Free Motion for Reconsideration - District Court of Colorado - Colorado

Case 1:04-cv-01876-RPM

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IN THE UNITED STATES DISTRICT COURT FOR THE STATE OF COLORADO

04-cv-01876-RPM-CBS

KIRK WARREN, Plaintiff, v. AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA, a Florida insurance company, Defendant.

PLAINTIFF'S MOTION FOR RECONSIDERATION OF ORDER OF DISMISSAL FOR LACK OF SUBJECT MATTER JURISDICTION

Plaintiff Kirk Warren, by and through his attorneys of record, The Carey Law Firm, moves for reconsideration of the court's Order of Dismissal for Lack of Subject Matter Jurisdiction, pursuant to Fed. R. Civ. P. 60, as follows: I. INTRODUCTION

At all times pertinent, Plaintiff Kirk Warren resided with his wife Karen Warren, his brother-in-law Lewey Thomas, and his mother-in-law Lonetta Askew. Karen Warren, Lewey Thomas and Lonetta Askew each held an automobile insurance policy with Defendant American Bankers; thus, Kirk Warren qualifies as a "resident relative" under those insurance policies, and has personal injury protection ("PIP") coverage for any personal injuries arising out of the use or operation of a motor vehicle. See Ex. C, to Plaintiff's Mot for Summ. J.; Colo. Rev. Stat. § 10-4707 ("The coverages shall be applicable to: ... (b) Accidental bodily injury sustained by a relative

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of the named insured... if the relative at the time of the accident is a resident in the household of the named insured..."). On September 29, 2002, Kirk Warren was riding as a passenger in his brother Kurt Warren's Chevrolet Suburban when the vehicle hit black ice, slid off the highway and rolled over. On the date of the accident, Kurt Warren, the owner of the vehicle, held an automobile insurance policy with Liberty Mutual Fire Insurance Company. Ex. 1, Liberty Mutual Fire Ins. Co. Declaration Page. Kirk Warren became an insured of Liberty Mutual Fire Ins. Co. since he was a passenger in the vehicle at the time of the accident, pursuant to Colo. Rev. Stat. § 10-4707(c) ("The coverages shall be applicable to: (c) Accidental bodily injury arising out of accidents occurring within this state sustained by any other person while occupying the described motor vehicle..."). The Liberty Mutual policy is the primary policy. "When a person injured is also an insured under a complying policy other than the complying policy insuring the vehicle out of the use of which the accident arose, primary coverage shall be afforded by the policy insuring said vehicle..." Colo. Rev. Stat. § 10-4-707(3). Plaintiff applied for PIP benefits under the Liberty Mutual Fire Ins. Co. policy for losses sustained as a result of the subject accident. Liberty Mutual extended basic PIP benefits only to Plaintiff, and those PIP benefits were exhausted on April 16, 2003. Ex. 2, letter from Liberty Mutual, dated June 10, 2003. Plaintiff then requested PIP coverage under the American Bankers policies held by his family members. Defendant American Bankers denied coverage, for various reasons, under all three of those policies.

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Plaintiff submitted a claim for liability coverage under his brother's Liberty Mutual policy. Liberty Mutual paid the policy limit of $25,000. Plaintiff then submitted a claim for underinsured motorist coverage to American Bankers, and that claim was denied. Am. Compl. ¶¶ 2(c)-(e), 13-16, 24-27, 39-42, 50-56, 62-64, 78, 84-85; Answer to Am. Compl., ¶¶ 7-8. On May 31, 2005, Plaintiff filed his Amended Complaint in this action. In that Amended Complaint, Plaintiff brought claims based upon Defendant's failure to offer the statutorilyrequired enhanced PIP coverage, and also claims based upon Defendant's failure to offer the statutorily required UM/UIM coverages. With regard to the enhanced PIP coverage, Plaintiff brought claims for declaratory relief, breach of insurance contract, willful and wanton statutory bad faith, breach of the implied covenant of good faith and fair dealing, common law bad faith and violation of the Colorado Consumer Protection Act. With regard to the UM/UIM coverage, Plaintiff brought claims for declaratory relief, breach of insurance contract, breach of the implied covenant of good faith and fair dealing, common law bad faith and violation of the Colorado Consumer Protection Act. On May 18, 2006, the Colorado Court of Appeals issued its ruling in DiCocco v. National Gen. Ins. Co., ___ P.3d ___, 2006 Colo. App. LEXIS 698 (2006), pertaining to primary and excess PIP coverage. Id. at *2. The court held, in an enhanced PIP case, that damages claims against excess insurers are not ripe if it has not yet been determined that the insured's losses exceed the primary policy limits. Id. at 2.

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On May 26, 2006, Defendant American Bankers moved for dismissal of the within action for lack of subject matter jurisdiction based upon the DiCocco decision. (Doc. No. 114.) That motion did not address Plaintiff's UM/UIM claims. Id. On June 23, 2006, this Court dismissed Plaintiff's entire action, without prejudice, for lack of subject matter jurisdiction based upon the DiCocco decision. Lack of Subject Matter Jurisdiction. (Doc. No. 122.) Plaintiff now moves for reconsideration of that ruling. II. A. ARGUMENT Order of Dismissal for

Plaintiff's Claims Based Upon Defendant's Failure To Offer UM/UIM Coverage Should Be Reinstated. Plaintiff brought a claim for declaratory relief pursuant to 28 U.S.C. § 2201 and Fed. R.

Civ. P. 57, seeking a declaration of the rights and liabilities of both parties to the automobile insurance contract as to UM/UIM coverage. (Am. Compl. ¶¶ 45, 50-56.) Since Plaintiff's UM/UIM coverage under the American Bankers policies is not a "primary" or "excess" coverage, the rule articulated in DiCocco does not apply. Thus, Plaintiff has viable claims for declaratory relief, breach of contract, breach of the implied covenant of good faith and fair dealing, common law bad faith, and violation of the Colorado Consumer Protection Act, all based upon American Bankers' failure to offer UM/UIM coverage. Even assuming arguendo that DiCocco did apply, Plaintiff's claims based upon Defendant's failure to offer and extend UM/UIM coverage are ripe. Plaintiff's UM/UIM coverage is not "primary" or "excess." Kirk Warren has received the $25,000 in liability coverage under his brother Kurt Warren's Liberty Mutual policy; therefore, that issue is resolved

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and the only thing left to do is pursue his UM/UIM coverage under the American Bankers' policies. Further, whether or not the ripeness principle in DiCocco does or does not apply, Plaintiff meets the reasonable likelihood test set forth in DiCocco (2006 WL 1348476 at *2) because of the extent of his damages. In a UM action, the damages are far more expansive than a PIP action. Plaintiff Kirk Warren has incurred medical expenses to date of approximately $1 million, and has incurred wage losses to date of approximately $73,000. Plaintiff anticipates future medical expenses in the amount of $1,796,113.00 and future wage losses of $371,755.00. Plaintiff obtained the $25,000 maximum liability coverage allowable under his brother's Liberty Mutual policy. Based upon the medical expenses and wage losses referenced above, it is easily determinable that Mr. Warren's losses exceed the Liberty Mutual liability policy limits, and that coverage under the American Bankers' policies has been triggered. Despite this, American Bankers has denied any UIM coverage to Mr. Warren. Since Plaintiff has collected his $25,000 in liability coverage, has pursued his UIM coverage and been denied, his claims for declaratory and other relief based upon American Bankers' failure to offer UM/UIM coverage to its policyholders, and its subsequent denial of UIM coverage to Mr. Warren, is ripe for adjudication. B. Plaintiff's Claim For Declaratory Relief With Regard To Enhanced PIP Coverage Should Be Reinstated. The Court stated in the Order of Dismissal for Lack of Subject Matter Jurisdiction that "...the plaintiff in this case is not seeking declaratory judgment but is seeking recovery of his losses." Order at p. 2.

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However, in his Amended Complaint, Plaintiff brought a claim for declaratory relief pursuant to 28 U.S.C. § 2201 and Fed. R. Civ. P. 57, seeking a declaration of the rights and liabilities of both parties to the automobile insurance contract as to PIP coverage. Am. Compl. ¶ 45-49. Moreover, because of the extent of his injuries and resulting damages, it is highly likely that Plaintiff will need the PIP benefits owing from the American Bankers policies; so it is important that he know the rights and obligations arising thereunder. He has standing to bring this claim because pursuant to Colo. Rev. Stat. § 10-4-707(c) he is an insured of American Bankers and thus a party to the contract. Also, as a party to the contract he has standing to request declaratory relief not only as to whether he is entitled to enhanced PIP benefits under those policies but also whether he is entitled to basic PIP benefits. That is regardless of whether or not he yet has a ripe claim for breach of contract. The Colorado Court of Appeals in DiCocco held that when the remedy sought is declaratory relief, it is not necessary to provide absolute proof that an excess insurer's policies will be triggered in order to establish an actual controversy ripe for adjudication. However, a plaintiff must show that it is reasonably likely that coverage under the excess policy will be triggered. Id., 2006 WL 1348476, *2. Here, Plaintiff's losses are exorbitant, and thus it is highly likely that the PIP coverage under the American Bankers policies will be triggered. Plaintiff has brought an action for enhanced PIP coverage against the primary insurer, Liberty Mutual Fire Insurance Company, D.Colo. No. 05-cv-01891-EWN-MEH. In that action, Liberty Mutual Fire Ins. Co. is arguing that, even if Plaintiff was entitled to enhanced PIP

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coverage, there would be a $200,000 aggregate limitation imposed on that coverage. Of course, Plaintiff is arguing that Plaintiff is entitled to enhanced PIP coverage unlimited in time or amount. The Court concluded in its Order of Dismissal in the within action that there was not a reasonable likelihood of using excess coverage in this case because Plaintiff included in his Complaint in the Liberty Mutual action a request for unlimited in time and amount coverage. (Doc. No. 122.) However, the mere fact that the request is made does not resolve the issue of whether there is a likelihood that such coverage will be available. Indeed, recent court treatment indicates that thus far insureds are not getting unlimited in time or amount coverage. See Clark v. State Farm Mut. Auto. Ins. Co., 2005 WL 3560879 (10th Cir. (Colo.)); Snipes v. American Family Mut. Ins. Co., --- P.3d ----, 2006 WL 560962 (Colo. App.) (Ex. 3); Breaux v. American Family Mut. Ins. Co., 387 F.Supp.2d 1154 (D. Colo. 2005) (which ruling was issued by Judge Nottingham, the same judge assigned to Warren v. Liberty Mut. Fire Inc. Co., D. Colo. No. 05cv-01891-EWN-MEH). Moreover, Liberty Mutual has already denied enhanced PIP coverage to Mr. Warren. That fact alone necessitates coverage from the excess carrier, who then would have a subrogation right to the insured's claim against Liberty Mutual. Based upon the foregoing, Plaintiff respectfully requests that the court reinstate all of Plaintiff's claims based upon American Bankers' failure to offer and extend UM/UIM coverage, and reinstate Plaintiff's claim for declaratory relief as to enhanced PIP coverage.

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Plaintiff also requests that the court set those claims for jury trial. Respectfully submitted this 28th day of July, 2006. s/Julie Cliff Robert B. Carey Julie Cliff The Carey Law Firm 2301 East Pikes Peak Avenue Colorado Springs, CO 80909 Telephone: (719) 635-0377 FAX: (719) 635-2920 E-mail: [email protected] Attorney for Plaintiff Kirk Warren

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on July 28, 2006, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following email address(es): Arthur Joel Kutzer [email protected]

Billy-George Hertzke [email protected]; [email protected] Walter D. Willson [email protected]

and I hereby certify that I have mailed or served the document or paper to the following non CM/ECF participant in the matter (mail, hand-delivery, etc) indicated by the non-participant's name: Kirk Warren 3589 S. Nucla Street Aurora, CO 80013 Mary R. Cullen, Esq. Department of Veterans Affairs Office of Regional Counsel 155 Van Gordon Street, Suite 25126 Denver, CO 80225 s/Julie Cliff Robert B. Carey Julie Cliff The Carey Law Firm 2301 East Pikes Peak Avenue Colorado Springs, CO 80909 Telephone: (719) 635-0377 Fax: (719) 635-2920 E-mail: [email protected] Attorney for Plaintiff Kirk Warren

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