Phan v. American Family

20CA1734 Phan v American Family 11-24-2021

COLORADO COURT OF APPEALS

Court of Appeals No. 20CA1734

Arapahoe County District Court No. 19CV280

Honorable John L. Wheeler, Judge

Kent Vu Phan,

Plaintiff-Appellant,

v.

American Family Insurance Company,

Defendant-Appellee.

JUDGMENT AFFIRMED

Division I

Opinion by JUDGE KUHN

Dailey and Dunn, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)

Announced November 24, 2021

Kent Vu Phan, Pro Se

Nina Hammon Jahn, Madison, Wisconsin, for Defendant-Appellee

1

¶ 1 Plaintiff, Kent Vu Phan, appeals the district court’s judgment

dismissing his claims against defendant, American Family

Insurance Company (American Family). We affirm.

I. Background

¶ 2 In 2012, Phan was involved in a car accident with a driver who

was insured by American Family. Alleging that he was injured in

the accident, Phan filed an insurance claim with American Family.

Three years later, American Family closed Phan’s claim.

¶ 3 Since then, Phan has filed multiple pro se state and federal

actions seeking damages from American Family based on the 2012

accident and American Family’s handling of his claim.

¶ 4 Phan first sued American Family in state court in 2015. In

that complaint (which did not assert specific claims or legal theories

for relief), Phan asked the district court to order American Family to

“re-open [his] claim” until he completely recovered from his injuries.

Finding that Phan’s action was time barred because it was filed

outside of the three-year statute of limitations applicable to tort

actions for bodily injuries arising from motor vehicle accidents, the

court dismissed the complaint. See § 13-80-101(1)(n)(I), C.R.S.

2

2021. Phan attempted to appeal to this court and the supreme

court, but his appeals were dismissed as untimely.

¶ 5 After his state appeals were dismissed, Phan sued American

Family in federal court. In his federal complaint, he alleged that

American Family had acted in bad faith and had violated the

Americans with Disabilities Act of 1990 (ADA), see 42 U.S.C.

§§ 12101-12213.

¶ 6 Finding that the “ADA [did] not apply to [his] allegations,” the

federal district court dismissed Phan’s complaint for lack of subject

matter jurisdiction based on the Rooker-Feldman doctrine, which

precludes federal courts from exercising jurisdiction over cases

brought by “state-court losers” challenging state court judgments

rendered before the federal district court proceedings commenced.

Phan v. Am. Fam. Ins. Co., Civ. A. No. 17-CV-00196-GPG, 2017 WL

5172250, at *2-3 (D. Colo. May 1, 2017) (unpublished opinion); see

Lance v. Dennis, 546 U.S. 459, 460 (2006). The Tenth Circuit

affirmed the federal district court’s dismissal. Phan v. Am. Fam. Ins.

Co., 705 F. App’x 766, 768 (10th Cir. 2017).

¶ 7 In 2018, following his unsuccessful foray into federal court,

Phan sued American Family a second time in state court. In that

3

complaint, Phan raised numerous common law claims, state

statutory claims, and federal statutory claims. The district court

granted American Family’s C.R.C.P. 12(b)(5) motion and dismissed

Phan’s complaint.

¶ 8 A division of our court affirmed. Phan v. Am. Fam. Ins. Co.,

(Colo. App. No. 18CA0975, Apr. 4, 2019) (not published pursuant to

C.A.R. 35(e)). Phan’s supreme court appeal was dismissed when he

failed to file a petition for certiorari after unsuccessfully moving for

a filing extension.

¶ 9 Phan later filed or attempted to file a petition for certiorari in

the United States Supreme Court. The status of that appeal is not

entirely clear. While American Family, without citation, states in its

answer brief that the appeal is still pending, nothing else in the

record sheds light on the current status of that appeal.

¶ 10 The case at issue here arose when Phan sued American Family

a third time in state court in 2019. That complaint, which relied on

the same facts and injuries Phan alleged in his prior actions against

4

American Family, was largely comprised of the same undeveloped

claims that the district court dismissed in the 2018 action.

1

¶ 11 Construed broadly, Phan’s complaint and other pleadings

asserted the following claims: (1) statutory bad faith; (2) common

law bad faith; (3) violation of section 10-4-1009, C.R.S. 2021; (4)

violation of section 10-3-1104, C.R.S. 2021; (5) violation of the ADA;

(6) violation of the Protection and Advocacy for Individuals with

Mental Illness Act (PAIMI); (7) violation of his civil rights under 42

U.S.C. §§ 1981, 1983, 1985, and 1986; (8) violation of the Equality

Act of 2010; and (9) violation of 18 U.S.C. § 2255.

¶ 12 While Phan’s third state action was pending, the district court,

in response to American Family’s “Motion to Enjoin Kent Vu Phan

From Filing Additional Pro Se Actions Without Prior Judicial

Approval” (motion to enjoin), ordered Phan to file an affidavit

regarding the criteria set forth in Karr v. Williams, 50 P.3d 910

1

Because the record is unclear whether Phan’s Supreme Court

appeal is still pending, we do not rely on the doctrine of claim

preclusion to resolve this appeal. See Barnett v. Elite Props. of Am.,

Inc., 252 P.3d 14, 22 (Colo. App. 2010) (“[A] judgment is not final for

purposes of issue preclusion until certiorari has been resolved both

in the Colorado Supreme Court and the United States Supreme

Court.”).

5

(Colo. 2002). In doing so, the court adopted and incorporated an

order issued by another trial court in the same jurisdiction in a

different case filed by Phan.

¶ 13 Subsequently, the district court — relying substantially on its

order dismissing Phan’s 2018 complaint — granted American

Family’s C.R.C.P. 12(b)(5) motion and dismissed Phan’s claims.

Additionally, the district court refused to reconsider its ruling on

American Family’s motion to enjoin Phan from filing additional pro

se actions without judicial approval.

¶ 14 Phan appeals the district court’s order.

II. Analysis

¶ 15 While Phan’s briefs do not comply with C.A.R. 28 and are

difficult to decipher, we recognize that, as a pro se litigant whose

first language is not English, he might not articulate his arguments

like a lawyer. See People v. Cali, 2020 CO 20, ¶ 34. To ensure that

he is not denied review of important issues, we construe his

pleadings broadly to effectuate their substance rather than their

form. See id. We will not, however, rewrite his pleadings, act as an

advocate on his behalf, or consider issues he did not raise in the

district court. See id.

6

¶ 16 Phan’s specific objections to the district court’s orders are not

entirely apparent. Broadly, he appears to contend that the district

court erred in two ways: (1) by granting American Family’s C.R.C.P.

12(b)(5) motion to dismiss and (2) in its ruling on the motion to

enjoin.

¶ 17 We first address the district court’s rulings on the individual

claims Phan raised in his complaint. Then, we turn to the order on

the motion to enjoin.

A. Standard of Review and Legal Standards

¶ 18 “We review a C.R.C.P. 12(b)(5) motion to dismiss de novo and

apply the same standards as the trial court.” Norton v. Rocky

Mountain Planned Parenthood, Inc., 2018 CO 3, ¶ 7.

¶ 19 A C.R.C.P. 12(b)(5) motion to dismiss for failure to state a

claim tests the formal sufficiency of a complaint and allows the trial

court to weed out meritless claims. See Credit Serv. Co. v.

Skivington, 2020 COA 60M, ¶ 11. Dismissal under C.R.C.P. 12(b)(5)

is appropriate “if the substantive law does not support the claims

asserted, or if the plaintiff’s factual allegations do not, as a matter

of law, support a claim for relief.” Peña v. Am. Fam. Mut. Ins. Co.,

2018 COA 56, ¶ 13 (citations omitted).

7

¶ 20 To survive a C.R.C.P. 12(b)(5) motion to dismiss, a complaint

must contain factual allegations sufficient to raise a right to relief

“above the speculative level.” Warne v. Hall, 2016 CO 50, ¶ 9

(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).

“[O]nly a complaint that states a plausible claim for relief survives a

motion to dismiss.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679

(2009)).

¶ 21 In evaluating a C.R.C.P. 12(b)(5) motion, we must accept all

factual allegations in the complaint as true and view them in the

light most favorable to the plaintiff. Bewley v. Semler, 2018 CO 79,

¶ 14. However, we are not required to accept as true bare legal

conclusions or conclusory statements that simply recite the

elements of a claim. See Norton, ¶ 7; Scott v. Scott, 2018 COA 25,

¶19. In our analysis, we may consider any documents that are

attached to the complaint as exhibits or incorporated by reference.

Nieto v. Clark’s Mkt., Inc., 2021 CO 48, ¶ 11.

¶ 22 Additionally, we may affirm an order granting a C.R.C.P.

12(b)(5) motion on any grounds supported by the record, even if the

district court did not rely on those grounds. See Taylor v. Taylor,

2016 COA 100, ¶ 31.

8

¶ 23 A district court may enjoin a pro se litigant from accessing the

court if that litigant has abused the judicial process through

repetitive, baseless litigation. Karr, 50 P.3d at 913-14. We review a

district court’s issuance of such an injunction for abuse of

discretion. Bd. of Cnty. Comm’rs v. Winslow, 706 P.2d 792, 795

(Colo. 1985). A court abuses its discretion when its decision is

manifestly arbitrary, unreasonable, or unfair. People v. Hall, 2021

CO 71M, ¶ 17.

B. Statute of Limitations

¶ 24 As a threshold matter, we briefly address Phan’s contention

that, under section 13-81-103, C.R.S. 2021, the applicable statute

of limitations should be tolled because he is disabled. See Southard

v. Miles, 714 P.2d 891, 897 (Colo. 1986) (Where a plaintiff is a

person under disability as defined by section 13-81-101(3), C.R.S.

2021, “[t]he provisions of section 13-81-103 . . . operate to suspend

the running of the applicable statute of limitations until either the

disability is removed or, as expressly provided in subsection (1)(a), a

‘legal representative’ is appointed for the ‘person under disability.’”).

9

¶ 25 We do not need to resolve this issue because, regardless of

whether the statute of limitations should be tolled, Phan’s claims

fail as a matter of law.

C. Statutory Bad Faith

¶ 26 Phan challenges the district court’s dismissal of his statutory

bad faith claim. We conclude that the district court properly

dismissed the claim.

¶ 27 Sections 10-3-1115 and 10-3-1116, C.R.S. 2021, permit a

“first-party claimant” to assert a claim against an insurance

company for unreasonably delaying or denying a claim for benefits

“owed to or on behalf of any first-party claimant.”

§ 10-3-1115(1)(a); see § 10-3-1116(1). A “first-party claimant” is

“an individual . . . or other legal entity asserting an entitlement to

benefits owed directly to or on behalf of an insured under an

insurance policy.” § 10-3-1115(1)(b)(I).

¶ 28 Phan is not a first-party claimant. He presents no factual

allegations that he is directly or indirectly entitled to benefits from

American Family. He was not insured by American Family, and his

only basis for seeking relief from American Family is that it insured

the other driver. But section 10-3-1115(1)(b)(II)(B) explicitly

10

excludes someone in Phan’s position — a party who is “asserting a

claim against an insured under a liability policy” — from the

definition of first-party claimant.

¶ 29 In short, the remedies provided by sections 10-3-1115 and

10-3-1116 are limited to first-party claimants and are not available

to third-party claimants like Phan. See Gustafson v. Am. Fam. Mut.

Ins. Co., 901 F. Supp. 2d 1289, 1305 (D. Colo. 2012). Therefore,

his claim fails because it is not supported by the substantive law.

See Peña, ¶ 13.

D. Common Law Bad Faith

¶ 30 Phan next challenges the district court’s dismissal of his

common law bad faith claim. We conclude that the district court

properly dismissed the claim.

¶ 31 An insurer has a duty to deal in good faith with its insured.

Kisselman v. Am. Fam. Mut. Ins. Co., 292 P.3d 964, 970 (Colo. App.

2011). That duty “is implied in law as a covenant of the insurance

contract,” and the basis for liability for a common law bad faith

claim “is grounded upon the special nature of the insurance

contract and the relationship which exists between the insured and

11

insurer.” Schnacker v. State Farm Mut. Auto. Ins. Co., 843 P.2d 102,

104 (Colo. App. 1992).

¶ 32 However, “the insurer’s duty of good faith and fair dealing

extends only to its insured, not [a] third party.” Nunn v. Mid-

Century Ins. Co., 244 P.3d 116, 119 (Colo. 2010). While a third-

party claimant may assert a common law bad faith claim against an

insurer for its handling of a claim brought by the third party

against its insured, the third-party claimant can only do so where

the insured has formally assigned its bad faith claims to the third

party. Id. Because Phan does not allege that those circumstances

exist here, his claim fails. See Peña, ¶ 13.

¶ 33 Additionally, Colorado law does not permit a third party to

bring a direct action against an alleged tortfeasor’s insurance

company. Synan v. Haya, 15 P.3d 1117, 1119 (Colo. App. 2000).

Therefore, Phan’s claim is not supported by the substantive law.

See Peña, ¶ 13.

E. Section 10-4-1009

¶ 34 Phan contends that the district court erred by dismissing his

claim that American Family violated section 10-4-1009. We

disagree.

12

¶ 35 Section 10-4-1009 is part of the Fraudulent Claims and Arson

Information Reporting Act, a statutory framework that requires an

insurer to notify certain authorities when it believes a claim may be

fraudulent or that the cause of a fire was arson, regulates the

sharing and disclosure of such information by agencies and

insurers, and provides insurers immunity from civil penalties

arising from providing such information to authorities. See §§ 10-4-

1001 to -1009, C.R.S. 2021.

¶ 36 Section 10-4-1009 states, in its entirety, that “[t]he provisions

of this part 10 shall not be construed to affect or supersede the

duties of insurers and other persons pursuant to the provisions of

part 11 of article 3 of this title.” This language does not create a

cause of action for Phan to assert against American Family.

¶ 37 Additionally, even assuming that section 10-4-1009 creates a

private cause of action, Phan points to no factual allegations in his

complaint that would support his claim. See Warne, ¶ 27.

F. Unfair Claim Settlement Practices

¶ 38 Phan contends that the district court erred by dismissing his

section 10-3-1104(1)(h) unfair settlement practices claim.

Specifically, he asserts that American Family failed to adopt and

13

implement reasonable standards for the prompt investigation of a

claim arising under its insurance policies; refused to pay his claim

without conducting a reasonable investigation based upon all

available information; and did not attempt in good faith to

effectuate prompt, fair, and equitable settlement of his claim even

though liability was reasonably clear. See § 10-3-1104(1)(h)(III)-(V).

¶ 39 Phan’s claim fails for two reasons. First, the statute cannot

support his claim as a matter of law because it “provides for state

regulation of insurance companies and does not create a private

cause of action.” Schnacker, 843 P.2d at 104.

¶ 40 Second, even assuming the statute did permit Phan’s private

cause of action, Phan does not present any factual allegations to

support his claim. See Warne, ¶ 27. Instead, his claim is

comprised of bare conclusory statements that simply recite the

elements of the claim. See Norton, ¶ 7.

G. Americans with Disabilities Act

¶ 41 Phan contends that the district court erred by dismissing his

ADA claim. He asserts that his “impairment and intellectual

disabilities have been exploited by state judges, federal judges . . .

14

and American Family.” Like the district court, we conclude that

Phan’s ADA claim fails.

¶ 42 The ADA “forbids discrimination against persons with

disabilities in three major areas of public life: employment, which is

covered by Title I of the statute; public services, programs, and

activities, which are the subject of Title II; and public

accommodations, which are covered by Title III.” Tennessee v.

Lane, 541 U.S. 509, 516-17 (2004); see 42 U.S.C. §§ 12112, 12132,

12182. None of these titles is applicable to Phan’s claim.

¶ 43 Title I is not applicable because Phan does not allege he

suffered employment discrimination by American Family. See Dep’t

of Hum. Servs. v. State Pers. Bd., 2016 COA 37, ¶ 17 (“To succeed

on an ADA claim, a plaintiff must show: (1) she is disabled, as

defined by the ADA; (2) she is a ‘qualified’ individual who, with or

without reasonable accommodation, can perform the essential

functions of the employment position that such individual holds or

desires; and (3) she suffered discrimination on the basis of her

disability.”).

¶ 44 Title II is also inapplicable. That provision prohibits public

entities — including state and local governments, as well as their

15

agencies and instrumentalities — from discriminating against

“qualified” persons with disabilities in the provision or operation of

public services, programs, or activities, see Lane, 541 U.S. at 517.

But Phan does not allege that American Family is a public entity.

¶ 45 Title III does not apply because Phan is seeking monetary

damages, not injunctive relief. See Powell v. Nat’l Bd. of Med.

Exam’rs, 364 F.3d 79, 86 (2d Cir. 2004) (“A private individual may

only obtain injunctive relief for violations of a right granted under

Title III; he cannot recover damages.”).

H. Protection and Advocacy for Individuals

with Mental Illness Act

¶ 46 Phan contends that the district court erroneously dismissed

his claim under PAIMI. We disagree.

¶ 47 PAIMI creates a framework that empowers certain entities to

investigate abuse of individuals with mental illness and seek civil

remedies on their behalf. See 42 U.S.C. §§ 10801, 10805. It does

not, however, create a private cause of action. See 42 U.S.C.

§ 10851(a) (“Subchapters I and II shall not be construed as

establishing any new rights for individuals with mental illness.”).

Therefore, because Phan is a private citizen, he cannot seek

16

monetary damages against American Family under PAIMI. The

district court properly dismissed his claim because it is not

supported by the substantive law. See Peña, ¶ 13.

I. Civil Rights Claims

¶ 48 Contending that he has suffered racial discrimination, Phan

alleges that the court erred in dismissing the civil rights claims he

raised under 42 U.S.C. §§ 1981, 1983, 1985, and 1986. We

disagree.

¶ 49 To state a claim under 42 U.S.C. § 1981, Phan needed to

allege facts supporting a plausible inference that (1) he was a

member of a protected class; (2) American Family intended to

discriminate against him on the basis of race; and (3) the

discrimination had interfered with a protected activity. See Phan v.

Hipple, 735 F. App’x 492, 494 (10th Cir. 2018); Hampton v. Dillard

Dep’t Stores, Inc., 247 F.3d 1091, 1101-02 (10th Cir. 2001). Phan’s

claim fails because, aside from bare legal conclusions and

unsupported cites to federal statutes, he does not point to any

factual allegations — either in his complaint or his appellate

briefing — that support a prima facie case of racial discrimination

under § 1981. See Norton, ¶ 12.

17

¶ 50 To establish a claim under 42 U.S.C. § 1983, a plaintiff must

allege that the defendant, acting under the color of state law,

deprived him of a right, privilege, or immunity guaranteed by the

Federal Constitution and laws. Beaver Creek Prop. Owners Ass’n v.

Bachelor Gulch Metro. Dist., 271 P.3d 578, 586 (Colo. App. 2011);

see West v. Atkins, 487 U.S. 42, 48 (1988). Because Phan does not

allege that American Family was a state actor or acting under the

color of state law, his § 1983 claim fails.

¶ 51 Phan does not state which subsection of § 1985 his claim falls

under. Based on the substance of his pleadings, it appears he

sought relief under subsection (3).

2

¶ 52 To establish a claim under § 1985(3), Phan needed to present

sufficient allegations of “(1) a conspiracy; (2) to deprive [him] of

equal protection or equal privileges and immunities; (3) an act in

furtherance of the conspiracy; and (4) an injury or deprivation

resulting therefrom.” Vazirabadi v. Denver Health & Hosp. Auth.,

2

Subsection (1) addresses conspiracies to prevent a person from

holding office or discharging official duties. Subsection (2)

addresses conspiracies to obstruct justice or intimidate parties,

witnesses, or jurors in legal proceedings. 42 U.S.C. § 1985(1), (2).

Neither is applicable here.

18

782 F. App’x 681, 689 (10th Cir. 2019) (quoting Tilton v.

Richardson, 6 F.3d 683, 686 (10th Cir. 1993)). Phan does not allege

that American Family engaged in a conspiracy and does not identify

which right he was supposedly deprived of. Therefore, his § 1985

claim fails.

¶ 53 Because Phan does not have a valid § 1985 claim, his § 1986

claim also fails. See Abercrombie v. City of Catoosa, 896 F.2d 1228,

1230 (10th Cir. 1990) (“Section 1986, which provides an action for

neglecting to prevent a violation of Section 1985, is premised upon

the existence of a valid Section 1985 claim.”).

J. Equality Act

¶ 54 Phan asserts that the court erred by dismissing his claim for

relief under the Equality Act of 2010. We disagree.

¶ 55 The Equality Act of 2010 is a British law. Thus, it cannot

support Phan’s claims for relief. Construing his pleadings broadly,

see Cali, ¶ 34, we believe Phan may have attempted to seek relief

under a similarly titled measure that has been introduced in the

United States House of Representatives. See Equality Act, H.R. 5,

116th Cong. (2019). That measure, which has not been passed by

19

the Senate or signed by the President, is not law. Therefore, it

provides Phan no basis for relief.

K. 18 U.S.C. § 2255

¶ 56 We conclude that the district court properly dismissed Phan’s

claim that American Family violated 18 U.S.C. § 2255.

¶ 57 That statute allows “[a]ny person who, while a minor, was a

victim” of a delineated set of sex crimes “and who suffers personal

injury as a result . . . regardless of whether the injury occurred

while such person was a minor” to sue and recover damages of no

less than $150,000. Doe v. Boland, 698 F.3d 877, 880 (6th Cir.

2012) (quoting 18 U.S.C. § 2255(a)).

¶ 58 Phan raises no factual allegations that he was victimized

under any of the delineated crimes as a minor. Therefore, the court

properly dismissed his claim.

L. Remaining State Law Claims

¶ 59 Phan appears to contend that the court erred by dismissing

claims he asserted under sections 13-21-102, 13-21-102.5,

13-64-202, and 13-64-302, C.R.S. 2021. Phan did not aver claims

under sections 13-64-202 and 13-64-302 in his complaint and the

district court did not address those provisions in its order. See

20

Melat, Pressman & Higbie, L.L.P. v. Hannon L. Firm, L.L.C., 2012 CO

61, ¶ 18 (“It is axiomatic that issues not raised in or decided by a

lower court will not be addressed for the first time on appeal.”).

Regardless of whether those claims were preserved, none of the four

statutes creates a private cause of action and therefore cannot form

the basis of a suit. See, e.g., City of Arvada ex rel. Arvada Police

Dep’t v. Denver Health & Hosp. Auth., 2017 CO 97, ¶¶ 19-22 (noting

that a plaintiff may only seek redress in Colorado courts if they

“have suffered (1) an injury-in-fact to (2) a legally protected

interest”).

M. Motion to Enjoin

¶ 60 Lastly, Phan appears to challenge the district court’s ruling on

the motion to enjoin. As noted in Part I, the district court adopted

an order that was issued by another court in the same jurisdiction

in a different action filed by Phan.

¶ 61 Recently, a division of our court concluded that the trial court

in that other case did not abuse its discretion when it enjoined

Phan from filing pro se lawsuits without complying with Karr. See

Phan v. State Farm Mut. Ins. Co., slip op. at 14 (Colo. App.

21

20CA0939, Oct. 28, 2021) (not published pursuant to C.A.R. 35(e)).

We adopt the reasoning of that division and do the same.

¶ 62 Given that Phan continues to file baseless litigation involving

the same claims, the district court did not err in requiring him to

file a Karr affidavit in this case.

III. Conclusion

¶ 63 The judgment is affirmed.

JUDGE DAILEY and JUDGE DUNN concur.