United States District Court, D. Colorado
ORDER ON MOTION TO RECONSIDER AND ON MOTION TO
BROOKE JACKSON, UNITED STATES DISTRICT JUDGE
matter is before the Court on defendant's motion for
reconsideration (ECF No. 39); and (2) plaintiff's motion
to dismiss defendant's counterclaims (ECF No. 40). The
motion for reconsideration is GRANTED in part and DENIED in
part, and the motion to dismiss the counterclaims is DENIED.
suit arises from Philadelphia's treatment of insurance
claims for property damage that Hometown sustained in a July
7, 2014 hailstorm. Philadelphia acknowledged coverage for
Hometown's insurance claim and issued an initial payment
according to its valuation of the claim. However, the parties
disagreed about the amount of damage and the scope and cost
of repairs, so Hometown invoked an appraisal process provided
in the insurance policy.
be discussed in more detail later in this order, the
appraisal process required each party to select a competent
and impartial appraiser, and because the appraisers could not
agree, an umpire was appointed to resolve the differences.
Ultimately an appraisal award was issued setting the loss
amount at $548, 489.82, comprised of $540, 089.82 for roofs
and exteriors and $8, 400 for windows and screens. ECF No. 31
at 6, ¶43. That figure, sometimes referred to as the
replacement cost value, has two main components:
“actual cash value” of the damaged property,
payable whether or not the repairs are made, and
depreciation, payable only after the repairs are completed.
The actual cash value of the appraisal award was set at $515,
580.43. The depreciation component was $32, 909.39.
paid the actual cash value amount, less its previous payment
and Hometown's deductible. Id. at ¶44. The
depreciation component has not been paid, and whether it is
owed is one of the parties' remaining disputes.
Philadelphia's payment of the appraisal award, Hometown
sued Philadelphia in the Jefferson County District Court
asserting breach of contract and two types of “bad
faith” claims: unreasonable delay or denial of an
insurance benefit contrary to Colo. Rev. Stat. §§
10-3-1115 and 10-3-1116, and common law bad faith.
Philadelphia removed the case and moved to dismiss. Plaintiff
asserted additional facts in an amended complaint, mooting
the motion to dismiss, but Philadelphia again moved to
dismiss on the grounds that (1) its participation in the
appraisal process and payment of the appraisal award
extinguished plaintiffs' claims; (2) even if payment of
the appraisal award did not preclude the bad faith claims,
(a) conduct during the appraisal process, including
litigation conduct, could not be considered as grounds for
bad faith claims; (b) Philadelphia did not in any event act
in bad faith during the appraisal process or in its
litigation conduct during that process and (c) plaintiff did
not allege pre-appraisal bad faith conduct. ECF No. 32.
December 12, 2017 I granted Philadelphia's motion to
dismiss in part, dismissing the contract claim but not the
bad faith claims. I concluded that Philadelphia's
participation in the appraisal did not necessarily preclude a
bad faith claim, finding that Hometown had alleged a course
of bad faith conduct occurring before, during and after the
appraisal process, ECF No. 35 at 12-13; that conduct during
the appraisal process, including litigation conduct, could
constitute bad faith conduct, id. at 13-16; and that
Hometown had plausibly alleged bad faith conduct sufficiently
to withstand a Rule 12(b)(6) motion, id. at 16-18.
the Court's order on the motion to dismiss, Philadelphia
filed an answer and counterclaim. ECF No. 38. In the
counterclaim Philadelphia alleges that Hometown breached its
contractual obligation to select a competent and impartial
appraiser such that the appraisal award should be vacated,
and damages should be awarded against Hometown in the amount
of the appraisal award (Counts I and III). The counterclaim
also seeks a declaration that Philadelphia owes nothing
beyond the “actual cash value” of the repairs,
i.e., no depreciation (Count II) and an award of damages
based on fraud allegedly committed by Hometown and its
appraiser (Count IV). In addition, Philadelphia moves the
Court to reconsider its order on the motion to dismiss. ECF
No. 39. Hometown has moved to dismiss the First, Third and
Fourth Counts of Philadelphia's counterclaim. ECF No 40.
Federal Rules of Civil Procedure do not explicitly provide
for motions for reconsideration. After judgment has entered
in a case, such motions are “generally accepted and
construed under Federal Rules of Civil Procedure 59(e) and
60(b).” Montano v. Chao, 07-CV-00735-EWN-KMT,
2008 WL 4427087, at *5 (D. Colo. Sept. 28, 2008). “On
the other hand, where a party files a motion for
reconsideration prior to the entry of judgment, Rules 59(e)
and 60(b) do not apply.” United Fire & Cas. Co.
v. Boulder Plaza Residential, LLC, 06-CV-00037-PAB-CBS,
2010 WL 420046, at *3 (D. Colo. Feb. 1, 2010).
“Instead, the motion falls within a court's plenary
power to revisit and amend interlocutory orders as justice
Grounds warranting a motion to reconsider include (1) an
intervening change in the controlling law, (2) new evidence
previously unavailable, and (3) the need to correct clear
error or prevent manifest injustice. Thus, a motion for
reconsideration is appropriate where the court has
misapprehended the facts, a party's position, or the
Lyons v. New Mexico Dep't of Corrections, 12
Fed.Appx. 772, 773 (10th Cir. 2001) (unpublished) (internal
citation omitted). However, a motion to reconsider is not to
be used to “reargue issues by rehashing facts and
arguments already addressed or available, yet neglected, in
the original proceeding.” Jaffrey v. Portercare
Adventist Health Sys., No. 15-CV-02297-NYW, slip
op., 2017 WL 3437986, at *2 (D. Colo. Aug. 10, 2017).
survive a 12(b)(6) motion to dismiss, the counterclaim must
contain “enough facts to state a claim to relief that
is plausible on its face.” Ridge at Red Hawk,
L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir.
2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007)).
the Court's analysis of the appraisal clause affects its
ruling on both parties' pending motions, I will begin
there. The clause provides that if the parties disagree on
the value of the property or the amount of the loss, either
party may demand an appraisal of the loss. See
Property Coverage Form ¶E(2), ECF No. 2-1 at 117. Then,
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.
Id. (emphasis added).
term “impartial” is not defined in the policy.
One well-known dictionary defines “impartial” to
mean “not partial or biased; treating or affecting all
However, a decision of the Colorado Court of Appeals defines
the term somewhat differently. In Owners Ins. Co. v.
Dakota Station II Condominium Association, Inc., 2017 WL
3184568 (Colo.App. 2017), cert. granted, 2018 WL
948601 (Colo. Feb. 20, 2018), the court held that an
impartial appraiser must act “fairly, without bias, and
in good faith, ” but that the appraiser is not
forbidden from favoring one side more than the other, i.e.,
that the appraiser need not be impartial “in the sense
that a judge or arbitrator (or the umpire under this policy)
would be required to be impartial.” Id. at *4.
Philadelphia's Motion for ...