United States District Court, D. Colorado
BROOKSHIRE DOWNS AT HEATHERRIDGE CONDOMINIUM ASSOCIATION, INC., a Colorado corporation, Plaintiff,
OWNERS INSURANCE COMPANY, a foreign corporation, Defendant.
ORDER DENYING PLAINTIFF'S MOTION FOR PARTIAL
SUMMARY JUDGMENT AND ORDERING PLAINTIFF TO SHOW CAUSE WHY
SUMMARY JUDGMENT SHOULD NOT ENTER IN DEFENDANT'S
William J. Martinez United States District Judge.
Brookshire Downs at Heatherridge Condominium Association,
Inc. (“Plaintiff”) sues Defendant Owners
Insurance Company (“Defendant”) for breach of
insurance contract and unreasonable delay or denial of
insurance benefits. (See ECF No. 1.) Currently
before the Court is Plaintiff's Motion for Partial
Summary Judgment (ECF No. 36), which seeks summary judgment
against Defendant's second affirmative defense. That
defense asserts that Plaintiff failed to file this lawsuit
within a two-year limitations period established by contract.
(See ECF No. 16 at 9.) According to Plaintiff,
however, a Colorado statute nullifies that contractual
limitations period, so the statutory limitations period for
contract claims (three years) applies.
reasons explained below, the Court disagrees and therefore
must deny Plaintiff's motion. In addition, the Court will
order Plaintiff to show cause why summary judgment should not
enter in Defendant's favor on Defendant's second
judgment is warranted under Federal Rule of Civil Procedure
56 “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a);
see also Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248-50 (1986). A fact is “material” if,
under the relevant substantive law, it is essential to proper
disposition of the claim. Wright v. Abbott Labs.,
Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). An issue
is “genuine” if the evidence is such that it
might lead a reasonable trier of fact to return a verdict for
the nonmoving party. Allen v. Muskogee, 119 F.3d
837, 839 (10th Cir. 1997).
analyzing a motion for summary judgment, a court must view
the evidence and all reasonable inferences therefrom in the
light most favorable to the nonmoving party. Adler v.
Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir.
1998) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986)). In addition, the
Court must resolve factual ambiguities against the moving
party, thus favoring the right to a trial. See Houston v.
Nat'l Gen. Ins. Co., 817 F.2d 83, 85 (10th Cir.
following facts are undisputed unless attributed to a party
or otherwise noted.
represents itself to be a condominium association comprised
of individual unit owners. (ECF No. 36 at 2, ¶
On January 14, 2014, Defendant issued to Plaintiff an
insurance policy (“Policy”) that
“consist[ed] of the following coverage part(s)”:
(1) “commercial property coverage, ” (2)
“commercial general liability coverage, ” and (3)
“commercial crime coverage.” (ECF No. 36-4 at 3.)
The Policy contains the following contractual statute of
limitations: “No one may bring a legal action against
us under this Coverage Part [i.e., the commercial
property coverage] unless * * * [t]he action is brought
within 2 years after the date on which the direct physical
loss or damage occurred.” (Id. at 108.)
insured property is zoned for residential use, and the
various individual condominium units are restricted to
residential use. (ECF No. 36 at 3, ¶¶ 2-3.)
Plaintiff claims that its governing documents also forbid
business activities on any portion of the property.
(Id. ¶ 4.)
alleges that hail and wind caused damage to Plaintiff's
property on September 29, 2014. (ECF No. 1 ¶ 7.)
Plaintiff further asserts that it filed a claim under the
Policy in June 2015. (Id. ¶ 8.) Plaintiff
became dissatisfied with Defendant's handling of the
claim. (Id. ¶¶ 27-32.) Plaintiff filed
this lawsuit on April 7, 2017-more than two years but less
than three years from the date of the wind and hail damage.
(See ECF No. 1.)
Court has diversity jurisdiction over this lawsuit
(see ECF No. 1 ¶¶ 2-4), and thus applies
Colorado law. Colorado law sets forth a three-year
statute of limitations for “[a]ll contract
actions.” Colo. Rev. Stat. § 13-80-101(1)(a). If
this limitations period applies, Plaintiff's lawsuit is
timely. But, as noted, the Policy specifies a two-year
period. If that limitations period applies, Plaintiff's
lawsuit is untimely.
Colorado Court of Appeals holds that a contractual
limitations period may override a statutory limitations
period so long as such contractual clauses are not
“prohibited by statute.” Grant Family Farms,
Inc. v. Colo. Farm Bureau Mut. Ins. Co., 155 P.3d 537,
538 (Colo.App. 2006). Plaintiff claims that the Policy's
two-year period is prohibited by the following statute:
(a) Notwithstanding any provision of a homeowner's
insurance policy that requires the policyholder to file suit
against the insurer, in the case of any dispute, within a
period of time that is shorter than required by the
applicable statute of limitations provided by law, a
homeowner may file such a suit within the period of time