United States District Court, D. Colorado
AMENDED  OPINION AND ORDER ON MOTION FOR
S. Krieger Chief United States District Judge
MATTER comes before the Court upon the
Defendant's Motion for Summary Judgment (#
23), the Plaintiff's response (#
42), and the Defendant's reply (#
44). For the reasons that follow, the Motion is
Court exercises jurisdiction under 28 U.S.C. § 1332.
Hiland Hills Townhouse Owners Association (“Hiland
Hills”) owns a multi-unit housing complex in Denver,
Colorado. From November 2014 to November 2015, that property
was covered by a casualty insurance policy (“the
Policy”) issued by Defendant Owners Insurance Co.
24, 2015, a severe hail storm occurred over Hiland Hills'
property. Hiland Hills' property manager and a roofing
contractor examined the roof systems of the buildings after
the storm, but neither observed any visible hail damage at
that time. As a result, Hiland Hills did not make any
immediate claim upon Owners under the Policy.
2016, Hiland Hills undertook an unrelated project to replace
the roof of one of its buildings, and observed that the
roof's membrane exhibited “star fractures”
which Hiland Hills believed evidenced hail-caused damage.
Thereafter, on November 7, 2016 - some 17 months from the
initial incident -- Hiland Hills filed a claim with Owners,
contending that the June 2015 hail storm caused property
damage that was covered by the Policy.
retained a company called Envista Forensics
(“Envista”), and its Engineer Amber Prom, to
conduct inspections and evaluate Hiland Hills' claim and
to answer two questions: (i) “[i]f the . . . roofing
located atop Buildings F, H, I, J, and K was hail-damaged. .
. .” and (ii) “[t]he most probable date in which
the hail damage occurred.” This second question was
based on the fact that, on May 24, 2016 -- after the Policy
had lapsed, but before Hiland Hills made its claim -- a
second hail storm struck the Hiland Hills property. Hiland
Hills contends that this storm produced hailstones that were
“very soft and splattered with ease” upon impact
with surfaces and rejects the notion that the May 2016 storm
was the cause of any property damage.
August 2, 2017, Envista issued its report. Ms. Prom concluded
that: (i) hail was a possible cause of the damage to the roof
membranes of the buildings in question, but (ii)
“[e]ither the June 24, 2015 or the May 24, 2016 hail
storms had the potential to have caused the observed hail
damage, with the maximum damage having been caused by the
storm with the largest hailstones, that being the May 24,
2016 hail storm.”
on Envista's report, on September 1, 2017, Owners wrote
to Hiland Hills, informing it that it was rejecting the Proof
of Loss. Owners gave a variety of reasons for that decision,
including: (i) Hiland Hills' failure to give prompt
notice of the loss to Owners and that the passage of time,
intervening repairs, and additional storms in the interim
prejudiced Owners' ability to investigate the claim; and
(ii)) Envista's report concluded that the predominant
damage to the property was caused by the May 2016 hailstorm,
at a time when the Policy was not in effect.
framed in the Amended Complaint (# 9), the
operative pleading in this case, Hiland Hills asserts four
claims: (i) a claim for a declaratory judgment that Owners
must abide by the Policy's provisions for conducting an
independent appraisal of the claimed loss; (ii) common-law
breach of contract, presumably under Colorado law, in that
Owners breached the Policy by “failing to properly and
timely adjust the loss” and “by failing to pay
all benefits due and owing under the Policy”; (iii)
common-law bad faith, presumably under Colorado law, in that
Owners “committed unfair claim settlement practices,
” such as “failing to acknowledge and act
properly upon communications” relating to the Policy,
“failing to adopt and implement reasonable standards
for the prompt investigation of claims, ” and
“refusing to pay claims without conducting a reasonable
investigation, ” among others; and (iv) violation of
C.R.S. § 103-1115 and -1116, in that Owners delayed or
denied payment of the claim in violation of “objective
industry standards for claim handling and payment.”
a few months of the commencement of the case, Owners filed
the instant Motion for Summary Judgment (#
23). The motion seeks judgment on all four claims
based on a single argument applicable to all four claims -
that Hiland Hills' failure to give prompt notice of the
claim operates to excuse Owners from any further obligations
under the Policy. Hiland Hills' response raises two
issues: (i) a legal argument that, under Colorado law, an
insurer may not deny a claim as untimely absent a showing
that it has suffered some prejudice as a result of the late
notice of claim, and (ii) a factual argument that Ms.
Prom's inability to trace the roof damage to one of the
two hailstorms does not demonstrate prejudice to Owners
because there is, at least, a genuine dispute of fact as to
whether the May 2016 hailstorm was sufficient to cause the
observed damage. Thus, the Court limits its analysis to those
of the Federal Rules of Civil Procedure facilitates the entry
of a judgment only if no trial is necessary. See White v.
York Int'l Corp., 45 F.3d 357, 360 (10th Cir. 1995).
Summary adjudication is authorized when there is no genuine
dispute as to any material fact and a party is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(a). Substantive
law governs what facts are material and what issues must be
determined. It also specifies the elements that must be
proved for a given claim or defense, sets the standard of
proof, and identifies the party with the burden of proof.
See Anderson v. Liberty Lobby Inc., 477 U.S. 242,
248 (1986); Kaiser-Francis Oil Co. v. Producer's Gas
Co., 870 F.2d 563, 565 (10th Cir. 1989). A factual
dispute is “genuine” and summary judgment is
precluded if the evidence presented in support of and
opposition to the motion is so contradictory that, if
presented at trial, a judgment could enter for either party.