Bushman v. Nationwide Agribusiness Insurance Co.

          ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND

          William J. Martinez United States-District Judge

         In this putative class action, Plaintiff Melodie Bushman (“Bushman”) sues Defendant Nationwide Agribusiness Insurance Company (“Nationwide”) for its alleged systemic failure to pay certain amounts that a Colorado statute requires insurers to pay when insureds' motor vehicles are declared a total loss. Currently before the Court is Nationwide's Motion to Dismiss Plaintiff's First Amended Class Action Complaint and Strike Allegations of Punitive and Exemplary Damages (“Motion to Dismiss”). (ECF No. 34.) For the reasons explained below, the Court finds that Bushman has failed to plausibly plead a central fact on which her recovery relies, and so the Court will grant the Motion to Dismiss on that basis and deny it without prejudice on all other bases. The Court will also grant Bushman leave to amend.

         Also before the Court is Nationwide's Rule 72 Objections to the Magistrate Judge's Order on Nationwide's Motion to Stay. (ECF No. 57.) Because the purported basis for a stay no longer exists, this objection will be overruled as moot.

         I. LEGAL STANDARD

         Federal Rule of Civil Procedure 12(b)(6) permits the Court to dismiss for “failure to state a claim upon which relief can be granted.” The Rule 12(b)(6) standard requires the Court to “assume the truth of the [claimant's] well-pleaded factual allegations and view them in the light most favorable to the [claimant].” Ridge at Red Hawk, LLC v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007). In ruling on such a motion, the dispositive inquiry is “whether the complaint [or counterclaim] contains ‘enough facts to state a claim to relief that is plausible on its face.'” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Granting a motion to dismiss “is a harsh remedy which must be cautiously studied, not only to effectuate the spirit of the liberal rules of pleading but also to protect the interests of justice.” Dias v. City & Cnty. of Denver, 567 F.3d 1169, 1178 (10th Cir. 2009) (internal quotation marks omitted). “Thus, ‘a well-pleaded complaint [or counterclaim] may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.'” Id. (quoting Twombly, 550 U.S. at 556).

         II. BACKGROUND

         The Court draws the following allegations from the First Amended Complaint (“complaint”) (ECF No. 25), and the Court assumes them to be true for present purposes.

         Sometime in 2016 or earlier, Bushman leased a Hyundai automobile. (Id. ¶ 10.) Bushman “incurred an estimated $232.09 in ownership taxes and title and registration fees” related to that vehicle. (Id.)

         On March 23, 2016, Bushman's Hyundai was in an accident. (Id. ¶ 11.) At that time, the vehicle was covered by a Nationwide policy that provided total-loss coverage. (Id. ¶ 9.) Nationwide soon determined that the Hyundai was, indeed, a total loss. (Id. ¶ 12.) Nationwide adjusted the claim and, as part of that adjustment, reimbursed Bushman for $9.50 in “Tag/Title Fees.” (Id. ¶ 14.)

         Bushman claims that Nationwide has violated Colorado Revised Statute § 10-4-639(1), which provides, “An insurer shall pay title fees, sales tax, and any other transfer or registration fee associated with the total loss of a motor vehicle.” In other words, although she does not explicitly say so, she appears to claim that the $9.50 reimbursement for “Tag/Title Fees” did not satisfy the statute's obligation. (See ECF No. 25 ¶ 14 (“To date, Nationwide has not paid the policyholder, Ms. Bushman, the total amount of any ownership tax and title and registration fees associated with the total loss of the Hyundai.” (capitalization normalized)).) Bushman alleges on information and belief that Nationwide has similarly underpaid other insureds who suffered a total loss, and so seeks to certify this lawsuit as a class action. (Id. ¶¶ 15-25.)

         III. ANALYSIS

         Bushman's specific claims for relief are as follows:

1. violation of Colorado Revised Statutes §§ 10-3-1115 & -1116, which prohibits unreasonable delay or denial of insurance benefits owed;

2. violation of the Colorado Consumer Protection Act (“CCPA”), Colo. Rev. Stat. §§ ...