Burgard v. Aha Prop. & Cas. Ins. Co.

• Decision Date: 21 July 2022
• Docket Number: 5:21-CV-05060-KES
• Parties: ROBERT BURGARD and TP ENTERPRISES, INC., A Colorado Corporation; Plaintiffs, v. ALPHA PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of South Dakota

ROBERT BURGARD and TP ENTERPRISES, INC., A Colorado Corporation; Plaintiffs,
v.
ALPHA PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant.

No. 5:21-CV-05060-KES

United States District Court, D. South Dakota, Western Division

July 21, 2022

ORDER REVERSING IN PART AND AFFIRMING IN PART ORDER GRANTING DEFENDANT'S MOTION TO TRANSFER VENUE

KAREN E. SCHREIER UNITED STATES DISTRICT JUDGE

Plaintiffs, Robert Burgard and TP Enterprises, filed this action against Alpha Property and Casualty Insurance Company alleging breach of contract, bad faith, breach of fiduciary duty, unfair trade practices, and intentional infliction of emotional distress. Docket 4 at 6-9. Alpha moves under 28 U.S.C. § 1404(a) to transfer venue to the District of Colorado. Docket 13. Burgard opposes the motion. Docket 16. The court referred the motion to transfer venue to Magistrate Judge Veronica Duffy for ruling. Docket 21.

The magistrate judge issued a memorandum opinion and order granting Alpha's motion to transfer venue to the District of Colorado. Docket 22 at 18. Burgard filed objections to the magistrate judge's order. Docket 23. Alpha did not file any objections to the magistrate judge's order but requested that the

1

court reject Burgard's objections and enter an order granting transfer to the District of Colorado. Docket 25.

FACTUAL BACKGROUND

This case arises out of a workplace injury Burgard experienced in Denver, Colorado. Docket 4 ¶¶ 5, 7. Burgard is a citizen of South Dakota who resides in Pennington County. Id. ¶ 1. TP Enterprises, Inc., is incorporated in Colorado with its principal place of business in Colorado. Id. ¶ 2. Alpha is incorporated in the state of Wisconsin with its principal place of business in Texas. Docket 11 ¶ 4.

On November 9, 2015, Burgard and Carlos Morales were working on a jobsite in Denver, Colorado. Docket 4 ¶¶ 5, 6. Burgard was employed as the foreman for Tharaldson Hospitality Development, L.L.C. and was acting within the course and scope of his employment. Id. ¶ 5. While Morales was operating a 2013 Genie forklift that day, he “ran into and over and through” Burgard. Id. ¶¶ 5, 7. This accident caused Burgard's leg to be severed. Id. ¶ 7. Morales, a Colorado resident, was also acting within the course and scope of his employment at the time for his employer, TP Enterprises, Inc., a subcontractor on the work site. Id. ¶ 6; Docket 14 at 2. At the time of the injury, the forklift was licensed in the State of Colorado, insured by Alpha, and owned by United Rentals, which is located in Colorado. Docket 4 ¶ 8.

On October 24, 2017, Burgard sued Morales and TP Enterprises in the United States District Court for the District of Colorado. Docket 14 at 3. On May 20, 2019, while the action in Colorado was still pending, Burgard's

2

counsel sent a letter to Alpha at a Dallas, Texas, address seeking coverage under TP Enterprises' insurance policy with Alpha. Docket 15-2. Kemper Insurance Company,^[1] on behalf of Alpha, issued a letter to TP Enterprises from an address in Clinton, Iowa, notifying TP Enterprises that Alpha agreed to handle the claim under a reservation of rights and notified TP Enterprises that the claim may not be covered under the insurance policy. Docket 15-3. Kemper's reservation of rights letter was signed by its agent, Amber Clay, who presumably lives in Iowa. Id.

Burgard's counsel responded to the reservation of rights letter by writing to Clay via email. Docket 15-4. On October 16, 2019, Kemper, on behalf of Alpha, responded and concluded that there was no coverage for Burgard's injuries under the commercial auto policy. Docket 15-5. The letter was signed by Senior Litigation Specialist, Helen Claire Quarles. Id. Quarles' signature block indicates she also is from Clinton, Iowa, however the footer bears a Chicago, Illinois, address for Kemper Corporation. Id. at 1, 4. Additionally, Kendra Slagle, the Director of Claims for Kemper, stated in an affidavit that she was familiar with the Colorado policy and supervised the Kemper adjustor who denied the claim. Docket 15 ¶¶ 1, 3, 4. Slagle presumably resides in Birmingham, Alabama. Id. at 2.

On August 6, 2021, Burgard settled his claims with Morales and TP Enterprises, Inc. Docket 4 ¶ 20. As part of the settlement, TP Enterprises

3

“assigned to Mr. Burgard all rights, title, interest, claims, and demands in and through certain causes of action, including any action for breach of contract and bad faith refusal defend and indemnify TP Enterprises, Inc., for Mr. Burgard's injury in relation to the forklift[.]” Id. ¶ 23; see Docket 24-3.

After settling, Burgard and TP Enterprises initiated this lawsuit against Alpha in the District of South Dakota on September 29, 2021. See Docket 1. Burgard alleges separate causes of action for breach of contract, bad faith, breach of fiduciary duty, unfair trade practices, and intentional infliction of emotional distress. Docket 4 ¶¶ 24-40. Burgard also seeks punitive damages under Colorado's punitive damage statute, C.R.S.A. § 13-21-102. Id. ¶ 48-50. Alpha now moves to transfer venue to the District of Colorado. Docket 13. Burgard opposes the motion. Docket 16.

DISCUSSION

I. Burgard's Appeal from the Magistrate Judge's Order Granting Alpha's Motion to Transfer Venue

A. Legal Standard

The court referred Alpha's motion to transfer venue to a magistrate judge for a determination under 28 U.S.C § 636(b)(1)(A). Docket 21. “The standard of review applicable to an appeal of a magistrate judge's order on a nondispositive issue is extremely deferential.” Reko v. Creative Promotions, Inc., 70 F.Supp.2d 1005, 1007 (D. Minn. 1999). The district court must affirm the magistrate judge's order unless “it has been shown that the magistrate judge's order is clearly erroneous or contrary to law.” 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a). “A finding is ‘clearly erroneous' when, although there is evidence to

4

support it, the reviewing court on the entire record is left with the definite and firm conviction that a mistake has been...