Alexander v. USAA Cas. Ins. Co.

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JUDY ALEXANDER, Plaintiff, v. USAA CASUALTY INSURANCE COMPANY, Defendant.

Civil Action No. 21-cv-02543-NYW-MDB

United States District Court, D. Colorado

October 4, 2022

MEMORANDUM OPINION AND ORDER

NINA Y. WANG, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Defendant's Motion for Summary Judgment [Doc. 26, filed June 30, 2022]. Upon review of the Motion and the associated briefing, the applicable case law, and the record before the Court, the Court concludes that oral argument will not materially assist in the resolution of this matter. For the reasons set forth below, the Motion for Summary Judgment is respectfully GRANTED.

BACKGROUND

The below material facts are drawn from the Parties' final Statement of Undisputed Material Facts, [Doc. 37], and the record before the Court and are undisputed unless otherwise noted. Plaintiff Judy Alexander (“Plaintiff” or “Ms. Alexander”) held a homeowner's insurance policy through her insurer, Defendant USAA Casualty Insurance Company (“Defendant” or “USAA”). [Doc. 6 at ¶ 10; Doc. 11 at ¶ 10]. In 2015, Ms Alexander submitted an insurance claim to Defendant, which arose out of hail and water damage to her Colorado Springs home. [Doc at ¶ 1; Doc. 27-1 at 4:23-5:1, 26:16-25].^[1] Ms. Alexander hired Black Label Restoration and Cleaning (“Black Label”) to complete related repairs to her home and entered into a contract with Black Label for home-repair services on April 20, 2016. [Doc. 37 at ¶¶ 3-4; Doc. 27-1 at 37:1539:2, 45:1-20, 71:12-72:24].^[2] After Black Label began its repairs, Ms. Alexander took issue with the quality of its repair work. [Doc. 37 at ¶ 5; Doc. 27-1 at 47:18-25]. On October 14, 2016, Ms. Alexander sent an email to USAA setting out her complaints about Black Label's work. [Doc. 37 at ¶ 6; Doc. 27-3]. The next month, Ms Alexander complained to the Better Business Bureau about Black Label's allegedly deficient work. [Doc. 37 at ¶ 7; Doc. 27-5].

Then on January 23, 2018, Ms. Alexander's attorney sent a letter to USAA, advising USAA of his representation of Plaintiff with respect to defects in Black Label's repairs and complaining that USAA had not provided proper support to Plaintiff in monitoring Black Label's work. [Doc. 37 at ¶¶ 8-9; Doc. 27-6]. USAA responded that it “[did] not warranty any of the repairs completed by [Plaintiff's] repair company.” [Doc. 37 at ¶ 10; Doc. 27-4 at 168:5-7].^[3] The insurance policy issued by USAA to Plaintiff “does not contain any provisions requiring USAA . . . to monitor or supervise contractors hired by an insured.” [Doc. 37 at ¶ 14]; see generally [Doc. 27-8].

Plaintiff initiated this action in the District Court for El Paso County, Colorado on January 6, 2021, naming Black Label and USAA as Defendants. [Doc. 4]. After Black Label was dismissed as a party while the case was pending in state court, see [Doc. 7], USAA removed the case to federal court on September 17, 2021. [Doc. 1]. Plaintiff asserts one claim of negligence against USAA. [Doc. 6 at 6]. She alleges that “USAA . . . treated Plaintiff in a negligent matter pertaining [to] the handling of the insurance claim and remodel of the home” because USAA “failed to properly defend and negotiate the claim of Plaintiff or assist her against the actions of [Black Label].” [Id. at ¶¶ 53-54]; see also [id. at ¶ 58 (Plaintiff alleging that USAA “provided zero additional help on the insurance matter”)]. USAA filed its Motion for Summary Judgment on June 30, 2022, arguing that it is entitled to summary judgment on Plaintiff's sole claim. [Doc. 26]. Ms. Alexander responded in opposition to the Motion, see [Doc. 33], and Defendant has since replied. [Doc. 36]. The matter is thus ripe for adjudication.

LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 56, summary judgment is warranted “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). “[I]t is not the party opposing summary judgment that has the burden of justifying its claim; the movant must establish the lack of merit.” Alpine Bank v. Hubbell, 555 F.3d 1097, 1110 (10th Cir. 2009). “A dispute is genuine if there is sufficient evidence so that a rational trier of fact could resolve the issue either way. A fact is material if under the substantive law it is essential to the proper disposition of the claim.” Crowe v. ADT Sec. Servs., Inc., 649 F.3d 1189, 1194 (10th Cir. 2011) (internal citations and quotation marks omitted). It is the movant's burden to demonstrate that no genuine dispute of material fact exists for trial, whereas the nonmovant must set forth specific facts establishing a genuine issue for trial. See Nahno-Lopez v. Houser, 625 F.3d 1279, 1283 (10th Cir. 2010).

To satisfy its burden at summary judgment, the nonmovant must point to competent summary judgment evidence creating a genuine dispute of material fact; conclusory statements based on speculation, conjecture, or subjective belief are insufficient. See Bones v. Honeywell Int'l, Inc., 366 F.3d 869, 875 (10th Cir. 2004); see also 10B Charles Alan Wright et al., Federal Practice and Procedure § 2738 (4th ed. 2022) (explaining that the nonmovant cannot rely on “mere reargument of his case or a denial of an opponent's allegation” to defeat summary judgment). In considering the nonmovant's evidence, the Court cannot and does not weigh the evidence or determine the credibility of witnesses. See Fogarty v. Gallegos, 523 F.3d 1147, 1165 (10th Cir. 2008). At all times, the Court will “view the factual record and draw all reasonable inferences therefrom most favorably to the nonmovant.” Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998).

ANALYSIS

USAA raises three arguments in its Motion for Summary Judgment. First, it contends that Plaintiff's negligence claim is legally untenable because “Colorado [law] does not recognize a negligence claim against an insurance carrier” and because Plaintiff has failed to establish any legal duty owed by USAA to Ms. Alexander. [Doc. 26 at 3]. In the alternative, Defendant asserts that Plaintiff's claim is time-barred by the applicable statute of limitations. [Id. at 5]. And finally, it argues that Plaintiff cannot establish damages, which is fatal to her negligence claim. [Id. at 6]. The Court finds Defendant's first argument dispositive and limits its analysis accordingly.^[4] USAA argues that Plaintiff's negligence claim must fail because Colorado law does not recognize negligence claims by an insured against an insurer. [Doc. 26 at 4]. The Court respectfully agrees. “Negligence in the abstract consists of a failure to exercise reasonable care in order to protect others from harm.” United Blood Servs., a Div. of Blood Sys., Inc. v. Quintana, 827 P.2d 509, 523 (Colo. 1992). To prevail on a claim of negligence generally, a plaintiff must demonstrate that (1) the defendant owed a legal duty to the plaintiff; (2) the defendant breached that duty; (3) the plaintiff was damaged; and (4) the defendant's breach caused the plaintiff's injury. Raleigh v. Performance Plumbing & Heating, 130 P.3d 1011, 1015 (Colo. 2006).

But “a claim for simple negligence against an insurer or its agent is not recognized in Colorado.” Jordan v. City of Aurora, 876 P.2d 38, 43 (Colo.App. 1993). Instead, in the context of the insurer-insured relationship, claims challenging the insurer's claims-handling conduct, like Plaintiff's, are typically classified as “bad faith” claims.^[5] Indeed, a number of courts have concluded that a plaintiff may not bring simultaneous claims for common-law bad faith and negligence against an insurance company. See, e.g., Peerless Indem. Ins. Co. v. Colclasure, No. 16-cv-00424-WJM-CBS, 2017 WL 633046, at *12 (D. Colo. Feb. 16, 2017); Martinez v. Allstate Ins. Co., No. 20-cv-00659-DDD-NRN, 2021 WL 326583, at *5 (D. Colo. Jan. 15, 2021), report and recommendation adopted, 2021 WL 4472912 (D. Colo. Sept. 30, 2021); Bankr. Est. of Morris v. COPIC Ins. Co., 192 P.3d 519, 528 (Colo.App. 2008); Snyder v. ACORD Corp., No. 14-cv-01736-JLK, 2016 WL 192270, at *14 (D. Colo. Jan. 15, 2016), aff'd, 684 Fed.Appx. 710 (10th Cir. 2017).

As discussed more fully below, Plaintiff fails to identify any authority to contradict this legal authority, see [Doc. 33 at 2-5], and the Court could locate no Colorado authority permitting a negligence claim against an insurance company.^[6]

Indeed, even Plaintiff does not dispute that general negligence claims are unavailable against insurers under Colorado law. See [Doc. 33 at 3]. Instead, Plaintiff asserts that “[u]pon information and belief, not all negligence claims are barred,” distinguishing a simple negligence claim, as referenced in Jordan, from a claim of gross negligence. [Id.]. “It is Plaintiff's contention that Defendant's behavior rises to the level of gross negligence which is a claim that can stand on its own merits and, upon information and belief, does not fall under the umbrella of a claim for simple negligence.” [Id.]. Plaintiff does not cite any case law in support of her argument, see generally [id.], and arguments “upon information and belief” are insufficient to demonstrate the viability of Plaintiff's claim. This Court will not “fill the gaps in undeveloped arguments unsupported by citations to relevant authority.” Cahill v. Am. Fam. Mut. Ins. Co., 610 F.3d 1235, 1238 (10th Cir. 2010); Phillips v. Hillcrest Med. Ctr., 244 F.3d 790, 800 n.10 (10th Cir. 2001) (observing that the court has no obligation to make arguments or perform research on behalf of litigants).

Furthermore in its Reply, USAA disputes that Plaintiff has pled a claim for gross negligence, arguing that Plaintiff's Amended Complaint raises only a claim for simple...