Free Reply to Response to Motion - District Court of Colorado - Colorado

Case 1:04-cv-00865-REB-CBS

Document 121

Filed 09/08/2005

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IN

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 04-cv- 0865- REB- CBS
ESTATE OF APRil Hill

SCOTT Hill , personal representative; SCOTT Hill , as Conservator of the Estate of Katelyn Hill; and SCOTT Hill , individually
Plaintiffs

AllSTATE INSURANCE COMPANY; MERASTAR INSURANCE COMPANY; and PRUDENTIAL INSURANCE COMPANY OF AMERICA

Defendants.
INSURANCE COMPANY' S REPLY IN SUPPORT OF MOTION FOR LEAVE TO FILE SECOND AMENDED ANSWER AND COUNTERCLAIM
AllSTATE

DEFENDANT

Defendant Allstate Insurance Company ("Allstate ), through its undersigned

counsel , submits the following Reply in Support of its Motion for leave to File Second
Amended Answer and Counterclaim in this matter.

On July 21 , 2005 , Allstate filed a Motion for leave to File: (1) Amended
Answer and Counterclaim; and (2) Third- Party Complaint Against John Paul (the " First
Motion to Amend" ). On August 29, 2005 , with the First Motion to Amend still pending,

Allstate filed a Motion for leave to File Second Amended Answer and Counterclaim (the
Second Motion to Amend" ), seeking to further amend its Answer to assert two

additional defenses: First , that Plaintiff's recovery, if any, is subject to setoff or

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reduction based on Plaintiff's recovery, if any, in

Scott Hill, et al. v. Western Door, et al.

No. 04-cv- 0332- REB- CBS

(the " Related Tort Action

see , e.

S. S 13- 21- 111.

and second , that Plaintiff's claims are subject to setoff or reduction under the terms of
the insurance policy at issue, including the Reimbursement and Trust Agreement
provisions of the policy. (See

Proposed Second Amended Answer and Counterclaim
Exhibit A
at 14.

attached to Second Motion to Amend as

These defenses arise from the Related Tort Action which involves the

same auto accident that gives rise to this case. In the Related Tort Action , which is
scheduled for trial on December 5 , 2005 , Plaintiff is seeking damages which overlap

with damages sought in this case. The offset Allstate seeks will prevent Plaintiff from
obtaining a double recovery for the losses sustained in the accident.
On September 7 2005, Plaintiff filed an Opposition to the Second Motion

to Amend (the " Opposition ), arguing first that Allstate s effort to assert a setoff defense

is premature because Plaintiff does not currently owe Allstate any money. (Opposition
at 2. )

However , as Allstate made clear in the Second Motion to Amend , Allstate

recognizes that the Related Tort Action is still pending, and the amount of setoff to which it may be entitled has not been determined. Through its Second Motion to Amend, Allstate merely seeks to place the Plaintiff on notice that at trial (by which time the Related Tort Action should be

concluded), it will seek to offset against any recovery by Plaintiff in this action the

duplicative amount, if any, which Plaintiff has already recovered in the Related Tort
Action. (See

Second Motion to Amend 1)1)1- ) If by the time oftrial, there is no

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settlement or judgment in the Related Tort Action , then the defense will be inapplicable.

However , it would seem preferable to assert a defense that may later prove

inapplicable , thereby providing notice of the issue, than to wait until the offset amount is
fully liquidated , in which case Plaintiff would likely argue that Allstate unduly delayed in

asserting the offset.

Moreover , because the defense of setoff is legal in nature , rather than

factual

, allowing the requested amendment will require no additional discovery.

See

Moore v. Subaru

of

America,

891 F. 2d 1445 , 1451 (10th Cir. 1989).

Plaintiff also argues that the Second Motion to Amend is somehow
improper as a " back- door" method to introduce the fraud- based affirmative defenses

and counterclaims asserted in the First Motion to Amend. (Opposition at 3-

However , Allstate clearly acknowledges that there has been no ruling on the First
Motion to Amend , and that
all new aspects of the proposed Second Amended

Complaint and Counterclaim ,

including the fraud- based defenses and counterclaims

remain subject to the Court' s approval.

Finally, Plaintiff argues that no good cause has been shown for granting

the amendment , as required by Rule 16(b). Plaintiff acknowledges that to show " good

cause " a party must show that it acted diligently. (Opposition at 4. ) In this case

1 It is noteworthy that Plaintiff has failed to refute , with any authority, the
proposition that it may not even be necessary to plead a setoff as an affirmative
defense. (See

Opposition at 3.

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Allstate has attempted to act diligently in asserting its right to setoff now , while discovery
is still open , rather than waiting until the dollar amount of the setoff has been liquidated.

There is nothing uncommon about pleading a claim that is unliquidated in
amount.

See, e.

, Davis Cattle

Co.

Inc. v. Great Western Sugar

Co. ,

544 F0 2d

436

441 (10th Cir. 1976) (regarding statutory interest on unliquidated claim). Because
Allstate filed its Second Motion to Amend while discovery remains open , well in advance
of trial , and even before the amount of the offset has been determined , Allstate has

acted diligently, and there is "good cause " to allow the amendment.
Missouri Pac. R.R. Sys.

See Summers v.

132 F. 3d 599 , 604 (10th Cir. 1997).

WHEREFORE , Allstate respectfully requests that this Court grant it leave to file
the proposed Second Amended Answer to the First Amended Complaint and Jury
Demand and Counterclaim previously submitted.

Respectfully submitted this 8th day of September , 2005.

sf Terence M. Ridlev Terence M. Ridley Wheeler Trigg Kennedy LLP 1801 California Street , Suite 3600

Denver , CO 80202 Telephone: (303) 292-2525 Facsimile: (303) 294- 1879 Mail: ridley(g)wtklaw. com

Attorney for Defendant Allstate Insurance Company

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CERTIFICATE OF SERVICE

I hereby certify that on this 8th day of September , 2005 , I electronically filed the foregoing Defendant Allstate Insurance Company s Reply in Support of Motion for Leave to File Second Amended Answer and Counterclaim with the Clerk of Court using the CMfECF system which will send notification of such filing to the following e-mail

addresses:
Michael Do Alper

alper(g)wtklaw. com purdy(g)wtklaw. com

Michael K. Alston
m ichael. alston (g) h usch. com

. Meghan Frei Berglind berglind(g)wtklaw. com

Robert Bruce Carey
rob. carey(g)att. net kuhl(g)careylaw. com

Marian Lee Carlson carlson(g)wtklaw. com carpenter(g)wtklaw. com

. Co Horgan co(g)hbsslaw. com karenw(g)hbsslaw. com
Clifton Jo Latiolais, Jr.

cjl(g)clr- Iaw. com dla(g)clr- Iaw. com

. Alma M. Lugtu lugtu(g)wtklaw. com purdy(g)wtklawo com

Elizabeth L. Morton lokey. lizzy(g)dorsey. com valenzuela. isa(g)dorsey. com; chafin. kem per(g)dorsey. com
. Alan Eo Popkin

alan. popkin(g)husch. com lisa. carter(g)husch. com
. Casey A. Quillen caq(g)clr- Iaw. com amm(g)clr- Iaw. com

Terence M. Ridley
ridley(g)wtklaw. com norris(g)wtklaw. com

Kenneth Alan Senn ksenn(g)bellsouth. net

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David Wo Sobelman david. sobelman(g)husch . com

Gregory Scot Tamkin tamkin. greg(g)dorsey. com
valenzu el a. isa(g)dorsey. com; chafi n. kemper(g)d orsey. com
. Cindy Rae Ten Pas cten pas(g) ca reylaw. com ddom i ng u es(g)ca reylaw . com
. John Mark

Vaught

vaught(g)wtklaw. com como(g)wtklaw. com

and I hereby certify that a copy of the document has been served to the following nonCMfECF participant in the manner indicated by the non- participant' s name:

Marian Elizabeth Lokey
Dorsey & Whitney, LLP

( ) First Class Mail
( ) Hand Delivery
( ) Facsimile

370 Seventeenth Street , #4700 Denver, CO 80202- 5647

( ) Overnight Delivery
(x) E- Mail

sf Terence M. Ridlev Terence M. Ridley Wheeler Trigg Kennedy LLP 1801 California Street , Suite 3600 Denver , CO 80202 Telephone: (303) 292- 2525

Facsimile: (303) 294- 1879
Mail: ridley(g)wtklaw. com

Attorney for Defendant

Allstate Insurance Company