Plaza Ins. Co. v. Lester

110 F.Supp.3d 1041

Plaza Insurance Company, a Missouri corporation, Plaintiff,

v.Carolyn Lester, James Braden, and Bonnie Braden, Defendants.

Civil Case No. 14–cv–01162–LTB–CBS

United States District Court, D. Colorado.

Signed May 13, 2015

Jon F. Sands, Katherine Karamalegos Kust, Sweetbaum Sands Anderson, P.C., Denver, CO, for Plaintiff.

Melissa A. Hailey, W. Randolph Barnhart, Antonio Bates Benard, P.C., Denver, CO, for Defendant.

MEMORANDUM OPINION AND ORDER

Babcock, District Judge.

This matter is before me on Plaintiff's Motion for Summary Judgment [Doc # 40 ] and Defendant's Cross–Motion for Partial Summary Judgment on Plaintiff's Claim for Declaratory Relief. [Doc # 41 ] Oral arguments would not materially assist me in my determination. After consideration of the parties' arguments, and for the reason stated, I DENY Plaintiff's motion, I GRANT Defendants' motion, and I ENTER SUMMARY JUDGMENT in favor of Defendants on Plaintiff's claim seeking a declaratory judgment.

I. BACKGROUND

On August 24, 2013, Martin Braden was killed in a motor vehicle accident, caused by Dana Beales, while Martin was working as a tow truck operator for C & J Auto Services (C & J). Mr. Beales was criminally charged and it is undisputed, at this point, that his conduct constituted a "felonious killing."

Martin's parents—Defendants James and Bonnie Braden—filed a wrongful death action against Mr. Beales in Weld County District Court on September 20, 2013. After filing the case, the Bradens became aware that Defendant Carolyn Lester was Martin's common-law wife. The Bradens and Ms. Lester participated in a mediation in order to decide how they would divide any proceeds received from claims arising out of Martin's death.

Sometime after filing the Weld County lawsuit, the parties discovered that Mr. Beales' liability insurance policy was limited at $100,000. At the time of the accident, Martin's employer, C & J, carried a $1,000,000 underinsured motorist (UIM) policy with Plaintiff Plaza Insurance Company. As such, Defendants submitted a policy limit demand to Plaintiff, pursuant to the UIM policy, on February 26, 2014.

The Bradens then agreed to settle their Weld County case against Beale for the $100,000 limit on his liability insurance policy. Plaintiff was made aware of and approved the settlement with Mr. Beales. The Bradens subsequently moved to dismiss their Weld County case against Mr. Beales, based on the settlement, and that case was dismissed with prejudice on April 10, 2014.

Two weeks later, on April 24, 2014, Plaintiff filed this case seeking declaratory relief pursuant to Fed.R.Civ.P. 57 and 28 U.S.C. § 2201. Specifically, Plaintiff seeks a declaration that the "one civil action" rule—set forth in the Colorado Wrongful Death Act at Colo.Rev.Stat. § 13–21–203(1)(a) —precludes a second action against it by Defendants for the wrongful death of Martin Braden. In the alternative, Plaintiff seeks a declaration that if such an action would be permitted, the proper plaintiffs would be the Bradens, not Carolyn Lester. [Doc # 1] Defendants, in response, have filed counterclaims—for breach of contract, breach of the implied covenant of good faith and fair dealing, violation of Colo.Rev.Stat. § 10–3–1115, and fraud—in which they contend that Plaintiff, by refusing to pay the UIM benefits to Defendant Lester, has committed a bad faith breach of the insurance policy. [Doc # 9]

II. SUMMARY JUDGMENT STANDARD

The parties have now filed cross-motions seeking summary judgment in their favor on Plaintiff's declaratory relief claim. Summary judgment is appropriate when the moving party can demonstrate that there is no genuine issue of material fact and it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c) ; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) ; Jenkins v. Wood, 81 F.3d 988, 990 (10th Cir.1996). Because the material facts relevant to the declaratory judgment claim are undisputed, the issue here is purely a matter of law and the parties agree that determination by summary judgment is appropriate and warranted.

III. APPLICABLE LAW

A wrongful death claim may be maintained in Colorado pursuant to the Wrongful Death Act, Colorado Revised Statute §§ 13–21–201 –204, which limits such claims in several ways. For example, it limits the types of plaintiffs that may bring suit as well as the amount of damages that can be recovered.

At issue in this case is the limitation provided by § 13–21–203(1)(a), which states, in relevant part, that: "[t]here shall be only one civil action ... for recovery of damages for the wrongful death of any one decedent." This limitation is known as the "only one civil action" provision. Barnhart v. American Furniture Warehouse Co., 338 P.3d 1027, 1030 (Colo.App.2013), cert. denied, 2014 WL 4322819 (Sept. 2, 2014). The legislative purpose of the "only one civil action" provision is to prevent multiple actions for the death of a single decedent, with the underlying goal of precluding multiple recoveries. Id.

IV. ANALYSIS

In this motion, Plaintiff seeks a ruling in its favor on its declaratory action claim. It argues that the "only one civil claim" provision in § 13–21–203(1)(a) bars Defendants from bringing an action against it for any UIM benefits, because a wrongful death action was already commenced and dismissed with prejudice in the Weld County case previously brought by the Bradens. As such, Plaintiff seeks a declaration that "the ‘one civil action’ rule precludes a second action for wrongful death with respect to the death of Martin Braden or, in the alternative, that if a second such action is permitted, then the proper plaintiffs are the same as those in the first wrongful death action, that is, James Braden and Bonnie Braden, and not Carolyn Lester." In support of its request for summary judgment on its declaratory action claim, Plaintiff argues that the law in Colorado is clear that the Wrongful Death Act requires all claims pursuant to the death of one person to be combined into one civil action. Because the claim for UIM coverage in this case is a claim pursuant to the wrongful death of Martin Braden, and a civil action has already been filed, settled and closed, Plaintiff argues that any claim by Defendants for UIM benefits is barred by the "only one civil action" provision.

In response, Defendants argue that the "only one civil action" rule does not negate Plaintiff's obligation to pay Defendants the benefits owed under C & J's UIM policy. They argue that their requests for payment of those benefits (as set out in their counterclaims in this action) do not constitute a civil action brought "for recovery of damages for the wrongful death of" Martin Braden, as prohibited by § 13–21–203(1)(a), but instead are actions to enforce the payment of a contractual obligation due under an insurance policy held by Martin's employer at the time of his death.

The legal authority interpreting and applying the "only one civil action" provision set forth in § 13–21–203(1)(a) is minimal. In 1997, a division of the Colorado Court of Appeals upheld the dismissal of a medical malpractice action against the physicians who treated a pedestrian after he was stuck by a car because § 13–21–203(1)(a) prohibited it as a second action after the plaintiffs had previously brought (and settled) a wrongful death action against the car's driver. Estate of Kronemeyer v. Meinig, 948 P.2d 119, 121 (Colo.App.1997). In so doing, the Court of Appeals concluded that:

the plain language of § 13–21–203(1) clearly and unambiguously reflects the intent of the General Assembly to permit only one wrongful death action for the death of one decedent. Pursuing in a sequential manner several wrongful death actions, against different defendants, and asserting different causes of death, is prohibited. Therefore, the trial court correctly concluded that the second wrongful death action in the instant case could not be maintained. Id.

In 2007, the Colorado Supreme Court looked at whether the provision prohibited multiple actions—one against a surgeon in one county and one against a medical center that provided post-surgical care in a different county—related to a wrongful death of an individual caused by the alleged tortious actions of both defendants. The Court found that the provision leaves "no room for doubt that Colorado law forbids multiple actions for the recovery of damages for the wrongful death of a decedent." Hernandez v. Downing, 154 P.3d 1068, 1070 (Colo.2007). The Supreme Court determined that two actions in two different venues/counties would result in "two proceedings for the infringement of a right, namely the wrongful death of [the decadent]." Id. at 1071 (quoting Clough v. Clough, 10 Colo.App. 433, 439, 51 P. 513, 515 (1897) (defining an action as "a proceeding on the part of one person, as actor, against another, for the infringement of some right of the first, before a court of justice, in the manner prescribed by the court or law")). Because the Wrongful Death Act "avoids the duplicative proceedings and inconsistent outcomes that could result from multiple actions arising from the wrongful death of one individual," the Court in Hernandez v. Downing, supra, ruled that the parties could not bring cases in two venues, but instead should proceed in one civil action and that one venue was proper as to both claims. Id. ; see also Steedle v. Sereff, 167 P.3d 135 (Colo.2007) (noting that the Wrongful Death Act limits damages by requiring that "all claims pursuant to the death of one person be combined into one civil action," and ruling that the death itself was the operative injury, not the harms suffered by the individual family members, under the Colorado Governmental Immunity Act).

Recently, a division of the Colorado Court of Appeals addressed whether the "only one civil action" provision of § 13–21–203(1)(a) prevented an heir (decedent's son) from bringing a wrongful death claim after her...