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Laurienti v. American Alternative Insurance Corporation

United States District Court, D. Colorado

December 16, 2019




         This matter is before the Court on Defendant's Motion for Leave to Amend Answer to Include Additional Affirmative Defenses Pursuant to Fed.R.Civ.P. 15(a)(2) [#43][1] (the “Motion”). Pursuant to 28 U.S.C. § 636(b) and D.C.COLO.L.CivR 72.1(c), the Motion has been referred to the undersigned for a recommendation regarding disposition. [#18, #44]. The Court has reviewed the Motion [#43], the Response [#47], the Reply [#48], the case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Court GRANTS IN PART the Motion [#43], and recommends that the Motion [#43] be DENIED IN PART.

         I. Background

         Plaintiff filed his Complaint [#3] in Adams County District Court, Colorado, on May 6, 2019, and Defendant removed the case to this Court on June 13, 2019 [#1]. Plaintiff alleges that Defendant has underpaid, unreasonably denied or delayed UIM payments following a motor vehicle accident on May 16, 2017, which occurred while Plaintiff was driving his employer's vehicle insured by Defendant. Complaint [#3]. Plaintiff asserts the following claims in the Complaint [#3]: (1) for UIM and Med Pay benefits allegedly owed under the Policy; (2) unreasonable denial or delay of payment of first party claims in violation of Colo. Rev. Stat. §§ 10-3-1115 and 1116; and (3) bad faith breach of insurance contract.

         Defendant filed its Answer and Counter-Claim for Declaratory Relief Pursuant to F.R.C.P. 57 [#13] on July 3, 2019. The Counter-Claim [#13] seeks a determination as to whether Defendant owes Plaintiff UIM benefits.

         Defendant's current counsel filed Entries of Appearance [#30, #31] on September 13, 2019, after prior counsel withdrew from the case [#37, #39]. On October 29, 2019, defense counsel filed the instant Motion [#43] seeking to amend the Answer [#13] to add two additional affirmative defenses: (1) reliance on advice of counsel; and (2) collateral estoppel/issue preclusion. Motion [#43] at 1.

         II. Analysis

         As a preliminary matter, Plaintiff does not oppose the Motion [#43] to the extent that Defendant seeks to amend the Answer to add an affirmative defense of reliance on the advice of counsel. See Pl.'s Resp. [#47] at 1. The Motion [#43] notes as to that affirmative defense that during the adjustment of the claim, Defendant hired early intervention counsel, Nathan Dumm & Mayer, to advise it on applicable Colorado law, and Defendant asserts that it relied upon that advice in its decisions on adjusting Plaintiff's claim. Id. at 3. To the extent Plaintiff alleges that Defendant has “unreasonably” denied or delayed payment, Defendant argues “that the reasonableness of any denial or delay of payment should be gaged against the backdrop of the advice given by early intervention counsel.” Id. As Plaintiff does not oppose this amendment, the Motion [#43] is granted to the extent Defendant seeks to amend the Answer [#13] to add the affirmative defense of reliance on advice of counsel.

         The Court now turns to the disputed portion of the motion seeking to amend the Answer to add the affirmative defense of collateral estoppel/issue preclusion. The pleading amendment deadline expired on September 30, 2019. Sched. Order [#24] at 10. The Motion [#43] was filed on October 29, 2019, and is thus untimely. Accordingly, the Court must start its analysis with whether Defendant has shown good cause under Rule 16(b)(4). See Ayon v. Kent Denver Sch., No. 12-cv-2546-WJM-CBS, 2014 WL 85287, at *2 (D. Colo. Jan. 9, 2014) (noting that where a party seeks to amend his pleadings after the deadline established in the scheduling order, “the majority of courts have held that a party must meet the two-part test of first showing good cause to amend the scheduling order under Rule 16(b), and then showing that amendment would be allowed under Rule 15(a)”); cf. Gorsuch, Ltd., B.C. v. Wells Fargo Nat'l Bank Ass'n, 771 F.3d 1230, 1241 (10th Cir. 2014) (holding that the trial court did not abuse its discretion by using “Rule 16's good cause requirement as the threshold inquiry to consider whether amendments should be allowed after a scheduling order deadline has passed”).

         Thus, Defendant is entitled to amend its Answer only if it makes the requisite showing at each step of the analysis. The two-step analysis is explained as follows:

Rule 16(b)[(4)]'s good cause standard is much different than the more lenient standard contained in Rule 15(a). Rule 16(b)[(4)] does not focus on the bad faith of the movant, or the prejudice to the opposing party. Rather, it focuses on the diligence of the party seeking leave to modify the scheduling order to permit the proposed amendment. Properly construed, good cause means that the scheduling deadlines cannot be met despite a party's diligent efforts. In other words, the Court may “modify the schedule on a showing of good cause if [the deadline] cannot be met despite the diligence of the party seeking the extension.”

Pumpco, Inc. v. Schenker Intern. Inc., 204 F.R.D. 667, 668 (D. Colo. 2001) (citations omitted); accord Dilmar Oil Co., Inc. v. Federated Mut. Ins. Co., 986 F.Supp. 959, 980 (D.S.C. 1997), aff'd, 129 F.3d 116 (4th Cir. 1997). If Defendant fails to show good cause under Rule 16(b)(4), there is no need for the Court to move on to the second step of the analysis, i.e., whether Defendant has satisfied the requirements of Rule 15(a). Nicastle v. Adams Cnty. Sheriff's Office, No. 10-cv-00816-REB-KMT, 2011 WL 1465586, at *3 (D. Colo. Mar. 14, 2011).

         A. Rule 16: Good Cause to Modify the Pleading Amendment Deadline

         A scheduling order deadline, such as the pleading amendment deadline, “may be modified only for good cause with the judge's consent.” Fed.R.Civ.P. 16(b)(4). This “good cause” requirement reflects the important role a scheduling order plays in the court's management of its docket. Washington v. Arapahoe Cnty. Dep't of Soc. Servs., 197 F.R.D. 439, 441 (D. Colo. 2000) ...

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