Spitzer v. IBM Credit LLC

          OPINION AND ORDER GRANTING MOTION TO DISMISS

          Marcia S. Krieger Chief United States District Judge

         THIS MATTER comes before the Court pursuant to the Defendant's (“IBM”) Motion to Dismiss (# 27). Also pending are two motions by IBM (# 33, 49) to dismiss the Sptizers' claims for lack of prosecution.

         FACTS

         A. Operative Facts

         The Spitzers' Complaint (# 5) appears to allege that Plaintiff Michael Spitzer was employed by IBM. In June 2015, apparently within the scope of his employment with IBM, Mr. Spitzer rented a vehicle from former Defendant Avis Budget Car Rental (“Avis”). Mr. Spitzer was driving that vehicle on June 25, 2015, when he was involved in an accident with a vehicle driven by Hector Salas-Gonzales. (The Complaint does not identify where.) It is somewhat unclear whether Plaintiff Deborah Spitzer was also in the vehicle at the time, but for purposes of this Opinion, the Court will assume she was. Both Spitzers suffered bodily injuries as a result of the accident.

         The Sptizers then sought compensation for their injuries. They first made claims against Mr. Gonzales' insurer and recovered the full policy limits available under that policy. They then made claims on their own auto insurance policy's Underinsured Motorist provisions and recovered the full policy limits there, as well. They then turned to both IBM and Avis for additional coverage, and that is where the allegations in the Complaint become disjointed and difficult to follow.

         The Spitzers allege that, “upon information and belief, ” IBM “provided [them] with first party benefits, ” ¶ 31, but also allege that they “contacted IBM to inquire what first party benefits were available to them.” ¶ 32. They later received “an email from IBM's corporate counsel directing [them] to” a representative of former defendant Sedgwick Claim Management Services (“Sedgwick”), “who would be handling the[ir] claim.” ¶ 36.

         At the same time, the Spitzers were pursuing a claim against any insurance coverage available through Avis, and eventually, Avis indicated that Sedgwick would also be handling the Spitzers' claim against it. ¶ 40.

         In the e-mail in which Sedgwick informed the Spitzers that it would be handling their claim against Avis, it also advised them “that there was no insurance policy for the Rental, but there was corporate coverage of 100/300/25.” ¶ 41. Thereafter, Sedgwick sent the Spitzers an email that advised that that “Avis is co-primary for the loss, ” that the Spitzers should work through their own insurer “until their limits were exhausted and then Avis would cover any excess damages.” ¶ 42. The Complaint continues on at some additional length about difficulties that the Spitzers had in communicating with Sedgwick. The Court notes that IBM is never mentioned again in the factual recitation of the Complaint.

         Based on these facts, the Spitzers assert three causes of action, all of which are pled generically against “the Defendants” - that is, IBM, Avis, Sedgwick, and Continental Casualty Company (the insurer of “the rental”) - for: (i) breach of contract, in that “an agreement existed between the parties by which the Plaintiffs were entitled to first party benefits” and that the Defendants failed to provide such benefits; (ii) bad faith breach of insurance contract, in that the Defendants - presumably IBM - “entered into an agreement with [the Spitzers] by means of . . . Michael's employment contract to provide first party benefits, ” but failed to pay the Spitzers' claims for insurance benefits; and (iii) unreasonable delay and denial, in violation of C.R.S. § 10-3-1115, based on the same facts as the bad faith breach claim. All of the Defendants other than IBM have since been dismissed from this action.

         B. Procedural History

         IBM moved (# 27) to dismiss the Spitzers' claims under Fed.R.Civ.P. 12(b)(6), arguing that: (i) as to the breach of contract claim, the Spitzers have not alleged the existence of any contract of insurance between themselves and IBM and any failure of IBM to perform under such a contract; and (ii) as to the bad faith and statutory claims, such claims lie only as against insurers and the Spitzers have failed to allege facts showing that IBM was an insurer.

         The Spitzers did not timely file a response to that motion. After a full month had passed with no response, IBM moved (# 33) to dismiss the Spitzers' claims for failure to prosecute. That motion spurred the Spitzers to file a response (# 34) to the original motion to dismiss a few days later (but not to the motion to dismiss for failure to prosecute). The Magistrate Judge sua sponte struck (# 35) the Spitzers' response as untimely. The Magistrate Judge invited the Spitzers to “fil[e] a formal motion requesting [ ] an extension [of the deadline for a filing a response to the motion to dismiss], which satisfies Rule 6(b)(1)(B)'s excusable neglect standard, and only after engaging in a robust and meaningful conferral with opposing counsel.” The Spitzers never filed such motion. They did, however, file an (untimely) consent form (# 37) (through counsel) and appeared at a Scheduling Conference (# 43). But for a period of nearly three months, the Spitzers simply ignored IBM's pending 12(b)(6) motion and motion to dismiss for failure to prosecute. This delay prompted IBM to file a second motion to dismiss for failure to prosecute (# 49).

         Once again, that motion prodded the Spitzers to action. In response, they filed a Motion for Extension of Time (# 51), seeking leave to file a response to IBM's Rule 12(b)(6) motion out-of-time. The Spitzers' counsel explained that: (i) “due to staff turnover, ” counsel did not “download” IBM's motion until a few days before the response's due date; (ii) counsel's staff then docketed an ...