MICHAEL E. HEGARTY, Magistrate Judge.
This Court entered a Scheduling Order (ECF #19) on June 4, 2015. On October 26, 2015, Plaintiffs and Defendants Steven A. Hansen and Hansen Construction, Inc. filed a joint motion to bifurcate discovery and certain other pre-trial proceedings, (ECF #30), which this Court granted (ECF #33). This Amended Scheduling Order is entered pursuant to this Court's Minute Order (ECF #33) bifurcating discovery and certain other pre-trial proceedings in this action.
The Scheduling/Planning Conference was held on June 4, 2015.
Nancy L. Pearl of Pearl Schneider LLC, 999 18th Street, Suite 1850, Denver, CO 80202 appeared in person on behalf of Plaintiffs.
Thomas W. Henderson of Burg Simpson Eldredge Hersh & Jardine, PC, 40 Inverness Drive East, Englewood, CO 80112 appeared in person on behalf of the homeowner defendants (all individual defendants except Defendants Steven A. Hansen and Hansen Construction, Inc.) (collectively referred to as "Homeowner Defendants")
Dennis Polk of Holley Albertson & Polk, PC, 1667 Cole Blvd., Bldg. 19, Suite 100, Golden, CO 80401 appeared in person on behalf of Defendants Steven A. Hansen and Hansen Construction, Inc. (collectively referred to as "Hansen Defendants")
This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332(a)(1) and (c)(1) as each of the Plaintiffs are citizens of different states than each of the Defendants (complete diversity among the parties) and the amount in controversy exceeds $75,000, exclusive of interest and costs.
The Homeowner Defendants served various Notices of Claim on the Hansen Defendants regarding damages they allege exist in their homes located in Glenwood Springs, Colorado. Thereafter, the Homeowner Defendants filed a construction defect lawsuit against the Hansen Defendants and others, including Ironbridge Homes, LLC and Dirk Gosda, alleging that the Homeowner Defendants sustained damage to their homes ("Underlying Litigation"). The claims asserted against the Hansen Defendants, Ironbridge Homes, LLC and Dirk Gosda were arbitrated in January of 2015. The arbiter entered an Order on Interim Award in the Homeowner Defendants' favor on March 19, 2015. The arbiter entered an Order on Final Awards in the Homeowner Defendants' favor on June 3, 2015. On or about October 7, 2015, the Garfield County District Court entered judgments on the arbitration awards. On October 20, 2015, the Hansen Defendants, Ironbridge Homes, LLC and Dirk Gosda, tendered into the registry of the court in the Underlying Litigation an amount intended to satisfy the judgments against Hansen Defendants, Ironbridge Homes, LLC and Dirk Gosda on the two arbitration awards. On October 22, 2015, the Garfield County District Court entered an Order approving the deposit of funds in and ordering disbursement of those funds from the registry of the court in the Underlying Litigation. The Homeowner Defendants filed separate Acknowledgments of Satisfaction of Judgments in the Underlying Litigation on October 26, 2015 acknowledging full satisfaction of the judgments entered against the Hansen Defendants, Ironbridge Homes, LLC and Dirk Gosda.
Navigators provided the Hansen Defendants with a defense to the Underlying Litigation, subject to a reservation of rights and partial denial of coverage under the Primary Policies. Navigators now seeks a declaration from this Court that it has no duty to indemnify the Hansen Defendants under the Primary Policies for the Underlying Litigation and the arbitration awards and subsequent judgments on the awards because:
NIC seeks a declaration from this court that it does not have a duty to indemnify the Hansen Defendants for the Underlying Litigation and the arbitration awards and subsequent judgments under the Excess Policies because:
Plaintiffs and the Homeowner Defendants have agreed that the Homeowner Defendants will be dismissed from this action in exchange for their agreement that: 1) the parties will file a Stipulated Motion to Dismiss Homeowner Defendants With Prejudice and Stipulation Regarding Agreement by the Homeonwer Defendants Regarding Plaintiffs' Primary and Excess Insurance Policies, by which the Homeowner Defendants will agree that they will not garnish Plaintiffs' Primary Policies or Excess Policies in connection with the Underlying Litigation, including the arbitration awards, the subsequent judgments entered on the arbitration awards and the jury verdict against LB Rose Ranch, LLC, and any ultimate judgment entered on that jury verdict; the Homeowner Defendants' will respond to certain of Plaintiffs' interrogatories and requests for production of documents in Plaintiffs' First Set of Interrogatories and Request for Production of Documents by November 20, 2015; and all parties will stipulate to move to dismiss with prejudice the Homeowner Defendants from this lawsuit pursuant to Fed. R. Civ. P. 41(a)(1)(ii).
1. Hansen Defendants generally dispute the allegations and claims made by the Plaintiffs in this matter and specifically assert and contend that there is coverage provided in each of the insurance policies. Further, not all of the policies have the same or like exclusions. In addition, NIC is also an excess insurance carrier in all of the pertinent years.
2. The Underlying Litigation and related arbitration alleges a variety of construction defect claims. It is alleged that certain of the damages were progressive and continuous.
3. Hansen Defendants have asserted counterclaims in this matter essentially alleging claims for declaratory relief, breach of insurance contract, common law bad faith and statutory bad faith.
4. Hansen Defendants claim that Plaintiffs had a duty of defense and indemnity obligations arising under the Primary Policies and Excess Policies (collectively, the "Navigators Policies") which provided coverage for the nature of the claim sought in the Underlying Litigation and related arbitration proceeding. It is the Hansen Defendants' position that Plaintiffs have not properly construing the Navigators Policies and that the claimed exclusions are not applicable to the facts and circumstances in the Underlying Litigation.
5. Hansen Defendants also assert that Plaintiffs carrier had the obligation to attempt to settle and resolve these claims and protect their insureds. The Plaintiffs failed to meaningfully participate or offer sufficient amounts to obtain indemnity for the insureds. That the basis upon which liability was determined in the Underlying Litigation and related arbitration does not fall within any of the policy exclusions contained within the insuring agreement of the Navigators Policies.
6. The insurance policies must be interpreted in Colorado under these circumstances to effectuate the reasonable expectations of the insured.
7. In construing the so called exclusions to coverage the insurance policy must be interpreted in such a fashion as to effectuate the reasonable expectations of the insured and cannot be expanded beyond the clear statement of such exclusions.
8. Certain of the exclusions upon which the Plaintiffs rely are in violation of and are contrary to the controlling Colorado statutes, including the Construction Insurance Reform Act of 2010.
9. Certain of the claimed exclusions violate the public policy of the State of Colorado in attempting to exclude or prevent coverage.
10. It is the nature of a construction defect claim that damages are progressive and continuous and that the exclusions do not avoid the insurance carrier's obligation to provide indemnity for all or portions of the claimed damages.
11. The Plaintiffs have violated both contractual and common law duties owed to the insured causing damage to the insured.
12. The Plaintiffs did not properly investigate the Underlying Litigation in such a fashion as to preclude injury to the insured.
13. The Plaintiffs have violated the provisions of the "Unreasonable delay and denial" provisions of controlling Colorado statutes, including C.R.S. 6-3-1115, 1116.
14. The Plaintiffs have engaged in bad faith conduct entitling the Hansen Defendants to damages as provided by statute, double damages together with all costs and attorneys' fees incurred in connection with the prosecution and defense of this proceeding.
15. The Plaintiffs have not properly reserved the right to assert certain of the claims or assertions made in this proceeding.
16. The assertion of certain claims and the assertion of certain exclusions and defenses in this case including the assertion that the subject claims are "not an occurrence" is a further indicia of continuing bad faith conduct.
17. The Plaintiffs have improperly asserted certain rights to reserve rights and make claims in this proceeding that are not recognizable as a matter of law in Colorado.
18. In general the conduct of the insurance carriers in this action represents continuing acts of bad faith conduct and the failure to exercise and protect the insured from risk of harm constitutes a breach of the insuring agreement and is both statutory and common law bad faith conduct.
19. Hansen Defendants have received at least one demand for indemnification from another party to the Underlying Litigation, LB Rose Ranch, LLC and/or its insurer(s). Hansen Defendants believe the Navigators Policies may be obligated to respond to any claim for defense and/or indemnity made to Hansen Defendants by LB Rose Ranch, LLC.
d. Plaintiffs' Defenses to Hansen Defendants' Counterclaims:
The following facts are undisputed:
1. Plaintiff NSIC issued the following policies of general liability insurance to HCI, as the named insured:
2. Plaintiff NIC issued the following policies of excess liability insurance to HCI, as the named insured:
3. The Homeowner Defendants filed the Underlying Litigation against the Hansen Defendants on May 14, 2010.
4. An Interim Arbitration Award was issued by arbiter Joel A. Kolodny on March 19, 2015, finding in favor of the Homeowner Defendants and against the Hansen Defendants, Ironbridge Homes, LLC and Dirk Gosda.
5. An Order on Final Awards was issued by arbiter Joel A. Kolodny on June 3, 2015 entering awards for attorneys' fees and costs in favor of the Homeowner Defendants.
6. On or about October 7, 2015, the Garfield District Court entered orders confirming the arbitration awards and entering judgments on those awards against the Hansen Defendants, Ironbridge Homes, LLC and Dirk Gosda, and in favor of the Homeowner Defendants.
7. On October 20, 2015, Hansen Defendants tendered into the registry of the court in the Underlying Litigation the amount of $9,218,911.60, intended to satisfy the judgments against Hansen Defendants, Ironbridge Homes, LLC and Dirk Gosda on the two arbitration awards and subsequent judgments on those awards.
8. On October 22, 2015, the Garfield County District Court entered an Order approving the deposit of funds in and ordering disbursement of those funds from the registry of the court in the Underlying Litigation.
9. The Homeowner Defendants filed separate Acknowledgments of Satisfaction of Judgments in the Underlying Litigation on October 26, 2015.
In addition to damages, Hansen Defendants claim pre-judgment and post-judgment interest, costs and attorney's fees.
The amounts of certain of Hansen Defendants' damages have not yet been quantified but will be updated as and when appropriate.
1. Nancy L. Pearl of Pearl Schneider LLC, 999 18th Street, Suite 1850, Denver, CO 80202 on behalf of Plaintiffs.
2. Thomas W. Henderson of Burg Simpson Eldredge Hersh Jardine PC, 40 Inverness Drive East, Englewood, CO 80112 on behalf of the Homeowner Defendants.
3. Dennis Polk of Holley Albertson & Polk, PC, 1667 Cole Blvd., Bldg. 19, Suite 100, Golden, CO 80401 on behalf of Hansen Defendants.
The parties served their Rule 26(a)(1) disclosures on or before June 30, 2015.
At this time, there have been no agreements to conduct informal discovery. Extensive discovery was previously undertaken in the Underlying Lawsuit, and as such, the parties agree to work together to conduct informal discovery.
The parties have no current agreement regarding the use of a unified exhibit numbering system, but will work together to adopt procedures that will reduce discovery and other litigation costs.
The parties acknowledge their obligations as to electronically stored information, but do not expect that this matter will involve extensive discovery of electronically stored information or that a substantial amount of disclosure or discovery will involve information or records maintained in electronic form.
The parties acknowledge their duty to discuss settlement and will endeavor to continue to do so as this case develops.
The parties have not consented to the exercise of jurisdiction of a magistrate judge.
Plaintiffs and the Hansen Defendants have agreed on a separate motion (ECF #30), and this Court has approved (ECF #33), bifurcation of the discovery in this case into two phases as set forth in Section (
Plaintiffs were allowed up to ten depositions in the prior Scheduling Order, plus the depositions of any specially retained experts designated pursuant to this Amended Scheduling Order; and to serve up to twenty-five (25) interrogatories, including discrete subparts, on any other party.
In addition to the ten depositions previously allowed, Plaintiffs may also require the depositions of the homeowners in Phase One for the following reasons: There were 20 homes at issue in the Underlying Litigation; Plaintiffs were precluded from attending the arbitration proceedings, and Plaintiffs were only recently allowed to have access to the transcripts from the arbitration proceedings (which will be provided to Plaintiffs on or about November 25, 2015). Thus, Plaintiffs have not been allowed to review the testimony of the Homeowner Defendants to determine if their depositions will be necessary. Although Plaintiffs are hopeful that it will not be necessary to take depositions of the homeowners, at this point, with the Homeowner Defendants being dismissed for this action, Plaintiffs need to be allowed the opportunity to depose the owners of the 20 homes. Hansen Defendants do not object to the number of Plaintiffs' proposed depositions.
The Hansen Defendants may each take up to ten depositions in Phase One, plus the depositions of any specially retained experts designated pursuant to this Supplemental Scheduling Order; and may serve up to twenty-five (25) interrogatories, including discrete subparts, to any party grouping.
No deposition shall exceed 7 hours in length without agreement of the party noticing the deposition and the party defending the deposition, or a court order.
The parties agree that each party shall be entitled to 25 Requests for Production and 25 Requests for Admission with up to an additional 50 requests for admission regarding document authentication.
The Homeowner Defendants anticipate being dismissed from this case but have agreed to respond to Plaintiffs' First Set of Interrogatories and Request for Production of Documents, specifically, Interrogatory Nos. 1, 2, 3, 4, 5, and 7 and Requests for Production Nos. 3, 4 and 5, by November 20, 2015.
Plaintiffs and the Hansen Defendants have agreed that this case will be divided into two phases for purposes of pretrial proceedings. Phase One will be devoted to the issue of whether Navigators owes any duty to the Hansen Defendants to indemnify them for the with respect to the Underlying Litigation and related arbitration. Discovery in Phase One will be limited to the coverage aspects of the case. After the completion of discovery in Phase One, Plaintiffs anticipate filing a dispositive motion on the coverage issues. If the Court denies Plaintiffs' dispositive motion, another Scheduling Conference will be convened at which time the parties will submit a plan for the Phase Two of the case, which will entail the completion of discovery, disclosure of experts, and the filing of further dispositive motions (if allowed by the Court) and setting of a Final Pretrial Conference for a single trial on all pending claims. Plaintiffs and Hansen Defendants believe these deadlines are reasonable and necessary under the circumstances.
The arbitration transcript from the Underlying Lawsuit was the subject of a protective order. The arbiter entered an order dated October 20, 2015, allowing the parties to this insurance coverage action to have access to the transcripts of the arbitration proceeding. Therefore, the parties are not in a position to determine what, if any, depositions will be needed in Phase One. At this time, the parties anticipate the following depositions:
All written discovery must be served so that responses are due on or before the Phase One fact discovery cut-off.
All written discovery must be served so that responses are due on or before the fact discovery cut-off.
a. Status conferences will be held in this case at the following dates and times: __________________________________________.
b. Chief Judge Krieger will hold the final pretrial conference in this case; accordingly, the Final Pretrial Conference currently set before this Court on June 13, 2016 is
None at this time.
Plaintiffs submit that the coverage issues may be determined on a motion for summary judgment and Plaintiffs have not requested a jury trial at this time. If the Court denies Plaintiffs' motion for summary judgment, another Scheduling Conference will be convened at which time the parties will provide their views on the anticipated length of trial and whether trial will be to the Court or to a jury. Hansen Defendants do not believe the coverage issues are susceptible of determination on summary judgment. Hansen Defendants have demanded a jury trial on all issues and claims.
Not applicable.
The parties filing motions for extension of time or continuances must comply with D.C.COLO.LCivR. 6.1D., by submitting proof that a copy of the motion has been served upon the moving attorney's client, all attorneys of record, and all pro se parties.
Counsel will be expected to be familiar and to comply with the Pretrial and Trial Procedures or Practice Standards established by the judicial officer presiding over the trial of this case.
With respect to discovery disputes, parties must comply with D.C.COLO.L.CivR 7.1A.
Counsel and unrepresented parties are reminded that any change of contact information must be reported and filed with the Court pursuant to the applicable local rule.
The scheduling order may be amended only upon a showing of good cause.
