Gardner v. State Farm Mut. Auto. Ins. Co.

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JERRY GARDNER, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.

Civil Action No. 21-cv-01557-NYW-MDB

United States District Court, D. Colorado

November 8, 2022

MEMORANDUM OPINION AND ORDER

Nina Y. Wang United States District Judge

This matter is before the Court on Defendant's Motion for Partial Summary Judgment on Plaintiff's Second and Third Claims for Relief (the “Motion” or “Motion for Partial Summary Judgment”). [Doc. 42]. 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 DENIED.

PROCEDURAL BACKGROUND

Plaintiff Jerry Gardner (“Plaintiff” or “Mr Gardner”) initiated this civil action on March 23, 2021 in the District Court for the City and County of Pueblo Colorado, raising a single breach of contract claim against Defendant State Farm Mutual Automobile Insurance Company (“Defendant” or “State Farm”). [Doc 7 at 1, 4]. Plaintiff filed an Amended Complaint on May 12 2021, adding claims for bad faith breach of an insurance contract and unreasonable delay or denial under Colo. Rev. Stat. §§ 10-3-1115 and 10-3-1116. [Doc. 8 at 6-9]. Defendant removed the case to federal court on June 9, 2021, [Doc. 1], and answered the Amended Complaint on June 15, 2021. [Doc. 11].

Plaintiff alleges in his Amended Complaint that on August 4, 2016, he was involved in a motor vehicle accident in Pueblo, Colorado. [Doc. 8 at ¶ 6]. At the time of the collision, Plaintiff held underinsured motorist (“UIM”) coverage through an insurance policy issued by Defendant. [Id. at ¶ 3]. Mr. Gardner entered into a settlement with the other driver's insurance company, Farmers Insurance, and the settlement was accepted by State Farm. [Id. at ¶¶ 12-13]. Mr. Gardner alleges that he tendered a UIM claim to State Farm, seeking compensation for damages incurred that were not covered by the settlement. [Id. at ¶¶ 12-16]. State Farm denied the UIM claim, which prompted Mr. Gardner to file this lawsuit. [Id. at ¶ 14, 18].

State Farm filed the instant Motion for Partial Summary Judgment on May 2, 2022. [Doc. 42]. Mr. Gardner responded in opposition, see [Doc. 44], and State Farm has since replied. [Doc. 45].^[1]This matter is thus ripe for disposition.

UNDISPUTED MATERIAL FACTS

The below material facts are drawn from the Parties' briefing and are undisputed unless otherwise noted.

1. On August 4, 2016, Plaintiff was involved in a motor vehicle accident. [Doc. 42 at ¶ 1; Doc. 20 at 3].

2. At the time of the collision, Mr. Gardner was the named insured of an automobile policy issued by Defendant that was in full force and effect. [Doc. 42 at ¶ 3; Doc. 20 at 3]. That policy included UIM coverage, subject to the terms and conditions of the policy. [Doc. 42 at ¶ 3; Doc. 20 at 3].

2. On June 4, 2019, Plaintiff's counsel advised State Farm that Mr. Gardner was settling his claim with Farmers Insurance, the insurance of the at-fault driver, for $50,000.^[2] [Doc.20 at 3; Doc. 42 at ¶ 4; Doc. 42-1 at ¶ 4].

3. That same day, Plaintiff's counsel advised State Farm that Mr. Gardner would be asserting a UIM claim “against the $100,000 of available UIM coverage under the State Farm policy.” [Doc. 42 at ¶ 4; Doc. 42-1 at ¶ 4].

4. Plaintiff's counsel further advised State Farm that as of June 4, 2019, Plaintiff had incurred approximately $23,000 in medical expenses. [Doc. 42 at ¶ 5; Doc. 42-1 at ¶ 5].

5. On June 14, 2019, State Farm informed Mr. Gardner that based on the information then submitted by Mr. Gardner, State Farm had evaluated his claim and had determined that the value of the claim was “within the available liability limits” of the Farmers Insurance settlement, such that no UIM benefits were owed to Mr. Gardner. [Doc. 42 at ¶ 6; Doc. 42-1 at ¶ 6].

6. State Farm informed Mr. Gardner that it would consider any additional information that he wished to submit. [Doc. 42 at ¶ 6; Doc. 42-1 at ¶ 6].

7. Between June 14, 2019 and March 10, 2021, Mr. Gardner did not provide any additional information related to his injuries or medical treatment to State Farm. [Doc. 42 at ¶ 7; Doc. 42-1 at ¶ 7].

8. On March 11, 2021, Mr. Gardner submitted to State Farm additional treatment notes from November 30, 2020; December 29, 2020; January 12, 2021; and January 25, 2021. [Doc. 42 at ¶ 8; Doc. 42-1 at ¶ 8].

9. On March 18, 2021, State Farm informed Mr. Gardner that medical bills were missing from the newly provided treatment notes and that State Farm had no medical records or bills for treatment between March 13, 2018 and November 20, 2020; State Farm requested the submission of this missing information “along with information concerning any new accidents or injuries between March 13, 2018 and November 20, 2020.” [Doc. 42 at ¶ 9; Doc. 42-1 at ¶ 9].

10. Mr. Gardner filed this lawsuit on March 23, 2021. [Doc. 42 at ¶ 10; Doc. 42-1 at ¶ 10; Doc. 7].

11. On that date, Plaintiff's counsel advised State Farm that “he recognized that State Farm had ‘not been given sufficient time to give proper consideration to Mr. Gardner's demand.'” [Doc. 42 at ¶ 11; Doc. 42-1 at ¶ 11].^[3]

12. On April 14, 2021, Mr. Gardner provided State Farm with receipts for payments made to Colorado Springs Orthopaedic Group and Synergy Physical Therapy and Wellness. [Doc.

42 at ¶ 12; Doc. 42-1 at ¶ 12].^[4] 13. The receipts reflected payments of $840.00. [Doc. 42 at ¶ 13; Doc. 42-1 at ¶ 13].

13. Mr. Gardner did not include treatment notes or itemized medical bills associated with the credit card payment receipts submitted on April 14, 2021. [Doc. 42 at ¶ 12; Doc. 42-1 at ¶ 12].^[5]

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). “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 omitted).

“[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). In attempting to meet this standard, a movant that does not bear the ultimate burden of persuasion at trial does not need to disprove the other party's claim; rather, the movant need simply point the Court to a lack of evidence for the other party on an essential element of that party's claim. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). Once the movant has met its initial burden, the burden then shifts to the nonmoving party to “set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). To satisfy this burden, 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 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, 144 F.3d at 670.

ANALYSIS

State Farm moves for summary judgment on Mr. Gardner's latter two claims: bad faith breach of an insurance contract, often referred to as “common law bad faith,” and unreasonable delay or denial of insurance benefits under Colo. Rev. Stat. §§ 10-3-1115 and 10-3-1116, also referred to as “statutory bad faith.” See generally [Doc. 42]; see also Dowgiallo v. Allstate Ins. Co., No. 19-cv-03035-KMT, 2020 WL 1890668, at *2 (D. Colo. Apr. 16, 2020). The Court addresses the Parties' respective arguments in turn.

I. Bad Faith Claims Under Colorado Law

Colorado law provides for two types of bad faith claims arising out of an alleged breach of an insurance contract: (1) common law bad faith and (2) statutory bad faith. Id. The two claims are similar, but nevertheless distinct. “[B]oth common law and statutory bad faith claims require a showing of unreasonable conduct.” McKinney v. State Farm Mut. Auto. Ins. Co., No. 20-cv-01651-CMA-KLM, 2021 WL 4472921, at *4 (D. Colo. Sept. 30, 2021). A statutory bad faith claim primarily concerns whether an insurer denied or delayed the payment of insurance benefits without a reasonable basis. State Farm Mut. Auto. Ins. Co. v. Fisher, 418 P.3d 501, 506 (Colo. 2018); see also Colo. Rev. Stat. § 10-3-1115(1)(a), (2) (an insurer “shall not unreasonably delay or deny payment of a claim for benefits owed to or on behalf of any first-party claimant.... an insurer's delay or denial was unreasonable if the insurer delayed or denied authorizing payment of a covered benefit without a reasonable basis for that action.”). To succeed on a claim of unreasonable delay or denial, an insured must establish that (1) the insurer...