County District Court No. 16CV30055 Honorable Shelley A.
Professional Law Corporation, Scott A. McGill, Robert L.
Grover, Steamboat Springs, Colorado, for Plaintiff-Appellant
D. Morse & Associates, LLC, Stuart D. Morse, Joseph P.
Kiley, Greenwood Village, Colorado, for Defendant-Appellee
1 Plaintiff, Andres Trucking Company (Andres Trucking),
appeals the judgment entered on its breach of contract and
statutory bad faith claims in favor of defendant, United Fire
and Casualty Company (United), after the district court
determined that the completion of the appraisal process
called for in the parties' policy necessarily resolved
2 Among questions we answer is whether Andres Trucking's
participation in the contractual appraisal process resolved
its claims against United and effectively ended the
3 We conclude that the appraisal process did not fully
resolve Andres Trucking's claims. The appraisal process
determined the value of the insured property, but it did not
determine United's liability for breach of contract or
statutory bad faith delay under sections 10-3-1115 and -1116,
C.R.S. 2017. Accordingly, we affirm the order approving the
appraisal value but reverse the judgment and remand for
reinstatement of the complaint.
4 Andres Trucking operates a dump truck in Steamboat Springs,
Colorado. The truck was insured by United under a policy that
included the following provision:
If you and we disagree on the amount of "loss,"
either may demand an appraisal of the "loss." In
this event, each party will select a competent appraiser. The
two appraisers will select a competent and impartial umpire.
The appraisers will state separately the actual cash value
and amount of the "loss." If they fail to agree,
they will submit their differences to the umpire. A decision
agreed to by any two will be binding.
If we submit to an appraisal, we will still retain our right
to deny the claim.
5 In June 2015, while covered by the insurance policy, the
truck caught fire. Both parties agreed the truck was a total
loss but disagreed about the truck's value.
6 After the parties' discussions failed to lead to an
agreement, Andres Trucking filed an action against United on
May 6, 2016. The complaint alleged that United unreasonably
refused to pay the value of the truck and related damages,
including storage fees, and asserted claims for breach of
contract and bad faith denial and delay of an insurance claim
under sections 10-3-1115 and -1116.
7 Two weeks later, in lieu of answering the complaint, United
moved to compel appraisal and stay the proceedings; over
Andres Trucking's objection, the court granted the
motion. Before commencing the appraisal process,
Andres Trucking filed an amended complaint. The amended
complaint contained a third claim for relief challenging the
enforceability of the contractual appraisal provision, but it
was otherwise substantially similar to the initial complaint.
The district court struck the amended complaint on the ground
that the insurance policy required an appraisal.
8 The parties proceeded to appraisal. Andres Trucking
submitted an appraisal valuing the truck at $42, 500, United
submitted an appraisal of $33, 454, and the umpire obtained
an appraisal of $54, 289. The umpire ultimately settled on a
value of $39, 507 plus $3907 in taxes, which United paid.
9 In January 2017, after United paid Andres Trucking the
appraised value of the truck, it moved for entry of judgment
under C.R.C.P. 12(b)(5), contending that, as a matter of law,
the completion of the appraisal process had resolved Andres
Trucking's claims. Andres Trucking objected, contending
that "several issues" required determination by a
jury, including whether United had unreasonably denied or
delayed paying the claim and whether United had breached the
insurance contract by failing to pay all of Andres
10 While United's motion for entry of judgment was
pending, Andres Trucking again moved to amend its complaint.
Its proposed second amended complaint included additional
allegations concerning its damages and a fourth claim for
11 Relying on the enforceability of the appraisal provision,
the court again denied the motion. It reasoned that, upon
completion of the appraisal process, "the issues before
the court were concluded," and that "[a]ll that
remains is for judgment to enter."
12 The court then entered judgment in favor of United on
Andres Trucking's breach of contract and statutory bad
faith claims. In its order entering judgment, the court
determined that Andres Trucking's claims "were
subject to the appraisal process," the "appraisal
process was completed and a value determined," and
"[a]ccordingly, as a matter of law [Andres Trucking] can
have no claim for breach of contract, much less bad faith
breach of contract." Without analyzing Andres
Trucking's allegations, the court found "[t]here has
been no breach of the insurance contract or any unreasonable
delay or denial of the claim that was caused by
District Court Erred in Dismissing Andres Trucking's
13 Andres Trucking argues that the district court erred in
dismissing its complaint, as the appraisal process did not
resolve whether United had breached the insurance policy or
unreasonably denied or delayed payment of benefits. We agree.
Standard of Review
14 The purpose of a motion under C.R.C.P. 12(b)(5) is to test
the legal sufficiency of the complaint to determine whether
the plaintiff has asserted a claim or claims upon which
relief can be granted. Hannon Law Firm, LLC v. Melat,
Pressman & Higbie, LLP, 293 P.3d 55, 62 (Colo.App.
2011), aff'd, 2012 CO 61. In evaluating a motion
to dismiss under Rule 12(b)(5), we must determine whether,
accepting the complaint's factual allegations as true and
viewing them in the light most favorable to the plaintiff,
id., the complaint states a plausible claim for
relief, Warne v. Hall, 2016 CO 50, ¶¶ 9,
15 Because it presents a question of law, we review de novo
an order granting a motion to dismiss under Rule 12(b)(5).
Hannon, 293 P.3d at 63.
16 The district court did not reach any conclusions about the
sufficiency of the complaint's allegations or the
plausibility of the claims for relief. Instead, the district
court determined that Andres Trucking could not state any
claim for relief because completion of the appraisal process,