Stemple v. State Farm Mutual Automobile Insurance Co.

          ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT

          CHRISTINE M. ARGUELLO JUDGE

         This matter is before the Court on Defendant State Farm Mutual Automobile Insurance Company's Motion for Partial Summary Judgment, in which Defendant requests that the Court enter summary judgment in its favor on Plaintiff Jodi Stemple's claims for unreasonable delay or denial of benefits under Colo. Rev. Stat. §§ 10-3-1115 and -1116; common law bad faith; and exemplary damages. (Doc. # 81.) For the reasons described below, the Court grants Defendant's Motion for Partial Summary Judgment.

         I. BACKGROUND

         On September 2, 2014, Plaintiff was injured in a motor vehicle accident when her vehicle was struck by a vehicle driven by non-party Raymond Bryant, who had sped through a red light at an intersection in Denver, Colorado. (Doc. # 75 at 1.) Plaintiff asserts that, as a result of the collision, she sustained “serious injuries, including permanent injuries to her cervical spine, [such as] a herniated disc in her neck that is impinging on her spinal cord, which in turn is causing radicular pain and . . . may result in future surgery.” (Doc. # 84 at 3.)

         Mr. Bryan was at fault for the accident. (Doc. # 81-1 at 22-23.) Mr. Bryant was insured by non-party Progressive Direct Insurance Company and had a policy limit of $25, 000. (Doc. # 75 at 2.) Plaintiff settled her claims against Mr. Bryant for his policy's $25, 000 limit in March 2016. (Id.; Doc. # 81 at 2.)

         On the date of the collision, Plaintiff maintained an automobile insurance policy with Defendant, Policy No. 326721206Q (“the Policy”). (Doc. # 75 at 2.) The Policy included underinsured motorist (“UIM”) coverage up to $100, 000. (Id.) On April 4, 2016, more than a year and a half after the collision, Plaintiff, acting through counsel, demanded from Defendant the $100, 000 limit of her UIM coverage under the Policy and submitted various medical records and bills in support of her claim. (Doc. # 81-1 at 33; Doc. # 81 at 2.) Defendant's claim adjuster, Matt Schultz, completed an evaluation of Plaintiff's demand on May 5, 2016, and estimated the net value of Plaintiff's claim to be between $3, 614 and $19, 114. (Doc. # 81-1 at 5; Doc. # 81 at 2.) On the same day, Defendant made an initial settlement offer of $5, 000 to Plaintiff. (Doc. # 81 at 2; Doc. # 81-1 at 32.) Plaintiff did not respond to the initial settlement offer, nor did she respond to Defendant's communications following up on the initial settlement offer on June 17, 2016; August 15, 2016; September 13, 2016; October 19, 2016; and December 20, 2016. (Doc. # 81-1 at 3-4.) Defendant reassigned Plaintiff's demand to another claim adjuster, Sheryl Tanaka, who again contacted Plaintiff as to the $5, 000 settlement offer on February 9, 2017. (Id. at 29.) Plaintiff did not respond.

         On March 23, 2017, Plaintiff submitted a supplemental demand to Defendant for the limits of her UIM coverage, along with new medical bills from a cervical MRI and physical therapy. (Doc. # 75 at 2; Doc. # 81-1 at 3.) Defendant updated its evaluation of Plaintiff's claim and extended a revised settlement offer of $10, 000 on March 29, 2017. (Doc. # 81-1 at 3, 28.)

         On April 3, 2017, Plaintiff submitted additional bills for massage therapy to Defendant. (Id. at 2.) Defendant confirmed receipt of the bills but informed Plaintiff that it appeared that as to “the continued massage treatments, two years after the accident, [it] may be questionable whether it is all related” to the collision. (Id. at 27.) Approximately a week later, Plaintiff submitted more bills for physical therapy and an MRI. (Id. at 2.) Defendant reviewed the new information. (Id.) On April 18, 2017, Defendant extended a settlement offer of $15, 000 to Plaintiff. (Id. at 2, 26.) Plaintiff did not respond to the offer, nor did she respond to Defendant's attempt to follow-up on it on June 8, 2017. See (id. at 2.; Doc. # 81 at 3.)

         Plaintiff initiated this litigation against Defendant on August 1, 2017 (Doc. # 5), and served the summons and complaint on Defendant on September 11, 2017 (Doc. # 6). On November 16, 2017, Defendant sent Plaintiff a check for $5, 000, “the amount of [its] initial offer, ” in recognition that they had “reached an impasse” regarding Plaintiff's claim.^[1] (Doc. # 84-7.)

         Pursuant to United State Magistrate Judge Scott T. Varholak's Order permitting Plaintiff to amend her complaint (Doc. # 74), Plaintiff maintains four claims against Defendant: (1) breach of contract; (2) unreasonable delay or denial of benefits under Colo. Rev. Stat. §§ 10-3-1115 and -1116; (3) common law bad faith; and (4) exemplary damages.^[2] (Doc. # 75.) She asserts that though she has “fulfilled all conditions precedent to UIM insurance benefits coverage” under the Policy, Defendant's settlement offers have been “intentional, unreasonably low, and grossly unfair.” (Id. at 2.)

         Defendant filed the Motion for Partial Summary Judgment presently before the Court on December 10, 2018. (Doc. # 81.) Defendant argues that it is entitled to summary judgment on Plaintiff's second, third, and fourth claims; it does not seek summary judgment on Plaintiff's claim for breach of contract. See (id. at 1.) Plaintiff responded to Defendant's motion on January 7, 2019, asserting that “[it] is clear that Defendant neglected its duty to handle Plaintiff's UIM claim in good faith, fairly value her claims, and to do so without unreasonable delay, and that such negligence was willful and wanton.” (Doc. # 84 at 11.) Defendant filed its Reply on January 22, 2019. (Doc. # 88.)

         A five-day jury trial in this matter is set to begin on August 19, 2019. (Doc. # 96.)

         II. APPLICABLE LEGAL 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. Abbott 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., 119 F.3d 837, 839 (10th Cir. 1997). When reviewing a motion for summary judgment, a court must view the evidence in the light most favorable to the non-moving party-in the matter presently before the Court, in the light most favorable to Plaintiff. See Id. ...