Quail Run II Association, Inc. v. American Alternative Insurance Corp.

          OPINION AND ORDER ON MOTION FOR SUMMARY JUDGMENT

          Marcia S. Krieger Chief United States District Judge.

         THIS MATTER comes before the Court upon the Defendant's Motion for Summary Judgment (# 39), the Plaintiff's Response (# 49), and the Defendant's Reply (# 50). For the reasons that follow, the motion is denied.

         I. JURISDICTION

         The Court exercises jurisdiction under 28 U.S.C. § 1332.

         II. BACKGROUND^[1]

         This is a case in which the Plaintiff, Quail Run II Association Inc., seeks to recover insurance benefits for hail damage. Quail Run owns commercial property located in Aurora, Colorado, which was insured under an insurance policy (Policy) issued by Defendant American Alternative Insurance Corp. (AAIC). In September 2014, Quail Run's property was damaged in a hail storm. Quail Run submitted a claim to AAIC in May 2015. The evidence is unclear as to how AAIC responded, but the parties agree that AAIC made payments on the claim.

         Quail Run brought this suit in September 2016 before the Policy's period to bring suit expired, asserting the following causes of action: (1) breach of contract based on denial/failure to pay its claim; (2) a violation of C.R.S. §§ 10-3-1115, 1116 based on unreasonable delay of the claim; (3) bad-faith breach of insurance contract based on, among other things, a failure to conduct a reasonable investigation and incorrectly valuing the claim, causing it to initiate litigation; and (4) breach of the implied covenant of good faith and fair dealing. AAIC now moves for summary judgment on all claims (# 39).

         III. LEGAL STANDARD

         Rule 56 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. See Anderson, 477 U.S. at 248. When considering a summary judgment motion, a court views all evidence in the light most favorable to the non-moving party, thereby favoring the right to a trial. See Garrett v. Hewlett Packard Co., 305 F.3d 1210, 1213 (10th Cir. 2002).

         If the movant has the burden of proof on a claim or defense, the movant must establish every element of its claim or defense by sufficient, competent evidence. See Fed. R. Civ. P. 56(c)(1)(A). Once the moving party has met its burden, to avoid summary judgment the responding party must present sufficient, competent, contradictory evidence to establish a genuine factual dispute. See Bacchus Indus. Inc. v. Arvin Indus. Inc., 939 F.2d 887, 891 (10th Cir. 1991); Perry v. Woodward, 199 F.3d 1126, 1131 (10th Cir. 1999). If there is a genuine dispute as to a material fact, a trial is required. If there is no genuine dispute as to any material fact, no trial is required. The court then applies the law to the undisputed facts and enters judgment.

         If the moving party does not have the burden of proof at trial, it must point to an absence of sufficient evidence to establish the claim or defense that the non-movant is obligated to prove. If the respondent comes forward with sufficient competent evidence to establish a prima facie claim or defense, a trial is required. If the respondent fails to produce sufficient competent evidence to establish its claim or defense, then the movant is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

         IV. DISCUSSION

         AAIC moves for summary judgment on all claims. First, it argues that Quail Run did not give prompt notice of the loss as required by the Policy, an issue it says affects all three claims. Second, it argues that Quail Run failed to submit a proof of loss as required by the Policy, which affects only the breach-of-contract claim. Finally, it maintains that Quail Run is limited to the actual cash value of the loss, not the replacement cost value.

         A. ...