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Vista Pointe Townhome Association, Inc. v. Auto-Owners Insurance Co.

United States District Court, D. Colorado

October 23, 2017

VISTA POINTE TOWNHOME ASSOCIATION, INC., Plaintiff,
v.
AUTO-OWNERS INSURANCE COMPANY, Defendant.

          ORDER TO SHOW CAUSE

          MARCIA S. KRIEGER, UNITED STATES DISTRICT COURT.

         THIS MATTER comes before the Court upon the Plaintiff's Motion to Reopen and for Appointment of an Umpire (# 28), the Defendant's response (# 29), and the Plaintiff's reply (# 30); and the Plaintiff's Motion for Forthwith Hearing on the foregoing motion (# 31). For the reasons that follow, the motion to reopen is granted in part, and the motion for hearing is denied.

         I. BACKGROUND

         This is a hail-damage case. Plaintiff Vista Pointe Townhome Association obtained a property insurance policy insured by defendant Auto-Owners Insurance Co. (“Owners”), covering the term of March 2014 to March 2015 (the Policy). The Policy included a provision allowing for independent appraisal of the insured property or amount of loss:

If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. # 19-4 at 2. The hailstorm occurred in September 2014 and Vista Pointe filed a claim pursuant to the Policy. Unhappy with Owners' value of the claim, Vista Pointe invoked the appraisal provision and filed this action in April 2016. In its complaint (# 1), Vista Pointe asserted the following causes of action: (1) breach of contract based on the denial of benefits under the Policy, (2) bad faith breach of insurance contract based on an insufficient investigation of the claim and the determination of amounts due, and (3) unreasonable delay and denial of benefits under Colorado statute. Vista Pointe also moved the Court to compel the appraisal process set forth in the Policy.

         The Court set the matter down for a hearing in June 2016, to determine the existence of diversity jurisdiction and express doubt that the Court can be involved in the appraisal process. With the parties' consent, the Court administratively closed the case pending completion of the appraisal process (# 18). In September 2016, Owners moved to reopen the case and disqualify Vista Pointe's appraiser (## 19, 20). The Court held (# 27) that it lacked jurisdiction to rule on the motions to disqualify Vista Ponite's appraiser because they were brought pursuant to an agreement governing the appraisal process that the parties entered into during the pendency of this lawsuit. This second agreement was unconnected to the Policy and the parties did not contend it was a novation. The Court invited a motion for reconsideration if Owners could find authority indicating that the Court could exercise jurisdiction over a contract unrelated to the contract sued upon, but none was filed.

         Instead, Vista Pointe has now returned, requesting that the Court reopen the case to appoint the umpire as contemplated by the Policy, as the parties' appointed appraisers disagree over who should be named umpire (# 28). Owners argues that Vista Pointe's appraiser already agreed to an umpire, but Vista Pointe asserts that its appraiser withdrew his assent to the named umpire.

         II. DISCUSSION

         The Court continues to have significant doubt that jurisdiction exists for the claims asserted in this case, and now orders the parties to show cause as to why the case should not be dismissed for lack of jurisdiction.

         A. Jurisdiction and Standing

         Starting with the obvious, federal courts are courts of limited jurisdiction that possess only the authority given to them by the United States Constitution and federal statutes.[1]Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Article III of the Constitution restricts the authority of federal courts to adjudicating actual “cases” and “controversies.” U.S. Const. art. III, § 2, cl. 1; Sprint Commc'ns Co. v. APCC Servs. Inc., 554 U.S. 269 (2008). A case or controversy can only be brought by a person with standing to sue.

         Unlike doctrines that restrain federal courts from exercising jurisdiction based on the characteristics of the claims themselves (e.g., doctrines of abstention or grants of exclusive jurisdiction), the question of standing focuses on the party who seeks relief, rather than on the issues that he or she wants adjudicated. See Flast v. Cohen, 392 U.S. 83, 95 (1968). A plaintiff must demonstrate standing for each claim.

         For each claim or type of relief sought, a plaintiff must show that there it is a “case or controversy” at the time of filing of the lawsuit. DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006). Thus, for each claim, Vista Pointe must demonstrate that: (1) it has suffered an “injury in fact” that is concrete and particularized, and actual or imminent (not merely conjectural or hypothetical); (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by the relief requested. Friends of the Earth Inc. v. Laidlaw Envtl. Servs. Inc., 528 U.S. 167, 180-81 (2000); Tandy v. City of Wichita, 380 F.3d 1277, 1283 (10th Cir.2004); Nova Health Sys. v. Gandy, 416 F.3d 1149, 1154 (10th Cir. 2005). If Vista Pointe suffered some injury subsequent to the filing of the lawsuit, that does not convey standing.

         B. Vista ...


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