Curran v. Progressive Preferred Insurance Company, et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Nina Y. Wang
Civil Action No. 22-cv-00878-NYW-MEH
MICHAEL CURRAN, individually and on behalf of all others similarly situated,
Plaintiff,
v.
PROGRESSIVE DIRECT INSURANCE COMPANY,
Defendant.
ORDER ON MOTION TO DISMISS
This matter is before the Court on Defendant Progressive Direct Insurance Company’s
Motion to Dismiss Plaintiff’s Second Amended Complaint (the “Motion” or “Motion to Dismiss”)
[Doc. 30]. The Court has reviewed the Motion, the related briefing, and the applicable case law,
and concludes that oral argument would not materially assist in the resolution of this matter. For
the reasons set forth herein, the Motion to Dismiss is GRANTED in part and DENIED in part.
BACKGROUND
On August 12, 2021, Plaintiff Michael Curran (“Plaintiff” or “Mr. Curran”) was involved
in an automobile collision that caused physical damage to his vehicle.1 [Doc. 21 at ¶ 16]. At the
time of the collision, Mr. Curran was insured through Defendant Progressive Direct Insurance
Company (“Defendant” or “Progressive Direct”). [Id.]. Progressive Direct declared Mr. Curran’s
1 This action was originally filed by Plaintiff Hersey Banks (“Plaintiff Banks”) based on an
automobile collision on or about October 1, 2018. 	[Doc. 1]. 	Mr. Curran was substituted for
Plaintiff Banks as the named plaintiff in the First Amended Complaint filed on May 2, 2022. [Doc.
9].
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vehicle to be a total loss. 	[Id. at ¶¶ 17–18]. 	Pursuant to Mr. Curran’s insurance policy (the
“Policy”), Progressive Direct purported to pay Mr. Curran the actual cash value (“ACV”) of his
total loss vehicle. [Id. at ¶¶ 2, 18].
In this lawsuit, Mr. Curran challenges Progressive Direct’s process by which it calculates
the ACV of a total loss vehicle. Plaintiff alleges that when Defendant calculates valuations and
claim payments, it “systemically employs a routine ‘total loss settlement process’” that “involves
obtaining a ‘Vehicle Valuation Report’ from Mitchell [International, Inc.] and relying upon the
valuation provided by Mitchell as the ACV amount owed under the policy.” [Id. at ¶¶ 1, 19]. The
Mitchell Vehicle Valuation Reports purport to contain values for comparable vehicles for sale in
the insured’s geographic area, which are used to compute a valuation for the total loss vehicle. [Id.
at ¶ 20]. The Valuation Reports then adjust the advertised sale prices of the comparable vehicles
to account for differences in equipment, mileage, and vehicle configuration. [Id.].2 The Valuation
Reports also apply “Projected Sold Adjustments,” which are “adjustment[s] to reflect consumer
purchasing behavior (negotiating a different price than the listed price),” to the comparable
vehicles. [Id. at ¶¶ 21–22].
Mr. Curran alleges that the Projected Sold Adjustments do not reflect market realities and
instead are contrary to customary automobile dealer practices and inventory management. [Id. at
¶ 23]. Specifically, Plaintiff alleges that previously, dealerships would price vehicles above market
value to allow for negotiation, in the hopes of securing higher profits from buyers who were poor
negotiators. 	[Id. at ¶ 24]. 	But now, Plaintiff alleges, the “intense competition” in the age of
“Internet pricing and comparison shopping” causes dealerships to no longer employ this practice;
instead, dealers now “use sophisticated pricing software . . . and now appraise vehicles before
2 Mr. Curran does not challenge these types of adjustments. See [Doc. 21 at ¶ 28].
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acquiring them to price them to market and do not negotiate from that price.” [Id. at ¶¶ 23, 25].
For this reason, Mr. Curran asserts that “a negotiated discount off the cash price is highly atypical
and is not proper to include in determining [the] ACV” of a total loss vehicle. [Id. at ¶ 27]. Mr.
Curran 	alleges 	that 	the 	Projected 	Sold 	Adjustments 	are 	“contrary 	to 	proper 	appraisal
methodologies for determining ACV” because they “permit arbitrary adjustments from the
advertised price based upon undocumented and unverifiable projections.” 	[Id. at ¶ 28].
Furthermore, he asserts that Progressive Direct
thumbs the scale [against insureds] by discarding vast amounts of relevant data that
contradict any application of a Projected Sold Adjustment and by failing to control
for material variables, including whether there were ancillary purchases or
transactions that may influence what is recorded as the “sales price” but do not
influence the ACV (e.g., whether the customer traded in a vehicle at the time of
purchase, bought an extended warranty or service plan, or financed the purchase).
[Id. at ¶ 29]. Mr. Curran also alleges that Progressive Direct excludes certain transactions from
the calculation of Projected Sold Adjustments—such as transactions in which the sold price was
greater than the list price—and that it has done so “[w]ithout having performed any investigation
or study” into market realities. [Id. at ¶¶ 30–34]. And finally, Plaintiff alleges that Defendant’s
use of Projected Sold Adjustments is arbitrary because Defendant does not apply these adjustments
in the states of California or Washington. [Id. at ¶ 47].
Defendant applied the Projected Sold Adjustments to Plaintiff’s Valuation Report. [Id. at
¶ 19]. 	For Mr. Curran specifically, Projected Sold Adjustments “in the amounts of -$1,302.00,
-$1,294.00, and -$1,485.00 . . . were applied to each of the three comparable vehicles” on his
Valuation Report. 	[Id. at ¶ 21].3 	Mr. Curran alleges that “were it not for this deceptive and
3 Plaintiff alleges that the Reports “make a further adjustment to each loss vehicle called a
‘Projected Sold Adjustment.’ 	For Plaintiff, Projected Sold Adjustments in the amounts of -
$1,302.00, -$1,294.00, and - $1,485.00 respectively, were applied to each of the three comparable
vehicles.” [Doc. 21 at ¶ 21 (emphasis added)]. It is thus unclear from the Amended Complaint
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improper adjustment, the payment of ACV by Defendant would have been $1,360.33 higher,
before adding the related increase in payments for applicable sales taxes.” [Id. at ¶ 49].
This class action lawsuit is brought on behalf of the following proposed class:
All Colorado citizens insured by Progressive [Direct] who, from the earliest
allowable time through the date an Order granting class certification is entered,
received compensation for the total loss of a covered vehicle, where that
compensation was based on a vehicle valuation report prepared by Mitchell and the
ACV was decreased based upon Projected Sold Adjustments to the comparable
vehicles used to determine ACV.
[Id. at ¶ 50]. Plaintiff asserts the following claims on behalf of the class: (1) breach of contract
(“Claim One”); (2) bad faith breach of an insurance contract (“Claim Two”); and (3) a declaratory
judgment claim seeking a declaration that “in paying total loss claims with first-party insureds, it
is a breach of the insurance contract . . . for Progressive [Direct] to base the valuation and payment
of claims on values of comparable vehicles that have been reduced by factually erroneous
Projected Sold Adjustments” and that “Progressive [Direct]’s application of unfounded Projected
Sold Adjustments results in a valuation of less than the ACV Progressive [Direct] is required under
its insurance contracts to pay insureds” (“Claim Three”). [Id. at 14–17].
Progressive Direct filed its Motion to Dismiss on August 5, 2022. [Doc. 30]. It argues that
each of Plaintiff’s three claims should be dismissed for failure to state a claim under Rule 12(b)(6).
First, it argues that Mr. Curran fails to state a cognizable breach of contract claim because he does
not allege that he suffered any damages arising from any purported breach. [Id. at 5–7]. Next, it
whether the Projected Sold Adjustments are applied to the loss vehicle, to the comparable vehicles,
or both. However, Plaintiff has provided a copy of his Valuation Report, see [Doc. 1-1], which
the Court can properly consider at this juncture. 	See Brokers’ Choice of Am., Inc. v. NBC
Universal, Inc., 861 F.3d 1081, 1103 (10th Cir. 2017) (a court may consider documents attached
to or referenced in the operative complaint if they are central to the plaintiff’s claims and
indisputably authentic). The Court notes that, in Plaintiff’s Valuation Report, the Projected Sold
Adjustments have been made to the comparable vehicles. See [Doc. 21-2 at 5, 6, 7].
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contends that Mr. Curran’s bad faith claim should be dismissed because Plaintiff’s allegations in
support of the claim are generic, conclusory, and insufficient to state a cognizable claim. [Id. at
7–9]. In the alternative, Progressive Direct maintains that Plaintiff’s bad faith claim is preempted
by Colorado’s Total Loss Statute, Colo. Rev. Stat. § 10-4-639(3). 	[Id. at 9–12]. 	And lastly,
Progressive Direct argues that Plaintiff lacks standing to bring his declaratory judgment claim,
which Progressive Direct also contends is duplicative of Plaintiff’s other claims. [Id. at 12–14].
Mr. Curran disagrees and maintains that he has plausibly alleged all of his claims. See generally
[Doc. 35]. Since completion of the briefing on the Motion to Dismiss, Mr. Curran has submitted
seven Notices of Supplemental Authorities, directing the Court to eight opinions denying motions
to 	dismiss 	in 	cases 	that, 	according 	to 	Plaintiff, 	involve 	allegations 	that 	are 	“materially
indistinguishable” from the allegations in this case. See [Doc. 43; Doc. 44; Doc. 45; Doc. 46; Doc.
47; Doc. 48; Doc. 49].
LEGAL STANDARD
Under Rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon
which relief can be granted.” Fed. R. Civ. P. 12(b)(6). In deciding a motion under Rule 12(b)(6),
the Court must “accept as true all well-pleaded factual allegations . . . and view these allegations
in the light most favorable to the plaintiff.” Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir.
2010) (quoting Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)). 	Nevertheless, a
plaintiff may not rely on mere labels or conclusions, “and a formulaic recitation of the elements of
a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather,
“a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that
is plausible on its face.” 	Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Robbins v.
Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (explaining that plausibility refers “to the scope
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of the allegations in a complaint,” and that the allegations must be sufficient to nudge a plaintiff’s
claim(s) “across the line from conceivable to plausible”). 	The ultimate duty of the Court is to
“determine whether the complaint sufficiently alleges facts supporting all the elements necessary
to establish an entitlement to relief under the legal theory proposed.” 	Forest Guardians v.
Forsgren, 478 F.3d 1149, 1160 (10th Cir. 2007).
ANALYSIS
I. 	Breach of Contract
To state a breach of contract claim under Colorado law, a plaintiff must allege facts
establishing: “(1) the existence of a contract, (2) performance by the plaintiff or some justification
for nonperformance, (3) failure to perform the contract by the defendant, and (4) damages.”
Lawson v. Heartland Payment Sys., LLC, 548 F. Supp. 3d 1085, 1095 (D. Colo. 2020). Progressive
Direct challenges Mr. Curran’s breach of contract claim on the fourth element, arguing that Mr.
Curran fails to state a breach of contract claim because he “has failed to plead any basis for his
alleged damages under the Policy.” [Doc. 30 at 6]. Namely, Progressive Direct contends that Mr.
Curran’s breach of contract claim should be dismissed because he raises only “conclusory” and
“barebones assertions that the ACV of his vehicle could have been ‘1,360.33 higher,’ and that his
damages are ‘at least $485.86.’” [Id. (citations omitted)]. According to Progressive Direct, Mr.
Curran’s allegations are deficient because he “has not identified the ACV of his total-loss vehicle,
the amount necessary to replace his total-loss vehicle (or that he even attempted to do so), . . . or
even how much Progressive Direct paid on the claim.” [Id.]. Mr. Curran disagrees, arguing that
his allegations are sufficient to state a claim for breach of contract because he has alleged that
Progressive “undercalculated the ACV [of his total loss vehicle] by $1,360.33, meaning that it
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underpaid Plaintiff by $1,360.33.” 	[Doc. 35 at 8]. 	He states that this amount is “the precise
amount” that he alleges he was underpaid. [Id.].
The Court respectively agrees with Mr. Curran that he has, at this stage in the proceedings,
plausibly alleged damages stemming from a breach of the insurance contract. 	He alleges that,
under the applicable insurance Policy, Defendant was obligated to pay him the ACV of his total
loss vehicle. 	[Doc. 21 at ¶ 2]. 	But he asserts that Progressive Direct employs a practice “of
undervaluing comparable and total loss vehicles when paying automobile total loss claims through
arbitrary, unsupported, and unjustified adjustments, which benefits the insurer at the expense of
the insured,” [id. at ¶ 10], and does so by using Projected Sold Adjustments that “do not reflect
market realities” and instead “run contrary to customary automobile dealer practices.” [Id. at ¶ 23].
And finally, he alleges that for his vehicle specifically, Progressive Direct improperly applied
Projected Sold Adjustments in the amounts of -$1,302.00, -$1,294.00, and -$1,485.00 to the
comparable vehicles, and if it were not for Defendant’s “deceptive and improper” use of the
Projected Sold Adjustments, the ACV payment for his vehicle “would have been $1,360.33 higher,
before adding the related increase in payments for applicable sales taxes.” [Id. at ¶¶ 21, 49].
A number of courts throughout the country have concluded that similar allegations—even
where the plaintiff did not allege specifically what he or she believed to be the actual ACV of their
total loss vehicle—are sufficient to plausibly state a breach of contract claim. See, e.g., Watson v.
Progressive Direct Ins. Co., No. CV 5:22-203-DCR, 2022 WL 18027628, at *8 (E.D. Ky. Dec.
30, 2022) (“[Plaintiff] satisfied Rule 12(b)(6)’s pleading requirements by stating that she suffered
$904.33 in damages: the amount by which Progressive reduced her settlement offer after applying
the PSA. . . . Contrary to Progressive’s assertions, Watson need not state how much her car was
worth or how much she believed she was owed at this stage of the litigation.”); Grady v.
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Progressive Direct Ins. Co., --- F. Supp. 3d ----, No. 22-cv-866 (NEB/TNL), 2022 WL 18494898,
at *6 (D. Minn. Nov. 30, 2022) (denying motion to dismiss on almost identical allegations to those
raised by Plaintiff here and rejecting Defendant’s argument that the plaintiff “must allege how
much she thinks her car was worth and that Progressive Direct paid her less than that amount”).4
Insofar as Defendant takes issue with Plaintiff’s failure to allege precise valuation numbers,
those numbers “will become more precise through the discovery process.” 	Petri v. Drive New
Jersey Ins. Co., No. 1:21-cv-20510, 2022 WL 4483437, at *5 (D.N.J. Sept. 26, 2022); see also
Grady, 2022 WL 18494898, at *6 (“Had Progressive Direct not applied those PSAs to the listed
cars, Grady’s ACV payment allegedly would have been $499.80 higher. 	Discovery may reveal
that number to be inaccurate. But at the motion-to-dismiss stage, Grady has plausibly alleged that
she was injured.”) (citations omitted). 	To be sure, while Mr. Curran’s allegations “could have
been more precise,” see Petri, 2022 WL 4483437, at *5, they are sufficient to “ensure that
[Defendant] is placed on notice of [its] alleged misconduct sufficient to prepare an appropriate
defense,” Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1215 (10th Cir. 2011), and are
sufficient to survive the Motion to Dismiss. Accordingly, the Motion to Dismiss is DENIED with
respect to the breach of contract claim.
4 See also, e.g., Holmes v. Progressive Universal Ins. Co., No. 22 C 894, 2023 WL 130477, at *8
(N.D. Ill. Jan. 9, 2023) (“Plaintiffs allege they would have been $445.00 and $374.80 better off,
respectively, but-for the application of a PSA. . . . Plaintiffs have plausibly alleged an injury
sufficient to survive Progressive’s motion to dismiss.”); Petri v. Drive New Jersey Ins. Co., No.
1:21-cv-20510, 2022 WL 4483437, at *5 (D.N.J. Sept. 26, 2022) (“Defendants were obligated to
pay a yet-to-be-determined amount of money but paid less than that amount. 	These allegations
are about as close to a contract law casebook’s definition of breach as one could get.”); Volino v.
Progressive Cas. Ins. Co., No. 21 CIV. 6243 (LGS), 2022 WL 5242894, at *2 (S.D.N.Y. Oct. 6,
2022) (rejecting argument raised by Defendant here, on nearly identical allegations to those
asserted here, and concluding that the complaint sufficiently alleged a breach of contract).
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II. 	Common Law Bad Faith
Claim Two is captioned as asserting a breach of the covenant of good faith and fair dealing,
see [Doc. 21 at 14], which the Court construes as a common law bad faith claim. “Every contract
in Colorado contains an implied duty of good faith and fair dealing,” and typically, a breach of this
duty gives rise only to a breach of contract claim. Goodson v. Am. Standard Ins. Co. of Wis., 89
P.3d 409, 414 (Colo. 2004). However, “[d]ue to the ‘special nature of the insurance contract and
the relationship which exists between the insurer and the insured,’ an insurer’s breach of the duty
of good faith and fair dealing gives rise to a separate cause of action arising in tort.” Id. (quoting
Cary v. United of Omaha Life Ins. Co., 68 P.3d 462, 466 (Colo. 2003)). 	This tort action is
commonly referred to as a common law claim for bad faith breach of an insurance contract. See,
e.g., Kisselman v. Am. Fam. Mut. Ins. Co., 292 P.3d 964, 970 (Colo. App. 2011).
Progressive Direct raises two arguments challenging Mr. Curran’s bad faith claim. It first
contends that Mr. Curran fails to allege sufficient facts to state a bad faith claim. [Doc. 30 at 7].
In the alternative, it argues that Plaintiff’s bad faith claim is precluded by Colorado’s Total Loss
Statute. [Id. at 9]. The Court addresses these arguments in turn.
A. 	Failure to State a Claim
To state a common law bad faith claim, the insured must allege facts demonstrating “that
(1) the insurer’s conduct was unreasonable, and (2) the insurer either had knowledge of or reckless
disregard for the fact that its conduct was unreasonable.” 	Kisselman, 292 P.3d at 970 (citing
Travelers Ins. Co. v. Savio, 706 P.2d 1258, 1275 (Colo. 1985)). “[T]he tort of bad faith breach of
an insurance contract encompasses an entire course of conduct and is cumulative,” Dale v. Guar.
Nat’l Ins. Co., 948 P.2d 545, 551 (Colo. 1997), and “[t]he reasonableness of the insurer’s conduct
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must be determined objectively and is based on proof of industry standards.” Schultz v. GEICO
Cas. Co., 429 P.3d 844, 847 (Colo. 2018) (quotation omitted).
Progressive Direct argues that Mr. Curran fails to state a claim because he “does not allege
he disputed the [Projected Sold Adjustments] at the time of the settlement [of his claim], rejected
Progressive Direct’s offer, or that Progressive Direct failed to consider additional information he
submitted regarding the value of his loss vehicle.” 	[Doc. 30 at 9]. 	According to Defendant,
“[w]ithout these allegations, there can be no plausible inference that Progressive Direct acted
unreasonably, and certainly no inference that Progressive Direct had knowledge of or reckless
disregard that its valuation was unreasonable.” [Id. (quotation omitted)].
The Court respectfully disagrees. Progressive Direct cites no legal authority establishing
that Mr. Curran must allege that Defendant failed to consider additional information he submitted
or that he disputed Progressive Direct’s use of the Projected Sold Adjustments at the time of the
settlement. 	See generally [id.]. 	Indeed, Progressive Direct cites no case law, and this Court
independently found none, that indicates that Mr. Curran’s conduct—rather than Progressive
Direct’s—is the proper focus of a bad faith claim. 	While the examples provided by Defendant
may be some bases upon which a plaintiff can base a bad faith claim, they are not the exclusive
bases for a common law claim. 	See, e.g., Colo. Rev. Stat. § 10-3-1104(h) (the Unfair Claims
Settlement Practices Act providing a non-exhaustive list of unfair claim settlement practices).5 For
example, an insurer may engage in bad faith if it “[m]isrepresent[s] pertinent facts . . . relating to
coverages at issue,” Colo. Rev. Stat. § 10-3-1104(h)(I), knowingly relies on incomplete or
5 “In determining whether an insurer’s delay in paying benefits or its denial of benefits was
reasonable, the jury may consider evidence that the insurer's conduct violated the [Unfair Claims
Settlement Practices Act, § 10-3-1104].” Peiffer v. State Farm Mut. Auto. Ins. Co., 940 P.2d 967,
971 (Colo. App. 1996).
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inaccurate information, see Ridgeview Ctr. LLC v. Canopius US Ins. Inc., No. 18-cv-02850-REB-
MEH, 2019 WL 2137394, at *4 (D. Colo. May 16, 2019), report and recommendation adopted,
2019 WL 13149200 (D. Colo. Sept. 17, 2019), or fails to conduct a reasonable investigation based
on all available information. 	See Am. Family Mut. Ins. Co. v. Allen, 102 P.3d 333, 344 (Colo.
2004).
Again, here, Mr. Curran alleges that Defendant’s use of Projected Sold Adjustments does
“not reflect market realities” and runs “contrary to customary automobile dealer practices and
inventory management.” [Doc. 21 at ¶ 23]. He then provides specific examples of what he alleges
to be automobile dealership practices, [id. at ¶¶ 23–27], and explains how the Projected Sold
Adjustments run contrary to these standard appraisal practices. 	[Id. at ¶ 28]. 	Mr. Curran also
alleges that Progressive Direct “discard[s] vast amounts of relevant data that contradict any
application of a Projected Sold Adjustment and by failing to control for material variables” and
excludes certain transactions from its Projected Sold Adjustments that may decrease the amount
of the Projected Sold Adjustment. 	[Id. at ¶¶ 30–34]. 	Taking these facts as true, as it must, the
Court concludes that Mr. Curran has plausibly alleged bad faith on the part of Progressive Direct.
See Bingman v. Safeco Ins. Co., No. 20-cv-03125-RMR-GPG, 2022 WL 2287539, at *7 (D. Colo.
Feb. 6, 2022) (recommending that bad faith claim survive a motion to dismiss where the plaintiff
alleged that the insurer “misused” pricing data and undervalued the plaintiff’s loss despite knowing
the prevailing competitive price in the relevant market), report and recommendation adopted,
2022 WL 2287508 (D. Colo. Mar. 31, 2022); see also Grady, 2022 WL 18494898, at *6–7.
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B. 	Colorado’s Total Loss Statute
In the alternative, Progressive Direct argues that Colorado’s Total Loss Statute, Colo. Rev.
Stat. § 10-4-639, “precludes a bad-faith breach of insurance contract claim.” [Doc. 30 at 9]. The
statute provides:
[a]n insurer shall establish a fair and consistent method for determining total loss
of 	a 	motor 	vehicle. 	Such 	method 	shall 	include 	consideration 	of 	unique
characteristics of the motor vehicle and a credible source of valuation. An insurer
shall maintain a record of its methodology for determining total loss evaluation and
provide such methodology to the commissioner upon request. The commissioner
may promulgate rules for the administration and enforcement of this subsection (3).
An insurer may not use different credible sources of valuation only to determine
the lowest amount payable for the total loss of the motor vehicle.
Colo. Rev. Stat. § 10-4-639(3). In making this argument, Progressive Direct relies on a decision
by this Court: Ubel v. Progressive Direct Insurance Co., No. 20-cv-00204-RM-NYW, 2020 WL
9432929 (D. Colo. Oct. 22, 2020), report and recommendation adopted, 2020 WL 6701102 (D.
Colo. Nov. 13, 2020). In Ubel, this Court concluded that a bad faith claim—also asserted against
Progressive Direct—was preempted by the Total Loss Statute. See Ubel, 2020 WL 9432929, at
*16–18. Specifically, the plaintiff in Ubel alleged that Progressive Direct’s valuation report relied
on a “statistically invalid” downward “Condition Adjustment” and also generally used a
“statistically invalid methodology.” Id. at *3. At the motion-to-dismiss stage, Progressive Direct
argued that the plaintiff could not raise a claim based on an alleged breach of statutory duty—
namely, the duty set out in the Total Loss Statute—because “the Colorado Legislature created a
comprehensive regulatory scheme governing the total loss valuation process,” such that it was
improper for the plaintiff to repackage his claim as an individual tort action. Id. at *16 (quotation
omitted).
In Ubel, this Court agreed with Progressive Direct. Noting that the plaintiff had alleged
that Progressive Direct had “a duty to its insureds to investigate and confirm the veracity and
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validity of the valuation products it uses” and had “breached this duty by knowingly using a
statistically invalid source for its total loss valuations,” id. at *17 (quotations omitted), the Court
determined that the plaintiff’s bad faith claim was not based on an alleged breach of a contractual
duty, but instead an “allege[d] violation of Progressive Direct’s statutory duty under the Total Loss
Statute because it [was] premised on the latter’s alleged failure to use a credible (i.e., statistically
valid) source of valuation to determine total loss claims.” Id. Then, using the factors identified
by the Colorado Supreme Court in Allstate Insurance Co. v. Parfrey, 830 P.2d 905 (Colo. 1992),6
the Court “consider[ed] whether the Total Loss Statute preclude[d] [the plaintiff’s] bad faith
claim.” Ubel, 2020 WL 9432929, at *17. Upon concluding that (1) the plaintiff was within the
class of persons identified to benefit from the Total Loss Statute; (2) the Colorado Legislature
intended for an administrative, rather than legislative, remedy for violations of the Total Loss
Statute; and (3) it was inappropriate to infer a legislative intent to create a private civil remedy, the
Court found that the Total Loss Statute “preclude[d] [the plaintiff’s] bad faith claim premised on
Progressive Direct’s alleged breach of its duty to use statistically valid valuation sources.” Id. at
*18–19 (emphasis added). 	This Court recommended that Progressive Direct’s motion to dismiss
be granted with respect to the bad faith claim, id. at *19, *22, the parties in Ubel did not object,
and the Honorable Raymond P. Moore adopted that recommendation. See 2020 WL 6701102, at
*1.
6 “In Colorado, to determine whether a private tort remedy is available for a defendant’s violation
of a statutory duty, the court considers three factors: (1) whether the plaintiff is within the class of
persons intended to benefit from the legislation, (2) whether the legislature intended to create an
implied private right of action, and (3) whether an implied civil remedy would be consistent with
the purposes of the legislative scheme.” Ubel, 2020 WL 9432929, at *17 (citing Parfrey, 830 P.2d
at 911).
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In his Response, Mr. Curran does not challenge the analysis or reasoning of this Court’s
decision in Ubel. Rather, he argues that Ubel is distinguishable from the instant matter. See [Doc.
35 at 10]. 	He suggests that Ubel “is completely different than Plaintiff’s claims here” because
here, “Plaintiff does not allege it is improper to use a comparable-vehicle methodology to
determine the actual cash value of a totaled vehicle,” but challenges only “Defendant’s sole
deviation from that otherwise acceptable methodology—applying an arbitrary adjustment that is
contrary to appraisal standards and methodologies and runs contrary to the used-car industry’s
market pricing and inventory management practices.” [Id. at 11]. He distinguishes this case from
Ubel, arguing that because this Court in Ubel had concluded that there was no contractual duty
that required Progressive Direct to use a statistically valid third-party valuation system, “the only
source for an independent duty [in Ubel] to use a statistically valid source—if one does not arise
from the contract itself—[was] the Total Loss [Statute].” [Id.]. Mr. Curran posits that this case is
different from Ubel because here, he “is alleging that Progressive [Direct] is breaching its
contractual duty by reducing the market value of insured vehicles through imposition of the made-
up, false, and capricious PSA—and because Progressive [Direct] is doing so knowingly (or with
reckless disregard), it is not only breaching the contract, but doing so in bad faith.” [Id. at 12].
Upon review of the record before it, the Court respectfully disagrees with Defendant’s
contention that Plaintiff’s bad faith claim should be dismissed at the pleading stage. 	Plaintiff
alleges that his insurance Policy obligated Defendant to pay the ACV of his total loss vehicle. See
[Doc. 21 at ¶ 3 (alleging that Progressive Direct “has a duty to pay . . . the ACV of a loss vehicle
when adjusting total loss claims”). The Policy requires Progressive Direct to pay “the actual cash
value of the stolen or damage property at the time of the loss reduced by the applicable deductible.”
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See [Doc. 1-1 at 25, § 1(a)].7 “The actual cash value is determined by the market value, age, and
condition of the vehicle at the time the loss occurs.” [Id. at 26, § 2(g)].
The definition within the Policy does not include expressly include Projected Sold
Adjustments or set out how market value is or should be calculated. 	See [id.]. 	But Plaintiff
contends that Projected Sold Adjustments as applied by Progressive Direct are discretionary, i.e.,
Plaintiff alleges that the Projected Sold Adjustments are not applied by Defendant in states like
California and Washington. 	[Doc. 21 at ¶ 47]. 	Plaintiff further alleges that, until July 2021,
Defendant excluded from the calculation of the Projected Sold Adjustments all transactions in
which the list price of a vehicle equaled the sold price and even after July 2021, Defendant still
excludes some transactions in which the list price of a vehicle equals the sold price. [Id. at ¶¶ 30–
31]. 	In addition, Defendant has excluded and continues to exclude from the calculation of the
Projected Sold Adjustments all transactions in which the sold price of the vehicles is greater than
the list price. [Id. at ¶ 32]. Plaintiff alleges that “[w]ithout having performed any investigation or
study, Defendant simply assumes all such transactions are anomalies.” [Id. at ¶ 33]. Thus, while
the application of the Projected Sold Adjustments is intended to reflect “consumer purchasing
behavior (negotiating a different price than the listed price),” [Doc. 21-2 at 8], Plaintiff contends
that, in reality, it always results in a “significant downward adjustment” of the base value of the
comparable vehicles and of the ACV paid to the insured. [Doc. 21 at ¶ 5].
While this Court recognizes the similarities between the allegations in this action and the
ones in Ubel, the crux of Plaintiff’s bad faith claim here does not arise from a duty that flows from
the Total Loss Statute. Rather, Plaintiff alleges that Defendant failed to pay Plaintiff the ACV of
7 The Court cites to the Policy as attached to the original Complaint, as the CM/ECF markings on
the Policy attached to the operative Second Amended Complaint are illegible.
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his total loss vehicle as it was contractually obligated to do, and justified doing so through
“[i]ntentionally inventing and applying Projected Sold Adjustments to undervalue comparable
vehicles, and, in turn, insureds’ total-loss vehicles.” See [Doc. 21 at ¶ 69(a), (c)]. Specifically,
Mr. Curran alleges that the use of Projected Sold Adjustments is contrary to the used car industry’s
market pricing and inventory management practices. [Id. at ¶¶ 1, 5, 22]. He further contends that
the application of the Projected Sold Adjustment is discretionary and that Progressive Direct
exercised that discretion unreasonably in fulfilling Defendant’s obligations under the contract. [Id.
at ¶¶ 1, 67-68]. Of course, Defendant may challenge whether Plaintiff can establish bad faith after
having had the benefit of discovery in this case. But at this stage in the proceedings, the Court
cannot conclude that dismissal is warranted on the current record. 	The Motion to Dismiss is
DENIED with respect to the bad faith claim.
III. 	Declaratory Judgment
Finally, Progressive Direct argues that Plaintiff’s declaratory judgment claim should be
dismissed for (1) lack of standing and (2) failure to state a claim. [Doc. 30 at 12–14]. Defendant’s
first argument is dispositive and the Court limits its analysis accordingly.8
In Claim Three, Mr. Curran seeks a declaratory judgment that “in paying total loss claims
with first-party insureds, it is a breach of the insurance contract with Progressive [Direct] for
Progressive [Direct] to base the valuation and payment of claims on values of comparable vehicles
that have been reduced by factually erroneous Projected Sold Adjustments,” and that Defendant’s
“application of unfounded Projected Sold Adjustments results in a valuation of less than the ACV
8 Although the Motion to Dismiss is raised exclusively under Rule 12(b)(6), an argument asserting
a lack of standing is appropriately raised under Rule 12(b)(1), as “[a] federal court does not have
jurisdiction over a case if the plaintiff does not have standing.” United States v. Colo. Supreme
Ct., 87 F.3d 1161, 1166 (10th Cir. 1996).
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Progressive [Direct] is required under its insurance contracts to pay insureds.” [Doc. 21 at ¶¶ 74,
77]. 	Progressive Direct contends that Mr. Curran lacks standing to seek such a declaratory
judgment because he fails to allege facts establishing that he is at risk of suffering a certainly
impending future injury. [Doc. 30 at 12–13]. In response, Mr. Curran argues that “[d]istrict courts
have allowed plaintiffs to maintain declaratory judgment claims in materially similar suits alleging
underpayment of actual cash value on total loss auto claims,” [Doc. 35 at 13 (collecting cases)],
and “Plaintiff therefore has standing to pursue the declaratory judgment claim alleged in the
Second Amended Complaint.” [Id.].
A plaintiff must establish Article III standing to bring each of his claims separately, see
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006), including claims for declaratory
judgment. See Bishop v. Smith, 760 F.3d 1070, 1091 n.13 (10th Cir. 2014) (“Like any lawsuit, a
declaratory-judgment action must meet Article III’s standing criteria.”). 	Article III standing
requires “(1) an ‘injury in fact,’ (2) sufficient ‘causal connection between the injury and the
conduct complained of,’ and (3) a ‘likel[ihood]’ that the injury ‘will be redressed by a favorable
decision.’” Susan B. Anthony List v. Driehaus, 573 U.S. 149, 157–58 (2014) (quoting Lujan v.
Defs. of Wildlife, 504 U.S. 555, 560–61 (1992) (alterations in original)). 	The injury-in-fact
requirement “helps to ensure that the plaintiff has a ‘personal stake in the outcome of the
controversy.’” Id. at 158 (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)). An injury in fact
must be “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.”
S. Utah Wilderness All. v. Palma, 707 F.3d 1143, 1153 (10th Cir. 2013). “An allegation of future
injury may suffice if the threatened injury is certainly impending, or there is a substantial risk that
the harm will occur.” Susan B. Anthony List, 573 U.S. at 158 (quotations omitted). But to “protect
against a feared future event, the plaintiff must demonstrate that the probability of that future event
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occurring is real and substantial, of sufficient immediacy and reality to warrant the issuance of a
declaratory judgment.” Armstrong World Indus., Inc. by Wolfson v. Adams, 961 F.2d 405, 412 (3d
Cir. 1992) (quotation omitted) (cited favorably by Jordan v. Sosa, 654 F.3d 1012, 1032 (10th Cir.
2011)). 	Plaintiff bears the burden of establishing the elements of standing. 	Lujan, 504 U.S. at
561.
The Court agrees with Defendant that Plaintiff fails to establish his standing to bring his
declaratory judgment claim. 	At best, Mr. Curran alleges that Progressive Direct’s “unlawful
common policy and general business practice of applying Projected Sold Adjustments is ongoing.”
[Doc. 21 at ¶ 75 (emphasis added)]. But he does not allege facts showing a “certainly impending”
injury or a “substantial risk” that he will suffer harm in the future. For example, Mr. Curran does
not allege that he remains insured through Progressive Direct; instead, he alleges that “[a]t all
relevant times, Plaintiff was contracted with Progressive [Direct] for automobile insurance.” [Id.
at ¶ 11]; see also [id. at ¶ 16 (“At the time of the car wreck, Plaintiff was contracted with
Progressive [Direct].”)]. Nor does he allege any facts establishing a likelihood that he will suffer
a total loss to his vehicle in the future, such that Progressive Direct, if he does remain insured
through Defendant, will again be put in the position to determine the ACV of his vehicle. 	See
generally [id.].
Courts have concluded that plaintiffs in similar cases lacked standing to seek this type of
declaratory relief. See, e.g., Holmes v. Progressive Universal Ins. Co., No. 22 C 894, 2023 WL
130477, at *9 (N.D. Ill. Jan. 9, 2023) (“Although Plaintiffs allege that Progressive’s practices
regarding total-loss claims are ‘ongoing,’ and purport to seek ‘prospective’ relief, they have not
demonstrated a substantial risk of harm in the future.”) (citation omitted); Grady, 2022 WL
18494898, at *7; Watson, 2022 WL 18027628, at *11.
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The Court agrees with this authority and concludes that, because Mr. Curran does not allege
facts plausibly alleging a certainly impending future injury or a substantial risk that such harm will
occur, he lacks standing to bring his declaratory judgment claim, and as a result, this Court lacks
subject matter jurisdiction over Claim Three. 	The Motion to Dismiss is thus GRANTED with
respect to Claim Three, and Claim Three is DISMISSED without prejudice for lack of subject
matter jurisdiction. See Brereton v. Bountiful City Corp., 434 F.3d 1213, 1218 (10th Cir. 2006)
(claims dismissed for lack of subject matter jurisdiction should be dismissed without prejudice).
CONCLUSION
For the reasons set forth herein, IT IS ORDERED that:
(1) 	Defendant Progressive Direct Insurance Company’s Motion to Dismiss Plaintiff’s
Second Amended Complaint [Doc. 30] is GRANTED in part and DENIED in
part; and
(2) 	Plaintiff’s declaratory judgment claim, Claim Three, is DISMISSED without
prejudice.
DATED: March 21, 2023 	BY THE COURT:
_________________________
Nina Y. Wang
United States District Judge
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