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Schimek v. Owners Insurance Co.

United States District Court, D. Colorado

August 23, 2017



          Scott T. Varholak United States Magistrate Judge

         This matter is before the Court on Plaintiff's Motion for Leave to Amend to Add Claim for Exemplary Damages (the “Motion”) [#37]. The Motion has been referred to this Court. [#38] This Court has carefully considered the Motion, related briefing, the case file, and the applicable case law, and has determined that oral argument would not materially assist in the disposition of the Motion. For the following reasons, the Motion is GRANTED.

         I. Background

         On January 6, 2016, Plaintiff Theresa Schimek was involved in a motor vehicle accident caused by non-party Elizabeth Wynkoop. [#1 at ¶¶ 6-7] Ms. Wynkoop was driving on the wrong side of the highway, resulting in a head-on collision between Plaintiff's car and Ms. Wynkoop's car. [Id. at ¶¶ 8-9] Ms. Wynkoop died at the scene, and Plaintiff was transported to a local hospital. [Id. at ¶ 9] Plaintiff contends that she suffered “significant damages from the collision including past and future medical expenses, emotional distress, and pain and suffering.” [Id. at ¶ 18]

         At the time of the accident, Ms. Wynkoop had a liability insurance policy with a $50, 000 limit through non-party Bristol West Insurance, and Plaintiff had a $500, 000 underinsured motorist policy underwritten by Defendant Owners Insurance Company. [Id. at ¶¶ 5, 10; #26] Defendant was notified of the accident on January 7, 2016, and the claim was assigned to Korrie Cole, a Field Claim Representative for Defendant. [#42-1 at ¶¶ 1, 6; #43-2 at 34]

         In a letter dated April 26, 2016, Plaintiff's counsel notified Defendant of a possible underinsured motorist claim. [#42-1 at ¶ 10] On June 28, 2016, Plaintiff's counsel provided Defendant with a copy of Plaintiff's demand letter to Wynkoop's insurer, which made a demand for $335, 000, and the final settlement offer from Wynkoop's insurer. [#42-1 at ¶ 14; #42-3 at 5] On July 21, 2016, Defendant provided its consent for Plaintiff to settle with Ms. Wynkoop's insurer for less than the policy limits and requested additional documentation in support of Plaintiff's demand. [#42-1 at ¶ 15; 43-2 at 5] On August 10, 2016, Plaintiff's counsel provided Defendant with additional documentation in support of her claim and requested “a good faith offer to settle” the uninsured motorist claim by August 19, 2016. [#42-1 at ¶ 16; #43-2 at 3] Ms. Cole requested 30 days to review the additional documentation and Plaintiff's counsel agreed. [#43-2 at 3]

         Defendant valued Plaintiff's total damages at $52, 500 and thus, on August 24, 2016, extended a settlement offer of $2, 500 (having subtracted the $50, 000 limit of Ms. Wynkoop's policy) to settle the uninsured motorist claim. [#42-1 at ¶ 22; #43-2 at 2-3] Plaintiff filed the instant lawsuit on August 30, 2016, asserting the following three claims for relief: (1) breach of insurance contract, (2) common law bad faith breach of contract; and (3) violations of Colorado's insurance regulations, Colorado Revised Statute §§ 10-3-1115 and 10-3-1116. [#1] On November 2, 2016, the Court entered a Scheduling Order, which set December 1, 2016 as the deadline for the joinder of parties and amendment of pleadings. [#25 at 7]

         On May 30, 2017, after the parties had conducted substantial discovery, Plaintiff filed the instant motion seeking leave to amend her complaint to add a claim for exemplary damages as additional relief for her common law bad faith breach of contract claim. [#37 at 1-2; #43 at 11] On June 14, 2017, Defendant filed its opposition brief responding to the Motion. [#42] Plaintiff filed a Reply in support of the Motion on June 21, 2017. [#43]

         II. Legal Standard

         After the deadline for the amendment of pleadings established by a scheduling order has expired, a party seeking leave to amend “must demonstrate (1) good cause for seeking modification under Fed.R.Civ.P. 16(b)(4) and (2) satisfaction of the Rule 15(a) standard” for amending pleadings. Birch v. Polaris Indus., Inc., 812 F.3d 1238, 1247 (10th Cir. 2015) (quoting Gorsuch, Ltd., B.C. v. Wells Fargo Nat'l Bank Ass'n, 771 F.3d 1230, 1240 (10th Cir. 2014)).

         Federal Rule of Civil Procedure 16(b)(4) allows modification of a scheduling order “only for good cause and with the judge's consent.” “Demonstrating good cause under the rule ‘requires the moving party to show that it has been diligent in attempting to meet the deadlines, which means it must provide an adequate explanation for any delay.'” Strope v. Collins, 315 F. App'x 57, 61 (10th Cir. 2009) (quoting Minter v. Prime Equip. Co., 451 F.3d 1196, 1205 n.4 (10th Cir. 2006)); see Lehman Bros. Holdings Inc. v. Universal Am. Mortg. Co., 300 F.R.D. 678, 681 (D. Colo. 2014). “In practice, this standard requires the movant to show the scheduling deadlines cannot be met despite [the movant's] diligent efforts.” Gorsuch, Ltd., 771 F.3d at 1240 (quotations omitted). “Rule 16's good cause requirement may be satisfied, for example, if a plaintiff learns new information through discovery or if the underlying law has changed.” Id. On the other hand, “[i]f the plaintiff knew of the underlying conduct but simply failed to raise tort claims, [ ] the claims are barred.” Id.

         Pursuant to Federal Rule of Civil Procedure 15(a)(2), the Court is to freely allow amendment of the pleadings “when justice so requires.” The grant or denial of an opportunity to amend is within the discretion of the Court, but “outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion; it is merely abuse of that discretion and inconsistent with the spirit of the Federal Rules.” Foman v. Davis, 371 U.S. 178, 182 (1962). “Refusing leave to amend is generally only justified upon a showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of amendment.” Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993).

         Pursuant to Colorado law, a request for “exemplary damages . . . may not be included in any initial claim for relief” but rather may be asserted “by amendment to the pleadings only after the exchange of initial disclosures . . . and the plaintiff establishes prima facie proof of a triable issue.” Colo. Rev. Stat. 13-21-102(1.5)(a). In order to obtain exemplary damages, a plaintiff must prove that “the injury complained of is attended by circumstances of fraud, malice, or willful and wanton conduct.” Colo. Rev. Stat. 13-21-102(1)(a). Pursuant to the statute, willful and wanton conduct “means conduct purposefully committed which the actor must have realized as dangerous, done heedlessly and recklessly, without regard to consequences, or of the rights and safety of others, particularly the plaintiff.” Colo. Rev. Stat. 13-21-102(1)(b).

         III. Analysis

         Defendant does not argue that Plaintiff lacks good cause for seeking to amend the Complaint to add a claim for exemplary damages after the deadline for the amendment of pleadings set in the Scheduling Order. As noted above, Colorado law does not allow a plaintiff to assert a claim for exemplary damages in the initial pleading, but rather requires the plaintiff to make a prima facie offer of proof-which often requires the plaintiff to obtain evidence through discovery-to obtain leave to add a claim for exemplary damages. ...

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