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Stoole v. Metropolitan Property and Casualty Insurance Co.

United States District Court, D. Colorado

June 26, 2018



          Nina Y. Wang United States Magistrate Judge

         This matter comes before the court on Defendant Metropolitan Property and Casualty Insurance Company's (“Defendant” or MetLife”) Motion for Summary Judgment (or “Motion”). [#32]. This civil action was referred to the undersigned Magistrate Judge to preside over fully for all purposes. See [#15]; Fed.R.Civ.P. 73; D.C.COLO.LCivR 72.2. The court concludes that oral argument will not materially assist in the resolution of this matter. Accordingly, upon careful review of the Motion and associated briefing, the applicable case law, and the entire docket, the court GRANTS IN PART and DENIES IN PART the Motion for Summary Judgment.


         Plaintiff Michelle Stoole (“Plaintiff” or “Ms. Stoole”) initiated this matter in the Denver County District Court on or about February 14, 2017. See [#1 at ¶ 2; #3]. Plaintiff asserts three claims against MetLife for: (1) breach of an insurance contract (“breach of contract”) (“Claim 1”); (2) common law bad faith breach of an insurance contract (“common law bad faith”) (“Claim 2”); and (3) unreasonable delay and denial of insurance benefits pursuant to Colo. Rev. Stat. §§ 10-3-1115, -1116 (“statutory bad faith”) (“Claim 3”). See generally [#3]. MetLife removed this suit to this District, invoking this court's diversity jurisdiction pursuant to 28 U.S.C. § 1332. See [#1].

         The undersigned held a Scheduling Conference with the Parties and entered a Scheduling Order setting, among others, a deadline for filing dispositive motions of March 9, 2018. See [#16; #17]. Upon MetLife's request, the court extended the dispositive motions deadline to March 30, 2018, see [#27], the date on which Defendant filed the instant Motion. See [#32]. Plaintiff has since filed her Response [#33], including a stipulated-to Amended Response [#40], [1]and Defendant has filed its Reply [#41]. The Motion for Summary Judgment is now ripe.


         Summary judgment is appropriate only if “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); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). “A ‘judge's function' at summary judgment is not ‘to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.'” Tolan v. Cotton, 134 S.Ct. 1861, 1866 (2014) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 249 (1986)). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or conversely, is so one-sided that one party must prevail as a matter of law. Anderson, 477 U.S. at 248-49; Stone v. Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000); Carey v. U.S. Postal Service, 812 F.2d 621, 623 (10th Cir. 1987). A fact is “material” if it pertains to an element of a claim or defense; a factual dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.'” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing First Nat. Bank of Ariz. v. Cities Service Com, 391 U.S. 253, 289 (1968)).

         When, as here, the moving party does not bear the ultimate burden of persuasion at trial, it may satisfy its burden at the summary judgment stage by identifying “a lack of evidence for the nonmovant on an essential element of the nonmovant's claim.” Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998) (citation omitted). “The movant bears the initial burden of making a prima facie demonstration of the absence of a genuine issue of material fact and entitlement to judgment as a matter of law.” Id. at 670-71. Relatedly, when a defendant moves for summary judgment to test an affirmative defense, it is the defendant's burden to demonstrate the absence of any disputed fact as to the affirmative defense asserted. See Helm v. Kansas, 656 F.3d 1277, 1284 (10th Cir. 2011).

         In either instance, once the movant meets its initial burden the burden shifts to the nonmovant to put forth sufficient evidence to demonstrate the essential elements of her claim(s), see Anderson, 477 U.S. at 248; Simms v. Okla. ex rel. Dep't of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999), and to “demonstrate with specificity the existence of a disputed fact” as to the defendant's affirmative defense, see Hutchinson v. Pfeil, 105 F.3d 562, 564 (10th Cir. 1997). Conclusory statements based merely on speculation, conjecture, or subjective belief are not competent summary judgment evidence. See Bones v. Honeywell Int'l, Inc., 366 F.3d 869, 875 (10th Cir. 2004). And the nonmoving party's evidence must be more than “mere reargument of his case or a denial of an opponent's allegation, ” or it will be disregarded. See10B Charles Alan Wright, et al., Federal Practice and Procedure § 2738 at 356 (3d ed.1998). But the “court [will] view[] the record and draw[] all inferences in the light most favorable to the non-moving party.” Pepsi-Cola Bottling Co. of Pittsburg, Inc. v. Pepsico, Inc., 431 F.3d 1241, 1255 (10th Cir. 2005).


         The following facts are drawn from the record before the court and are undisputed unless otherwise noted.[2] On or about September 23, 2011, a non-party, Ms. Ha Vo, rear-ended Ms. Stoole's vehicle. See [#3 at ¶ 1; #40-12 at ¶¶ 2-5; #40-15 at 2]. At the time of the traffic collision Ms. Stoole was insured by MetLife Policy 833-28-0008-0 (the “Policy”), which provided a $100, 000 per person limit for underinsured motorist coverage (“UIM”). See [#32-15 at 2]. Plaintiff subsequently brought suit against Ms. Vo in Denver County District Court (the “Underlying Suit”), asserting claims for negligence and negligence per se for the traffic collision and resulting injuries to Ms. Stoole. See [#40-12].

         In a letter dated November 5, [3] 2012, Plaintiff's counsel infromed MetLife that Ms. Stoole would assert a UIM claim in connection with the Underlying Suit if applicable. See [#40-11 at 3-4]. MetLife responded on or about November 19, 2012, requesting information regarding Ms. Stoole's medical treatment, bills, and records, as well as attaching a medical authorization for all of Ms. Stoole's medical records. See [#32-1]. Between November 30, 2012 and May 30, 2013, Ms. Stoole's counsel sent MetLife four letters seeking disbursement of Plaintiff's medical payments coverage to reimburse Plaintiff for her out-of-pocket medical expenses. See [#40-1; #40-2; #40-3; #40-4]. Each letter purportedly attached Ms. Stoole's medical bills incurred to date as a result of the traffic collison. See [#40-1; #40-2; #40-3; #40-4]; see also [#40-5 (Plaintiff's medical records)].

         Plaintiff settled the Underlying Suit with Ms. Vo's insurer for $98, 000. See [#3 at ¶¶ 28- 29; #40-13]. The Denver County District Court then dismissed the Underlying Suit on or about August 14, 2015. See [#40-14]. About September 1, 2015, Ms. Stoole sent MetLife a UIM demand for the full $100, 000 available under the Policy. See [#40-15]. Defendant acknolwedged receipt of the demand [#40-16], and then offered Ms. Stoole $3, 500 to settle her UIM claim on or about October 2, 2015 [#40-17].

         Communication between the Parties through their respective counsel soon became strained and sporadic. See, e.g., [#32-2 at ¶¶ 14-20 (detailing MetLife's claim adjuster's attempts to correspond with Plaintiff's counsel)]. The Parties exchanged several correspondences expressing their divergent views on whether Ms. Stoole submitted all relevant medical records and documents related to the Underlying Suit, inclunding an independent medical examination (“IME”) report and Plaintiff's deposition transcripts, see, e.g., [#32-5; #32- 6; #40-6; #32-7; #40-19; #32-9; #40-20]; whether Ms. Stoole was undergoing additional treatment for her injuries, compare [#32-2 at ¶¶ 14-20; #40-8 at 1; #40-22 at 92:6-9, [4] 92:14-20] with [#32-10 at 73:4-11 (testifying that her treatment ceased in 2013)]; whether she had accepted MetLife's $3, 500 offer; and whether she would sign MetLife's medical authorization, see, e.g., [#40-18 at 2].

         Around December 2016, Defendant tendered $3, 500 to Plaintiff for the undisputed amount of her UIM claim. See [#32-2 at ¶ 21; #32-10 at 91:3-6]. Because Plaintiff believed she was entitled to the full $100, 000 UIM limit, this litigation ensued. See generally [#3].


         I. Claim 1 - Breach of Contract

         In Colorado, to recover for an alleged breach of contract a plaintiff must prove: (1) the existence of a contract; (2) the plaintiff's performance of its contractual obligations or its justification(s) for non-performance; (3) the defendant's failure to perform; and (4) the plaintiff's damages. See Xtreme Coil Drilling Corp. v. Encana Oil & Gas (USA), Inc., 958 F.Supp.2d 1238, 1243 (D. Colo. 2013) (citing W. Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992)). “The interpretation of an insurance contract is a question of law” to which traditional principles of contract interpretation apply. USAA Cas. Ins. Co. v. Anglum, 119 P.3d 1058, 1059 (Colo. 2005); Chacon v. Am. Family Mut. Ins. Co., 788 P.2d 748, 750 (Colo. 1990). Thus, “‘[c]ourts should not rewrite insurance policy provision[s] that are clear and unambiguous.'” Lovell v. State Farm Mut. Auto. Ins. Co., 466 F.3d 893, 902 (10th Cir. 2006) (quoting Compass Ins. Co. v. City of Littleton, 984 P.2d 606, 613 (Colo. 1999)).

         Relevant here, an insured may forfeit her ability to recover under the insurance contract “only when, in violation of a policy provision, ” she “fails to cooperate with the insurer in some material and substantial respect.” Ahmadi v. Allstate Ins. Co., 22 P.3d 576, 579 (Colo.App. 2001). “[T]his failure to cooperate [must] materially and substantially disadvantage[] the insurer.” Soicher v. State Farm Mut. Auto. Ins. Co., 351 P.3d 559, 564 (Colo.App. 2015). An inconsequential lack of cooperation is immaterial, and an insured's failure to cooperate may be excused if due to a mistake or a showing that there was no exercise of bad faith. See Hansen v. Barmore, 779 P.2d 1360, 1364 (Colo.App. 1989). “[T]he question of whether the insured failed to cooperate with the insurer is a question of fact for the trial court.” See Summit Bank & Tr. v. Am. Modern Home Ins. Co., 71 F.Supp.3d 1168, 1176 (D. Colo. 2014).

         MetLife moves for summary judgment on Claim 1, arguing that Ms. Stoole breached the Policy's cooperation provision, thereby excusing Defendant's performance obligations. See [#32 at 11-16; #41 at 5-8]. In support, MetLife focuses on Ms. Stoole's failure to: (1) sign a medical authorization, (2) provide MetLife with all of her relevant medical records, (3) timely inform MetLife of a potential UIM claim, (4) respond to MetLife's $3, 500 settlement offer, and (5) provide expert reports and deposition transcripts from the Underlying Suit. See [#32 at 11- 16; #41 at 5-8]. Ms. Stoole counters by attacking the legality of MetLife's medical authorization, arguing that the law does not require her to waive her physician-patient privilege to receive UIM benefits, that the medical authorization is unconscionable, and that the medical release violates state law as well as federal law and regulations. See [#40 ...

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