Clark's Cherry Villa's Condo. Ass'n v. Scottsdale Ins. Co.
| Docket Number | Civil Action 21-cv-03196-NYW-SBP |
| Decision Date | 03 August 2023 |
| Parties | CLARK'S CHERRY VILLA'S CONDOMINIUM ASSOCIATION, INC., Plaintiff, v. SCOTTSDALE INSURANCE COMPANY, and JOHN DOES 1-5, Defendants. |
| Court | U.S. District Court — District of Colorado |
ORDER ON MOTION TO DISMISS
This matter comes before the Court on the Motion to Dismiss Second Amended Complaint (“Motion to Dismiss” or “Motion”), [Doc. 63, filed February 23, 2023] filed by Defendant Scottsdale Insurance Company (“Defendant” or “Scottsdale”). Plaintiff Clark's Cherry Villa's Condominium Association, Inc. (“Plaintiff”) has filed a brief in opposition (“Response”), [Doc. 74], and Defendant has submitted a Reply, [Doc. 76]. The Court has reviewed the briefing on the Motion and the applicable law and concludes that oral argument would not materially assist in the resolution of this matter. For the reasons discussed below, the Court respectfully GRANTS the Motion and DISMISSES without prejudice all claims against Scottsdale.
The following factual background is based on the allegations in the Second Amended Complaint, [Doc. 55, filed November 28 2023], which are taken as true for the purposes of this instant Motion, as well as the Statements of Facts in the Motion to Dismiss and Response, [Doc. 63 at 4-5; Doc. 74 at 3-4], and Plaintiff's Statement of Additional Undisputed Facts [Doc. 74 at 4].[1]Plaintiff is a Colorado nonprofit corporation. [Doc. 55 at ¶ 1; Doc. 63 at ¶ 1; Doc. 74 at 3, ¶ 1]. In November 2017, Defendant issued Plaintiff a $1,000,000 property and bodily injury insurance policy covering property in Greenwood Village, Colorado (“Policy”), including 9263 East Chenango Avenue (“Property”). [Doc. 55 at ¶ 10; Doc. 63 at ¶ 2; Doc. 74 at 3, ¶ 2]. In September 2018, several individuals vandalized the Property and were later arrested. [Doc. 55 at ¶¶ 11-12; Doc. 63 at ¶ 3; Doc. 74 at 3, ¶ 3]. At this time, the Policy was in effect. [Doc. 55 at ¶ 11].
Plaintiff reported the incident to Defendant pursuant to the Policy. [Id. at ¶ 13; Doc. 63 at ¶ 4; Doc. 74 at 3, ¶ 4]. On November 30, 2018, a representative of Defendant[2]valued the repair costs at $14,421.91 and tendered Plaintiff a check for $13,421.91. [Doc. 55 at ¶ 14; Doc. 63 at ¶ 5; Doc. 74 at 3, ¶ 5]. Plaintiff did not cash the check or otherwise accept the offer of payment. [Doc. 55 at ¶ 14; Doc. 74 at 3, ¶ 5]. Instead, on December 28, 2018, Plaintiff informed Defendant “that the settlement proposed by the adjuster for Scottsdale was not acceptable and that [Plaintiff] was getting [its] own estimate to use as a point of discussion.” [Doc. 55 at ¶ 15]; see also [Doc. 63 at ¶ 6; Doc. 74 at 3, ¶ 6].
Meanwhile, criminal proceedings against the Property's vandals presented the possibility that Plaintiff would receive restitution payments. [Doc. 55 at ¶ 16; Doc. 74 at 4, ¶ 1]. However, Defendant's claims specialist Kris Breton (“Ms. Breton”) advised the Greenwood Village Police (“GVP”) that Plaintiff was paid $13,421.91,[3]despite Plaintiff refusing that offer as insufficient.
[Doc. 55 at ¶ 17; Doc. 63 at ¶ 7; Doc. 74 at 3, ¶ 7]. Plaintiff alleges that Defendant's false statement prevented Plaintiff from recovering restitution through the criminal action. [Doc. 55 at ¶ 18; Doc. 74 at 4, ¶ 2].
Plaintiff ultimately obtained its own estimate to repair the Property, totaling $225,594.13. [Doc. 55 at ¶ 19; Doc. 74 at 4, ¶ 3]. Drawing all inferences in Plaintiff's favor, Plaintiff alleges it provided this estimate to Defendant. See [Doc. 55 at ¶¶ 19-23; Doc. 74 at 4, ¶¶ 3-4]. The Second Amended Complaint does not allege when Plaintiff obtained this estimate, although it notes that, since objecting to the initial estimate in late 2018, “[n]o counteroffer has been received” from Defendant. [Doc. 55 at ¶ 20]; see also [Doc. 74 at 4, ¶ 4].
Plaintiff filed suit in Colorado state court on September 24, 2021, bringing state law claims for breach of contract and insurance bad faith. See [Doc. 4 at 2-3; Doc. 63 at ¶ 9; Doc. 74 at 4, ¶ 9]. Defendant[4] removed the action to federal court on November 29, 2021, invoking diversity jurisdiction under 28 U.S.C. § 1332. [Doc. 1]. The operative Second Amended Complaint includes three claims: bad faith breach of insurance contract (“Count I”); unreasonable denial or delay of insurance benefits in violation of Colo. Rev. Stat. §§ 10-3-1115 and 10-3-1116 (“Count II”); and declaratory judgment pursuant to the Colorado Rules of Civil Procedure (“Count III”). [Doc. 55 at 4-7]. Defendant has moved to dismiss the Second Amended Complaint, [Doc. 63], and its Motion is ripe for resolution.[5]
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.” 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 Atl. 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, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570); see also Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) ( that plausibility refers “to the scope of the allegations in a complaint,” and that the allegations must be sufficient to nudge a plaintiff's claims “across the line from conceivable to plausible”). The ultimate duty of the Court is to “determine whether the complaint sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief under the legal theory proposed.” Forest Guardians v. Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007).
Defendant argues that the Second Amended Complaint is barred in its entirety by the applicable statute of limitations and should be dismissed.[6]See [Doc. 63 at 5]; see also Montana v. Hargett, No. 07-cv-00545-CMA-KLM, 2008 WL 4964717, at *3 (D. Colo. Nov. 17, 2008) . Separately, Defendant argues that Counts I and II fail to state a claim for relief under applicable law. See [Doc. 63 at 5-11]. Defendant also suggests that Plaintiffs declaratory judgment claim should be dismissed because of the absence of a fiduciary relationship. See [id. at 11]. For the reasons that follow, the Court respectfully GRANTS the Motion with respect to the statute of limitations, insofar as Counts I-III arise from Defendant's failure to pay for any amount over $13,421.91.[7]
I. Statute of Limitations
Although the statute of limitations is an affirmative defense, the Court may dismiss a complaint under Rule 12(b)(6) when “the dates given in the complaint make clear that the right sued upon has been extinguished.” Colby v. Herrick, 849 F.3d 1273, 1279 (10th Cir. 2017) (quotation omitted); but cf. Ghailani v. Sessions, 859 F.3d 1295, 1306 (10th Cir. 2017) (). In the Motion to Dismiss, Defendant contends that the Second Amended Complaint is subject to a two-year statute of limitations, and that Plaintiff's claims accrued by December 28, 2018, at which point Plaintiff “knew . . . that it disagreed with” Defendant's determination about the claim. [Doc. 63 at 5]; see also [Doc. 55 at ¶ 15 (“On 12/28/18, [Plaintiff's representative] indicated to [Defendant's representative] that the settlement proposed by the adjuster for Scottsdale was not acceptable and that he was getting his own estimate to use as a point of discussion.”)].
Opposing dismissal, Plaintiff takes the legal position that the proper accrual date is “when Plaintiff received [its] own estimate of cost on repairing the [Property] demonstrating that there was a viable conflict and Scottsdale subsequently refused to discuss the claim.” [Doc. 74 at 4]; see also [id. at 6 ()]. Plaintiff argues that the statute of limitations issue should be evaluated with respect to the “entire course of conduct of the insurer.” [Id. at 5-6 (citing Pham v. State Farm Mut. Auto. Ins. Co., 70 P.3d 567, 572 (Colo.App. 2003))]. Plaintiff also takes the related factual position that it obtained the second estimate in “2020,” so this action was timely filed in September 2021. [Id. at 4]. However, that assertion finds no support in the Second Amended Complaint, which does not provide any year in connection with the second estimate. See generally [Doc. 55]. Nor does the assertion appear in the Response's statements of fact. [Doc. 74 at 3-4]. Plaintiff instead concedes that, no later than December 28, 2018, Plaintiff's agent advised Defendant that the payment of $13,421.91 was unacceptable and that he was getting his own estimate. [Id. at 3, ¶ 6 (citing Doc. 55 at ¶ 15)]. Finally, Plaintiff points to Defendant's allegedly false statement to GVP, [id. at 5], which is likewise undated in the Second Amended Complaint. [Doc. 55].
The Court begins with the legal framework governing accrual. The Parties agree that a two-year statute of limitations applies. See [Doc. 63 at 5; Doc. 74 at 4]; see also Colo. Rev. Stat. § 13-80-102(1)(a); ...
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