United States District Court, D. Colorado
ORDER GRANTING MOTION TO DISMISS IN PART AND
ADMINISTRATIVELY CLOSING THIS ACTION
WILLIAM J. MARTINEZ, UNITED STATES DISTRICT JUDGE.
Owners Insurance Company (“Owners”) brings this
declaratory judgment action against Alan and Peggy Kasloff
(together, the “Kasloffs”), who are separately
represented. Currently before the Court is Alan Kasloff's
Rule 12(b)(1) Motion to Dismiss Complaint for Declaratory
Judgment, and, Alternative Motion to Dismiss Under the
Declaratory Judgments Act. (ECF No. 15.) Peggy Kasloff has
joined this motion. (ECF No. 16.)
reasons explained below, the Court rejects the Kasloffs'
argument that the Court lacks subject matter jurisdiction,
but the Court agrees with the Kasloffs that declaratory
judgment is, from a practical perspective, not appropriate at
this time. Rather than dismissing this case, however, the
Court will administratively close it pending certain
developments in an ongoing lawsuit in Arizona.
motion under Rule 12(b)(1) requests that the Court dismiss a
claim for lack of subject matter jurisdiction. A plaintiff
bears the burden of establishing that the Court has
jurisdiction. Basso v. Utah Power & Light Co.,
495 F.2d 906, 909 (10th Cir. 1974). “A court lacking
jurisdiction cannot render judgment but must dismiss the case
at any stage of the proceedings in which it becomes apparent
that jurisdiction is lacking.” Id.
12(b)(1) motions generally take one of two forms: a facial
attack or a factual attack. See Holt v. United
States, 46 F.3d 1000, 1002 (10th Cir. 1995). Here, the
Kasloffs present a purely facial attack, so the matter will
be resolved with reference to Owners' Complaint and
Complaint alleges as follows:
Kasloffs are a married couple. (ECF No. 1 ¶ 2.) As of
August 2015, the Kasloffs' auto insurer was Owners.
(Id. ¶ 3.) In that month, the Kasloffs were
moving from Greenwood Village, Colorado, to Atlanta, Georgia.
(Id. ¶ 2, 45, 47.) While “in route to
Atlanta, ” they took a vacation in Scottsdale, Arizona,
where they were involved in a two-vehicle auto accident.
(Id. ¶ 4, 45, 47.) Alan Kasloff was driving the
Kasloffs' vehicle (in which Peggy was a passenger), and
non-party Scott Acton (“Acton”) was driving the
other vehicle. (Id. ¶ 4.)
and Peggy each retained a lawyer, and Alan Kasloff's
lawyer soon informed Owners that Peggy had made a claim
against Alan. (Id. ¶ 5, 7.) Owners responded by
pointing to a portion of the relevant auto insurance policy
(“Policy”) commonly known as the “Household
Exclusion, ” which excludes bodily injury or property
damage caused by a member of the insured's household.
(Id. ¶ 7, 40.)
November 2015, Owners received correspondence from Peggy
Kasloff's lawyer, who notified Owners that Peggy intended
to file an uninsured/underinsured (“UM/UIM”)
claim. (Id. ¶ 8.) It is not clear whether
Peggy's counsel considered Alan to be uninsured or
underinsured because of the household exclusion, or whether
she considered Acton to be uninsured or underinsured, or
both. The letter to Owners is clearly a generic template, and
it refers only to “the other motorist.” (ECF No.
1-7.) In any event, Owners again communicated-this time to
both of the Kasloffs' respective attorneys-its position
that it owed no coverage as to any of Peggy's injuries
caused by Alan's negligence. (ECF No. 1 ¶ 9.)
December 2015, a paralegal in Peggy Kasloff's
attorney's office sent two e-mails to Owners' outside
counsel, Mr. Gregory Giometti. The first e-mail asked whether
Owners was denying medical payments coverage as well as
liability coverage. (Id. ¶ 10.) The second
e-mail “ask[ed] Owners to look at the issue of UIM
coverage.” (Id.) In January 2016, Mr.
Giometti's associate, Mr. Evan Spencer, sent a letter to
Peggy Kasloff's attorney denying any claim for UM/UIM
coverage based on Alan's actions, but agreeing that
medical payments coverage was available. (Id. ¶
2016, Peggy Kasloff filed a lawsuit in Arizona state court,
naming Alan Kasloff and Acton as defendants (“Arizona
Lawsuit”). (Id. ¶ 17.) Neither Peggy nor
her attorney informed Owners of that lawsuit at that time.
(Id. ¶¶ 14-17.)
March 2017, Peggy Kasloff applied for entry of default
against Acton in the Arizona Lawsuit. (Id. ¶
18.) In May 2017, a paralegal for Peggy's attorney
e-mailed Mr. Spencer, attaching various documents from the
Arizona Lawsuit, including the application for entry of
default. (Id. ¶ 19.) As it turns out, Mr.
Spencer had left Mr. Giometti's firm over a year earlier,
but his e-mail account “was not properly shut
down”-so the e-mail arrived but no one in Mr.
Giometti's firm knew about that communication.
(Id. ¶ 19 & n.1.)
Alan Kasloff, in his capacity as a cross-claimant against
Acton in the Arizona Lawsuit, had also applied for default
judgment against Acton, because the Arizona court issued a
$500, 000 default judgment in favor of Alan and against Acton
on June 14, 2017. (Id. ¶ 20; ECF No. 1-12.)
Five days later (June 19, 2017), Peggy Kasloff's attorney
sent a letter to Mr. Giometti stating that “our
previous correspondence has not been responded to” and
attaching a copy of the default judgment in favor of Alan.
(ECF No. 1-13.) Peggy's attorney demanded $500, 000
from Owners. (Id.) And, the day after that, Alan
Kasloff sent a letter addressed to Mr. Spencer demanding
$488, 000 in UIM coverage based on the default ...