United States District Court, D. Colorado
S.
KATO CREWS JUDGE
ORDER ADOPTING THE RECOMMENDATION OF UNITED STATES
MAGISTRATE
CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE
This
matter is before the Court on review of the Recommendation by
United States Magistrate Judge S. Kato Crews (Doc. # 44),
wherein he recommends that this Court deny Defendant Owners
Insurance Company’s Motion to Dismiss Amended Complaint
Pursuant to Fed.R.Civ.P. 12(b)(6) (Doc. # 23). On September
3, 2019, Defendant filed an Objection to the Recommendation.
(Doc. # 45.) Plaintiff Steve Bardill did not respond to the
Objection nor did he file any objections to the
Recommendation. For the following reasons, Defendantâs
objections are overruled. The Court affirms and adopts the
Recommendation.
I.
BACKGROUND
A.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Magistrate
Judge Crews provided a thorough recitation of the factual and
procedural background in this case. The Recommendation is
incorporated herein by reference, see 28 U.S.C.
§ 636(b)(1)(B); Fed.R.Civ.P. 72(b), and the facts will
be repeated only to the extent necessary to address
Plaintiff’s objections.
On
November 30, 2015, Plaintiff was a passenger riding in a work
vehicle owned by his employer Meyers Heating and Air
(“MHA”). (Doc. # 20 at ¶ 7.) On that day,
when the work vehicle was stopped at a red traffic light, an
“unknown driver” rear-ended the work vehicle and
drove away. (Id. at ¶ 8.) Plaintiff reported
the accident to the police within 24 hours of the collision.
(Id. at ¶ 20.) As a result of the accident,
Plaintiff alleges to have “suffered bodily injury
resulting in permanent physical impairment”
(id. at ¶ 11), economic damages in the form of
“medical, rehabilitation, and other health care
expenses” (id. at ¶ 12), and noneconomic
damages “including, but not limited to past and future
pain and suffering, inconvenience, emotional distress, loss
of enjoyment of life, and impairment of quality of
life” (id. at ¶ 13).
Prior
to the accident, Defendant issued an insurance policy
(“Policy”) to Plaintiff’s employer MHA
providing “automobile coverage for company employees
operating and riding as a passenger in company vehicles
and/or while working in the course and scope of employment,
including [Uninsured Motorist] benefits, as provided in
C.R.S. § 10-4-609.” (Id. at ¶ 15.)
The Policy covered the work vehicle involved in the accident.
(Id. at ¶ 19); (Doc. # 20-1 at 1); (Doc. # 23-1
at 8.) Moreover, the Policy Section entitled,
“Uninsured Motorist Coverage” (“UM
Policy”) defined “Uninsured automobile” to
include a “hit and run automobile, ” which is one
that “causes bodily injury whether or not physical
contact is made with the injured person or the automobile the
injured person is occupying; and [] whose owner or operator
is unknown” as long as the “occurrence involving
a hit and run automobile [is] reported to the police within
24 hours of when it takes place.” (Doc. # 20 at ¶
14); (Doc. # 20-4 at 1 (emphasis omitted).)
The UM
Policy was in effect from January 1, 2015 to January 1, 2016,
and specifically, on the date of the accident. (Id.
at ¶¶ 15–16.) The UM Policy provided that
Defendant would “pay compensatory damages, including,
but not limited to loss of consortium, any person is legally
entitled to recover from the owner or operator of an
uninsured automobile because of
bodily injury sustained by an injured person
while occupying or using an
automobile that is covered by
SECTION II – LIABILITY COVERAGE of the
policy.” (Doc. # 20-4 at 1 (emphasis in original);
(Doc. # 23-2 at 18.) The Policy provided Uninsured Motorist
(“UM”) coverage up to $1, 000, 000.00 per
person/$1, 000, 000.00 per occurrence. (Id. at
¶ 18.)
Pertinent
to the Recommendation, the UM Policy also provided that any
person “seeking coverage under the policy must notify
[Defendant] promptly as to how, when and where the accident
happened. (Doc. # 23-2 at 20); (Doc. # 20-4 at 3 (emphasis in
original).) The “Notify Us Promptly” provision
(“Notification Provision”) continued:
Failure of any person entitled to Uninsured Motorist Coverage
to comply with these provisions shall invalidate the coverage
provided by this policy if we show by a
preponderance of evidence that we were
prejudiced by the delay.
(Doc. # 23-2 at 20 (emphasis in original)); (Doc. # 20-4 at
3.) The UM Policy also afforded coverage on the condition
that the person seeking UM coverage “present a claim
for compensatory damages according to the terms and
conditions of the policy and conform with any applicable
statute of limitations applying to bodily
injury claims in the state in which the accident
occurred.” (Doc. # 20-4 at 3); (Doc. # 23-2 at 20)
(emphasis in original).
Plaintiff
alleges that the UM Policy covered his losses arising from
the hit-and-run accident because (1) he
“occupied” the covered vehicle with permission
from MHA at the time of the accident; (2) the unknown driver
who rear-ended the covered vehicle is considered an
“uninsured motorist” under the UM Policy; (3) he
suffered bodily injury from the accident; (4) he reported the
accident to the police within 24 hours; and (5) he made a
claim for compensatory damages under the Policy within
Colorado’s three-year statute of limitations period for
UM claims. (Doc. # 20 at ¶¶ 7–37.)
On May
4, 2016, Plaintiff’s then-attorney, Bradley Hall, sent
Auto-Owners[1]Insurance a letter providing Defendant
notice of Plaintiff’s “uninsured motorist claim
under the [] policy” (“First Letter”).
(Doc. # 20 at ¶¶ 23–24); (Doc. # 20-5 at 1.)
The First Letter provided the Policy Number, name of the
insured, date of the accident, and Plaintiff’s name.
(Doc. # 20-5 at 1.) Mr. Hall also requested a “complete
copy” of Defendant’s “claim file and
documentation of the policy limits.” (Id.)
Defendant did not respond to the First Letter. (Doc. # 20 at
¶ 25.)
On
September 21, 2016, Mr. Hall sent Defendant another letter
(“Second Letter”) advising Defendant that Mr.
Hall no longer represented Plaintiff and that Defendant
should “direct all future correspondence regarding this
case to” Richard Blundell, Plaintiff’s new
attorney. (Doc. # 20 at ¶ 26); (Doc. # 20-6 at 1.) The
Second Letter provided the Policy Number, name of insured,
date of the accident, and Plaintiff’s name.
(Id.) Defendant did not respond to the Second
Letter. (Doc. # 20 at ¶ 27.)
On
September 18, 2018, Plaintiff’s then-attorney J. Todd
Tenge sent Defendant a letter (“Third Letter”)
providing Defendant with notice that Mr. Tenge represented
Plaintiff “in connection with the injuries, damages,
and losses he sustained in an automobile accident on November
30, 2015.” (Doc. # 20-7 at 1.) In the Third Letter,
Plaintiff’s counsel also requested “a copy of all
applicable insurance policies, including all
resident/relatives, together with any endorsements, addenda
or amendments thereto” and “a copy of the
property damage claims file, and any and all photographs of
the Bardill vehicle as well as transcribed copies of all
recorded statements.” (Id.) The Third Letter
provided the Policy Number, the date of loss, and
Plaintiff’s name. (Id.)
On
November 14, 2018, Defendant for the first time responded to
Plaintiff’s letters (“Acknowledgment
Letter”). (Doc. # 20 at ¶¶ 29–30.)
Defendant acknowledged receipt of the Third Letter, provided
a claim number for Plaintiff’s UM claim, and declined
Plaintiff’s request for copies of the Policy and
declaration(s) page. (Doc. # 20-8 at 1.) In the
Acknowledgment Letter, Defendant requested an “update
on [Plaintiff’s] condition and treatment[, ]”
including the “extent of the injuries and the duration
of their treatment” in addition to “all medical
records, police reports, facts of the incident, and any
additional information” that Plaintiff had
“amassed on this case.” (Id.) The
Acknowledgement Letter was sent to Plaintiff sixteen days
before the three-year statute of limitations expired. (Doc. #
20 at ¶ 30.)
On
November 27, 2018, Plaintiff filed suit in Boulder County
District Court and asserted one claim for relief,
“Contractual Liability of Defendant Auto-Owners
Insurance, ” and described the hit-and-run accident and
cited the basis for which Plaintiff sought coverage under the
UM Policy. (Doc. # 1-5 at 1–4.) On December 26, 2018,
Defendant removed Plaintiff’s action to United States
District Court for the District of Colorado. (Doc. # 1.) On
January 7, 2019, Plaintiff’s counsel sent Defendant
another letter (“Demand Letter”) requesting that
Defendant evaluate Plaintiff’s claim for UM benefits
and demand for UM benefits. (Doc. # 23-4 at 1–6.) The
Demand Letter provided a summary of the accident,
Plaintiff’s injuries, and damages. (Id.)
On
January 15, 2019, Plaintiff filed his Amended Complaint and
asserted four claims for relief: (1) Claim for UM
Benefits/Contractual Liability of Defendant Pursuant to Colo.
Rev. Stat. § 10-4-609; (2) Breach of Contract; (3) Bad
Faith Breach of Insurance Contract; and (4) Violation of
Colo. Rev. Stat. §§ 10-3-1115(1) and 10-3-1116(1).
(Doc. # 21 at 6–9).
On
February 22, 2019, Defendant filed a Motion to Dismiss
Plaintiff’s Amended Complaint pursuant to Fed.R.Civ.P.
12(b)(6) (Doc. # 23). Defendant argued that Plaintiff failed
to state claims for relief because (1) with respect to his
contractual claims, the Amended Complaint was devoid of
allegations establishing that he complied with the
Notification Provision and submitted a claim prior to the
expiration of the statute of limitations (Doc. # 23 at
4–8); (2) failure to state contractual claims was fatal
to his bad faith claims (id. at 8–9); and (3)
Plaintiff failed to plead sufficient allegations to support
that Defendant owed benefits to Plaintiff in the first place
and, as a result, that Defendant unreasonably delayed or
denied benefits to Plaintiff (id. at 9–10).
On
March 22, 2019, Plaintiff filed his Response (Doc. # 36), and
therein asserted that his Amended Complaint set forth facts
supporting that Plaintiff complied with the Policy’s
Notification Provision. (Id. at 7.) Moreover,
Plaintiff stated that he properly pleaded allegations
sufficient to support both his common law bad faith and
unreasonable delay claims because the Amended Complaint sets
forth “multiple ways” that Defendant failed in
claims processing, ...