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Carter v. Amica Mutual Insurance Co.

United States District Court, D. Colorado

June 22, 2018

FRISBY MILES CARTER, on behalf of himself and all others similarly situated, Plaintiff,
v.
AMICA MUTUAL INSURANCE COMPANY, and DOES 1-10, inclusive, Defendants.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE.

          Michael E. Hegarty, United States Magistrate Judge.

         Plaintiff Frisby Miles Carter, on behalf of himself and others similarly situated (“Plaintiff”), initiated this purported class action on September 7, 2017 and filed the operative Amended Complaint on December 20, 2017 alleging, inter alia, that Defendant Amica Mutual Insurance Company (“Amica”) unlawfully failed to pay its insureds - specifically, holders of Amica automobile insurance policies - ownership tax and title and registration fees associated with a motor vehicle's total loss in the event that an automobile accident or other event results in a total loss determination by Amica for the insured's vehicle. In response, Amica filed a motion to dismiss all of the Plaintiff's claims. The Court finds that Colo. Rev. Stat. § 10-4-639(1) does not require an insurer to pay “ownership taxes” in settlement for the total loss of a vehicle, but the Plaintiff plausibly pleads claims for recovery of any such “registration fees” for his first and third claims; the Plaintiff fails to plead a deceptive trade practice with particularity as required by Fed.R.Civ.P. 9(b); and Plaintiff does not properly state claims for monetary or injunctive relief on behalf of a class under the CCPA. Thus, the Court recommends that the Honorable Raymond P. Moore grant in part and deny in part Amica's motion.

         BACKGROUND

         I. Statement of Facts

         The following are factual allegations (as opposed to legal conclusions, bare assertions, or merely conclusory allegations) made by the Plaintiff in the Second 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).

         Plaintiff Frisby Carter obtained automobile insurance from Amica, which covered the 2016 calendar year, for a personal Toyota Tacoma automobile he owned during that time period. The policy provided for coverage in the event of total loss of the motor vehicle.

         In or about October 2015, Plaintiff incurred $397.18 in ownership taxes and registration and title fees related to the Toyota Tacoma. On or about February 9, 2016, Plaintiff's Toyota Tacoma was in an accident. Plaintiff submitted a claim to Amica based on the insurance policy he had obtained for the Toyota Tacoma. Amica apparently determined during its investigation the Toyota Tacoma was a total loss as a result of the accident, and provided Plaintiff with a “Total Loss Summary, ” including an accounting of the insurance benefits it would pay him in light of the total loss. As stated in the “Total Loss Summary, ” Amica did not agree to pay Plaintiff the pro-rata amount of any ownership taxes and title and registration fees associated with the total loss of the Toyota Tacoma, nor the total amount of ownership taxes and title and registration fees he incurred related to the replacement vehicle. Instead, Amica paid Plaintiff $7.20 related to a “Title Fee” only.

         Thereafter, in or about May 2016, Plaintiff incurred $144.66 in ownership taxes and registration and title fees related to a replacement vehicle for the Toyota Tacoma. Plaintiff did not receive any credit from the Department of Motor Vehicles (“DMV”) for the registration fees he incurred when registering the replacement vehicle.

         To date, Amica has not paid Plaintiff, who is the policy holder, the pro-rata amount of any ownership taxes and title and registration fees he incurred for the Toyota Tacoma, nor has it paid the total amount of ownership tax and registration and title fees related to the replacement vehicle.

         II. Procedural History

         Based on these factual allegations, Plaintiff claims, on behalf of himself and others similarly situated, violations of Colo. Rev. Stat. § 6-1-105, et seq. and § 10-3-1115, et seq., and bad faith breach of insurance contract. Am. Compl., ECF No. 39.

         Amica moves to dismiss these claims arguing that Plaintiff fails to allege he is entitled to any ownership taxes or fees associated with the total loss, fails to properly plead the elements of his causes of action, fails to plead fraud with specificity as required for an individual claim under the Colorado Consumer Protection Act (“CCPA”), and lacks standing to bring a claim for injunctive relief under the CCPA.

         Plaintiff counters that Colorado statutory law supports his position that ownership taxes fall within the purview of Colo. Rev. Stat. § 10-4-639(1), and this section mandates the payment of such taxes and fees; he has plausibly pled the elements of all causes of action; he has properly pled fraud with specificity; and he is not aware of binding case law prohibiting class-wide injunctive relief under the CCPA.

         Amica replies that Plaintiff fails to articulate facts supporting an allegation that Plaintiff incurred unpaid fees and taxes covered by the statute and associated with the total loss, and “Plaintiff's alleged entitlement to specific unpaid fees and taxes under C.R.S § 10-4-639(1) is a necessary condition precedent to each claim alleged”; he fails to allege facts to support the elements of a claim that Amica unreasonably denied or delayed responding to a request for payment of a covered benefit under the insurance policy; his breach of contract claim is supported only by conclusory allegations; and his CCPA class and individual claims must be dismissed.

         LEGAL STANDARDS

         The parties do not dispute that the pleading requirements of Fed.R.Civ.P. 9(b) apply to Plaintiff's CCPA claim; otherwise, the Court will apply Fed.R.Civ.P. 8 and applicable case law to analyze Amica's Rule 12(b)(6) motion.

         I. Pleading Requirements under Fed.R.Civ.P. 9(b)

         Pursuant to Federal Rule of Civil Procedure 9(b), a more stringent pleading standard is mandated for certain claims, such as fraud or misrepresentation. “For any claim alleging fraud, the circumstances constituting fraud or mistake must be stated with particularity.” In re Accelr8 Tech. Corp. Secs. Litig., 147 F.Supp.2d 1049, 1054 (D. Colo. 2001) (citing Fed.R.Civ.P. 9(b)). Thus, with regard to their second claim alleging a violation of the CCPA, Plaintiffs must plead “the who, what, when, where, and how of the alleged fraud” or in other words, “the time, place, and contents of the false representation, the identity of the party making the false statements and the consequences thereof.” United States ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah, 472 F.3d 702, 726-27 (10th Cir. 2006); see also HealthONE of Denver, Inc. v. UnitedHealth Grp., Inc., 805 F.Supp.2d 1115, 1120-21 (D. Colo. 2011) (“a plaintiff must meet the heightened pleading requirements pursuant to Rule 9(b) to prove a deceptive or unfair trade practice.”). In the District of Colorado, this is required regardless of whether the alleged fraud is an active representation or a passive omission. See Tara Woods Ltd. P'ship v. Fannie Mae, 731 F.Supp.2d 1103, 1114 (D. Colo. 2010).

         II. Dismissal Pursuant to Fed.R.Civ.P. 12(b)(6)

         “To survive a motion to dismiss, a complaint must 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 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff pled facts which allow “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Twombly requires a two-prong analysis. First, a court must identify “the allegations in the complaint that are not entitled to the assumption of truth, ” that is, those allegations which are legal conclusions, bare assertions, or merely conclusory. Id. at 678-80. Second, the Court must consider the factual allegations “to determine if they plausibly suggest an entitlement to relief.” Id. at 681. If the allegations state a plausible claim for relief, such claim survives the motion to dismiss. Id. at 680.

         Plausibility refers “to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs ‘have not nudged their claims across the line from conceivable to plausible.'” Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012) (quoting Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008)). “The nature and specificity of the allegations required to state a plausible claim will vary based on context.” Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1215 (10th Cir. 2011). Thus, while the Rule 12(b)(6) standard does not require that a plaintiff establish a prima facie case in a complaint, the elements of each alleged cause of action may help to determine whether the plaintiff has set forth a plausible claim. Khalik, 671 F.3d at 1191.

         However, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. The complaint must provide “more than labels and conclusions” or merely “a formulaic recitation of the elements of a cause of action, ” so that “courts ‘are not bound to accept as true a legal conclusion couched as a factual allegation.'” Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, ” the complaint has made an allegation, “but it has not shown that the pleader is entitled to relief.” Id. (quotation marks and citation omitted).

         ANALYSIS

         Amica seeks dismissal of all three claims for relief alleged by the Plaintiff: (1) violations of Colo. Rev. Stat. § 10-3-1115, et seq.; (2) violations of Colo. Rev. Stat. § 6-1-105, et seq.; and (3) bad faith breach of insurance contract. The Court will address Amica's requests for dismissal of each of these claims in turn.

         I. First Claim for Relief

         For their § 10-3-1115 claim, Plaintiffs allege:

28. C.R.S. § 10-4-639(a) [sic] provides in relevant part that an insurer shall pay title fees and any other transfer or registration fees associated with the total loss of a motor vehicle.
29. C.R.S. § 10-3-1115(1)(a) provides in relevant part that a person engaged in the business of insurance shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party claimant.
30. Despite its own determination the insured vehicles of Plaintiff and the Class Members were total losses, when claims were submitted by Plaintiff and the Class Members after a motor vehicle accident or other event resulted in damage to their property, Amica failed to pay the pro-rata amount of ownership taxes and title and registration fees related to the totaled vehicle or the total amount of ownership tax and title and registration fees related to the replacement vehicle, required by C.R.S. ยง 10-4-639(a) [sic], and therefore violated the express language of that statute. Plaintiff seeks these two alternative forms of relief as the statute is unclear as to which form of relief ...

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