Vincent et al v. Certain Underwriters at Lloyd's, London et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
District Judge S. Kato Crews
Civil Action No. 1:23-cv-00096-SKC-KAS
MIKE VINCENT and
KIM VINCENT,
Plaintiffs,
V.
CERTAIN UNDERWRITERS AT LLOYDS, LONDON, et al.,
Defendants.
ORDER RE: DEFENDANTS ELG INSURANCE SERVICES, LLC, MICHAEL
MAJOR AND BRANDON LOPEZ’S JOINT MOTION FOR SUMMARY
JUDGMENT OR, IN THE ALTERNATIVE,
PARTIAL SUMMARY JUDGMENT
(DKT. 70)
Plaintiffs Mike and Kim Vincent brought the present action to recover losses
related to the destruction of their home in Grand Lake, Colorado. Relevant here, they
assert a claim of negligence against their insurance agents ELG Insurance Services,
LLC (“ELG”), Michael Major, and Brandon Lopez (collectively “Defendants”).1 Before
the Court is Defendants’ request for full or, in the alternative, partial summary
judgment (“Motion”). Dkt. 70. The Court has carefully considered the Motion and
1 Plaintiffs also asserted claims against Certain Underwriters at Lloyd’s of London,
their insurance company. The Court granted Underwriters request for summary
judgment in a separate order. Dkt. 93.
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respective briefing, the Parties’ exhibit attachments, pertinent matters from the
Court’s own docket, and the applicable law and legal authorities. No hearing is
necessary. Because, when considering the undisputed material facts, no reasonable
jury could conclude Defendants were negligent, their Motion is GRANTED.
UNDISPUTED MATERIAL FACTS
In 2015, Plaintiffs purchased a residential property in Grand Lake, Colorado
that served as their primary residence, business office, and a short-term rental (“the
Property”). Dkt. 92 at ¶¶1-2. Prior to the events underlying this action, Plaintiffs
purchased insurance polices for the Property with dwelling limits of $714,000,
$724,000, and $742,000 for the years 2016, 2017, and 2018, respectively. Id. at ¶¶3,5.
In October 2019, Plaintiffs contacted ELG and spoke with Lopez regarding
their insurance needs for both the Property and another Grand Lake residence that
is not subject to the current dispute. Id. at ¶9. Plaintiffs had not previously worked
with ELG, Lopez, or Major regarding insuring their properties. Id. at ¶10. According
to Defendants’ evidence, which Plaintiffs have failed to rebut, Plaintiffs expressed
interest in acquiring a policy for the Property with dwelling limits of $825,000.2
2 Defendants submitted sworn deposition testimony from Lopez and Major regarding
Lopez’s 	initial 	communications 	with 	Plaintiffs 	wherein 	both 	attest 	Plaintiffs
requested dwelling limits of $825,000. Dkt. 70-1 at ECF pp. 25, 35-37. In response,
Plaintiffs submitted an email from Mike Vincent to ELG offering clarifications
regarding the Property and posing several questions. Dkt. 85-9. But at no point in the
email is the desired limit of liability discussed, and Plaintiffs have offered no other
competent evidence on the point. Therefore, this fact is undisputed.
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Based on his conversation with Mr. Vincent, Lopez prepared an insurance
application and solicited various admitted insurance companies; however, all the
admitted insurers declined coverage.3 Id. at ¶¶12-13. Thereafter, ELG used a
wholesale broker to solicit non-admitted insurers regarding Plaintiffs’ insurance
needs. 	Id. 	at 	¶14. 	Defendant 	Certain 	Underwriters 	at 	Lloyd’s 	of 	London
(“Underwriters”) offered to insure the Property with a dwelling limit of $825,000. Id.
at ¶15. ELG then asked Plaintiffs to review and make any necessary revisions to the
information regarding the Property “to make sure [they got] the limit of insurance
correct” in case of a total loss.4 	Id. at ¶¶17-18. ELG also provided Plaintiffs with a
pamphlet explaining the concept of coinsurance.5
Based 	on 	the 	revised 	information 	from 	Plaintiffs, 	ELG 	generated 	a
replacement cost estimate for the Property of $975,000 and then solicited non-
3 “Admitted” insurance companies must meet state regulations and requirements.
“Non-admitted” do not have to meet the same requirements but are often more willing
to provide coverage for high-risk properties. See Toolkit for Homeowners and HOAs
on Insurance, Colorado Division of Insurance, https://doi.colorado.gov/homeowners-
hoainsurancetoolkit (last visited January 30, 2025).
4 The Parties, at times, dispute whether a particular communication came from Major
or Lopez. However, there is no question that both Major and Lopez were, at all times
relevant to this dispute, communicating within the scope of their employment and on
behalf of ELG. Thus, the Court does not quibble—and concludes it makes no material
difference to the ultimate outcome—over which individual defendant spoke with or
emailed Plaintiffs. For simplicity, the Court refers to communications as being from
ELG.
5 Plaintiffs contend this pamphlet was inadequate in its explanation. But they do not
dispute receiving the pamphlet and apparently Mr. Vincent did not tell ELG that he
did not understand the concept of coinsurance. Dkt. 92 at ¶19.
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admitted insurers regarding their interest in providing a policy with such dwelling
limits. Id. at ¶¶20, 22. Underwriters again offered an insurance policy at the
requested limit, which 	ELG 	provided to 	Plaintiffs. 	Id. at 	¶¶22, 23. Plaintiffs
ultimately decided to purchase the policy with dwelling coverage limits of $825,000.
Id. at ¶24. Thereafter, in January 2020, Underwriters had the Property inspected
and estimated that the rebuild cost for the Property was $991,000. Id. at ¶¶25, 26.
Although Underwriters would have increased the dwelling coverage limits based on
the inspection’s findings, Plaintiffs did not request any changes to their policy. Id. at
¶¶30, 31.
In October 2020, the East Troublesome Fire destroyed the Property. Id. at ¶34.
After Plaintiffs filed an insurance claim, Underwriters paid them the full policy limits
and an additional $41,250 for trees, shrubs, and other plants. See Dkt. 93 at p.3. In
addition to seeking additional payments from Underwriters, Plaintiffs seek monetary
damages from Defendants for their alleged negligence in procuring the insurance
policy. Dkt. 4 at ¶¶121-34.
SUMMARY JUDGMENT STANDARD
The purpose of summary judgment is to assess whether a trial is necessary.
White v. York Int’l Corp., 45 F.3d 357, 360 (10th Cir. 1995). Summary judgment is
appropriate “when there is no genuine issue as to any material fact and the moving
party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The movant
bears the “responsibility of informing the district court of the basis for its motion, and
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identifying those portions of [the record] which it believes demonstrate the absence
of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
If the movant meets this burden, then the nonmoving party must identify material
facts showing there is a genuine dispute for trial. Id. at 324. A fact is “material” if it
has the potential to affect the outcome of a dispute under applicable law. Ulissey v.
Shvartsman, 61 F.3d 805, 808 (10th Cir. 1995). An issue is “genuine” if a rational
trier of fact could find for the nonmoving party on the evidence presented. Adams v.
Am. Guarantee & Liab. Ins. Co., 233 F.3d 1242, 1246 (10th Cir. 2000). In performing
this analysis, the factual record and any reasonable inferences from it are construed
in the light most favorable to the nonmoving party. Id.
ANALYSIS AND FINDINGS
Plaintiffs’ claim of negligence is based on their contention they had a special
relationship with Defendants, who allegedly failed to appropriately advise Plaintiffs
and procure sufficient coverage to rebuild the Property in the event of a total loss.
Dkt. 	4 	at 	pp.121-34. 	In 	their Motion, Defendants 	contend 	that 	based on 	the
undisputed evidence, no jury could reasonably conclude they developed a special
relationship with Plaintiffs or that they were negligent in procuring Plaintiffs’
insurance policy.6 The Court agrees with Defendants.
6 Defendants also contend, in the alternative, they are entitled to partial summary
judgment because Plaintiffs have failed to disclose expert testimony regarding the
proximate cause of damages. Given the Court’s conclusions regarding their first
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A. 	Negligence
To establish a claim of negligence, a plaintiff must show (1) a duty or obligation
requiring the defendant to conform to a specific standard of care; (2) a breach of the
duty by the defendant; (3) a sufficient causal nexus between the defendant’s breach
and the plaintiff’s injury; and (4) actual damages to the plaintiff’s interest. Bayly,
Martin & Fay, Inc. v. Pete’s Satire, Inc., 739 P.2d 239, 242 (Colo. 1987).7 Under
Colorado law, “[t]he general duty of the insurer’s agent to the insured is to refrain
from affirmative fraud, not to watch out for all rights of the insured and inform the
latter of them.” Kaercher v. Sater, 155 P.3d 437, 441 (Colo. App. 2006) (quoting Estate
of Hill v. Allstate Ins. Co., 354 F.Supp.2d 1192, 1197 (D. Colo. 2004), and 4 Couch on
Insurance § 55:5 (3d ed.)).
Consistent with these legal principles, absent a special relationship, insurance
agents and companies do not “ have a common law duty to ensure complete protection
to the policyholder or to recommend higher policy limits, but only [have] a duty to
exercise a reasonable duty of care.” Apodaca v. Allstate Ins. Co., 232 P.3d 253, 259
(Colo. App. 2009), aff’d, 255 P.3d 1099 (Colo. 2011); see also Kaercher, 155 P.3d at 441
(“No duty to give advice is created simply because the insurance intermediary
becomes a person’s agent. This applies both to advice about what policies should be
argument, it need not address the purported lack of experts or Defendants’ pending
motions regarding expert testimony.
7 Federal courts sitting in diversity apply the substantive law of the forum state.
Berry & Murphy, P.C. v. Carolina Cas. Ins. Co., 586 F.3d 803, 808 (10th Cir. 2009).
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purchased as well as advice about what coverage is contained in an insureds existing
policy.”). “An insurance agent who agrees to obtain a particular form of insurance
coverage has a duty to obtain such coverage or to notify the person seeking coverage
of his failure or inability to do so.” Valley Equip. Leasing, Inc. v. McGriff, Seibels &
Williams of Oregon, Inc., No. 14-cv-02383-CMA-NYW, 2016 WL 1697861, at *4 (D.
Colo. Apr. 28, 2016).
The undisputed facts in this case are clear. Plaintiffs contacted Defendants
seeking an insurance policy with dwelling limits of $825,000. Defendants solicited
various companies and ultimately presented Plaintiffs with proposed insurance
policies with dwelling limits of $825,000 and $975,000. Plaintiffs specifically directed
Defendants to procure the policy with the lower limit, which they did. Consequently,
absent a finding of a special relationship, which the Court turns to next, no
reasonable jury could conclude Defendants were negligent in procuring Plaintiffs’
insurance policy.
B. 	Special Relationship
Plaintiffs 	contend 	there 	is 	a 	genuine 	dispute 	as 	to 	whether 	a 	special
relationship existed between the parties. The Court disagrees. “Whether a special
relationship has been formed turns on whether there is ‘entrustment,’ that is,
whether the agent or broker assumes additional responsibilities beyond those which
attach to an ordinary, reasonable agent possessing normal competencies and skills.”
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Sewell v. Great N. Ins. Co., 535 F.3d 1166, 1171 (10th Cir. 2008) (citing Kaercher v.
Sater, 155 P.3d 437, 441 (Colo. App. 2006)).
Plaintiffs first contend Defendants exercised a special level of discretion
because Defendants submitted the initial application for insurance without first
obtaining 	Plaintiffs’ 	signatures. 	Dkt. 	85 	at 	p.8. 	This 	conduct, 	however, 	is
distinguishable from cases where an insurance agent exercised a level of discretion
or authority such that it formed a special relationship between the parties. In those
cases, the agents “customarily took care of a customer’s insurance needs without
consulting 	the 	insured 	and 	without 	further 	express 	orders 	from 	the 	insured.”
Richardson v. Amica Mut. Ins. Co., 693 F. Supp. 3d 1182, 1187 (D. Colo. 2023)
(emphasis added) (discussing Estate of Hill v. Allstate Ins. Co., 354 F. Supp. 2d 1192
(D. Colo. 2004)); see also Construction Planners, Inc. v. Dobax Ins. Agency, Inc., 583
N.E.2d 255, 257 (Mass. App. Ct. 1991) (a jury could find prior dealings giving rise to
a duty where plaintiff had relied on defendant for several years to meet its varied
insurance needs, and defendant often renewed the policies automatically without
consulting plaintiff); Barnett v. Security Ins. Co. of Hartford, 352 S.E.2d 855, 857
(N.C. Ct. App. 1987) (a jury could find prior dealings giving rise to a duty where
defendant automatically renewed plaintiffs’ multiple insurance policies when they
expired over a period of three and a half years).
Here, it is undisputed that this initial application was not binding on Plaintiffs.
And more importantly, when that application resulted in two options for coverage,
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Plaintiffs made the ultimate decision regarding which insurance policy they wanted.
Plaintiffs have not cited any cases where an agent’s act of submitting an initial
insurance application that lacked the insured’s signature was found to establish a
special duty, and this Court is aware of none.
Plaintiffs next contend the Defendants incurred a special duty because they
provided Plaintiffs with additional counseling—upon which they relied—that went
beyond a traditional agent and insured relationship. Specifically, Plaintiffs state
Defendants (1) provided advice regarding insurance for short-term rentals and
“insurance [] value for properties;” (2) assisted with claims handling; and (3) offered
coverage opinions for lost rental income due to COVID-19. Dkt. 85 at pp.9-11.8
There are several problems with these arguments. Chief among them is that
Plaintiff cites no evidence in the record, nor even to the statement of facts, to support
these allegations. The Court will not root through the record in search of evidence to
support any factual assertions. Gross v. Burggraf Constr. Co., 53 F.3d 1531, 1546
(10th Cir.1995) (“Without a specific reference, [courts] will not search the record in
an effort to determine whether there exists dormant evidence.”). And Plaintiffs again
fail to cite any authority supporting their arguments that Defendants’ purported
“additional counseling” warrants finding a special relationship.
8 Plaintiffs also insist they did not understand the concept of coinsurance; however,
it is undisputed they were provided with a pamphlet explaining coinsurance. Dkt. 92
at ¶19. There is no evidence they expressed any confusion or concern to Defendants
after receiving the pamphlet.
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To be sure, the results of this Court’s research directly contradict Plaintiffs’
arguments. Colorado courts have consistently concluded that even “when an agent
represents that he or she is knowledgeable about insurance coverages, and regularly
in the course of his or her business, informs, counsels, and advises customers about
their insurance needs,” the agent has not triggered a special relationship or assumed
a heightened duty of care to the insured. Apodaca, 232 P.3d at 259. Plaintiffs’
allegations regarding Defendants’ counseling efforts are indistinguishable from facts
Colorado 	courts 	have 	previously 	deemed 	insufficient 	to 	trigger 	a 	“special
relationship.”
Finally, 	Plaintiffs 	assert—again 	without 	directing 	this 	Court 	to 	record
citations—they 	paid 	Defendants 	“additional 	fees 	which 	were 	incremental 	to
[Defendants’] traditional earned commissions.” Dkt. 85 at p.11. This argument is
inapposite for two reasons. First, cases discussing payment of additional fees do so in
the context of an agent providing additional personalized risk-management services
and expert advice. See Parker v. State Farm Mut. Auto. Ins. Co., 630 N.E.2d 567, 570
(Ind. Ct. App. 1994) (articulating the kinds of factors required to establish a special
relationship of entrustment including “receiving compensation, above the customary
premium paid, for expert advice provided”); Tackes v. Milwaukee Carpenters Dist.
Council Health Fund, 476 N.W.2d 311 (Wis. Ct. App. 1991) (no additional duty where
there was no long-standing relationship of entrustment and agent did not receive any
compensation for insurance consulting work other than the commissions he received
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from 	premiums). 	Plaintiffs 	have 	not 	cited 	any 	evidence 	that 	these 	purported
additional fees were compensation for personalized expert advice beyond the advice
ordinarily provided by an insurance agent to their client.
Second, the evidence is in fact undisputed that Defendants were only paid their
10% commission. Dkts. 92-1, -2. The additional amounts on the invoice include the
wholesale broker’s fee, an inspection fee, and taxes. Id. Thus, the Court concludes
that no reasonable jury could find a special relationship on this basis. See Sewell, 535
F.3d at 1171 (no special relationship where, among other factors, the plaintiff did not
pay more for a detailed needs analysis or for personal risk-management services).
* 	* 	*
Because there are no disputed questions as to whether there was a special
relationship between Defendants and Plaintiffs requiring a heightened duty of care,
Defendants are entitled to judgment on Plaintiffs’ negligence claims as a matter of
law. It is, therefore, ORDERED:
1. 	Defendants’ Motion for Summary Judgment is GRANTED and the
claims against them are dismissed;
2. 	The Court finds as MOOT Defendants’ motions (Dkts. 53, 54) to exclude
or limit Plaintiffs’ experts.
SO ORDERED.
DATED: 	January 31, 2025
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BY THE COURT:
S. Kato Crews
United States District Judge
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