Opinion
Civil Action 20-cv-00659-DDD-NRN
01-15-2021
NANCY J. MARTINEZ, Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant.
REPORT AND RECOMMENDATION ON DEFENDANT ALLSTATE'S MOTION FOR JUDGMENT ON THE PLEADINGS (DKT. #67)
N. REID NEUREITER, United States Magistrate Judge
This case is before the Court pursuant to an Order (Dkt. #69) issued by Judge Daniel D. Domenico referring Defendant Allstate Insurance Company's (“Allstate” or “Defendant”) Motion for Judgment on the Pleadings. Dkt. #67. The Court has carefully considered the motion, Plaintiff Nancy J. Martinez's response and amended responses (Dkt. ##72, 117, & 126), and Allstate's reply (Dkt. #86), and on December 11, 2020, the Court heard argument from the parties. See Dkt. #129. The Court has taken judicial notice of the Court's file and has considered the applicable Federal Rules of Civil Procedure and case law. The Court now being fully informed recommends that the motion for judgment on the pleadings be granted.
I. BACKGROUND
Ms. Martinez initiated this suit in Jefferson County District Court, Colorado on October 18, 2019. See Dkt. #1-1. She filed an Amended Complaint, the operative pleading, on December 23, 2019. See Dkt. #1-30; #9. Allstate timely removed the case to this District on March 3, 2020. Dkt. #1.
The following allegations are taken from Ms. Martinez's Amended Complaint. Relevant, well-pled allegations are accepted as true for the purposes of this motion.
Ms. Martinez, who was and is disabled, alleges that she was hit by a car driven by Donald Hernandez on January 22, 2014 while she was crossing a crosswalk in her electric scooter. She sustained numerous, serious injuries. She alleges that Hernandez was ticketed for driving without insurance. She contacted her insurer, Allstate, and an investigation was performed from March through July 2014. On July 24, 2014, Ms. Martinez was informed that her claim was being denied because she was not in an automobile when the accident occurred. She never heard from Allstate again. In October 2017, Ms. Martinez received settlement funds from American Family Insurance, which she alleges insured Hernandez at some point after the accident.
Ms. Martinez claims that Allstate refused to disclose the claim file to her and conspired with her “many lawyers” in denying her benefits. She also seems to allege that her insurance agent, Paul Novak, fraudulently induced her into reducing the limits on her UM/UIM coverage in 2011.
In terms of claims for relief, the Amended Complaint lists them as follows: “1) Bad Faith Claim C.R.S. 10-3-1115”; “2) Breach of Contract C.R.S. 10-3-1116”; “3) Fraud C.R.S. 18-5-211”; “4) Statues [sic] Limitation Laws C.R.S. 13-80-101 (n)Personal, property [sic]”; “5) Statues [sic] of Limitations For contracts C.R.S. 13-80-102”; and “6) Insurance fraud C.R.S. 8-5-211.” Dkt. #9 at 11, ¶¶ 1-6. Allstate has interpreted the Amended Complaint to assert claims for 1) breach of contract; 2) common law bad faith; 3) statutory bad faith under Colo. Rev. Stat. §§10-3-1115 and 10-3-1116; 4) negligence; 5) fraud; 6) civil conspiracy; and 7) breach of fiduciary duty. However, in her “Final Amend[ed] Response, ” Ms. Martinez states that Allstate “adds civil conspiracy and breach of fiduciary duty and tort and insurance fraud (see Dkt. #126 at 6), which implies that those claims are not contained in the Amended Complaint itself. Out of an abundance of caution, the Court will address the claims as listed by Allstate.
II. LEGAL STANDARDS
a. Pro se Plaintiff
Ms. Martinez is proceeding pro se. The Court, therefore, “review[s] [her] pleadings and other papers liberally and hold[s] them to a less stringent standard than those drafted by attorneys.” Trackwell v. United States, 472 F.3d 1242, 1243 (10th Cir. 2007) (citations omitted). However, a pro se litigant's “conclusory allegations without supporting factual averments are insufficient to state a claim upon which relief can be based.” Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). A court may not assume that a plaintiff can prove facts that have not been alleged, or that a defendant has violated laws in ways that a plaintiff has not alleged. Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). See also Whitney v. New Mexico, 113 F.3d 1170, 1173-74 (10th Cir. 1997) (court may not “supply additional factual allegations to round out a plaintiffs complaint”); Drake v. City of Fort Collins, 927 F.2d 1156, 1159 (10th Cir. 1991) (the court may not “construct arguments or theories for the plaintiff in the absence of any discussion of those issues”). A plaintiff's pro se status does not entitle her to an application of different rules. See Montoya v. Chao, 296 F.3d 952, 957 (10th Cir. 2002).
b. Motion for Judgment on the Pleadings
A motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) is evaluated under the same standard applicable to a Rule 12(b)(6) motion to dismiss. See Corder v. Lewis Palmer Sch. Dist. No. 38, 566 F.3d 1219, 1223-24 (10th Cir. 2009). Therefore, in ruling on a motion for judgment on the pleadings, courts look to the specific allegations of the complaint to determine whether they plausibly support a legal claim for relief-that is, a complaint must include “enough facts to state a claim for relief that is plausible on its face.” TON Servs., Inc. v. Qwest Corp., 493 F.3d 1225, 1236 (10th Cir. 2007); Alvarado v. KOB-TV, LLC, 493 F.3d 1210, 1215 (10th Cir. 2007). The Court accepts as true the well-pled factual allegations of the opposing party and draws all reasonable inferences in its favor. See Nelson v. State Farm Mut. Auto. Ins. Co., 419 F.3d 1117, 1119 (10th Cir. 2005).
Further, a “motion for a judgment on the pleadings only has utility when all material allegations of fact are admitted or not controverted in the pleadings and only questions of law remain to be decided by the district court.” 5C Charles Alan Wright et al., Federal Practice & Procedure § 1367 (3d ed., Apr. 2017 update); see also Park Univ. Enters., Inc. v. Am. Cas. Co., 442 F.3d 1239, 1244 (10th Cir. 2006) (“Judgment on the pleadings should not be granted unless the moving party clearly establishes that no material issue of fact remains to be resolved and the party is entitled to judgment as a matter of law.”). In ruling on a motion for judgment on the pleadings, the Court may consider the Complaint, any material that is attached to the Complaint, and the Answer. See Park Univ., 442 F.3d at 1244. Additionally, the Court may take judicial notice of state court documents. Denver Health & Hosp. Auth. v. Beverage Distrib. Co., LLC, 546 Fed.Appx. 742, 747 n.3 (10th Cir. 2013).
III. ANALYSIS
Allstate argues that Ms. Martinez's claims are either time-barred or not sufficiently supported by fact or law. The Court agrees.
A. Allstate's motion is timely.
The Court will first address Ms. Martinez's contention that Allstate's motion for judgment on the pleadings is untimely. She insists that it should have been filed within 21 days after Allstate was served with a summons and the Amended Complaint. Ms. Martinez is mistaken. Rule 12(c) states, “After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). Allstate filed its Answer on March 17, 2020. See Dkt. #16. Thus, the pleadings were closed when it filed the subject motion on September 1, 2020. No trial has been set. Accordingly, the Court finds the motion was timely filed.
B. Ms. Martinez fails to state a claim for fraud.
Under Colorado law, the prima facie elements of a fraud claim are “(1) a false representation of a material existing fact; (2) knowledge on the part of the one making the representation that it is false; (3) ignorance on the part of the one to whom the representation is made of the falsity; (4) representation made with intention that it be acted upon; (5) representation resulting in damage.” Kinsey v. Preeson, 746 P.2d 542, 550 (Colo. 1987). Rule 9(b) requires that “[f]or any claim alleging fraud, the circumstances constituting fraud or mistake must be stated with particularity.” In re Accelr8 Technology Corp. Securities Litigation, 147 F.Supp.2d 1049, 1054 (D. Colo. 2001) (citing Fed.R.Civ.P. 9(b)). Thus, a plaintiff in such a case must plead “the time, place, and contents of the false representation, the identity of the party making the false statements and the consequences thereof.” Koch v. Koch Indus., Inc., 203 F.3d 1202, 1236 (10th Cir. 2000). Rule 9(b)'s purpose is to afford defendants fair notice of a plaintiff's claims and the factual ground on which they are based. Id.
Ms. Martinez asserts that her former insurance agent coerced her into lowering her UM/UIM policy limits. However, Ms. Martinez concedes that the agent did not work for Allstate, and her conclusory allegations are insufficient to establish the existence of an agency relationship between the two. See Dkt. #9 at 9, ¶ 11 (“This is why Paul Novak is not being sued he is not All State [sic] but works under the guidelines of Allstate.”). Moreover, the Amended Complaint does not identify any false statement made by the agent. Ms. Martinez alleges that the agent recommended she sign the Colorado Uninsured Motorists Insurance-Bodily Injury Selection/Rejection Form (the “IUMIB Selection/Rejection Form”) because $50, 000.00 is all she would need in UM/UIM coverage. This may have been bad advice, but Ms. Martinez does allege that the agent knew it to be false. Nor does she adequately allege that the reduction in UM/UIM coverage has caused her actual damages because it is undisputed that Allstate determined that Ms. Martinez was not entitled to any UM/UIM benefits.
Even if Ms. Martinez's fraud claim is actionable, it should still be dismissed because it is barred by the statute of limitations. As an affirmative defense, the statute of limitations can be raised on a motion to dismiss only if the complaint itself plainly establishes the defense. ASARCO, LLC v. Union Pac. R.R Co.., 765 F.3d 999, 1004 (9th Cir. 2014). “If the basis for a defendant's Rule 12(c) motion is that the claim is precluded by an applicable statute of limitations, but there are material disputed facts that could undermine the statute of limitations defense, the motion should be denied.” In re Baker, No. 09-12997 T13, 2012 WL 4482123, at *3 (Bankr. D.N.M. Sept. 27, 2012). “A Rule 12(c) motion may be of particular value when the statute of limitations provides an effective bar to a party's claims and the entire controversy could be disposed of by a pretrial summary motion.” Hamilton v. Cunningham, 880 F.Supp. 1407, 1410 (D. Colo. 1995).
Under Colorado law, the statute of limitations for fraud is three years. Colo. Rev. Stat. § 13-80-101 (1)(c). A cause of action for fraud is considered to accrue on the date such fraud “is discovered or should have been discovered by the exercise of reasonable diligence.” Id. § 13-80-108(3). Ms. Martinez attached the IUMIB Selection/Rejection Form to her Amended Complaint. See Dkt. #9 at 14-15. It was signed on January 12, 2011. The accident at issue in this case took place January 22, 2014, and the driver who hit Ms. Martinez was given a ticket for not having insurance. Id. at 5, ¶ 2. Her cause of action for fraud relating to the reduction of her UM/UIM coverage, to the extent that it exists, accrued in March 2014, when Ms. Martinez made a UM/UIM claim. Id. at 6, ¶ 6. This lawsuit was not filed until October 2019, more than three years later. Thus, it is barred by the statute of limitations.
In her Amended Complaint, Ms. Martinez contends that all her claims, including fraud, accrued on October 23, 2017, the date reflected on an uncashed settlement check from American Family Insurance. See Dkt. #9 at 11, ¶ 102. This is not persuasive. Ms. Martinez's fraud claim accrued when she became aware, through reasonable diligence, that her UM/UIM coverage was less than the damages she suffered. She was aware of this in March 2014, when she made a claim on her UM/UIM policy with her insurer. When she received funds from Hernandez is immaterial to her knowledge of her own claim for fraud.
C. Ms. Martinez fails to state a claim for breach of fiduciary duty.
In Colorado, a claim for a breach of fiduciary duty has the following four elements: “(1) that the defendant was acting as a fiduciary of the plaintiff; (2) that the defendant breached a fiduciary duty to the plaintiff; (3) that the plaintiff incurred damages; and (4) that the defendant's breach of fiduciary duty was a cause of the plaintiff's damages.” Sewell v. Great N. Ins. Co., 535 F.3d 1166, 1172 (10th Cir. 2008) (citing Graphic Directions, Inc. v. Bush, 862 P.2d 1020, 1022 (Colo.App.1993)). However, under Colorado law, there no fiduciary or quasi-fiduciary relationship between an insured and insurer in a first-party context. Brodeur v. Am. Home Assurance Co ., 169 P.3d 139, 152 (Colo. 2007); see also Bailey v. Allstate Ins. Co., 844 P.2d 1336, 1339 (Colo.App. 1992) (“While there are circumstances . . . in which fiduciary-like duties may be placed on an insurer to benefit the insured, such situations do not arise in first-party disputes between the insurer and the insured.”). This claim should be dismissed.
D. Ms. Martinez's breach of contract claim is barred by the statute of limitations.
An insured who alleges a claim against an insurer based on a UM/UIM policy must file a claim within three years after the cause of action accrues. Colo. Rev. Stat. § 13-80-107.5(1)(a) and (b). A claim accrues “after both the existence of the death, injury, or damage giving rise to the claim and the cause of the death, injury, or damage are known or should have been known by the exercise of reasonable diligence.” Id. § 13-80-107.5(3). But a UM/UIM claim also may be considered as having been filed timely when the action is commenced within two years (a) after the insured knows that the particular tortfeasor is uninsured, or (b) after the insured “received payment in settlement or judgment on the underlying claim” if the tortfeasor is underinsured. Id. § 13-80-107.5(1)(a) and (b). However, this two-year extension of the statute of limitations arising from settlement requires actual receipt of payment from the tortfeasor within three years after the accident. Stoesz v. State Farm Mut. Auto. Ins. Co., 2015 COA 86, ¶ 10, 410 P.3d 583, 586.
Mr. Hernandez struck Ms. Martinez on January 22, 2014. It is unclear whether Hernandez was uninsured or underinsured. Given that Ms. Martinez alleges that he was given a ticket for not having insurance, it would appear that he was uninsured. If this was the case, Ms. Martinez was aware of this fact in March 2014, when she submitted the UM/UIM claim.
However, Ms. Martinez also alleges that she received a settlement check from American Family on behalf of Hernandez on October 23, 2017, which implies that he was underinsured, as opposed to uninsured. This does not change the Court's analysis, though, because Ms. Martinez did not receive the payment within the three years of the accident. Ms. Martinez is time-barred from seeking UM/UIM benefits from Allstate.
E. Ms. Martinez's common law and statutory bad faith claims are likewise barred.
Ms. Martinez's common law and statutory bad faith claims are torts subject to a two-year statute of limitations. See Olson v. State Farm Mut. Auto. Ins. Co ., 174 P.3d 849, 853 (Colo.App. 2007) (“All tort actions for bad faith must be commenced within two years after the cause of action accrues.”) (citing Colo. Rev. Stat. § 13-80-102(1)(a)). Ms. Martinez's claims accrued when she was denied coverage in July 2014. See Farmers Grp., Inc. v. Trimble, 691 P.2d 1138, 1142 (Colo. 1984) (bad faith tort claim accrues upon unreasonable failure to pay claim); Wardcraft Homes, Inc. v. Employers Mut. Cas. Co., 70 F.Supp.3d 1198, 1213 (D. Colo. 2014) (claims for violation of Color. Rev. State. §§ 10-3-1115 and 10-3-1116 accrue in the same manner as bad faith claims). Accordingly, the statute of limitations expired in July 2017, well before this case was filed.
Ms. Martinez asserts that she did not receive the July 24, 2014 letter sent by Allstate to American Family Insurance until it was disclosed in 2020. See Dkt. #117 at 5, 9; #126 at 5-6, 12-13. In addition to being patently untrue (the letter was attached to the Amended Complaint, which Ms. Martinez filed on December 23, 2019), Ms. Martinez's argument is beside the point. She affirmatively states in her Amended Complaint that in “July 2014 I received a call from [Allstate representative] Ms. Reyes and she said they were den[y]ing my claim and not paying a dime because I was NOT in my automobile.” Dkt. #9 at 6, ¶ 6. Whether or not she was aware of the Allstate letter, it undisputed that Allstate told Ms. Martinez in 2014 that her claim was denied. Therefore, her bad faith claims are untimely.
F. Ms. Martinez's negligence claim is not legally cognizable.
To the extent that Ms. Martinez's Amended Complaint can be construed to assert a common law negligence claim against Allstate, that claim must be dismissed. The assertion of separate and distinct claims for bad faith and negligence is inappropriate in light of the reasonableness test for bad faith. Bankr. Estate of Morris v. COPIC Ins. Co., 192 P.3d 519, 528 (Colo.App. 2008) (citing Trimble, 691 P.2d at 1142-43). Ms. Martinez has not identified an exception to the general rule that 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. Ct. App. 1993).
G. Ms. Martinez fails to state a claim for civil conspiracy.
To state a claim for civil conspiracy under Colorado law, a plaintiff must allege: “(1) two or more persons, and for this purpose a corporation is a person; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful overt acts; and (5) damages as the proximate result thereof.” In re Qwest Commc'ns Int'l, Inc. Sec. Litigation, 387 F.Supp.2d 1130, 1153 (D. Colo. 2005) (citation omitted). A plaintiff must “allege specific facts showing agreement and concerted action among defendants.” Durre v. Dempsey, 869 F.2d 543, 545 (10th Cir. 1989); see also Nelson v. Elway, 908 P.2d 102, 106 (Colo. 1995) (noting that “evidence of . . . an agreement [to form a conspiracy] must be presented by the plaintiff”).
“If the acts alleged to constitute the underlying wrong provide no cause of action, then there is no cause of action for the conspiracy itself.” Double Oak Const., L.L.C. v. Cornerstone Dev. Int'l, L.L.C., 97 P.3d 140, 146 (Colo.App. 2003). As discussed above, Ms. Martinez has not stated an independent cause of action against Allstate. Insofar as Ms. Martinez alleges that her “many lawyers” conspired with Allstate, she does not identify those lawyers or the specific agreement(s) they came to with Allstate. She does not identify the unnamed conspirators' ultimate goals; it is unclear why any plaintiff's attorney would collude with an insurance company to deny his or her client's claim. Ms. Martinez fails to allege any overt unlawful acts in furtherance of the conspiracy. And without alleging in the first instance the existence of any conspiracy, Ms. Martinez obviously cannot make the requisite showing that she suffered any damages as a result thereof. Therefore, this claim fails as a matter of law.
IV. RECOMMENDATION
WHEREFORE, for the foregoing reasons, it is hereby RECOMMENDED that Defendants' Motion for Judgment on the Pleadings (Dkt. #67) be GRANTED.
NOTICE: Pursuant to 28 U.S.C. § 636(b)(1)(C) and Fed.R.Civ.P. 72(b)(2), the parties have fourteen (14) days after service of this recommendation to serve and file specific written objections to the above recommendation with the District Judge assigned to the case. A party may respond to another party's objections within fourteen (14) days after being served with a copy. The District Judge need not consider frivolous, conclusive, or general objections. A party's failure to file and serve such written, specific objections waives de novo review of the recommendation by the District Judge, Thomas v. Arn, 474 U.S. 140, 148-53 (1985), and also waives appellate review of both factual and legal questions. Makin v. Colo. Dep't of Corrections, 183 F.3d 1205, 1210 (10th Cir. 1999); Talley v. Hesse, 91 F.3d 1411, 1412-13 (10th Cir. 1996).