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Shaw v. Shelter Insurance Co

United States District Court, D. Colorado

June 18, 2018

SHARON SHAW, Plaintiff,
SHELTER MUTUAL INSURANCE COMPANY, d/b/a Shelter Insurance Companies, Defendant.


          Kristen L. Mix United States Magistrate Judge

         This matter is before the Court on Defendant's Motion for Summary Judgment on Claims for Unreasonable Denial of Benefits Pursuant to C.R.S. 10-3-1115 - 1116 [#28][1] (the “Motion”). Plaintiff filed a Response [#29] in opposition to the Motion, and Defendant filed a Reply [#30]. The Court has reviewed these filings, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Motion [#28] is DENIED.[2]

         I. Summary of the Case [3]

         Plaintiff Sharon Shaw (“Plaintiff”) was involved in an automobile/pedestrian collision on Abbey Road in Pueblo County, Colorado. Sched. Order [#15] ¶ 1. Defendant Shelter Mutual Insurance Company (“Defendant”) is Plaintiff's insurer, with an underinsured motorist limit of $250, 000. Id. ¶ 2. At approximately 9:45 p.m. on October 9, 2015, Plaintiff was driving north on Abbey Road, which is a two-lane road with a single lane for northbound traffic and a single lane for southbound traffic. Id. ¶ 1, 5. Plaintiff stopped and exited her vehicle from the driver's side door and was struck by a southbound vehicle driven by Lee Morey (“Morey”). Id. ¶ 6. Plaintiff suffered injuries, and was paid the limits of Mr. Morey's liability policies through GEICO and Travelers Insurance Company, a total of $275, 000. Id. ¶ 7, 8-10. Thus, Plaintiff asserts that Defendant is liable to Plaintiff for any amount she would be legally entitled to recover against Mr. Morey that exceeds $275, 000, up to her underinsured policy limit of $250, 000. Id. ¶ 10. Plaintiff filed an underinsured motorist claim, which Defendant ultimately denied on May 13, 2016. Id. ¶ 11.

         Plaintiff asserts that Defendant is liable for the damages Mr. Morey negligently caused to Plaintiff up to the $250, 000 underinsurance coverage limit. Compl. [#3] ¶ 44. Plaintiff asserts three claims against Defendant: (1) “Underinsured Motorist/Declaratory Judgment”; (2) a breach of contract claim for denying underinsured motorist benefits; and (3) a statutory unreasonable delay and denial of Plaintiff's claim for underinsured motorist benefits. Id. at 9-10. Defendant moves for entry of summary judgment in its favor on Claim Three on the grounds that Defendant did not unreasonably deny benefits. See generally Motion [#28].

         II. Standards

         A. Motion for Summary Judgment

         The purpose of a motion for summary judgment pursuant to Fed.R.Civ.P. 56 is to assess whether trial is necessary. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Pursuant to Fed.R.Civ.P. 56(a), summary judgment should be entered if the pleadings, the discovery, any affidavits, and disclosures on file show “that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” An issue is genuine if the evidence is such that a reasonable jury could resolve the issue in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material if it might affect the outcome of the case under the governing substantive law. Id.

         The burden is on the movant to show the absence of a genuine issue of material fact. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670-71 (10th Cir. 1998) (citing Celotex, 477 U.S. at 323). When the movant does not bear the ultimate burden of persuasion at trial, the “movant may make its prima facie demonstration [of the absence of a genuine issue of material fact] simply by pointing out to the [C]ourt a lack of evidence for the nonmovant on an essential element of the nonmovant's claim.” Id. at 671. If the movant carries the initial burden of making a prima facie showing of a lack of evidence, the burden shifts to the nonmovant to put forth sufficient evidence for each essential element of his claim such that a reasonable jury could find in his favor. See Anderson, 477 U.S. at 248; Simms v. Okla. ex rel. Dep't of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999), abrogation recognized by Dewitt v. Sw. Bell Tel. Co., 845 F.3d 1299, 1308 (10th Cir. 2017). The nonmovant must go beyond the allegations and denials of his pleadings and provide admissible evidence, which the Court views in the light most favorable to him. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Panis v. Mission Hills Bank, N.A., 60 F.3d 1486, 1490 (10th Cir. 1995) (citing Celotex, 477 U.S. at 324). Conclusory statements based merely on conjecture, speculation, or subjective belief are not competent summary judgment evidence. Bones v. Honeywell Int'l, Inc., 366 F.3d 869, 875 (10th Cir. 2004). The nonmoving party's evidence must be more than “mere reargument of [his] case or a denial of an opponent's allegation” or it will be disregarded. See 10B Charles Alan Wright, et. al., Federal Practice and Procedure § 2738 at 356 (3d ed. 1998).

         B. Choice of Law

         Defendant argues that Colorado law controls this diversity action because the Policy is a Colorado policy issued to a Colorado driver, and the accident at issue occurred in Colorado. Motion [#28] at 13-14. Plaintiff does not contest that Colorado law applies, and cites Colorado law throughout the Response [#29]. Thus, the parties appear to be in agreement that Colorado law applies. Accordingly, the Court applies federal procedural law and Colorado substantive law. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941) (applying choice of law rules of the forum state in a diversity case); Essex Ins. Co. v. Vincent, 52 F.3d 894, 896 (10th Cir. 1995). “When the federal courts are called upon to interpret state law, the federal court must look to the rulings of the highest state court, and, if no such rulings exist, must endeavor to predict how that high court would rule.” Johnson v. Riddle, 305 F.3d 1107, 1118 (10th Cir. 2002).

         III. Analysis

         Defendant argues that judgment should enter in its favor because the decision to deny Plaintiff's claim was reasonable as a matter of law. Motion [#28] at 2. Plaintiff contends that Defendant has not sufficiently established a lack of genuine issue of material fact regarding reasonableness. Response [#29] at 19.

         Colo. Rev. Stat. § 10-3-1115(1)(a) provides that an insurer may not “unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party claimant.” Defendant contends that the appropriate legal standard for reasonableness is articulated in Tozer v. Scott Wetzel Services, 883 P.2d 496, 498 (Colo.App. 1994). However, Tozer concerns a Colorado statute providing for an award of attorney's fees “when the bringing or defense of an action . . . is determined to have been substantially frivolous, substantially groundless, or substantially vexatious.” Motion [#28] at 16; Colo. Rev. Stat. ยง 13-17-101. There has been no ...

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