Opinion
Civil Action 23-cv-00636-CNS-STV
08-13-2024
ACQUEST HOLDINGS FC, LLC; ALLIED WORLD ASSURANCE COMPANY; ACE AMERICAN INSURANCE COMPANY; CERTAIN UNDERWRITERS AT LLOYD'S subscribing to Policy of Insurance 20CVSSPNP3020111; ENDURANCE AMERICAN SPECIALTY INSURANCE COMPANY; EVEREST INDEMNITY INSURANCE COMPANY; AIG SPECIALTY INSURANCE COMPANY; and ZURICH AMERICAN INSURANCE COMPANY, Plaintiffs, v. JOHNSON CONTROLS, INC., Defendant.
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
SCOTT T. VARHOLAK, MAGISTRATE JUDGE
This matter is before the Court on Plaintiffs' Motion to Strike Defendant Johnson Controls, Inc.'s Designation of Nonparties at Fault (the “Motion”) [#66], which has been referred to this Court [#67]. The Court has carefully considered the Motion and related briefing, arguments made at the February 14, 2024 hearing, the entire case file, and the applicable case law. For the following reasons, the Court respectfully RECOMMENDS that the Motion be GRANTED.
Magistrate Judges in this District have proceeded by Order rather than Recommendation when considering motions to strike that are not dispositive of any party's claim or defense. See Est. of Hurtado v. Smith, No. 20-CV-03505-DDD-NYW, 2022 WL 2439088, at *1 n.1 (D. Colo. July 5, 2022). This Court recognizes that its conclusion regarding the applicability of the procedures provided by Colo. Rev. Stat. §
I. BACKGROUND
This case arises out of a flood which occurred when a valve in a fire protection system failed, causing the release of a significant amount of water into the basement of a building leased by the National Wildlife Research Center. [See generally #3] Plaintiffs, the owner of the building and its insurers, allege that on February 4, 2019, Plaintiff Acquest Holdings FL, LLC (“Acquest”) and Defendant entered into a Service Agreement, Contract No. 276212 (the “Contract”), whereby Defendant contracted to perform “preventative Chiller maintenance, inspection, and other services” at the building owned by Acquest and located at 4101 La Porte Avenue, Fort Collins, Colorado, 80521 (the “Subject Property”). [#3 at ¶¶ 1, 12] On August 25, 2020, pursuant to the Contract, Acquest issued a Request For Services Purchase Order No. 10927167 (the “Purchase Order”) to Defendant for the replacement of the main domestic water tee coming into the Subject Property that divides the flow of water coming into the Subject Property to different service lines. [Id. at ¶ 13]
The Complaint alleges that while Defendant was replacing the main domestic water tee in late August or early September of 2020, it did not ensure that a fire protection system valve directly downstream from the new replacement tee it installed remained properly seated on its support stands. [Id. at ¶ 14] And, approximately six months later, on February 15, 2021, the fire protection system valve directly downstream from the replacement tee installed by Defendant failed, resulting in the release of a significant amount of water into the basement of the Subject Property. [Id. at ¶ 15] As a result of 13-21-111.5 could be understood as dispositive as to an affirmative defense asserted under that Section. The Court therefore proceeds by Recommendation. the valve failure and resulting flood, mechanical and other equipment in the basement of the Subject Property sustained substantial damages in excess of $11 million. [Id. at ¶ 17]
On February 8, 2023, Plaintiffs initiated this action. [#3] In the Complaint, Plaintiffs originally asserted two counts against Defendant: negligence and breach of contract. [Id. at ¶¶ 19-27] But, on August 22, 2023, United States District Judge Charlotte N. Sweeney dismissed the negligence count pursuant to the economic loss doctrine. [#52]
On September 20, 2024, Defendant filed a Designation of Nonparties at Fault (the “Designation”), giving notice pursuant to Colo. Rev. Stat. § 13-21-111.5(3)(b) that they intend to assert that two entities, Innovative Mechanical & Design, Inc. (“Innovative”) and Fire Alarm Services, Inc. (“Fire Alarm”), were wholly or partially responsible for Plaintiffs' alleged injuries. [#56] On December 26, 2023, Plaintiffs filed the Motion which seeks to strike the Designation. [#66] Defendant has responded [#79] and Plaintiffs have replied [#84]. On February 14, 2024, this Court held oral argument on the Motion. [#85]
II. ANALYSIS
Plaintiffs are asking the Court to strike Defendant's Designation of Innovative Mechanical & Design, Inc. and Fire Alarm Services, Inc. as nonparty defendants. [#66] In evaluating Plaintiffs' request, the Court will determine whether: (1) the Designation is sufficient, and (2) Defendant can designate nonparty defendants in an action based on a breach of contract claim. The Court's jurisdiction in this matter is based on diversity of citizenship under 28 U.S.C. § 1332(a) and, therefore, the Court applies the substantive law of Colorado. See Etherton v. Owners Ins. Co., 829 F.3d 1209, 1223 (10th Cir. 2016). Several decisions from the District of Colorado have found that Colorado's Pro Rata Liability Statute, Colo. Rev. Stat. § 13-21-111.5 (“Section 13-21-111.5”), is substantive in nature and applied it as such, and the parties do not dispute the statute's applicability. See Resolution Trust Corp. v. Deloitte & Touche, 818 F.Supp. 1406, 1408 (D. Colo. 1993); Avalon Condo. Ass'n, Inc., v. Secura Ins., No. 14-cv-00200-CMA-KMT, 2014 WL 3631760, at *2 (D. Colo. July 23, 2014).
A. Sufficiency of Designation
A defendant may designate nonparties pursuant to Section 13-21-111.5. The designation of nonparties at fault ensures that parties found liable will not be responsible for more than their fair share of damages. See Stone v. Satriana, 41 P.3d 705, 708-09 (Colo. 2002). This statute requires a defendant to give notice by filing a pleading “designating such nonparty and setting forth such nonparty's name and last-known address, or the best identification of such nonparty which is possible under the circumstances, together with a brief statement of the basis for believing such nonparty to be at fault.” § 13-21-111.5(3)(b). To satisfy this requirement, the defendant must establish: (1) the nonparty's name; (2) the nonparty's last-known address; and (3) a brief statement of the basis for the nonparty's fault. See Redden v. SCI Colo. Funeral Servs., Inc., 38 P.3d 75, 80 (Colo. 2001).
Courts should construe the nonparty designation requirements strictly to avoid the attribution of liability by a defendant to a nonparty from whom the plaintiff cannot recover. See id. “[Section 13-21-111.5(3)(b)] is clear that a non-party designation is reserved for individuals or entities who might themselves be at fault and therefore liable for the injury at issue.” Id. at 81. Although the nonparty designation need not prove the nonparty's fault or negligence, the designation must “go beyond bald allegation” and connect alleged facts with the established elements of negligence. Id. And “[i]n order to establish a prima facie case for negligence, a plaintiff must show a legal duty of care on the defendant's part, breach of that duty, injury to the plaintiff, and causation.” Health ONE v. Rodriquez ex rel. Rodriquez, 50 P.3d 879, 888 (Colo. 2002).
Upon review of the Designation, the Court finds it is sufficient. The Designation provides the nonparties' names and last known addresses. [#56 at 1, 2] Thus, the first two requirements are satisfied, and Plaintiff has not challenged either of these first two requirements. [#66]
Regarding the brief statement requirement, at this early stage of the proceedings (as opposed to on summary judgment or at trial), “Defendant[ ] need not produce evidence of the claim or prove negligence; to designate a nonparty, Defendant[ ] need[s] to provide only sufficient support for [its] belief of nonparty negligence.” McGraw v. Cobra Trucking Inc., No. 20-CV-01032-NYW, 2020 WL 7230637, at *3 (D. Colo. Dec. 8, 2020) (quoting Larrieu v. Best Buy Stores, L.P., No. 10-CV-01883-CMA-BNB, 2013 WL 4838912, at *2 (D. Colo. Sept. 9, 2013)). Here, Plaintiffs previously conceded that the contractual duty between Acquest and Defendant is “identical to the common-law tort duty.” [#52 at 3-4] Defendant argues in its Designation and at oral argument that the nonparties-who are responsible for replacement of the mechanical tee and for performing sprinkler testing, inspection and maintenance of the wet sprinkler system at the Subject Property-would owe the exact same common law duty to Plaintiffs allegedly owed by Defendant. [#56 at 1-2]; Feb. 14, 2024 Oral Argument at 9:31- 9:35. This premise is arguably supported by Colorado case law, where courts have found a common law duty of care exists between subcontractors and third parties for negligent construction, installation, or repair, even after completion of the contract. See A.C. Excavating v. Yacht Club II Homeowners Ass'n., 114 P.3d 862, 870 (Colo. 2005) (“subcontractors owe homeowners a duty of care, independent of any contractual obligations, to act without negligence in the construction of homes”); see also Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041, 1044-45 (Colo.1983) (builder or contractor is held to a standard of reasonable care to foreseeable future users of the property for defects in workmanship and construction); Metro. Gas Repair Serv., Inc. v. Kulik, 621 P.2d 313, 318 (Colo. 1980) (involving the duty of a heating contractor to exercise reasonable care and skill in the installation of a new part in a heating system and holding that Metropolitan's contractual relationship gave rise to a common law duty to perform its work with reasonable care and skill); Lembke Plumbing and Heating v. Hayutin, 366 P.2d 673, 673-78 (Colo. 1961) (addressing negligence claims concerning the failure of a plumbing contractor to exercise reasonable care and skill in the installation of a plumbing system in a new house); Johnson v. Graham, 679 P.2d 1090, 1094 (Colo. App., Div. I., 1983) (“[a] building contractor is under a common law duty to exercise reasonable care and skill in the construction of the building,” and “[a] negligence claim is not contingent upon privity of contract”), rev'd in part on other grounds, Tri-Aspen Constr. Co. v. Johnson, 714 P.2d 484 (Colo. 1986). Accordingly, the Court “cannot conclude, at this early stage of the proceedings, that the existence of a duty . . . on the part of [the nonparties] is foreclosed.” McGraw, 2020 WL 7230637, at *4 (quotation omitted). The Designation also indicates how the nonparties may have breached that duty. [#56 at 2 (“To the extent the replacement of the mechanical tee caused or contributed to Plaintiffs' damages as alleged, which Defendant denies, Innovative Mechanical may have breached that duty, and thereby the subcontract”); id. (“Plaintiffs allege that a fire suppression valve, within the scope of Fire Services' inspection obligations, was unseated in August or September of 2020”)] Finally, the designation asserts that both nonparties were potentially responsible for the injury at issue-flood damage caused by the condition of the valve. [#56 at 1-2] The Court thus finds that Defendant's Designation sets forth allegations sufficient to support a prima facie cause of negligence under Colorado law; indeed, Plaintiffs do not contest the sufficiency of the designation. [See generally #66]; Fourhorn v. City & Cty. of Denver, No. 08-cv-01693-MSK-KLM, 2008 WL 5423349, at *3 (D. Colo. Dec. 30, 2008) (“Courts from our district have recognized that a designation may be proper if it minimally sets forth facts sufficient to permit a plaintiff to identify the transaction or occurrence which purportedly leads to the nonparty's fault” (quotation omitted)).
B. Designation of Nonparty Defendants in Contract Disputes
Plaintiffs argue that the Designation should be stricken because Colorado law does not permit the designation of nonparty defendants in contract disputes. [#66 at 2] Defendant contends that a federal line of cases addressing the designation of nonparty defendants carves out an exception to the general rule prohibiting the designation of nonparty defendants in contract disputes. [#79 at 9-12] Because the Colorado Supreme Court has not addressed the issue Defendant raises, this Court must predict how that court would decide the issue. BonBeck Parker, LLC v. Travelers Indem. Co. of Am., 14 F.4th 1169, 1176 (10th Cir. 2021); see also Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). In its inquiry the Court may consider all resources available, including decisions of Colorado, other states, and federal decisions, and the general weight and trend of authority. Stuart v. Colorado Interstate Gas Co., 271 F.3d 1221, 1228 (10th Cir. 2001).
Defendant relies on Federal Deposit Insurance Corporation v. Clark, 978 F.2d 1541 (10th Cir. 1992) and Sterling Construction Management, LLC v. Steadfast Insurance Company, No. 09-cv-02224-MSK-MJW, 2011 WL 3903074 (D. Colo. Sept. 6, 2011) for the proposition that when contract claims are nothing more than “tort claims [ ] in a contractual wrapper,” Section 13-21-111.5 allows the designation of nonparty defendants. [#79 at 9-11] In Clark, the plaintiff brought claims under “Colorado state law for professional negligence and/or for breach of an implied warranty of professional capacity and ability.” 978 F.2d at 1543 (emphasis added). The basis for these claims was that the defendants-two attorneys and a law firm-negligently failed to uncover and prevent fraud perpetrated by third parties. Id. at 1545-46. Specifically, the plaintiff alleged the breach of four duties owed by the defendants: “first, to exercise independent judgment without compromising loyalties of joint representation; second, a duty to investigate allegations of fraudulent activities; third, a duty to fully disclose the allegations of fraud to the board of directors; and fourth, a duty to advise the board.” Id. at 1546. The plaintiff argued that its claim for breach of implied warranty was a contract claim and, thus, was not subject to Section 13-21-111.5. Id. at 1551-52. The district court disagreed, holding that the professional negligence and breach of implied warranty claims should be merged into one hybrid tort claim for malpractice. Id. On appeal, the Tenth Circuit affirmed. Id. at 1554. The Tenth Circuit reasoned that the district court's decision was consistent with the Colorado Pattern Jury Instructions and the jury's findings that the defendants were negligent in their professional duties to the plaintiff and that the defendants' negligence was the cause of the loss. Id. The claims in Clark were simply unwrapped tort claims- there was no discussion of an overarching contractual agreement because the claims in Clark were malpractice claims. The focus on the defendants' negligence, the duties the defendants owed to the plaintiff, and the district court's holding that this was a tort claim all buttress the conclusion that the claims at issue were tortious. In fact, the district court rejected the contention that “attorney malpractice sounds in contract” because the plaintiff failed to cite to any authority supporting that proposition. Id. Thus, this Court does not read Clark as standing for the proposition that Section 13-21-111.5 applies to any contract claim that includes an element of negligence.
Even if Clark did so hold, the Court is not bound by Clark given the intervening state court authority discussed below. “A district court considering a state law issue after the publication of a Tenth Circuit opinion on point may not come to a contrary conclusion based only on state court cases available to and considered by the Tenth Circuit, but it may come to such a conclusion based on intervening state court cases.” Anderson Living Tr. v. WPX Energy Prod., LLC, 306 F.R.D. 312, 433 n.77 (D.N.M. 2015) (emphasis in original), adhered to on reconsideration, 312 F.R.D. 620 (D.N.M. 2015).
Another court in this District applied Clark in Sterling when it was addressing a breach of contract claim. 2011 WL 3903074, at *6. There, Overland Pass Pipeline Company (“Overland”) contracted with the plaintiff to construct a pipeline. Id. at *1. The plaintiff, acting as a general contractor, subcontracted with Willbros Engineers, Inc. (“Willbros”) to perform construction design services and with the defendant to perform horizontal drilling in accordance with Willbros' designs. Id. While the defendant was performing drilling, the drilling ruptured an irrigation canal causing damage to the canal and nearby properties. Id. The plaintiff indemnified Overland for the damage. Id. The plaintiff then brought suit against the defendant, seeking indemnification. Id. The defendant sought to name Willbros as a nonparty at fault pursuant to Section 13-21111.5. Id. at *5. The Sterling court found that the designation was appropriate. Id. at *6. Relying on Clark, the court reasoned that the “‘contract' claims [] were merely tort claims in a contractual wrapper.” Id. As a result, the court found that Willbros could be designated. Id.
In applying Colorado law, these federal opinions applied an interpretation of Section 13-21-111.5 in the absence of more specific guidance from state courts. Several years after the Tenth Circuit decided Clark, the Colorado Supreme Court provided its interpretation of several relevant portions of Section 13-21-111.5 in Resolution Trust Corp. v. Heiserman, 898 P.2d 1049, 1055 (Colo. 1995). Then, approximately one year after the United States District Court for the District of Colorado decided Sterling, the state's intermediate court issued an opinion, which specifically foreclosed the applicability of Section 13-21-111.5 in actions based on contract claims. See Core-Mark Midcontinent, Incorporated v. Sonitrol Corporation, 300 P.3d 963, 975-76 (Colo.App. 2012). Because these two cases impact this Court's prediction as to how the Colorado Supreme Court would decide the issue of Section 13-21-111.5's applicability to Plaintiff's contract claim, the Court analyzes these cases below.
In Resolution Trust Corp., the Supreme Court interpreted the term “tortious act” in Section 13-21-111.5(4) to include “any conduct other than breach of contract that constitutes a civil wrong and causes injury or damages.” 898 P.2d at 1055 (emphasis added). The Court also concluded that the phrase “negligence or fault,” which appears in subsection (1), is synonymous with the phrase “tortious act.” Id. at 1056 (“defendants assert[ ] that because the phrase ‘negligence or fault' appears in section 13-21-111.5 nine times but the term ‘tortious act' appears once in section 13-21-111.5(4), the term ‘tortious act' must mean something other than the phrase ‘negligence or fault.' We disagree.”) Core-Mark relied on this interpretation in holding that Section 13-21-111.5 does not apply to claims for breach of contract. In Core-Mark, the Colorado Court of Appeals decided whether an alarm company could designate a burglar who set fire to a warehouse as a nonparty defendant with respect to breach of contract claims. 300 P.3d at 966-67. The Court of Appeals agreed with the district court's conclusion that Section 13-21-111.5(4)'s reference to a “‘tortious act' indicates that the section permits apportionment of liability only to a nonparty at fault in a tort action.” Id. at 975. This conclusion was based largely on the Colorado Supreme Court's prior interpretation of the term “tortious act” in Section 13-21-111.5(4). Id. at 976. Subsequent opinions from the Colorado Court of Appeals have followed Core-Mark. See Taylor Morrison of Colo., Inc., v. Bemas Constr., Inc., 411 P.3d 72, 80 (Colo.App. 2014) (“[The plaintiff's] breach of contract claim against [the defendant] was not subject to allocation of damages based on the comparative fault of the parties.”); Just in Case Bus. Lighthouse, LLC v. Murray, 383 P.3d 1, 16 (Colo.App. 2013) (“[Section 13-21-111.5(3)] applies to ‘any conduct other than a breach of contract that constitutes a civil wrong and causes injury or damages.'” (quoting Core-Mark, 300 P.3d at 976)), aff'd in part, rev'd in part on other grounds, 374 P.3d 443 (Colo. 2016). Indeed, as recently as 2023, a division of the Colorado Court of Appeals reiterated that Section 13-21-111.5 does not apply to breach of contract claims. Heights Healthcare Co., LLC v. BCER Eng'g, Inc., 534 P.3d 939, 946-47 (Colo.App. 2023). And this Court is mindful of the fact that, “when [it] appl[ies] state law, [it must] follow the opinions of an intermediate state appellate court unless ‘convinced by other persuasive data that the highest court of the state would decide otherwise.'” Evanston Ins. Co. v. L. Off. of Michael P. Medved, P.C., 890 F.3d 1195, 1200 (10th Cir. 2018) (quoting Dullmaier v. Xanterra Parks & Resorts, 883 F.3d 1278, 1283-84 (10th Cir. 2018)); Sports Unlimited, Inc. v. Lankford Enterprises, Inc., 275 F.3d 996, 1000-01 (10th Cir. 2002) (Intermediate appellate decisions are “a datum for ascertaining state law which is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise” (quoting West v. Am. Tel. & Tel. Co., 311 U.S. 223, 236-37 (1940))).
This Court is not convinced that the Colorado Supreme Court would reject the approach set out in Core-Mark and followed by every division of the Colorado Court of Appeals to consider the issue. Sterling does not appear to have shaped Colorado law to any discernable degree or to have been ratified as a proper interpretation: no Colorado court has cited it, although the state courts must be aware of it. And while several courts in this District have recognized the Sterling Court's interpretation of Section 13-21-111.5, none of them has actually applied that interpretation, permitting application of Section 1321-111.5 to a breach of contract claim. See e.g., Great N. Ins. Co. v. NGL Warehouse, LLC, No. 14-CV-03233-PAB-STV, 2016 WL 11691175, at *4-5 (D. Colo. Dec. 9, 2016) (discussing Sterling, yet striking designation in an action based on a contract claim); Avalon Condo. Ass'n, Inc. v. Secura Ins., No. 14-CV-00200-CMA-KMT, 2014 WL 3631760, at *2 (D. Colo. July 23, 2014) (“Defendant's nonparty designation cannot apply to Plaintiff's breach of contract claim”); Phoenix Ins. Co. v. Trinity Universal Ins. Co. of Kansas, No. 12-CV-01553-REB-KLM, 2013 WL 4510304, at *4 (D. Colo. Aug. 26, 2013) (finding that claims for equitable subordination, equitable contribution, and declaratory relief related to contract claims to which Section 13-21-111.5 does not apply). These cases do not provide persuasive data that the Colorado Supreme Court would decline to follow Core-Mark. Moreover, the Court finds it persuasive that Core-Mark's holding is espoused by the Colorado Supreme Court's Committee on Civil Jury Instructions, whose Notes on Use for Pattern Instruction 9:29, addressing cases in which there are one or more defendants and/or multiple designated non-parties affirms that “Section 13-21111.5 is limited to tort claims and therefore does not apply to contract-based claims.” Colo. Pattern Jury Inst. Civ. 9:29, Note on Use No. 8. (2023).
As another district in this Circuit has explained:
[In weighing] Tenth Circuit case law against more-recent state court decisions, [the Court must choose] a point on the spectrum between the two extremes: rigidly adhering to Tenth Circuit precedent unless there is intervening case law directly on point from the state's highest court, on one end; and independently interpreting the state law, regarding the Tenth Circuit precedent as persuasive authority, on the other. In striking this balance, the Court notes that it is generally more concerned about systemic inconsistency between the federal courts and the state courts than it is about inconsistency among federal judges. Judges, even those within a jurisdiction with ostensibly identical governing law, sometimes interpret and apply the law differently from one another; this inconsistency is part and parcel of a common-law judicial system.... Systemic inconsistency between the federal courts and state courts, on the other hand, not only threatens the principles of federalism, but litigants may more easily manipulate the inconsistency. When the Tenth Circuit issues an opinion interpreting state law . . . and the state courts subsequently shift away from that interpretation, litigants-if the district courts strictly adhere to the Tenth Circuit opinion-have a definite substantive advantage in choosing the federal forum over the state forum, or vice versa.
The Court further notes that district courts may be in better position than the Tenth Circuit to be responsive to changes in state law. Tenth Circuit decisions interpreting a particular state's law on a specific issue are further apart in time than the collective district courts' are. More importantly, the Tenth Circuit does not typically address such issues with the frequency that the state's courts themselves do. As such, Tenth Circuit precedent can lag behind developments in state law-developments that the district courts may be nimble enough to perceive and adopt.Anderson Living Tr., 306 F.R.D. at 433 n.77.
Policy considerations also compel this Court to conclude that comparative fault plays no part in contract disputes. Contract law “is intended to enforce the expectancy interests created by the parties' promises so that the parties can allocate risks and costs while bargaining.” Trs. of Colo. Laborers' Health & Welfare Tr. Fund v. Am. Ben. Plan Adm'rs, Inc., No. 04-CV-02630-EWN-OES, 2005 WL 1661079, at *2 (D. Colo. July 14, 2005). The law serves to encourage parties to bargain accordingly without fear that unanticipated liability may arise in the future, effectively negating the parties' efforts to build these cost considerations into the contract. See Brooktree Vill. Homeowners Assn, Inc. v. Brooktree Vill., LLC, 479 P.3d 86, 98 (Colo.App. 2020) (finding award for breach of contract claim cannot be reduced based on principles of comparative fault); Fidelity & Deposit Co. of Maryland v. Bondwriter Sw., Inc., 263 P.3d 633, 637 (Ariz.Ct.App. 2011) (comparative fault statute did not authorize apportionment of damages on contract claim); Lesmeister v. Dilly, 330 N.W.2d 95, 101 (Minn. 1983) (“[C]ontract law has never spoken in terms of fault; the contract measure of damages generally is based on recovery of the expectancy or benefit of the bargain.”). Allowing parties to reduce their bargained-for contractual responsibilities by pushing liability onto nonparties to the contract-at the expense of other parties to the contract-seriously diminishes these contractual expectations.
Of course, in this case, nothing prohibits Defendant from seeking indemnification from Innovative and Fire Alarm. Indeed, Defendant has a subcontractor contractual relationship with Innovative. [#56 at 1-2]
Ultimately, if a distinction is to be drawn, for purposes of Section 13-21-111.5, between contract claims and contract claims that involve “tort-like duties,” “that decision is [the Colorado Supreme Court's] decision to make, not [the federal courts].” Espinoza v. Ark. Valley Adventures, LLC, 809 F.3d 1150, 1153 (10th Cir. 2016). “[I]t is not our place to expand [Colorado] state law beyond the bounds set by the [Colorado] Supreme Court.” Belnap v. Iasis Healthcare, 844 F.3d 1272, 1295 (10th Cir. 2017) (quotation omitted). Rather, our job is to “follow the most recent decisions of the state's highest court.” Wade v. EMCASCO Ins. Co., 483 F.3d 657, 665-66 (10th Cir. 2007). “[A]ny further development of the law on this point” is properly reserved for Colorado authorities. Russo v. Ballard Med. Prod., 550 F.3d 1004, 1023 (10th Cir. 2008). To be sure, the Colorado Supreme Court may decide, when faced with the question, that Section 13-21-111.5 allows the designation of non-party defendants in contract claims that involve “tort-like duties.” But, “[a]bsent a strong showing to the contrary, [this Court is] disinclined to predict that the [Colorado] Supreme Court would recognize” such a distinction. Belnap, 844 F.3d at 1295.
For the foregoing reasons, this Court concludes that Section 13-21-111.5 does not apply to breach of contract claims.
III. CONCLUSION
Accordingly, for the reasons stated above, the Court respectfully RECOMMENDS that Plaintiffs' Motion to Strike [#66] be GRANTED and that Defendant's Designation of Nonparties at Fault [#56] be STRICKEN.
Within fourteen days after service of a copy of this Recommendation, any party may serve and file written objections to the magistrate judge's proposed findings of fact, legal conclusions, and recommendations with the Clerk of the United States District Court for the District of Colorado. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); Griego v. Padilla (In re Griego), 64 F.3d 580, 583 (10th Cir. 1995). A general objection that does not put the district court on notice of the basis for the objection will not preserve the objection for de novo review. “[A] party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review.” United States v. 2121 East 30th Street, 73 F.3d 1057, 1060 (10th Cir. 1996). Failure to make timely objections may bar de novo review by the district judge of the magistrate judge's proposed findings of fact, legal conclusions, and recommendations and will result in a waiver of the right to appeal from a judgment of the district court based on the proposed findings of fact, legal conclusions, and recommendations of the magistrate judge. See Vega v. Suthers, 195 F.3d 573, 57980 (10th Cir. 1999) (holding that the district court's decision to review magistrate judge's recommendation de novo despite lack of an objection does not preclude application of “firm waiver rule”); Int'l Surplus Lines Ins. Co. v. Wyo. Coal Refining Sys., Inc., 52 F.3d 901, 904 (10th Cir. 1995) (finding that cross-claimant waived right to appeal certain portions of magistrate judge's order by failing to object to those portions); Ayala v. United States, 980 F.2d 1342, 1352 (10th Cir. 1992) (finding that plaintiffs waived their right to appeal the magistrate judge's ruling by failing to file objections). But see, Morales-Fernandez v. INS, 418 F.3d 1116, 1122 (10th Cir. 2005) (holding that firm waiver rule does not apply when the interests of justice require review).