JRW Family Limited Partnership LLLP v. Bluffs Owner LLC et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 25-cv-02961-CNS-KAS
JRW FAMILY LIMITED PARTNERSHIP LLLP,
Plaintiff,
v.
BLUFFS OWNER LLC,
SECURITY PROPERTIES RESIDENTIAL LLC, and
AMBIPAR HOLDINGS USA, INC.,
Defendants.
_____________________________________________________________________
ORDER
_____________________________________________________________________
ENTERED BY MAGISTRATE JUDGE KATHRYN A. STARNELLA
This matter is before the Court on Plaintiff’s Opposed Motion for Leave to
Amend 	Complaint 	[#41] 	(the 	“Motion”). 	Defendant 	Ambipar 	Holdings 	USA, 	Inc.
(“Ambipar”) and Defendants Bluffs Owner, LLC and Security Properties Residential LLC
(the “Bluffs Defendants”) filed Responses [#44, #48], and Plaintiff filed a Reply [#49]. The
Court set the Motion [#41] for hearing, but before the hearing took place, Plaintiff filed a
Notice of Supplemental Authority [#53] highlighting the United States Supreme Court’s
recent opinion in Berk v. Choy, 146 S. Ct. 546 (2026). At the hearing, the Court ordered
supplemental briefing on the question of how Berk applies to the instant Motion [#41].
Courtroom 	Minutes 	[#54]. 	The 	parties 	timely 	submitted 	supplemental 	briefs. 	Def.
Ambipar’s Suppl. Brief [#61]; Bluffs Defs.’ Suppl. Brief [#62]; Plf.’s Suppl. Brief [#63]. The
Motion [#41] has been referred to the undersigned pursuant to 28 U.S.C. § 636(b)(1)(B),
Case No. 1:25-cv-02961-CNS-KAS Document 64 filed 06/18/26 USDC Colorado
pg 1 of 10

2
Federal 	Rule 	of 	Civil 	Procedure 	72(b)(1), 	and 	D.C.COLO.LCivR 	72.1(c)(3).1 	See
Memorandum [#42]. The Court has reviewed the briefs, the case file, and the applicable
law. For the reasons stated below, the Motion [#41] is GRANTED.2
I. 	Background
According to the operative Complaint [#4], Plaintiff owns property in Douglas
County, Colorado, on which it operates a cattle ranching business. Compl. [#4] ¶ 1. The
Bluffs Defendants own and operate an apartment complex adjacent to Plaintiff’s property.
Id. ¶¶ 2-3. Plaintiff alleges that in February 2024, the Bluffs Defendants allowed a
“preventable raw sewage spill” to contaminate its property. Id. ¶ 14.
Defendant Ambipar is an environmental management company that the Bluffs
Defendants retained to remediate the spill. Id. ¶ 5. Plaintiff alleges that Defendant
Ambipar did not construct appropriate fencing around the contaminated area of Plaintiff’s
property, and as a result, Plaintiff’s cattle entered the contaminated area and drank the
contaminated sewage water, leading to the death of at least four cattle. Id. ¶¶ 30-36.
Further, Defendant Ambipar did not complete its remediation work, leaving the area
1 All parties do not consent to magistrate judge jurisdiction. See Signed Consent/Non-Consent
Form [#22]; Order of Reference [#24].
2 “Judges in this District remain split whether a magistrate judge’s ruling on a motion to amend
to add a claim for exemplary damages is dispositive or nondispositive.” Residences at Olde
Town Square Ass’n v. Travelers Cas. Ins. Co. of Am., 413 F. Supp. 3d 1070, 1072-73 (D. Colo.
2019). However, “[c]ourts in this circuit have found that a magistrate judge’s ruling on a motion
to amend is nondispositive ‘particularly where the magistrate judge’s order grants leave to
amend and does not have the effect of removing any claim or defense.’” Sunflower Condo.
Ass’n, Inc. v. Owners Ins. Co., 16-cv-2946-WJM-NYW, 2018 WL 1755784, at *1 (D. Colo. Apr.
12, 2018) (quoting Cuenca v. Univ. of Kan., 205 F. Supp. 2d 1226, 1228 (D. Kan. 2002)); see
also Hendrickson v. Doyle, No. 14-cv-02013-WJM-KLM, 2015 WL 2106225, at *1 n.2 (D. Colo.
May 4, 2015) (“In this case the Court grants Plaintiff’s request to amend his First Amended
Complaint to add a claim for punitive damages. Therefore, the Court assumes that the issue is
not dispositive.”).
Case No. 1:25-cv-02961-CNS-KAS Document 64 filed 06/18/26 USDC Colorado
pg 2 of 10

3
excavated without replacing the removed soil or reseeding the area for cattle grazing.
Defendant Ambipar’s apparent abandonment of the remediation left Plaintiff’s property
unusable and in disrepair for many months, causing additional erosion and damage. Id.
¶¶ 38-43.
Plaintiff filed the instant action in state court in August 2025, asserting six causes
of action: (1) private nuisance; (2) negligent operation of sewer lift (negligence per se);
(3) negligent failed remediation; (4) violation of the common law accommodation doctrine;
(5) trespass (failing to minimize intrusion upon and damage to the surface); and (6) unjust
enrichment (use of JRW’s surface land at JRW’s expense). Id. at 16-20. Plaintiff also
requested injunctive relief in the form of a permanent injunction “compelling Bluffs to fully
remediate 	and 	clean 	the 	sewer 	spill 	(including 	through 	full 	topsoil 	replacement),
recontouring of the property for effective drainage, to remove the heavy equipment being
stored on JRW’s property, and to reseed, repair, and otherwise properly remediate
portions of JRW’s property that have been damaged.” Id. at 20.
Defendant Ambipar removed the case, invoking the Court’s diversity jurisdiction.
Notice of Removal [#1] ¶¶ 2-3. Defendant Ambipar filed a partial Motion to Dismiss [#11]
Plaintiff’s Claim 4 for violation of the common law accommodation doctrine. The District
Judge heard oral arguments on the partial Motion to Dismiss [#11] and granted it.
Courtroom Minutes [#51]. The parties later stipulated to the dismissal of Plaintiff’s Claim
4 against the Bluffs Defendants as well. See Stipulation of Partial Dismissal [#52]. Plaintiff
did not file a Notice of Amended Complaint documenting the partial dismissal.
Meanwhile, on December 29, 2025, Plaintiff filed the instant Motion [#41]. In
addition to asserting several new factual allegations, Plaintiff seeks leave to assert a claim
Case No. 1:25-cv-02961-CNS-KAS Document 64 filed 06/18/26 USDC Colorado
pg 3 of 10

4
for punitive damages. See Plf.’s Ex. 1, Redlined Proposed First Am. Compl. [#41-1]. As
grounds, Plaintiff alleges that during the early remediation efforts, a second sewage spill
occurred and that Defendants concealed it from Plaintiff. Id. ¶¶ 97-99. Plaintiff further
alleges that the Bluffs Defendants recklessly or intentionally misled Plaintiff concerning
the cause of the original spill and that all Defendants deliberately chose not to complete
remediation. Id. ¶¶ 100-07.
II. 	Legal Standard
Until earlier this year, courts in this District almost universally applied Colo. Rev.
Stat. § 13-21-102(1.5)(a) to motions for leave to add requests for exemplary (or punitive)
damages. Colo. Rev. Stat. § 13-21-102(1.5)(a) provides that “[a] claim for exemplary
damages in an action governed by this section may not be included in any initial claim for
relief,” and is only allowed “by amendment to the pleadings . . . after the exchange of
initial disclosures . . . and [after] the plaintiff establishes prima facie proof of a triable
issue.” Therefore, courts in this District, including the undersigned, required the movant
to meet this heightened pleading standard in order to assert punitive damages claims.
See Hubchik v. Owners Ins. Co., No. 23-cv-01359-DDD-KAS, 2024 WL 4653176, at *6
(D. Colo. Oct. 31, 2024), report and recommendation adopted, 2025 WL 904364 (D. Colo.
Jan. 28, 2025); Burke v. Lindner, No. 23-cv-01295-GPG-KAS, 2024 WL 3650445, at *2
(D. Colo. Aug. 3, 2024); see also Apartment Income REIT Corp. v. Certain Underwriters
at Lloyds London Subscribing to Pol’y No. B0713MEDTE2202301, No. 24-cv-01285-
NYW-KAS, 2026 WL 1162277, at *3 (D. Colo. Apr. 29, 2026) (flagging Berk but reserving
the issue for a later day).
Case No. 1:25-cv-02961-CNS-KAS Document 64 filed 06/18/26 USDC Colorado
pg 4 of 10

5
That changed last month when Magistrate Judge Cyrus Y. Chung issued an order
that 	carefully 	traced the historical 	underpinnings of the District-wide 	practice and
persuasively made the case for a new path forward. McCormick v. HRM Res., LLC, --- F.
Supp. 3d ----, 2026 WL 1213398, at *1 (D. Colo. May 4, 2026). Finding it unnecessary to
regurgitate Judge Chung’s thorough analysis here, the Court briefly summarizes the main
points.
The Rules of Decision Act, 28 U.S.C. § 1652, directs federal courts sitting in
diversity to apply state substantive law, “leaving federal law to cover the rest.” Berk, 146
S. Ct. at 552; see Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). In Berk, after noting
that federal courts are occasionally faced with difficulties navigating “Erie’s murky waters,”
the Court paused to recite the basic principle that “when a Federal Rule of Civil Procedure
is on point, a federal court bypasses Erie’s inquiry altogether.” Id. at 552. In other words,
“a valid Rule of Civil Procedure displaces contrary state law even if the state law would
qualify as substantive under Erie’s test.” Id.
Thus, the question becomes whether Rules 8 and 15 of the Federal Rules of Civil
Procedure, which dictate the standards for pleading and amendment, displace Colo. Rev.
Stat. § 13-21-102(1.5)(a). McCormick, 2026 WL 1213398, at *3. An initial complaint “must
contain . . . a short and plain statement of the claim showing that the pleader is entitled
to relief; and . . . a demand for the relief sought.” FED. R. CIV. P. 8(a). “Rule 8 sets a ceiling
on the information that plaintiffs can be required to provide about the merits of their
claims.” Berk, 607 U.S. at 194. After a short period for amendments as of right, the plaintiff
“may amend its pleading only with the opposing party’s written consent or the court’s
leave,” which the court is to give freely “when justice so requires.” FED. R. CIV . P. 15(a)(2).
Case No. 1:25-cv-02961-CNS-KAS Document 64 filed 06/18/26 USDC Colorado
pg 5 of 10

6
The state statute, however, provides that punitive damages claims may not be included
in an initial complaint and may only be asserted if accompanied by prima facie proof of a
triable issue. COLO. REV . S TAT. § 13-21-102(1.5)(a).
Judge Chung discerned a conflict between Colo. Rev. Stat. § 13-21-102(1.5)(a)
and Rules 8 and 15. Rule 8(a)(3)—by simply providing that a pleading must contain a
demand for the relief sought—unquestionably allows a plaintiff to include a request for
punitive 	damages 	in 	its 	initial 	complaint. 	McCormick, 	2026 	WL 	1213398, 	at 	*3.
Accordingly, “Colo. Rev. Stat. § 13-21-102(1.5)(a) and Rule 8(a)(3) ‘answer the same
question—may a punitive damages claim be included in an initial complaint?—in opposite
ways:’ the state statute ‘answers the question no—never. Rule 8 answers the question
yes— always.’” Id. (quoting Kilburn v. Autosport Acquisitions, LLC, No. 1:20 CV 211 ACL,
2021 WL 307550, at *2 (E.D. Mo. Jan. 29, 2021)). Further, and in contrast to Colo. Rev.
Stat. § 13-21-102(1.5)(a), Rule 15 neither imposes a waiting period nor demands an
evidentiary threshold. True, Rule 15 imposes a futility evaluation, but such an evaluation
is limited to the sufficiency of the allegations, taken as true, in the amended pleading. Id.
And even so, courts in this district invoke futility of amendment as a ground to justify
denying leave only very rarely. “The statute therefore conflicts with Rule 15 with respect
to both when and how a plaintiff can add a punitive-damages request.” Id.; see also
Famuyide v. Chipotle Mexican Grill, Inc., No. 23-cv-01127 (DWF/ECW), 2026 WL
765356, at *4 (D. Minn. Mar. 18, 2026) (citing Dolphin Kickboxing Co. v. Franchoice, Inc.,
335 F.R.D. 393, 398-99 (D. Minn. 2020)).
Judge Chung then turned to the “long-standing consensus” in this District applying
Colo. Rev. Stat. § 13-21-102 and concluded that it “does not rest on a robust foundation
Case No. 1:25-cv-02961-CNS-KAS Document 64 filed 06/18/26 USDC Colorado
pg 6 of 10

7
of repeatedly adversarial challenges.” Id. at *4. Instead, the practice was born of a single
judge’s decision in Jones v. Krautheim, 208 F. Supp. 2d 1173, 1174 (D. Colo. 2002),
which addressed Colo. Rev. Stat. § 13-64-302.5, a similar statute governing punitive-
damages requests against healthcare professionals. Id. The practice quickly became the
norm across the rest of the District. See id.
But the Supreme Court’s recent decision in Berk calls Jones’s logic into question.
For example, the Jones court relied on the Tenth Circuit’s decision in Trierweiler v.
Croxton & Trench Holding Corp., 90 F.3d 1523 (10th Cir. 1996), which in turn considered
a state statute similar to that at issue in Berk. Id. at *5. To the extent that Jones relied on
Trierweiler, and Berk now calls Trierweiler into question, the Court must assess Jones’s
logical foundation in light of more recent Supreme Court precedent. Additionally, many of
the federal districts that the Jones court (and later this District) joined in finding no conflict
between like state statutes and the Federal Rules have subsequently disclaimed their
wholesale adoption of the same, leaving this District to stand “in a small minority.” Id.
Accordingly, Judge Chung concluded that “continued application of [Colo. Rev.
Stat. § 13-21-102(1.5)(a)] in federal court is no longer sound,” and applied Rule 15
instead. Id. The undersigned finds the above referenced analysis thorough, well-
researched, and persuasive. Therefore, the Court adopts it in full.3 Rule 15, and not Colo.
Rev. Stat. § 13-21-102(1.5)(a), applies to motions for leave to assert a claim for punitive
damages.
3 The Court is cognizant of Defendants’ position that applying Rule 15 instead of Colo. Rev. Stat.
§ 13-21-102(1.5)(a) would prejudice them and may result in forum shopping in the future, but they
have not provided any authority suggesting that this Court may deviate from what it believes is
Berk’s clear mandate and the consequences inherent therein.
Case No. 1:25-cv-02961-CNS-KAS Document 64 filed 06/18/26 USDC Colorado
pg 7 of 10

8
Rule 15(a)(2) states that “[t]he court should freely give leave [to amend] when
justice so requires.” “[T]his mandate is to be heeded.” Foman v. Davis, 371 U.S. 178, 182
(1962). In other words, “[i]f the underlying facts or circumstances relied upon by a [litigant]
may be a proper subject of relief, he ought to be afforded an opportunity to test his claim
on the merits.” Id. Denying leave to amend is generally justified only on “a showing of
undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure
to cure deficiencies by amendments previously allowed, or futility of amendment.” Frank
v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993).
III. 	Analysis
The 	Bluffs 	Defendants 	make 	no 	Rule 	15 	arguments 	in 	their 	briefing,
notwithstanding the Court’s prior practice of addressing both Rule 15 and § 13-21-
102(1.5)(a) in earlier rulings on this issue. See Bluffs Defs.’ Response [#48]; Bluffs Defs.’
Suppl. Brief [#62]; see also Hubchik, 2024 WL 4653176, at *6. During oral arguments, the
Bluffs Defendants invoked Rule 11, which states that an attorney, by signing a pleading
or other paper, certifies that the factual contentions they present have “evidentiary
support” or “will likely have evidentiary support after a reasonable opportunity for further
investigation or discovery.” FED. R. CIV . P. 11(b)(3). But the Bluffs Defendants have not
moved for sanctions. “And to use Rule 11 as a freewheeling license to weigh evidence
on the allegations of a proposed amended complaint would run afoul of the principle that
the futility of a motion to amend is judged by ‘the sufficiency of the allegations within the
four corners of the complaint after taking those allegations as true.’” McCormick, 2026
WL 1213398, at *3 (quoting Atl. Richfield Co. v. NL Indus., Inc., No. 20-cv-00234-RMR-
Case No. 1:25-cv-02961-CNS-KAS Document 64 filed 06/18/26 USDC Colorado
pg 8 of 10

9
KLM, 2022 WL 986124, at *2 (D. Colo. Apr. 1, 2022), report and recommendation
adopted, 2022 WL 2292848 (D. Colo. May 2, 2022)).
Defendant Ambipar, for its part, rests only on a futility argument, asserting that
Plaintiff’s claim for punitive damages is not plausible. See Response [#44]; Def. Ambipar’s
Suppl. Brief [#61]. However, courts in this District often prefer to address futility of
amendment on a Rule 12(b)(6) motion rather than on a motion for leave to amend.
Retzolff v. Jacobs Ent., Inc., No. 24-cv-03538-PAB-KAS, 2026 WL 21233, at *5 (D. Colo.
Jan. 4, 2026). The Court finds this consideration especially weighty here, where the
briefing on Rule 8 plausibility was relatively succinct in comparison to the larger issue
before the parties and the Court.
And even if the Court were inclined to take up the futility challenge at this juncture,
the Court notes that Defendant Ambipar appeared to assume in its Response brief that
Plaintiff is asserting a claim of fraudulent concealment. See Response [#44] at 5. But
Plaintiff disclaimed any intention to assert such a claim during the April 8, 2026 Motion
Hearing. Instead, Plaintiff maintained its intent to assert only claims of negligence,
trespass, and unjust enrichment against Defendant Ambipar. Plaintiff grounded its
punitive damages theory not on fraud, but on attendant circumstances of willful and
wanton conduct. See § 12-31-102(1)(a).
In sum, the Court finds that Plaintiff has readily cleared the relevant Rule 15
threshold, and Defendants have offered little rebuttal that persuades the Court otherwise.
IV. 	Conclusion
Based on the foregoing,
IT IS HEREBY ORDERED that the Motion [#41] is GRANTED.
Case No. 1:25-cv-02961-CNS-KAS Document 64 filed 06/18/26 USDC Colorado
pg 9 of 10

10
IT IS FURTHER ORDERED that Plaintiff shall file a clean copy of the First
Amended Complaint documenting the dismissal of Claim 4 and the addition of its punitive
damages claim no later than June 25, 2026.
Dated: June 18, 2026 	BY THE COURT:
Kathryn A. Starnella
United States Magistrate Judge
Case No. 1:25-cv-02961-CNS-KAS Document 64 filed 06/18/26 USDC Colorado
pg 10 of 10