United States District Court, D. Colorado
MALIK M. HASAN, M.D., and SEEME G. HASAN, Plaintiffs,
AIG PROPERTY CASUALTY COMPANY, a Pennsylvania corporation, Defendant.
RECOMMENDATION TO DENY RENEWED MOTION FOR LEAVE TO
L. Carman United States Magistrate Judge
case comes before the court on the renewed motion of
Plaintiffs Malik M. Hasan, M.D. and Seeme G. Hasan
("Plaintiffs") to amend their complaint. Doc. 47.
Plaintiffs revise a proposed claim for bad faith non-renewal
of insurance that the court recently found would be futile
for lack of facts to support unreasonable conduct and
damages. Doc. 46 (Amended Recommendation). Defendant AIG
Property Casualty Company ("AIG") argues the
revised claim suffers the same flaws and therefore remains
futile. Doc. 50. Plaintiffs replied in support of their
renewed motion. Doc. 52. For the reasons that follow, the
court concludes Plaintiffs' revision adds detail without
a difference for purposes of plausibility. The court
accordingly recommends denying the renewed motion.
court recited the alleged facts and claims in the
Recommendation of May 8, 2018. Doc. 46. The Final Pretrial
Order was entered December 12, 2017, and the case is set for
trial to begin October 1, 2018. In their first motion to
amend, Plaintiffs sought to add a claim for bad faith
non-renewal of both their private collections insurance
policy and homeowners' insurance policy. Plaintiffs now
limit the new claim to the non-renewal of their
homeowners' insurance. Doc. 47-1 (Revised Proposed
Amended Complaint) ¶¶ 34-43 and Fifth Claim for
to their first proposed amendment, Plaintiffs add allegations
that the parties had a prior course of conduct that
Plaintiffs negotiated premiums beyond the expiration date of
their policies and then paid the agreed-upon premiums.
Id. ¶¶ 36-37. Plaintiffs note among other
things "[t]his annual premium negotiation was predicated
upon the properties to be covered, the amount of coverage,
the loss history and other relevant factors."
Id. ¶ 36. Plaintiffs continue to propose
without significant change that they
have been AIG insurance customers since 2005. Over the past
five years, the Hasans have paid AIG $624, 245 in insurance
premiums under various insurance policies issued by AIG
During that same period, AIG paid the Hasans only $120,
069.86 in covered losses (more than half of which was the
$62, 500 paid to the Hasans under a "Fraud SafeGuard
Coverage" endorsement to the AIG Homeowners
Policy in connection with the Hasans' losses
which are the subject of the captioned litigation).
Accordingly, it cannot be said that AIG experienced a
negative claims history in respect of the insurance coverage
that it has provided to the Hasans.
Doc. 47-1 ¶ 38. Again relative to their first motion to
amend. Plaintiffs also continue to allege AIG sent
"retaliatory Notices of Nonrenewal of the Homeowners
Insurance (the 'Non-Renewal Notices'). The
Non-Renewal Notices referenced AIG's payments to the
Hasans under the Homeowners Insurance and the expenses
incurred defending the claims in the captioned litigation
brought by the Hasans." Id. ¶ 39. Copies
of the Notices are attached to the proposed amended
complaint. Doc. 47-2 at 64-65 of 65.
their revision. Plaintiffs add the following allegations
regarding AIG's non-renewal of the homeowners'
The reasons for non-renewal set forth in the Non-Renewal
Notices were sham and pretext. For example, the Non-Renewal
Notices recite as a basis the Hasans' loss history but
AIG elected not to renew the homeowners insurance coverage
with respect of multiple properties and structures for which
no losses (or only de minimus losses) had ever been claimed
by the Hasans.
Following receipt of the Non-Renewal Notices the Hasans
reasonably requested that AIG continue for 30 days the
homeowners insurance coverage to enable them to locate and
procure replacement coverage from another insurer. That
request was denied by AIG.
Predictably, AIG's non-renewal of the homeowners
insurance proximately caused material injury, damages and
losses to the Hasans. Failure to keep the Hasans'
residential properties continuously insured is a material
default under lien instruments encumbering the Hasans'
properties. Accordingly, the Hasans were required to seek
replacement insurance coverage from other insurers. The only
replacement insurance that proved to be available is
materially inferior. That replacement insurance coverage is
materially more expensive and provides materially less
coverage than the AIG Homeowners Insurance which was not
renewed by AIG in retaliation of the Hasans initiation of the
Doc. 47-1 ¶¶ 40-42. In alleging future harm,
Plaintiffs continue to assert increased insurance premium
expense and add "inferior insurance coverage."
Id. ¶ 43. The proposed fifth claim for relief
now specifies the claim regards only the homeowners'
Legal Standards Applicable to the Motion
Federal Rule of Civil Procedure 16(e), the court may amend
the Final Pretrial Order "to prevent manifest
injustice." Little has changed with respect to the
court's May 8 analysis under that standard. If the court
were to grant the amendment, the schedule would be tighter
but it appears the parties could still meet it - except if a
dispositive motion were filed regarding the new claim. The
court will assume Plaintiffs still meet the Rule 16 standard
for preventing manifest injustice.
revised proposed amendment is a supplemental pleading, which
"[o]n motion and reasonable notice, the court may, on
just terms, permit a party to serve a supplemental pleading
setting out any transaction, occurrence, or event that
happened after the date of the pleading to be
supplemented." Fed.R.Civ.P. 15(d). The court
"should apply the same standard for exercising its
discretion under Rule 15(d) as it does for deciding a motion
under Rule 15(a)." Sw. Nurseries, LLC v. Florists
Mut. Ins., Inc., 266 F.Supp.2d 1253, 1256 (D. Colo.
2003). "While Fed.R.Civ.P. 15(a) requires that leave to
amend be freely given, that requirement does not apply where
an amendment obviously would be futile." Id.
amendment or supplement is futile if, notwithstanding the
amendment, the claim "would be subject to
dismissal." Jefferson Cty. Sch. Dist. No. R-I v.
Moody's Investor's Servs.,Inc., 175
F.3d 848, 859 (10th Cir. 1999). A claim is subject to
dismissal if it does not "contain sufficient factual
matter, accepted as true, to state a claim to relief that is
plausible on its face." Ashcroft v. Iqbal, 556
U.S. 662, 678 ...