McGlothlen v. Am. Family Mut. Ins. Co.

• Decision Date: 24 April 2013
• Docket Number: Civil Action No. 11-cv-02892-DME-KLM
• Parties: KEVIN and LISA MCGLOTHLEN, Plaintiffs, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Colorado

KEVIN and LISA MCGLOTHLEN, Plaintiffs,

v.AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant.

Civil Action No. 11-cv-02892-DME-KLM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Dated: April 24, 2013

ORDER GRANTING SUMMARY JUDGMENT

This matter is before the court on a motion for summary judgment made by Defendant American Family Mutual Insurance Company ("American Family"). (Doc. 21.) Upon consideration of the parties' pleadings addressing this motion, the Court GRANTS in full American Family's motion for summary judgment.

BACKGROUND

Plaintiffs Kevin and Lisa McGlothlen ("McGlothlens") allege that their home was damaged by a hail storm that occurred June 27, 2010. On or about December 13, 2010, the McGlothlens reported to American Family a claim for alleged damage sustained by the roof of their property during the hail storm.

A few days later, Dustin Theriault, a property claims adjuster for American Family, inspected the home. He completed an estimate for the water damage to the interior of the home, which provided a settlement for the claim, and contacted WesternInspections and Consultants, Inc. ("Western") to inspect the alleged damage to the McGlothlens' roof. Following the inspection, Western's report to American Family noted that there was no evidence of hail or wind damage to the roof. Accordingly, in January 2011, Mr. Theriault sent letters to the McGlothlens denying the claim for roof damage¹ and informing the McGlothlens that if they were not satisfied, within twenty days, they could commence the appraisal process provided for in their insurance contract.

The McGlothlens did not pursue appraisal. Instead, on October 17, 2011, the McGlothlens filed a complaint and jury demand ("Complaint") (Doc. 2) against American Family, which asserted claims for breach of contract and violation of Colo. Rev. Stat. §§ 10-3-1115 and 10-3-1116.² Subsequently, American Family filed its motion for summary judgment. (Doc. 21.)

This Court has jurisdiction to consider this matter under 28 U.S.C. § 1332. Venue is proper pursuant to Colo. R. Civ. P. 98(c). As explained below, because there are no genuine disputes of material fact and American Family is entitled to summary judgmentas a matter of law, the Court GRANTS summary judgment to American Family on all of the McGlothlens' claims.

ANALYSIS

To obtain summary judgment, the movant must demonstrate "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). "At summary judgment, the relevant inquiry is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Simpson v. Univ. of Colo. Boulder, 500 F.3d 1170, 1179 (10th Cir. 2007) (internal quotation marks omitted).

"An issue is 'genuine' if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way." Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). And "[a]n issue of fact is 'material' if under the substantive law it is essential to the proper disposition of the claim." Id. "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. Where "the movant carries this initial burden . . . the burden shifts to the nonmovant to go beyond the pleadings and set forth specific facts that would be admissible in evidence in the event of trial from which a rational trier of fact could find for the nonmovant." Id. (internal quotation marks omitted). "To accomplish this, the facts must be identified by reference to affidavits, deposition transcripts, or specific exhibits incorporated therein." Id.

I. The Court Grants American Family's Request for Summary Judgment as to the McGlothlens' Claim for Breach of Contract

In its motion for summary judgment, American Family argues that the McGlothlens' claim for breach of contract must fail because the McGlothlens did not file this lawsuit within the one-year time limit required by the insurance contract.³ Specifically, the provision at issue states: "Suit must be brought within one year after the loss or damage occurs."

Colorado courts⁴ have held that "parties to a contract may require that actions founded on the contract be commenced within a shorter period of time than that prescribed by the applicable statute of limitations." Grant Family Farms, Inc. v. Colo. Farm Bureau Mut. Ins. Co., 155 P.3d 537, 539 (Colo. App. 2006); see also, e.g., Hepp v. United Airlines, Inc., 540 P.2d 1141, 1143 (Colo. App. 1975) (explaining that "[i]n Colorado such a contractual limitation is enforceable, provided that the period in which the action must be brought is reasonable and that the provision has not been waived."); Kesling v. Am. Family Mut. Ins. Co., 861 F. Supp. 2d 1274, 1281 (D. Colo. 2012)(holding that an insurance contract's one-year contractual time limit for commencing litigation is not contrary to Colorado law).

In this case, the McGlothlens do not argue that the contractual time limit is unenforceable. Instead, the McGlothens argue that they commenced their lawsuit against American Family within the contractual time limit because they commenced litigation within one year from discovering the damage to the roof. As discussed below, regardless of whether the contractual time limit at issue applies from the time the loss or damage occurred or from the time the McGlothlens discovered the damage, the McGlothlens commenced litigation outside of the permissible timeframe and their claim for breach of contract is therefore barred.

A. There is No Genuine Dispute that the McGlothens Failed to Bring their Lawsuit Within One Year after the Loss or Damage Occurred

The plain, unambiguous language of the insurance contract between American Family and the McGlothlens states that a lawsuit against American Family "must be brought within one year after the loss or damage occurs." (Doc. 21 at 7 (emphasis added).) There is no genuine dispute that the loss or damage actually occurred on or about June 27, 2010. Indeed, in their Complaint, the McGlothlens allege that "[o]n about June 27, 2010, Denver, Colorado was hit by a severe storm," and "[a]s a result of the storm, MCGLOTHLENS sustained severe damage to their residence." (Doc. 2 at 1). The Complaint also states that "[t]he McGlothlen home was severely damaged by a devastating hail storm occurring June 27, 2010." (Id.).

In accordance with these allegations in the complaint, when Mr. McGlothlen was asked in his deposition about when the storm had occurred, Mr. McGlothlen indicated that June 27 was "sincerely a best guess as to the exact night of the storm." (Doc. 21 at Ex. O at 34:12-25.) When asked again later in the deposition, "If you don't know for sure when the exact loss was, was it in . . . June or July of 2010? Can you at least state that it was around that time period?," Mr. McGlothlen responded that "[i]t was that weekend of late June." (Id. at 81:7-11.)

Additionally, in the contract Mr. McGlothlen signed to retain a public adjuster in this matter, Mr. McGlothlen indicated a date of loss "on or about 6/27/10." (Doc. 21, Ex. M.) Similarly, when the McGlothlens reported the claim to American Family, American Family recorded the date of loss as June 27, 2010, and the paperwork from American Family denying the claim also lists June 27, 2010 as the date of loss.

Accordingly, there is no genuine dispute that the loss or damage actually occurred on or about June 27, 2010, which was more than a year before the McGlothlens commenced their lawsuit on October 17, 2011. Thus, under the plain language of the contract, the McGlothlens are barred for bringing their breach-of-contract claim.

B. There is No Genuine Dispute that the McGlothens Failed to Bring their Lawsuit Within One Year after They Discovered that the Loss or Damage Occurred

The McGlothlens argue that their claim is not barred by the contractual time limit provision because they commenced litigation within one year of discovering the damage. The plain language of the contract does not reference discovery of the damage. But evenif the contract were interpreted to require the McGlothlens to bring their lawsuit against American Family within one year from when they discovered the damage, for the following three reasons, there is no genuine dispute that the McGlothens failed to commence their lawsuit within that timeframe.

First, during Mr. McGlothen's deposition, he testified that the McGlothlens noticed the damage in the days following the storm. Specifically, he explained that after the storm that occurred on June 27, 2010, "we noted the internal water damage to the house, which is when we realized it was a pretty big storm." (Doc. 21, Ex. O at 26:6-8). Mr. McGlothlen was then asked when he noticed internal water damage. He replied, "It came on over the days following the storm, because we'd just recently repaired and repainted the area from prior damage." (Id. at 26:9-13 (emphasis added).) Mr. McGlothen was asked "So if the hailstorm occurred June 27, 2010, you would have noticed the leaking maybe June 28, 29, 30?" (Id. at 26:14-16.) Mr. McGlothen responded, "It's hard to say. . . . I don't honestly know whether it was the next day or a couple days later when we see [sic] the internal damage and pointed out, hey, there's -- there's problems from the roof again." (Id. at 26:17-24 (emphases added).)

Moreover, when asked why it took him so long to file an insurance claim with American Family, Mr. McGlothlen did not testify that he could not make a claim because he had no knowledge of the damage. Instead, he provided other reasons for the delay; reasons that do not conflict with his testimony that the McGlothlens noticed internal water damage in the days following the storm. Specifically, he testified that the reason ithad...