Ramos v. The Hertz Corp.

          ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT ON DEFENDANT'S DEFENSES

          CHRISTINE M. ARGUELLO JUDGE

         This matter is before the Court on Plaintiff Jenny Ramos' Motion for Summary Judgment on Defendant's Defenses (Doc. # 67) and Defendant Hertz Corporation's Amended Motion for Summary Judgment (Doc. # 72). Having thoroughly reviewed the underlying briefing, pertinent record, and applicable law, the Court grants Defendant's Motion and denies Plaintiff's Motion for the following reasons.

         I. BACKGROUND

         This case involves an insurance dispute arising out of an automobile collision. On March 7, 2014, Allen George^[1] rented a car from Defendant. Mr. George did not purchase any insurance from Defendant, and the rental agreement that Mr. George executed indicated that no other person was permitted to use the car without prior written authorization from Defendant. (Doc. # 72 at 3.) However, on April 5, 2014, Mario Benavides was driving the rental car, and he collided with Plaintiff's car. Mr. Benavides did not have Defendant's written authorization to drive the car.

         It is undisputed that Mr. Benavides' driver's license was revoked for being a habitual traffic offender in 2009, and his license had not been reissued at the time of the collision. (Doc. # 70-5 at 3.) It is also undisputed that Mr. Benavides was under the influence of drugs and or alcohol while he was driving. (Doc. # 70-6.)

         At the time of the April 5, 2014 collision, Defendant was insured by an insurance policy (“the Policy”) that was issued by ACE USA. (Doc. # 70-3.) The Policy provided limited coverage to individuals who rented cars from Defendant even if the renters declined to purchase insurance directly from Defendant, and it also provided coverage to individuals who were not renters under certain circumstances.^[2] The Policy limit for bodily injury was $25, 000 for each person and $50, 000 per accident, and the limit for property damage was $25, 000. (Id. at 7.)

         On August 3, 2014, Plaintiff's counsel sent Defendant a demand letter which contained various medical records purporting to show some of the harm Plaintiff sustained as a result of the collision. (Doc. # 72 at 8.) The letter demanded that Defendant pay the insurance policy limits of $25, 000, and it set an unreasonable deadline of one month for Defendant to tender such payment, after which the offer to settle would be automatically withdrawn. Although Defendant made a counteroffer of $14, 806.09 (Doc. # 75 at 3), Plaintiff rejected that offer, and twelve days after the deadline, on September 15, 2014, Plaintiff sued Mr. Benavides and Mr. George in Colorado state court (Doc. # 70-8). Defendant was not a party to that case.

         Subsequently, Plaintiff and Mr. Benavides entered into an agreement, according to which Mr. Benavides agreed to participate in arbitration. (Doc. # 70-10 at 1.) Mr. Benavides further agreed to assign to Plaintiff “all rights, title, and interest [Mr. Benavides] may have to claims against [Defendant] for collection of the judgment entered in the [state court] Lawsuit, including the rights to prosecute those claims in a civil action and retain the proceeds from such an action.” (Id. at 2.) In exchange, Plaintiff promised “not to execute on or otherwise attempt to enforce any judgment resulting from the arbitration against [Mr.] Benavides . . . .” (Id.)

         The one-day arbitration hearing took place on Wednesday, September 27, 2016. (Doc. # 70-11 at 2.) Mr. Benavides was not present at the hearing, and his counsel did not enter an appearance. Additionally, Defendant, who was not a party to the case, did not attend the hearing despite an invitation from Plaintiff. Thus, the only evidence that formed the basis of the arbiter's decision was produced by Plaintiff. On November 22, 2016, the arbiter issued Plaintiff an award of $3, 426, 729.85.^[3]

         In the instant case, Plaintiff seeks recovery of the $3, 426, 729.85 arbitration award from Defendant under theories of breach of contract and bad faith insurance practices claims based on the car rental agreement between Plaintiff and Mr. Benavides. Both claims are based on the premise that Defendant is obligated-either as an insurer or third-party insurance policy administrator-to indemnify Mr. Benavides, as an insured, for the judgment entered against him in state court.

         II. SUMMARY JUDGMENT STANDARD

         Summary judgment is warranted when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is “material” if it is essential to the proper disposition of the claim under the relevant substantive law. Wright v. Abbot Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). A dispute is “genuine” if the evidence is such that it might lead a reasonable jury to return a verdict for the nonmoving party. Allen v. Muskogee, Okl., 118 F.3d 837, 839 (10th Cir. 1997). When reviewing motions for summary judgment, a court may not resolve issues of credibility, and must view the evidence in the light most favorable to the nonmoving party-including all reasonable inferences from that evidence. Id. However, conclusory statements based merely on conjecture, speculation, or subjective belief do not constitute competent summary judgment evidence. Bones v. Honeywell Int'l, Inc., 366 F.3d 869, 875 (10th Cir. 2004).

         The moving party bears the initial burden of demonstrating an absence of a genuine dispute of material fact and entitlement to judgment as a matter of law. Id. In attempting to meet this standard, a movant who does not bear the ultimate burden of persuasion at trial does not need to disprove the other party's claims; rather, the movant need simply point the court to a lack of evidence for the other party on an essential element of that party's claim. Adler v. Wal-Mart Stores, Inc., 144 F.3d 644, 671 (10th Cir. 1998) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)).

         Once the movant meets its initial burden, the burden then shifts to the nonmoving party to “set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby Inc., 477 U.S. 242, 256 (1986). The nonmoving party may not simply rest upon its pleadings to satisfy this burden. Id. Rather, the nonmoving party must “set forth specific facts that would be admissible in evidence from which a rational trier of fact could find for the nonmoving party.” Adler, 144 F.3d at 671. “To accomplish this, the facts must be identified by reference to affidavits, deposition transcripts, or specific exhibits incorporated therein.” Id. Ultimately, the Court's inquiry on summary judgment is whether the facts and evidence ...