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Pinon Sun Condominium Association, Inc. v. Atain Specialty Insurance Co.

United States District Court, D. Colorado

September 25, 2019

PINON SUN CONDOMINIUM ASSOCIATION, INC., a Colorado non-profit corporation, Plaintiff and Counter Defendant,
v.
ATAIN SPECIALTY INSURANCE COMPANY, a foreign corporation, INDIAN HARBOR INSURANCE COMPANY, a foreign corporation, and GREAT LAKES INSURANCE, SE, f/k/a Great Lakes Reinsurance UK, Plc, a foreign corporation, Defendants. GREAT LAKES INSURANCE, SE, f/k/a Great Lakes Reinsurance UK, Plc, a foreign corporation, Defendant and Third-Party Plaintiff,
v.
PINON SUN CONDOMINIUM ASSOCIATION, INC., a Colorado non-profit corporation. CLAIM SOLUTIONS LLC, a Colorado limited liability company, SCOTT BENGLEN, SHALZ CONSTRUCTION LLC, a Colorado limited liability company, and BRADLEY SHALZ, Third Party Defendants.

          ORDER AFFIRMING AND ADOPTING THE JANUARY 9, 2019 RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE AND DENYING JOINT MOTION TO AMEND ANSWER TO ADD COUNTERCLAIMS AGAINST DEFENDANTS

          CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE.

         This matter is before the Court upon the January 9, 2019 Recommendation by United States Magistrate Judge N. Reid Neureiter that the Court deny Plaintiff Pinon Sun Condominium Association, Inc. (“Plaintiff Pinon Sun”) and Third-Party Defendants Claim Solutions LLC and Scott Benglen’s (together, “Third Party Defendant Claim Solutions”) Joint Motion to Amend their Answer to Add Counterclaims Against Defendants (Doc. # 190). (Doc. # 237.) Plaintiff Pinon Sun and Third-Party Defendant Claim Solutions (for purposes of this Order, “Movants”) filed a joint Objection to the Recommendation (Doc. # 238), which, for the reasons described herein, the Court overrules. The Court affirms and adopts Magistrate Judge Neureiter’s Recommendation and denies Movants’ Joint Motion to Amend Answer to Add Counterclaims Against Defendants.

         I. BACKGROUND

         Magistrate Judge Neureiter’s Recommendation (Doc. # 237) and this Court’s previous Order Denying Plaintiff’s and Certain Third-Party Defendants’ Motion for Bifurcation and Stay (Doc. # 189) thoroughly recite the factual and procedural background of this convoluted dispute and are incorporated herein by reference. See 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b). Accordingly, this Order will reiterate only what is necessary to address Movants’ Objection.

         Plaintiff Pinon Sun is the homeowners’ association for a multi-family condominium property in Colorado Springs, Colorado, and is organized as a non-profit Colorado corporation. (Doc. # 43 at 2–3.) It sought and obtained an insurance policy (the “Policy”) from Defendant Great Lakes Insurance, SE (“Defendant Great Lakes”) on its property for the period of August 15, 2015, to August 15, 2016. See (Doc. # 71-3). Defendant Great Lakes was the primary insurer of the Policy, covering up to $10, 000, 000.00 for any given incident. (Doc. # 43 at 25.) Defendant Atain Specialty Insurance Company (“Defendant Atain”) and Defendant Indian Harbor Insurance Company (“Defendant Indian Harbor”) were the excess carriers under the Policy. (Id.); see also (Doc. # 49 at 2.)

         Plaintiff Pinon Sun filed a claim under the Policy after its properties allegedly sustained hail and wind damage on July 28, 2016. (Doc. # 43 at 4.) Plaintiff Pinon Sun retained Third-Party Defendant Claim Solutions LLC as its public adjuster during the claims process (Doc. # 49 at 8); Third Party Defendant Scott Benglen is the managing partner of Claim Solutions LLC (Doc. # 43 at 2). Plaintiff Pinon Sun and Third-Party Defendant Claim Solutions engaged in a year-long dispute with Defendant Great Lakes over the value of Plaintiff Pinon Sun’s alleged damage and the cost of allegedly necessary repairs. See, e.g., (id. at 4–25.) At some point over the course of that year, Plaintiff Pinon Sun and Third-Party Defendant Claim Solutions hired Third-Party Defendant Shalz Construction LLC, managed by Third-Party Defendant Bradley Shalz (together, “Third-Party Defendant Shalz”), to repair the roofs of Plaintiff Pinon Sun’s properties. See (id. at 15; Doc. # 49 at 15.) The estimates for and invoices from Third-Party Defendant Shalz’s work were central to Defendant Great Lake’s claim investigation and dispute with Plaintiff Pinon Sun and Third-Party Defendant Claim Solutions. See (Doc. # 43 at 4–25.)

         Plaintiff Pinon Sun initiated this action on June 30, 2017 (Doc. # 1), and filed the operative Complaint against Defendant Great Lakes, Defendant Atain, and Defendant Indian Harbor on September 25, 2017 (Doc. # 43). Plaintiff Pinon Sun asserts the following claims:

1. Breach of contract, against Defendant Great Lakes;
2. Breach of contract, against Defendant Atain;
3. Breach of contract, against Defendant Indian Harbor;
4. Violation of Colo. Rev. Stat. §§ 10-3-1115, -1116, for unreasonable delay or denial of payment of a claim for benefits, against Defendant Great Lakes;
5. Breach of the covenant of good faith and fair dealing, against Defendant Great Lakes; and
6. Violation of the Colorado Consumer Protection Act, Colo. Rev. Stat. § 6-1-101, et seq., against Defendant Great Lakes;

(Id. at 25–34; Doc. # 234 at 2.)

         Defendant Great Lakes answered the Complaint on October 17, 2017, and therein asserted counterclaims and third-party claims against Plaintiff Pinon Sun, Third-Party Defendant Claim Solutions, and Third-Party Defendant Shalz:

1. Breach of contract, against Plaintiff Pinon Sun;
2. Fraud and misrepresentation; against Plaintiff Pinon Sun, Third-Party Defendant Claim Solutions, and Third-Party Defendant Shalz;
3. Insurance fraud, against Plaintiff Pinon Sun, Third-Party Defendant Claim Solutions, and Third-Party Defendant Shalz;
4. Civil conspiracy, against Plaintiff Pinon Sun, Third-Party Defendant Claim Solutions, and Third-Party Defendant Shalz;
5. Civil theft, against Plaintiff Pinon Sun, Third-Party Defendant Claim Solutions, and Third-Party Defendant Shalz;
6. Violation of the Colorado Organized Crime Control Act (“COCCA”), Colo. Rev. Stat. § 18-17-104, et seq., against Plaintiff Pinon Sun, Third-Party Defendant ...

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