the entire case file, and the applicable
case law, the partial Motion to Dismiss is GRANTED IN PART
and DENIED IN PART.
AND FACTUAL BACKGROUND
A. MacKinney (“Plaintiff” or “Ms.
MacKinney”) is a resident of Golden, Colorado, and
Allstate is an Illinois corporation with its principal place
of business in Illinois. See [#1 at ¶¶
3-4; #3 at ¶¶ 2-5]. Plaintiff originally filed her
Complaint in Jefferson County District Court on or about
April 1, 2016. See [#3]. Plaintiff's Complaint
alleged three state law causes of action against Defendant
for breach of contract, common law bad faith breach of an
insurance contract (“common law bad faith”), and
violations of Colo. Rev. Stat. (“C.R.S.”) §
10-3-1115 Unreasonable Delay and Denial of Insurance Benefits
(“statutory bad faith”). See [#3 at
8-10]. Approximately two months later, Defendant removed the
case to this court, based on diversity of citizenship
pursuant to 28 U.S.C. § 1332, on June 14,
2016. [#1]. A summary of the events giving rise
to this action, drawn from the Complaint and taken as true
for the purposes of the pending partial Motion to Dismiss,
about October 6, 2010, Plaintiff' car-through no fault of
her own-collided with another driver (“Ms.
Mott”), resulting in injuries to the Plaintiff. [#3 at
¶ 1]. As a result of her injuries, Plaintiff's
medical bills totaled approximately $250, 000. [Id.
at ¶ 18]. Plaintiff alleges that as a “direct and
reasonably foreseeable result of [her] Injuries (sic),
” she suffered and will continue to suffer economic and
non-economic damages, as well as damages for physical
impairment and/or disfigurement. [Id. at ¶ 7].
Further, that because of the automobile accident, Plaintiff
is more vulnerable to subsequent injuries. [Id. at
time of Plaintiff's accident, there were four insurance
contracts in effect between her and Defendant. [Id.
at ¶ 15]. These included, Policy Numbers 964294702 (the
“Auto Policy”), 917977315 (the “KTM
Policy”), 964296870 (the “Motorcycle
Policy”), and 964296872 (the “Umbrella
Policy”). [Id.]. Plaintiff alleges that each
contract included provisions for uninsured motorists coverage
(“UIM”) for which Plaintiff paid premiums.
[Id. at ¶ 16]. Plaintiff avers that the Auto
Policy provided $100, 000 in coverage, the KTM and Motorcycle
Policies provided $25, 000 in coverage each, and the Umbrella
Policy provided $500, 000 in coverage. [Id. at
February 25, 2014, Plaintiff's UIM carrier granted her
permission to accept Ms. Mott's offer of $100, 000 in
bodily injury coverage, thereby releasing Ms. Mott from
further damage liability. [Id. at ¶¶
19-21]. Plaintiff received Ms. Mott's offer on March 12,
2014; however, Plaintiff alleges that she was “legally
entitled to collect an amount from Ms. Mott that exceeded
$100, 000.” [Id. at ¶¶ 22-24].
Accordingly, Plaintiff requested UIM benefits from Defendant
under her four insurance contracts on June 16, 2014.
[Id. at ¶25]. Defendant acknowledged receipt of
Plaintiff's request on June 19, 2014, and informed
Plaintiff that an offer would be forthcoming in a reasonable
amount of time. [Id. at ¶ 26].
the next month and a half, Defendant requested, and Plaintiff
submitted, additional medical records and bills. See
[id. at ¶¶ 27-30]. On August 4, 2014,
Defendant informed Plaintiff that its investigation was
on-going, to which Plaintiff replied that she had already
documented over $230, 000 in economic losses alone since
filing her claim on June 16, 2014. [Id. at
¶¶ 31-32]. In addition, Plaintiff also informed
Defendant that the subsequent medical records and bills
totaled approximately $25, 000 and that Defendant had not
contested over $200, 000 in accident related medical bills.
[Id. at ¶ 33].
August 19, 2014, Defendant sent a letter to Plaintiff
thanking her for “settlement on Claim #1079345491 HCJ
(‘Claim 1'), and included releases.”
[Id. at ¶ 34]. The next day, Plaintiff left a
voicemail with Defendant seeking clarification of its August
19 letter and, on August 22, 2014, Plaintiff wrote Defendant
a letter requesting it update its records, as Plaintiff did
not agree to settle Claim 1. See [id. at
¶¶ 35-36]. Plaintiff also requested information on
the availability of coverage from additional policies.
[Id. at ¶ 37]. An Allstate claim's
adjuster, Ms. Covak, informed Plaintiff's counsel that an
additional policy existed and that she filed an additional
claim. [Id. at ¶ 38]. On September 1, 2014,
Plaintiff received a Claim Acknowledgement Form for Claim
#0338786916 HCJ (“Claim 2”). [Id. at
offered to settle Claim 1 for $100, 000 on September 2, 2014,
and informed Plaintiff that Claim 2 was under review.
[Id. at ¶¶ 41-42]. Then, on September 17,
2014, Defendant offered to settle Claim 2 for $25, 000.
[Id. at ¶ 43]. On September 29, 2014, Defendant
again offered to settle Claim 1 for $100, 000, and informed
Plaintiff that the Auto Policy and Motorcycle Policy
“were the only policies” that provided
UIM coverage for Plaintiff's losses (for a settlement
total of $125, 000); however, Plaintiff informed Defendant of
her coverage under the KTM Policy. [Id. at
¶¶ 44-45, 48]. In addition, Defendant indicated
that they were pleased to settle Claim 2 and included
releases as to all claims. [Id. at ¶ 46].
October 6, 2014, Plaintiff received another Claim
Acknowledgement Form for Claim #0342431327 AAF (“Claim
3”). [Id. at ¶ 47]. Defendant offered to
settle Claim 3 for $25, 000 (a total settlement of $150, 000)
and again included releases for all of Plaintiff's
claims. See [id. at ¶¶ 51-53].
Between October 15 and November 17, 2014, Defendant sent
repeated requests to Plaintiff to settle Claims 1 and 2, with
related releases included. See [id. at
¶¶ 54-63]. Upon receiving the offers to settle and
related releases, Plaintiff's counsel sought
clarification from Defendant as to why it continually sent
releases to Plaintiff before tendering the UIM benefits, but
to no avail. See [id. at ¶¶ 54,
60, 62, 64]. Then, on November 18, 2014, Defendant sent
Plaintiff $150, 000 in benefits-the total settlement offer
under the Auto, Motorcycle, and KTM Policies. See
[id. at ¶ 65].
December 4, 2014, Defendant responded to Plaintiff's
questions regarding the claim releases and stated that the
releases “acknowledge that Defendant had met its
contractual obligations.” [Id. at ¶ 67].
Despite this response, Plaintiff again sought clarification
from Defendant as to why “every time Defendant agreed
that more coverage applied to Ms. Mackinney's (sic) loss,
Defendant would send a release of all claims.”
See [id. at ¶¶ 54, 68-69].
Defendant's counsel responded that Allstate verified that
no additional coverage applied to Plaintiff's loss and
that Allstate paid in full all available coverage and, once
again, requested that Plaintiff sign the claim releases.
[Id. at ¶¶ 70-71]. On January 9, 2015,
Plaintiff responded that she believed Defendant sought to
deprive her of additional coverage by forcing her to sign the
claim releases, and again sought clarification as to the
included releases. [Id. at ¶ 72-73]. Thirteen
days later, Defense counsel responded with a proposed
agreement “relating to the releases, ” and
informed Plaintiff that Allstate paid the maximum amount of
benefits from all applicable policies. [Id. at
¶ 74]. On February 13, 2015, Plaintiff once again
requested clarification as to the purpose of the releases.
[Id. at ¶ 75].
alleges that during the claims process, Defendant
“failed to acknowledge coverages under multiple
policies that it knew would benefit Plaintiff and were
applicable to her claim”-specifically, coverage under
her Umbrella Policy. [Id. at ¶¶ 76-77]. In
addition, Defendant failed to acknowledge or timely respond
to Plaintiff's communications regarding her claims, and
that Defendant tried to induce Plaintiff to release it from
liability and coverage without informing Plaintiff of all
available coverage to her claims. See [id.
at ¶¶ 78-80]. Accordingly, Plaintiff filed claims
for breach of contract for Defendant's failure to provide
the contracted-for UIM benefits under Plaintiff's four
insurance contracts, common law bad faith for Defendant's
unreasonable conduct in settling and/or handling
Plaintiff's UIM claims, and statutory bad faith for
Defendant's unreasonable delay and denial of
Plaintiff's UIM benefits. [Id. at 8-10].
response, Defendant filed its partial Motion to Dismiss on
June 16, 2016. [#8]. Defendant seeks dismissal of
Plaintiff's breach of contract claim because
Plaintiff's Umbrella Policy contains no UIM provision and
because Defendant performed all of its contractual
obligations under the three remaining insurance contracts.
See [id. at 5-6]. Defendant also seeks
dismissal of Plaintiff's statutory bad faith claim
because the one-year statute of limitations bars such a
claim. [Id. at 6]. And, lastly, dismissal of
Plaintiff's common law bad faith claim because the
Umbrella Policy does not provide for UIM benefits and,
therefore, Plaintiff cannot maintain any failure to pay claim
under that Policy. See [id. at 10]. The
court addresses the Parties' arguments below.
Rule 12(b)(6) a court may dismiss a complaint for
“failure to state a claim upon which relief can be
granted.” Fed.R.Civ.P. 12(b)(6). In deciding a motion
under Rule 12(b)(6), the court must “accept as true all
well-pleaded factual allegations . . . and view these
allegations in the light most favorable to the
plaintiff.” Casanova v. Ulibarri, 595 F.3d
1120, 1124 (10th Cir. 2010) (quoting Smith v. United
States, 561 F.3d 1090, 1098 (10th Cir. 2009)). However,
a plaintiff may not rely on mere labels or conclusions,
“and a formulaic recitation of the elements of a cause
of action will not do.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007).
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim
to relief that is plausible on its face.” Ashcroft
v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Plausibility
refers “to the scope of the allegations in a complaint:
if they are so general that they encompass a wide swath of
conduct, much of it innocent, then the plaintiffs ‘have
not nudged their claims across the line from conceivable to
plausible.'” Robbins v. Oklahoma, 519 F.3d
1242, 1247 (10th Cir. 2008) (citation omitted).
“The burden is on the plaintiff to frame ‘a
complaint with enough factual matter (taken as true) to
suggest' that he or she is entitled to relief.”
Id. The ultimate duty of the court is to
“determine whether the complaint sufficiently alleges
facts supporting all the elements necessary to establish an
entitlement to relief under the legal theory proposed.”
Forest Guardians v. Forsgren, 478 F.3d 1149, 1160
(10th Cir. 2007).
12(b)(6) provides that the court may only consider facts
alleged within the complaint. See Miller v. Glanz,
948 F.2d 1562, 1565 (10th Cir. 1991). Should the court
receive and consider materials outside the complaint, the
court may convert a Rule 12(b)(6) motion to a motion for
summary judgment if the parties have notice of the changed
status and the nonmovant responded by supplying its own
extrinsic evidence. See Alexander v. Oklahoma, 382
F.3d 1206, 1214 (10th Cir. 2004). However, a district court
may consider arguments contained in the memorandum in
opposition to dismiss or documents referred to in the
complaint that are central to a plaintiff's claim if the
Parties' do not dispute their ...