United States District Court, D. Colorado
PINON SUN CONDOMINIUM ASSOCIATION, INC., a Colorado non-profit corporation, Plaintiff,
ATAIN SPECIALTY INSURANCE COMPANY, a foreign corporation, INDIAN HARBOR INSURANCE COMPANY, a foreign corporation, and GREAT LAKES INSURANCE, SE, f/k/a Great Lakes Reinsurance UK, Plc, a foreign corporation, Defendants. ATAIN SPECIALTY INSURANCE COMPANY, a foreign corporation, INDIAN HARBOR INSURANCE COMPANY, a foreign corporation, and GREAT LAKES INSURANCE, SE, f/k/a Great Lakes Reinsurance UK, Plc, a foreign corporation, Defendants and Third-Party Plaintiffs,
CLAIM SOLUTIONS LLC, a Colorado limited liability company, SCOTT BENGLEN, SHALZ CONSTRUCTION LLC, a Colorado limited liability company, and BRADLEY SHALZ, Third Party Defendants.
ORDER DENYING PLAINTIFF'S MOTION TO COMPEL
APPRAISAL AND TO STAY PROCEEDINGS PENDING COMPLETION OF
CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE
matter is before the Court on Plaintiff Pinon Sun Condominium
Association, Inc.'s Motion to Compel Appraisal and to
Stay Proceedings Pending Completion of Appraisal. (Doc. #
50.) For the reason described below, the Court denies
Plaintiff's Motion to Compel Appraisal and to Stay
Proceedings Pending Completion of Appraisal.
following facts are undisputed. Plaintiff is the homeowners
association for a multi-family condominium property in
Colorado Springs, Colorado, and is organized as a non-profit
Colorado corporation. (Doc. # 43 at 2-3.) Plaintiff sought
and obtained an insurance policy (the “Policy”)
from Defendant Great Lakes Insurance, SE (“Defendant
Great Lakes”) on its property for the period of August
15, 2015, to August 15, 2016. See (Doc. # 71-3).
Defendant Great Lakes was the primary insurer of the Policy,
covering up to $10, 000, 000.00 for any given incident. (Doc.
# 43 at 25.) Defendant Atain Specialty Insurance Company
(“Defendant Atain”) and Defendant Indian Harbor
Insurance Company (“Defendant Indian Harbor”)
were the excess carriers under the Policy. (Id.);
see also (Doc. # 49 at 2.)
Policy included coverage for wind and hail losses, subject to
a two percent deductible. (Doc. # 43 at 4.) Relevant here,
the Policy provided for appraisal if the parties disagreed on
the amount of loss (the “Appraisal Provision”):
If the Named Insured and the Company fail to agree on the
amount of loss, each, upon the written demand either
of the Named Insured or of the Company made within 60 days
after receipt of proof of loss by the Company, shall
select a competent and disinterested appraiser. . . Then, at
a reasonable time and place, the appraisers shall appraise
the loss, stating separately the value at the time of loss
and the amount of loss. . . An award in writing by any two
shall determine the amount of loss. The Named Insured and the
Company shall each pay his or its chosen appraiser and shall
bear equally the other expenses of the appraisal and of the
(Doc. # 71-3 at ¶ 26) (emphasis added.)
28, 2016, Plaintiff's property was damaged by a hail and
wind storm. (Doc. # 43 at 4.) Plaintiff filed a claim with
Defendants shortly thereafter. (Id.) The parties
have since disputed the cost of repairs and amount of loss.
(Doc. # 50 at 3.) At no time during the parties' dispute
did any party issue a written demand for appraisal.
filed the underlying action on June 30, 2017, (Doc. # 1), and
alleges the following claims: (1) breach of contract against
Defendant Great Lakes; (2) breach of contract against
Defendant Atain; (3) breach of contract against Defendant
Indian Harbor; (4) violation of Colo. Rev. Stat. §
10-3-1115 and relief pursuant to § 10-3-1116 against all
Defendants; (5) breach of the covenant of good faith and fair
dealing against all Defendants; and (6) violation of the
Colorado Consumer Protection Act, § 6-1-101, et
seq., against all Defendants (Doc. # 43 at 25-34.)
October 23, 2017, Plaintiff moved to compel appraisal
pursuant to the terms of the Policy and to stay proceedings
pending completion of appraisal. (Doc. # 50.) Defendants
Atain and Indian Harbor jointly responded in opposition on
November 13, 2017. (Doc. # 70.) Defendant Great Lakes
responded in opposition on the day. (Doc. # 71.) Plaintiff
replied to Defendants' briefs on November 17, 2017. (Doc.
# 79.) Plaintiff's Motion to Compel Arbitration and to
Stay Proceedings Pending Completion of Appraisal is therefore
ripe for the Court's review.
the Court's jurisdiction over this matter is founded on
diversity of citizenship pursuant to 28 U.S.C. §
1332(a), the Court applies the substantive law of Colorado.
Essex Ins. Co. v. Vincent, 52 F.3d 894, 896 (10th
Cir. 1995). Under Colorado law, the interpretation of an
insurance contract is a matter of law reserved for the
courts. Fire Ins. Exch. v. Bentley, 953 P.2d 1297,
1300 (Colo.App. 1998). An insurance policy must be enforced
as written, unless the policy contains an ambiguity. Cary
v. United of Omaha Life Ins. Co., 108 P.3d 288, 290
(Colo. 2005). The policy should be construed to give effect
of the parties' intent, id., and
“[w]henever possible, this intent should be ascertained
from the plain language of the policy alone.”
Farmers Ins. Exch. v. Anderson, 260 P.23d 68, 72
(Colo.App. 2010). Finally, words should be given their plain
meaning according to common usage, “and strained
constructions should be avoided.” Allstate Ins. Co.
v. Starke, 797 P.2d 14, 18 (Colo. 1990).
decisions from this District have found that under Colorado
law, an appraisal process like the one at issue in this
dispute is properly classified as an arbitration pursuant to
the Colorado Uniform Arbitration Act, Colo. Rev. Stat. §
13-22-201, et seq. (“CUAA”). See,
e.g., Laredo Landing Owners Ass'n, Inc. v.
Sequoia Ins. Co., No. 14-cv-014545-RM-KMT, 2015 WL
3619205, *1 (D. Colo. June 10, 2015); El Toledo,
LLC v. Sequoia Ins. Co., No. 14-cv-01696-RM-KMT, 2015 WL
3457475, *1 (D. Colo. May 29, 2015); Auto-Owners Ins. Co.
v. Summit Park Townhome Ass'n, 100 F.Supp.3d 1099,
1103 (D. Colo. 2015). Colorado has a “strong public
policy in favor of arbitration.” Braata, Inc. v.
Oneida Cold Storage Co., LLP, 251 P.3d 584, 590
(Colo.App. 2010). For example, the CUAA allows the stay of
arbitration proceedings only in limited circumstances,
including where “it is apparent from the language of
the contract that the claim sought to be arbitrated is
clearly beyond the scope of the arbitration clause.”
Sopko v. Clear Channel Satellite Serv., Inc., 151
P.3d 663, 666 (Colo.App. 2006); see also El Toledo,
LLC, 2015 WL 3457475 at *1; 15 Couch on Ins. §
209:8 (3d ed. 2017) (“Like the arbitration remedy,
appraisal is designed to be consistent with the public policy
of discouraging litigation.”).