Church Mut. Ins. Co. v. Phillip Marshall Coutu, an Individual, Power Adjusters, Inc.

• Decision Date: 13 September 2017
• Docket Number: Civil Action No. 17-cv-00209-RM-NYW
• Parties: CHURCH MUTUAL INSURANCE COMPANY, a Wisconsin corporation, Plaintiff, v. PHILLIP MARSHALL COUTU, an individual, POWER ADJUSTERS, INC., a Colorado corporation, JUDAH LEON BENSUSAN, an individual, and ATLANTIS CLAIMS SERVICES, LLC, a Florida limited liability company, Defendants.
• Court: U.S. District Court — District of Colorado

CHURCH MUTUAL INSURANCE COMPANY, a Wisconsin corporation, Plaintiff,
v.
PHILLIP MARSHALL COUTU, an individual,
POWER ADJUSTERS, INC., a Colorado corporation,
JUDAH LEON BENSUSAN, an individual,
and ATLANTIS CLAIMS SERVICES, LLC, a Florida limited liability company, Defendants.

Civil Action No. 17-cv-00209-RM-NYW

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

September 13, 2017

RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Magistrate Judge Nina Y. Wang

This matter is before the court on the Joint Motion To Dismiss ("Motion to Dismiss" or "Motion") filed by Defendants Phillip Marshall Coutu ("Mr. Coutu"), Power Adjusters, Inc. ("Power Adjusters"), Judah Leon Bensusan ("Mr. Bensusan"), and Atlantis Claims Services, LLC's ("Atlantis") (collectively, "Defendants"). [#65,¹ filed June 5, 2017]. The undersigned considers the Motion pursuant to 28 U.S.C. § 636(b), the Order Referring Case dated March 30, 2017 [#33], and the memorandum dated June 5, 2017 [#66]. Upon careful review of the Motion and associated briefing, the entire case file, applicable law, and the comments offered at the September 7, 2017 Motion Hearing, this court respectfully RECOMMENDS that the Motion to Dismiss be GRANTED IN PART and DENIED IN PART for the reasons stated herein.

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BACKGROUND

The following facts are drawn from the First Amended Complaint & Jury Demand ("FAC") [#49], and are presumed to be true for the purposes of the instant Motion. Plaintiff Church Mutual Insurance Company ("Plaintiff" or "Church Mutual") is a Wisconsin corporation with its principal place of business in Merill, Wisconsin, and is licensed to issue property and casualty insurance to individuals and companies located in Colorado. [#49 at ¶ 1]. Mr. Coutu is a resident of Florida who holds a non-resident public adjuster license in Colorado, and allegedly owned, operated, controlled, or was otherwise employed by or involved with Power Adjusters, a Colorado corporation. [Id. at ¶¶ 2-3, 5]. Mr. Bensusan, a resident of Colorado, once held a Colorado resident public adjuster's license in Colorado, and allegedly owned, operated, controlled, or was otherwise employed by or involved with Atlantis Claims, a Florida limited liability company. [Id. at ¶¶ 4, 6-8]. Both Power Adjusters and Atlantis Claims provide services to "policyholders in connection with disputes with insurance companies." [Id. at ¶¶ 5, 8].

As relevant here, Church Mutual issued Policy No. 0226224-02-92707 (the "Policy") to Montview Boulevard Presbyterian Church ("Montview") for a period of July 27, 2009, through July 27, 2012. [Id. at ¶¶ 14-15]. On May 5, 2012, Montview submitted Claim No. 1186476 (the "claim") to Church Mutual for benefits owed under the Policy to recover roof repair costs incurred following a wind and hailstorm. [Id. at ¶ 16]. On or about September 11, 2012, Plaintiff remitted $41,183.44 to Montview under the claim—Plaintiff then remitted an additional $48,397.92 under the claim to Montview on or about February 12, 2013. [Id. at ¶¶ 17-18].

While Plaintiff continued to adjust the claim, Montview hired Mr. Coutu and Power Adjusters as its public adjuster to represent it in the adjustment of the claim on October 10, 2012. [Id. at ¶ 19]. Mr. Coutu allegedly entered into a "consulting" agreement with Integrity Roofing,

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Montview's roofing contractor, at this same time but did not disclose the existence of this agreement with Plaintiff. [#49 at ¶ 19]. At some point, Plaintiff proposed that an independent adjuster visit Montview's property to conduct a re-inspection in the presence of a contractor and engineer to assess the alleged damage; however, Mr. Coutu allegedly refused to participate and instead sought to have a personal meeting with the independent adjuster. [Id. at ¶ 21].

Mr. Coutu then indicated that he would go directly to the appraisal process, despite Plaintiff's ongoing adjustment of the claim, and, in accordance with Mr. Coutu's urging, Montview issued a written demand, via email, for appraisal (the "Appraisal Demand") on or about January 23, 2013. [Id. at ¶¶ 21-22, 24]. The Appraisal Demand named Mr. Bensusan of Atlantis Claims as the purported impartial appraiser under the Policy's appraisal clause. See [id. at ¶¶ 23-24]. On January 31, 2013, Plaintiff acknowledged and accepted the Appraisal Demand and nominated William McConnell, P.E. as its appraiser. [Id. at ¶ 25]. Mr. McConnell also agreed to Mr. Bensusan's nomination of John Kezer, Esq. of Jones & Keller, P.C. to serve as the umpire. See [id. at ¶ 26].

On or about September 30, 2013, an appraisal award issued for $268,168.54 (the "Appraisal Award"). [Id. at ¶ 26]. Then, on or about October 11, 2013, Church Mutual remitted $154,410.68 to Montview as an actual cash value payment under the claim and the Appraisal Award. [Id. at ¶ 29]. That same day, Montview's facilities manager Bob Cloud, met with Messrs. Coutu and Bensusan as well as Integrity Roofing to discuss the Appraisal Award and to divide the proceeds. [Id. at ¶ 32]. Allegedly, at this meeting, Mr. Cloud first learned that Mr. Bensusan's compensation was a percentage of the Appraisal Award, not an hourly fee. [Id. at ¶¶ 33, 49]. According to Plaintiff, Messrs. Coutu and Bensusan have a de facto partnership amongst themselves, Power Adjusters and Atlantis Claims, and with Mr. Kezer. See [id. at

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¶¶ 35-45]. Plaintiff then remitted an additional $14,176.50 as recoverable depreciation under the claim on November 1, 2013. [Id. at ¶ 30].

On or about May 1, 2014, Montview filed a complaint against Church Mutual in the District Court for the City and County of Denver, later removed to the District of Colorado, asserting claims for common law bad faith breach of an insurance contract as well as violations of Colo. Rev. Stat. §§ 10-3-1115, -1116 ("statutory bad faith") related to the claim. [Id. at ¶¶ 46-48]. Church Mutual asserted a counterclaim against Montview, seeking to vacate the Appraisal Award given, inter alia, Mr. Bensusan's undisclosed financial interest in the outcome of the appraisal. [Id. at ¶¶ 50-51]. Ultimately, Church Mutual and Montview settled their case, but Plaintiff alleges that it suffered damages defending against the action—the action Messrs. Coutu and Bensusan urged Montview to file and which both stood to gain from financially. [Id. at ¶¶ 56-58]. Moreover, Plaintiff alleges that Messrs. Coutu and Bensusan actively concealed the nature of their financial and business relationships, despite an independent duty to disclose this information. See [id. at ¶¶ 59-71, 72-88, 92-93]. Further, that these misrepresentations of material facts would have relieved Church Mutual from any payment obligations under the Policy, see [id. at ¶¶ 70-71], and that Messrs. Coutu and Bensusan seek additional compensation by urging policyholders to file suit against Church Mutual for delaying and/or withholding benefits and, in doing so, have committed mail and wire fraud. [Id. at ¶¶ 92-93, 96, 97-104].

Plaintiff initiated this action by filing its Complaint in this District on January 23, 2017. Plaintiff's Complaint alleged two claims against the Defendants: (1) civil conspiracy and (2) fraudulent concealment. [Id.]. Following several extensions of time to answer or otherwise respond to Plaintiff's Complaint, see, e.g., [#20; #25; #29; #38], and prior to the Rule 16(b) Scheduling Conference, the undersigned granted the Parties' request to set a deadline of April

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25, 2017, for Plaintiff to file its FAC, and granted Defendants one final extension of May 16, 2017, to answer or otherwise respond to Plaintiff's FAC. See [#46]. Plaintiff filed its FAC on April 25, 2017, and levied several new claims against Defendants. The operative claims in this matter are: (1) civil conspiracy against all Defendants ("Claim I"); (2) fraudulent concealment against all Defendants ("Claim II"); (3) federal civil violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO") against all Defendants ("Claim III"); (4) federal civil RICO conspiracy against Messrs. Coutu and Bensusan ("Claim IV"); and (5) state civil violations of the Colorado Organized Crime Control Act ("COCCA") against Messrs. Coutu and Bensusan ("Claim V"). [#49].

The undersigned then held a Status Conference on May 10, 2017, setting a Scheduling Conference for June 23, 2017. [#56]. On June 5, 2017, Defendants filed the instant Motion to Dismiss directed at all five claims [#65], as well as a Motion to Stay discovery [#64] that the undersigned denied. See [#103]. Plaintiff then filed a Response [#95], and Defendants filed a Reply.² [#110]. On September 7, 2017, the undersigned held a Motion Hearing on the Motion to Dismiss, and took the Motion under advisement. [#115]. Because the Motion is ripe for Recommendation, this court considers the Parties' arguments below.³

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LEGAL STANDARD

Under Rule 12(b)(6) a court may dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). In deciding a motion under Rule 12(b)(6), the court must "accept as true all well-pleaded factual allegations . . . and view these allegations in the light most favorable to the plaintiff."⁴ Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir. 2010) (quoting Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)). Nevertheless, a plaintiff may not rely on mere labels or conclusions, "and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); see also Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (explaining that plausibility refers "to the scope of the allegations in a complaint," and that the allegations must be sufficient to nudge a plaintiff's claim(s) "across the line from...