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Corsentino v. Hub International Insurance Services, Inc.

United States District Court, D. Colorado

January 29, 2018




         This matter comes before the Court on Plaintiff Kimberly Corsentino's Motion for Leave to File Out-of-Time Certificate of Review [#174] (the “Motion”). The Motion has been referred to this Court. [#175] This Court has carefully considered the Motion and related briefing, related oral argument held on November 27, 2017 [#167], the entire case file and the applicable case law. For the following reasons, I GRANT the Motion.

         I. BACKGROUND

         On July 5, 2013, Ms. Corsentino turned her Jeep in front of Jason and Mendy Brockman's Honda causing an accident injuring Ms. Brockman and rendering her a tetraplegic.[1] [#173 at ¶¶ 8-9] At the time of the accident, Ms. Corsentino was a named driver on an insurance policy (the “Policy”) issued by The Travelers Indemnity Company of Connecticut (“Travelers”) to Corsentino Dairy Farms, Inc. (the “Farm”), and the Jeep was listed as a scheduled vehicle. [Id. at ¶ 10]

         The Policy was sold to the Farm by Defendant Hub International Insurance Services, Inc. (“Hub”), an insurance producer and agent of Travelers. [Id. at ¶ 17] Ms. Corsentino alleges that Hub “knew or should have known [at the time it placed the Policy] that many of the insured Corsentino family members, including Ms. Corsentino, were not employees of the Farm and that their vehicles were not owned by the Farm.” [Id. at ¶ 19]

         Ms. Corsentino alleges that the Policy, which has a bodily injury liability limit of $500, 000 per accident, imposed a duty upon Travelers to defend and indemnify her in any action brought by the Brockmans related to the accident. [Id. at ¶¶ 12-13] Ms. Corsentino further alleges that Travelers had previously paid liability benefits under the Policy on a claim involving Ms. Corsentino and a different vehicle she owned. [Id. at ¶ 22]

         Following the accident, on or about July 8, 2013, the Farm and Ms. Corsentino submitted a claim to Travelers under the Policy. [Id. at ¶ 29] At that time, Travelers retained a law firm on behalf of the Farm and Ms. Corsentino to begin investigating the accident, and authorized the law firm to retain an accident reconstructionist. [Id. at ¶ 30] On July 12, 2013, Travelers informed the law firm that it was denying Ms. Corsentino's claim and instructed the law firm to no longer represent Ms. Corsentino; Travelers did not communicate to Ms. Corsentino that she was no longer represented. [Id. at ¶ 31] Travelers then sent a letter to Ms. Corsentino on July 18, 2013, stating that it was denying her claim, because “the Farm had no insurable interest in the 2008 Jeep Grand Cherokee at the time of the Accident, as the Jeep was not owned by the Farm and was being driven by its owner, Ms. Corsentino.” [Id. at ¶ 32] Nonetheless, on August 20, 2013, Travelers paid benefits to the Farm for the damage sustained by the Jeep in the accident. [Id. at ¶ 34]

         On August 8, 2014, the Brockmans told Travelers that they would release all claims against Ms. Corsentino if Travelers paid the bodily injury liability limit on the Policy. [Id. at ¶ 33] Travelers responded on September 3, 2014, refusing to pay any liability injury coverage to the Brockmans. [Id. at ¶ 35] The Second Amended Complaint then alleges that “[a]s a direct result of Travelers' refusal to pay liability benefits owed to the Brockmans, the Brockmans filed suit [(the “Underlying Action”)] against Ms. Corsentino . . . on June 17, 2015.” [Id. at ¶ 36] After Ms. Corsentino was served with a copy of the complaint in the Underlying Action, she asked Travelers to defend her, and Travelers refused. [Id. at ¶¶ 37-38] The Underlying Action concluded with the entry of a $31, 761, 724.04 judgment against Ms. Corsentino on December 5, 2016. [Id. at ¶ 40] On December 28, 2016, Ms. Corsentino asked Travelers to indemnify her from this judgment, and Travelers refused on February 3, 2017. [Id. at ¶¶ 41-42]

         Ms. Corsentino originally filed this lawsuit against Defendants Hub and Travelers in Denver District Court on July 1, 2016. [#3] The state court complaint alleged four causes of action: (1) declaratory relief, (2) breach of contract, (3) bad faith breach of contract, and (4) civil conspiracy. [Id. at 3-5] Of relevance to the instant Motion, only the second and fourth claims were brought against Hub. [Id.] On July 27, 2016, Hub (with Travelers' consent) removed the case to this Court, based on diversity of citizenship pursuant to 28 U.S.C. § 1332. [#1 at 1, 4]

         On September 6, 2016, Ms. Corsentino filed a certificate of review pursuant to Colorado Revised Statute §13-20-602 (the “Original Certificate of Review”). [#24] In the Original Certificate of Review, Ms. Corsentino certified:

that counsel has consulted with a professional with expertise in the areas addressed in the Complaint, has reviewed the facts and circumstances as alleged in the plaintiff's Complaint, and that the professional has found the filing of the claims to be justified and not lack substantial justification within the meaning of C.R.S. §13-17-102(4) based on his training, expertise, experience and knowledge concerning insurance industry claim-handling and policy issuance standards and practices for complying with applicable law.


         Travelers subsequently filed a Motion to Compel Joinder of Additional Parties, asking the Court for an order compelling the joinder of the Brockmans. [#33] On February 1, 2017, the Court sua sponte issued an Order asking the parties to address whether joinder of the Brockmans would destroy the Court's diversity jurisdiction. [#66] In response, Ms. Corsentino and Defendants both asserted that the Court's diversity jurisdiction would not be altered, because the Brockmans could be added as involuntary plaintiffs. [#67, 68] Before the Court resolved Travelers' Motion to Compel Joinder, the Brockmans filed a Motion to Intervene. [#73] The Court granted the Motion to Intervene, and the Brockmans were given leave to intervene. [#75]

         On March 15, 2017, Ms. Corsentino filed an Amended Complaint asserting six claims for relief: (1) declaratory judgment; (2) breach of contract; (3) bad faith breach of contract; (4) violation of Colorado Revised Statute § 10-3-1115 (statutory bad faith); (5) negligent procurement; and (6) negligent misrepresentation.[2] [#80 at 12-17] Only the last two claims were brought against Hub. [Id.] ...

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