United States District Court, D. Colorado
LESLIE B. LILLY and DAVID H. WOLLINS, Plaintiffs,
BANK OF AMERICA, N.A., Defendant.
ORDER ON MOTION TO DISMISS
Brooke Jackson, United States District Judge.
matter is before the Court on defendant Bank of America,
N.A.'s (BANA) motion to dismiss plaintiffs'
complaint. ECF No. 9. For the reasons stated below,
the motion is DENIED.
2004, Plaintiff Leslie Lilly obtained a loan from Countrywide
Home Loans, Inc. (Countrywide), BANA's
predecessor-in-interest. ECF No. 13 at 1. Ms. Lilly secured
the loan by her Miami, Florida home. ECF No. 13 at 1. To protect
her property against hazards, the loan required Ms. Lilly to
continuously maintain property insurance according to such
terms and against such hazards as the lender may require. ECF
No. 28 at 3-4. Prior to the loan closing, Ms. Lilly provided
a copy of the policy to Countrywide for review. Id.
at 3. The insurance policy insured the home for $1, 633, 889.
Id. Ms. Lilly asserts that Countrywide represented
to her that this homeowner's insurance policy would
satisfy the loan's hazard insurance requirement, and
further stated that Countrywide represented that it would
never require her to purchase additional coverage including
wind and hurricane protection. Id. at 2. Ms. Lilly
states that she adhered to this requirement by maintaining
proper and adequate insurance coverage for the entirety of
the loan, and Countrywide apparently never objected to her
insurance policy. Id. at 2-3.
after BANA acquired the loan from Countrywide, BANA sent
written notices to Ms. Lilly directing her to purchase
additional property insurance to protect against wind and
hail. Id. at 4. The letters notified Ms. Lilly that
BANA may exercise its option to purchase the additional
insurance at Ms. Lilly's expense should she fail to act.
Id. According to the amended complaint, BANA
purchased additional hazard insurance (with an annual premium
of $55, 000 per year) without Ms. Lilly's permission or
September 2015, Ms. Lilly paid the loan balance in full.
Id. at 4. When she called BANA to pay off the loan,
she learned that the principal on the $500, 000 loan was
actually $787, 000, which meant that BANA had apparently
exercised its right to force-place insurance. Id. at
4-5. Until September 2015, plaintiffs argue that they were
unaware that BANA purchased additional hazard insurance.
Id. at 4. Instead, plaintiffs state that BANA simply
threatened to purchase additional insurance and further argue
that because BANA did not increase Ms. Lilly's monthly
payments and did not otherwise demand additional payment,
plaintiffs were not harmed financially until September 2015.
motion to dismiss rests solely on statute of limitations
grounds. ECF No. 9 at 1. BANA argues that plaintiffs have
been aware that BANA purchased additional hazard insurance
since at least 2009. Id. at 8-9. In 2009, Mr.
Wollins wrote a letter to BANA stating that Countrywide
debited Ms. Lilly's account two times for
insurance. ECF No. 5-1 at 6, Ex. 4. BANA further
argues that plaintiffs were aware of the force-place
insurance because plaintiffs disputed the numerous written
notices from BANA that demanded plaintiffs obtain additional
insurance coverage. ECF No. 9 at 9.
response, plaintiffs contend that they were unaware BANA
actually exercised its right to force-place insurance until
September 2015. ECF No. 28 at 4. Therefore, plaintiffs argue
the statute of limitations began to accrue in September 2015.
Id. With a three-year statute of limitations,
plaintiffs argue their lawsuit is not time-barred.
Lilly filed suit in Denver District Court on August 30, 2017,
because she believed that BANA unlawfully executed its right
to force-place insurance. ECF No. 13 at 3. BANA removed the
case to federal court on September 29, 2017. ECF No. 1. BANA
subsequently filed a motion to dismiss on October 6, 2017,
arguing that the applicable statute of limitations precluded
all ten of Ms. Lilly's original claims. ECF No. 9 at 1.
Ms. Lilly responded to the motion to dismiss on October 27,
2017, where she agreed to drop each of her claims minus the
breach of contract claim. ECF No. 13 at 7. BANA submitted a
reply brief on November 9, 2017. ECF No. 15. On August 27,
2018, plaintiffs submitted an unopposed motion for leave to
file amended complaint. ECF No. 28. In the same motion,
plaintiffs stated that both parties agreed that Plaintiff
Wollins should be added as a plaintiff in the case.
Id. The Court granted the motion on August 29, 2018.
ECF No. 30. Despite the amended complaint, the Court will
rule on the motion to dismiss because the contract claim in
the amended complaint is essentially the same as in the
STANDARD OF REVIEW
survive a 12(b)(6) motion to dismiss, the complaint must
contain “enough facts to state a claim to relief that
is plausible on its face.” Ridge at Red Hawk,
L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir.
2007) (quoting Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A plausible claim is a claim that
“allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While
the Court must accept the well-pleaded allegations of the
complaint as true and construe them in the light most
favorable to the plaintiff, Robbins v. Wilkie, 300
F.3d 1208, 1210 (10th Cir. 2002), conclusory allegations are
not entitled to be presumed true. Iqbal, 556 U.S. at
681. However, so long as the plaintiff offers sufficient
factual allegations such that the right to relief is raised
above the speculative level, he has met the threshold
pleading standard. See, e.g., Twombly, 550
U.S. at 556; Bryson v. Gonzales, 534 F.3d 1282, 1286
(10th Cir. 2008).
reviewing BANA's well-drafted motion to dismiss,
plaintiffs have one claim remaining: breach of contract. ECF
No. 28. BANA's sole argument in its motion to dismiss is
that the breach of contract claim is time-barred by the
applicable statute of limitations. ECF No. 9 at 8-9. Under
Colorado law, all contract actions “shall be commenced
within three years after the cause of action accrues . . .
.” Colo. Rev. Stat. § 13-80-101(1)(a). The issue
in this case is when the cause of action for the breach of
contract began to accrue. In Colorado, a “cause of
action for breach of any express or implied contract [or]
agreement . . . shall be considered to accrue on the date the
breach is discovered or should have been discovered by the
exercise of reasonable diligence.” Id. §
13-80-108(6). Finally, the Court notes that “[w]hether
a statute of limitations bars a particular claim is a
question of fact.” Trigg v. State Farm Mut. Auto.
Ins., 129 P.3d 1099, 1101 (Colo.App. 2005).
“However, if undisputed facts demonstrate that the
plaintiff had the requisite information as of a particular
date, then the issue of whether the statute of limitations
bars a particular claim may be decided as a matter of
contract at issue in this case originated in 2004, when Ms.
Lilly agreed to a home equity line of credit from
Countrywide. ECF No. 28 at 2. During negotiations,
Countrywide allegedly represented that Ms. Lilly's
existing insurance policy would be adequate throughout the
duration of the loan and that Countrywide would never require
Ms. Lilly to purchase additional hazard insurance.
Id. In reliance upon Countrywide's express
representations, Ms. Lilly opened a home equity line of