United States District Court, D. Colorado
ORDER ON MOTION TO DISMISS
Michael E. Hegarty, United States Magistrate Judge.
“duty to defend and indemnify” action, Plaintiff
Georgiana Chavez (“Plaintiff”) sued Marlena
Whicker (“Whicker”), the driver of a vehicle
allegedly insured by the Defendant Arizona Automobile
Insurance Company (“Defendant”), in the District
Court for the County of Arapahoe, Colorado and obtained a
default judgment against Whicker in the amount of $732,
238.72 with accruing interest.
Plaintiff, the alleged assignee of all rights Whicker held
against Defendant as an “insured” under the
subject insurance policy, claims Defendant failed to defend
Whicker, failed to pay insurance benefits with respect to the
underlying litigation, and acted in bad faith. Defendant
moves to dismiss this action asserting that Plaintiff fails
to plausibly allege Whicker was an “insured” as
defined by the subject policy. The Court finds Defendant
improperly relies on a “duty to defend” standard
in arguing Plaintiff fails to allege Whicker was an
“insured” and, thus, the Court will deny the
Statement of Facts
following are factual allegations (as opposed to legal
conclusions, bare assertions, or merely conclusory
allegations) made by the Plaintiff in the operative First
Amended Complaint, which are taken as true only for analysis
under Fed.R.Civ.P. 12(b)(6) pursuant to Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
December 4, 2015, Plaintiff was involved in an automobile
collision in which she was the passenger of a vehicle rear
ended by an automobile operated by Whicker. The owner of the
vehicle, Javier Galindo, permitted Whicker to use it. As a
result of the collision, Plaintiff sustained serious and
time of the collision, the vehicle operated by Whicker was
allegedly insured under Defendant's Policy No. 56 COAA
000029252 (the “Policy”). Pursuant to the Policy,
Defendant agreed to pay $25, 000 per person/$50, 000 per
accident to protect its insureds for legal liability to
persons such as the Plaintiff. By letter dated June 26, 2015,
Plaintiff requested from Defendant a tender of the $25, 000
policy limits. Defendant rejected the offer and failed to
tender any payment to Plaintiff.
October 1, 2015, Plaintiff filed a lawsuit against Whicker in
the District Court for Arapahoe County, Colorado, Civil
Action No. 2015CV031667 (“the Underlying Case”),
seeking compensatory damages from Whicker. Whicker was served
and the Return of Service was provided to Defendant on
October 4, 2015. Despite being provided the Return of
Service, Defendant did not file a responsive pleading to the
underlying complaint nor provide any defense to Whicker.
default judgment was entered in the Underlying Case on
December 2, 2015. A damages hearing was held on March 18,
2016 before the Honorable John L. Wheeler, who entered an
award of damages on March 21, 2016. Judge Wheeler
subsequently entered an Order of Judgment against Whicker in
the amount of $732, 238.72 with accruing interest.
has assigned to Plaintiff her rights and interests to any
claims against Defendant for collection of the judgment
entered in the Underlying Case, including the rights to
prosecute those claims in a civil action and retain the
proceeds of such action.
on these factual allegations, Plaintiff claims Defendant
breached its insurance contract with Galindo, the owner of
the vehicle, who allegedly permitted Whicker to drive the
car, and engaged in bad faith by:
a. Its failure to timely review, investigate and settle the
claims against Whicker;
b. Its refusal to attempt in good faith to effectuate a
prompt, fair and equitable settlement of the claims against
Whicker, especially in light of the evidence concerning
Whicker's liability and the severity of Plaintiff's
c. Its failure to provide a defense to Whicker;
d. Its consistent actions placing its own interests above
those of its insured, Whicker;
e. Its depriving Whicker of the benefits and protection of
the contract of insurance; and
f. Other conduct to be developed during these proceedings.
Compl. ¶ 27. In response, Defendant filed the present
motion seeking to dismiss the action for Plaintiff's
failure to allege Whicker is an “insured”
entitled to benefits under the Policy, ...