United States District Court, D. Colorado
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 GRANTING IN PART AND DENYING IN PART MOTIONS
FOR SUMMARY JUDGMENT
CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE
This
matter is before the Court upon four motions for summary
judgment:
1. Third-Party Defendants Shalz Construction LLC and Bradley
Shalz’s (together, “Shalz”) Corrected
Motion for Summary Judgment (Doc. # 204);
2. Third-Party Defendant Claim Solutions LLC and Scott
Benglen’s (together, “Claim Solutions”)
Motion for Summary Judgment (Doc. # 241);
3. Plaintiff/Counter Defendant Pinon Sun Condominium
Association, Inc.’s (“Pinon Sun”) Motion
for Summary Judgment (Doc. # 246); and
4. Defendant/Third-Party Plaintiff Great Lakes Insurance,
SE’s (“Great Lakes”) Motion for Summary
Judgment (Doc. # 240).
For the
reasons discussed herein, the Court grants Shalz’s,
Claim Solutions’, and Pinon Sun’s Motions for
Summary Judgment and grants in part and denies in part Great
Lakes’ Motion for Summary Judgment.
I.
BACKGROUND
The
Court meticulously recited the factual and procedural
background of this knotty dispute in its October 26, 2018
Order (Doc. # 189) and more recently in its September 25,
2019 Order (Doc. # 287). That background information, as well
as that laid out by United States Magistrate Judge N. Reid
Neureiter in his January 9, 2019 Recommendation (Doc. # 237),
is incorporated herein by reference. This Order will recount
only what is necessary to address the Motions for Summary
Judgment.
Pinon
Sun is the homeowners’ association for a multi-family
condominium property in Colorado Springs, Colorado. (Doc. #
43 at 2–3.) It sought and obtained an insurance policy
(the “Policy”) from Great Lakes on its property
for the period of August 15, 2015, to August 15, 2016.
See (Doc. # 71-3). 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 (“Atain”) and
Defendant Indian Harbor Insurance Company (“Indian
Harbor”) were the excess carriers under the Policy.
(Id.); see also (Doc. # 49 at 2.)
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), and retained Claim Solutions[1]as its public
adjuster for the claims process (Doc. # 49 at 8). Pinon Sun
and Claim Solutions engaged in a year-long dispute with Great
Lakes over the value of alleged hail damage and the cost of
allegedly necessary repairs. See, e.g.,
(id. at 4–25.) At some point over the course
of that year, Pinon Sun and Claim Solutions hired
Shalz[2] to repair the roofs, siding, and decks of
its properties. See (id. at 15; Doc. # 49
at 15.) The estimates for and invoices from Shalz’s
work were central to Great Lake’s ensuing claim
investigation and dispute with Pinon Sun and Claim Solutions.
See (Doc. # 43 at 4–25.)
It is
undisputed that Great Lakes made two actual cash value
(“ACV”) payments to Pinon Sun pursuant to the
Policy: (1) a payment of $134, 681.80 on September 14, 2016,
and (2) a payment of $554, 536.75 on September 30, 2016.
(Doc. # 244 at 152, 159); see, e.g., (Doc. # 241 at
9; Doc. # 262 at 7.) These are the only
payments Great Lakes has made under the Policy. It is also
undisputed that Great Lakes’ ACV payments were
“based upon estimates prepared by [Jim Black
Construction Company (“JBC”)], a large,
well-established contractor specializing in property
restoration” that was retained by the Great Lakes,
Atain, and Indian Harbor’s claim adjusting agent, the
Claims Adjusting Group. (Doc. # 240 at 4, 18.) Great Lakes
did not rely on any information provided by Pinon Sun, Claim
Solutions, or Shalz in making the two ACV payments. (Doc. #
204 at 7; Doc. # 229 at 6.)
Pinon
Sun initiated this action on June 30, 2017 (Doc. # 1), and
filed the operative Complaint against Great Lakes, Atain, and
Indian Harbor (together, the “Insurers”) on
September 25, 2017 (Doc. # 43). Pinon Sun asserts the
following claims:
1. Breach of contract, against Great Lakes;
2. Breach of contract, against Atain;
3. Breach of contract, against 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 Great Lakes;
5. Breach of the covenant of good faith and fair dealing,
against Great Lakes; and
6. Violation of the Colorado Consumer Protection Act
(“CCPA”), Colo. Rev. Stat. § 6-1-101, et
seq., against Great Lakes.
(Id. at 25–34; Doc. # 234 at 2.)
Great
Lakes answered the Complaint on October 17, 2017, and asserts
counterclaims and third-party claims against Pinon Sun, Claim
Solutions, and Shalz:
1. Breach of contract, against Pinon Sun;
2. Fraud and misrepresentation; against Pinon Sun, Claim
Solutions, and Shalz;
3. Insurance fraud, against Pinon Sun, Claim Solutions, and
Shalz;
4. Civil conspiracy, against Pinon Sun, Claim Solutions, and
Shalz;
5. Civil theft, against Pinon Sun, Claim Solutions, and
Shalz;
6. Violation of the Colorado Organized Crime Control Act
(“COCCA”), Colo. Rev. Stat. § 18-17-104, et
seq., against Pinon Sun, Claim Solutions, and Shalz;
7. Violation of the federal Racketeer Influenced and Corrupt
Organizations statute (“RICO”), 18 U.S.C. §
1962, against Pinon Sun, Claim Solutions, and Shalz; and
8. A claim for declaratory judgment resolving the
parties’ contractual issues and declaring that the
actions of Pinon Sun, Claim Solutions, and Shalz
“during the claim process” “constitute
fraud, misrepresentation and concealment.”
(Doc. # 49 at 14–21.) Atain and Indian Harbor jointly
answered Plaintiff Pinon Sun’s Complaint on October 21,
2017, and asserted the same eight counterclaims and
third-party claims as Great Lakes against Pinon Sun, Claim
Solutions, and Shalz. (Doc. # 51.)
Pinon
Sun, Claim Solutions, and Shalz together moved to dismiss the
Insurers’ counterclaims and third-party claims against
them on October 31, 2017, and November 7, 2017. (Doc. ## 52,
64.) On June 29, 2018, United States Magistrate Judge Michael
J. Watanabe recommended that the Insurers’ COCCA and
RICO claims be dismissed. (Doc. # 167.) No. party objected to
the Magistrate Judge’s Recommendation, and this Court
affirmed and adopted the Recommendation on July 18, 2018.
(Doc. # 174.) Accordingly, the Insurers’ COCCA and RICO
claims were dismissed. (Id.)
On
October 31, 2018, Pinon Sun and Claim Solutions filed a Joint
Motion to Amend Answer to Add Counterclaims Against
Defendants, seeking to add claims of abuse of process and
malicious prosecution against the Insurers. (Doc. # 190.)
Atain and Indian Harbor subsequently withdrew all of their
remaining counterclaims and third-party claims. See
(Doc. ## 225, 228, 230, 234.) The Court denied Pinon Sun and
Claim Solutions’ request for leave to assert these
additional claims on September 25, 2019. (Doc. # 287.)
On
December 27, 2018, all parties to this action jointly filed a
Status Report regarding the remaining claims. (Doc. # 234.)
The following claims remain:
Pinon
Sun’s claims:
1. Breach of contract, against Great Lakes;
2. Breach of contract, against Atain;
3. Breach of contract, against 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 Great Lakes;
5. Breach of the covenant of good faith and fair dealing,
against Great Lakes; and
6. Violation of the Colorado Consumer Protection Act, Colo.
Rev. Stat. § 6-1-101, et seq., against Great Lakes.
Great
Lakes’ claims:
1. Breach of contract, against Pinon Sun;
2. Fraud and misrepresentation; against Pinon Sun, Claim
Solutions, and Shalz;
3. Insurance fraud, against Pinon Sun, Claim Solutions, and
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