Free Reply to Response to Motion - District Court of Colorado - Colorado

Case 1:01-cv-02018-RPM-MJW

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. OI- CV- 2018- RPM- MJW
AP ARTMENT INVESTMENT AND MANAGEMENT COMPANY , a/k/a AIMCO , a Maryland corporation

Plaintiff,

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH , P A, a Pennsylvania corporation , et aI.
Defendants.

DEFENDANT FIRST CAPITAL GROUP' S REPLY IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON AIMCO' S CLAIMS AGAINST FIRST CAPITAL
Defendant First Capital Agency, Inc. d/b/a First Capital Group (" First Capital" ) submits
the following reply in support of its motion for summary judgment on AIMCO' s claims against
First Capital.

INTRODUCTION
In a tactic often employed in response to a motion for summary judgment , AIMCO offers
the "

banker s box of exhibits must equal disputed issue of fact" approach in its Joint Response In

Opposition to Motions for

Summary Judgment of First Capital Group and Roger Metzger

Associates (" Response ). However , after sifting through AIMCO' s Response in search of any

genuinely disputed issues of material fact relevant to AIMCO' s
there are none. See

claims against First Capital

Summary of AIMCO' s Responses to First Capital' s Statement of Undisputed
any genuine

Facts , attached hereto as Exhibit A. Because AIMCO has failed to demonstrate

).

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disputed issue of material fact relative to its claims as asserted against First Capital , the Court
should grant First Capital' s motion for summary judgment.

STANDARD OF REVIEW
This Court recently provided a very thorough roadmap that litigants must follow in order
to win a motion

for

summary judgment.

In re Ribozyme Pharmaceuticals, Inc. Securities
(D. Colo. 2002).

Litigation 209 F. Supp. 2d 1106
particularly helpful here.

A brief overview of the roadmap is

The Court' s initial determination is whether there is a genuine dispute as to any issue of

material fact. It is most important to note (and particularly here) that not all facts relevant in a
lawsuit are material to a Rule 56 motion. Only those facts which tend to prove or disprove an
element of a claim or defense are considered material. Id

at 1110. 1

With respect to those facts that are material , a dispute is considered " genuine " only when evidence presented in support and opposition to the motion is " so contradictory that , if presented
at trial , a reasonable jury could return a verdict for either party.
Id

It is not enough to present a

scintilla of evidence or rely upon allegations in a party s pleadings. " A genuine dispute means

the party opposing the Rule 56 motion has produced enough contrary evidence that had such
evidence been presented at trial , no directed verdict could be entered.
Id

The judge

s inquiry

1 For example , in AIMCO' s claims against First Capital , there are no factual allegations
relating to the "

formation of the Program" as a whole , nor are there any factual allegations of injury to AIMCO as a result of conduct by First Capital leading to the coverage provided by Fourth Am. Cmplt. , Fourth , Sixth Security Insurance Company of Hartford (" SOH" See Seventh and Eighth Claims for Relief. Thus , this Court can completely ignore as irrelevant and immaterial the litany of facts in AIMCO' s Response , pp. 2- 18 up to the entry regarding National

Union.

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is whether reasonable jurors could find by a preponderance of the evidence that the plaintiff is
entitled to a verdict. Id

at 1111.

As is the case here , when the party moving for summary judgment does not bear the

burden of proof, the non-moving party must present competent
element of its claim or defense. Id

evidence to

establish every

Otherwise , the entry of summary judgment is appropriate.

LEGAL ARGUMENT
AIMCO' s Assumption that Colorado Law Governs Fails To Apply The Correct Standard and Relies On Immaterial Facts.
AIMCO' s choice oflaw analysis fails to demonstrate Colorado bears the most significant

relationship to the claims brought by AIMCO against First Capital. While AIMCO initially cites
to the applicable authority, RESTATEMENT (SECOND) OF CONFLICT OF LAWS , 9 145 , AIMCO fails

to complete the analysis required by this section.

Rather ,

AIMCO weakly argues in favor of

Colorado law based solely on the location of AIMCO' s corporate headquarters in Colorado - but

without addressing the other factors under section 145. This analysis falls far short.

As set forth in First

Capital'

s Opening Brief, Restatement Section 145(2) lists four

contacts this Court must consider when determining which state has the most significant
contacts: (1) the place where the injury occurred , (2) the place where the conduct causing the
injury occurred , (3) the domicile , residence ,

nationality, place of incorporation and place of

business of the parties , and (4) the place where the relationship, if any, between the parties is
centered.

Lewis-DeBoer 728 F. Supp. at 644. As explained in the Opening Brief, an analysis of

these four factors dictates the application of New York law to AIMCO' s claims against First
Capital.
In

an effort to distract the Court from the proper analysis

under section 145 ,

AIMCO

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points to

RESTATEMENT (SECOND) OF CONFLICT OF LAWS ,

9 193. AIMCO' s Response ,

p. 30.

While Restatement section 193 does govern claims

relating to insurance contracts , it is

applicable where the claims at issue involve " the validity or effect of the insurance contract."
Mitchell v. State Farm Fire

Cas. Co.

902 F. 2d 790 ,

793 (10th Cir. 1990). AIMCO' s

tort

claims against First Capital do not relate to the validity or effect of the insurance contract.
Rather , AIMCO' s claims allege that First Capital made certain misrepresentations in connection

with the procurement of insurance for AIMCO. As explained in First Capital' s Opening Brief,
such claims are governed by the analysis prescribed by section 145 , and in a case such as this
involving alleged misrepresentations ,

the principal location of the defendant's conduct is given

the greatest weight.

Even if this Court were to determine that section 193 did apply, Colorado law is not the

state with the most significant contacts. Despite AIMCO' s

assertions to the contrary, (based

solely on the location of AIMCO' s principal place of business as Colorado), Colorado is not the
principal location of the risk nor would most of the impact of any claim adjustments be felt in
Colorado. The

Specifications for the AIMCO-owned portion of the policy provided to National

Union state: " This policy covers loss occurring anywhere within the 50 States comprising the
United States of America , the District of Columbia , Puerto Rico , the Virgin Islands and Canada.
AIMCO' s Response , Exh. 5 at NUO06088.
includes AIMCO properties located in 46 different states.

Moreover ,
Id

the submission to National

Union

at NUO06111. Of those 46 states

Florida and Texas are home to 30% of the overall portfolio while Colorado is a mere 2. 86%.
Colorado s relationship to the actual insurance contract and its impact is minor at best; it is

certainly not the most significant state.

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AIMCO' s attempts to muddy the water further by pointing to various isolated contacts by

First Capital with locations other than New York has no bearing on the assessment at hand.
AIMCO cites to meetings and conversations between First Capital and SOH in Connecticut.
AIMCO' s Response , p. 31. However , none of this conduct has any
material

bearing on the

conduct included in AIMCO' s claims against First Capital which involve only conduct leading

up to the National Union policy - not the SOH policy.

In re Ribozyme Pharmaceuticals 209 F.

Supp. 2d at 1110 (not all facts relevant in a lawsuit are material; material facts are only those
which tend to prove or disprove an element of the subject claim or

defense).

Similarly,

AIMCO' s recitation of conduct by NPS that occurred in New Jersey is equally immaterial to the
location of First Capital' s conduct at issue - all

of which occurred in New York. AIMCO'

Response ,

pp. 31- 32.

Thus ,

the Court need not consider any of these " disputed facts " in its

choice of law analysis.

The focus of AIMCO' s claims against First Capital points to alleged negligence by First
Capital in its receipt of information pertaining to AIMCO' s submission that First Capital then

passed along to National Union ,
Capital'

First Capital'

s receipt of the National Union policy and First
See

s handling of any AIMCO premiums associated therewith.

AIMCO' s Fourth Amd.

Cmplt. , Fourth , Sixth , Seventh and Eighth Claims for Relief. It is undisputed by AIMCO that all
of First Capital' s
conduct relating to those specific events took place in New York. See

Exhibit
Opening

, ,m 23-

, 35- 40.

Thus , referring back to the

analysis set forth in First Capital' s

Brief, New York law applies to AIMCO' s claims against First Capital.

II.

AIMCO' s Response Fails to Present Competent Evidence In Support of AIMCO' Negligent Misrepresentation Claim Against First Capital.
Here again , AIMCO relies on pages and pages of immaterial facts in its efforts to create a

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genuine dispute over a material fact.

See

AIMCO' s Response , p. 34. A review of the undisputed

material facts

pertaining to the negligent misrepresentation claim alleged by AIMCO alongside

the required elements of such a claim

under New York law leads

to one conclusion - no

reasonable juror could find in AIMCO' s favor by a preponderance of the evidence.

AIMCO does not dispute that under New York law , where there is no privity and

no

special relationship is demonstrated to exist , a negligent misrepresentation claim fails as a matter
of law. Trizzano v.

Allstate Ins. Co.

7 AD. 3d

783 ,

785 (N. Y. App. Div. May 24 , 2004) (no

special relationship established between insured and insurance broker). AIMCO also does not
dispute that there is no privity between it and First Capital.

With respect to any special relationship, AIMCO offers no evidence , let alone competent
evidence , of the three requisite elements: (1) awareness by First Capital that its statements were
to be used for a particular purpose or purposes; (2) reliance by AIMCO in furtherance of that

purpose; and (3) some conduct by First Capital linking it to AIMCO and evincing First Capital'
understanding of AIMCO' s
reliance. See Credit Alliance Corp. v. Arthur Anderson

Co. 483

E.2d 110 , 118 (N. Y. 1985).
In

its Opening Brief, First Capital sets forth specific evidence demonstrating that AIMCO
pp. 13- 14.
In

cannot establish these three elements. Opening Brief,

its Response , AIMCO does

nothing more than make the unsupported statement that the elements " mirror the disputed facts
of this case. "

Response ,

p. 36. AIMCO does not identify any alleged statements made by First

Capital to be used for a particular purpose in conjunction with the National Union coverage. Nor
does AIMCO dispute First Capital' s assertion that all statements relating to the coverage offered

to AIMCO were statements attributable to National Union , the carrier ,

and not to First Capital.

, ~

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AIMCO does not dispute that First Capital passed along the information it received from
National Union accurately. AIMCO does not dispute that there is no evidence linking AIMCO
to First Capital to show First Capital knew of AIMCO' s reliance on any alleged statement made
by First Capital.

AIMCO has not come forward with competent evidence such that a reasonable

juror

could find in AIMCO' s favor on its negligent misrepresentation claim as defined by New York
law by a preponderance of the evidence. The Court should grant First Capital' s motion on

AIMCO' s negligent misrepresentation claim.

III.

There Is Not Even A Scintilla Of Evidence
Submission.

That First Capital Altered The

As with its negligent misrepresentation claim , AIMCO offers no competent evidence of
any wrongdoing by First Capital as alleged in AIMCO' s negligence claim. All AIMCO offers is
a "

guilty by association" strategy of lumping First Capital in with RMA and assuming that any

fact in the possession ofRMA demonstrates complicit knowledge by First Capital. This strategy
does not present a preponderance of evidence against First Capital.
As pointed out in First Capital' s Opening Brief, AIMCO' s negligence claim asserts that
First Capital breached its duty of care to

AIMCO " to the extent the information received by
Fourth Am. Complt.

National Union was inaccurate. " AIMCO

121. Despite AIMCO'

belated attempt in its Response to now broaden its claims to include each and every fact learned
in this case with respect to " the Program
see

AIMCO' s Response ,

pp. 3-

, AIMCO'
National

negligence claim against First Capital contains

allegations only with respect to the

Union policy. Thus , only facts relating to First Capital' s provision of information to National

Union are material.

g.,

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And here agam ,

AIMCO

does not offer

one single fact

to show what First Capital

provided to National Union was anything other than what First Capital had in its own possession
or knew about. The best AIMCO can come up with is to lump First Capital in with RMA in

connection with any weak evidence that suggests RMA had knowledge of inaccuracies in the
AIMCO submission yielding nothing more than an insinuation of knowledge on the part of First
Capital.

See ,

e.

AIMCO' s Response , pp. 19-

, describing evidence of discrepancies in loss
nothing

information in AIMCO submission

supported only by testimony of Don Kelly -

attributable to First Capital , and Response , p. 20 , describing evidence of discrepancies in TIV s in

AIMCO submission supported only by documents in RMA' s possession - nothing attributable to

First Capital. There is not one document or one piece of testimony that shows First Capital knew
anything about discrepancies. Even AIMCO' s experts could find no
see

evidence to say otherwise

Opening Brief, p. 16 , and AIMCO does not dispute it.

AIMCO just flatly ignores the explicit evidence offered by First Capital

that any

alterations of the AIMCO submission occurred prior to First Capital' s receipt of the submission
from RMA See

Exhibit A, ~~ 29- 33. Because there is not even a scintilla of evidence in support

of AIMCO' s negligence claim against First Capital , this Court should dismiss it.

IV.

AIMCO' s Authority Advocating Extraterritorial Application of the CCPA and the Common Plan or Design Statute Is Entirely Inapposite.
In

support of its " quick dismissal" of First Capital' s argument that the CCP

A and

Common Plan or Design statutes have no extraterritorial application to First Capital , AIMCO
cites to three cases , none of which are applicable here. The
Rubber Co. Loughridge v.

Goodyear Tire and

case , 192 F. Supp. 2d 1175 (D. Colo. 2002), involved seven Colorado homeowner
the sale of

products liability suits regarding

radiant heating hose where " Colorado was the

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primary market for that hose.

Id

at 1185. Unlike the case at bar , in

Loughridge

the defendants

raised no objection to the application of Colorado law to their conduct. Thus , there was no issue
of extraterritorial application of the CCP A
Next AIMCO erroneously cites to Sabell v.

Pacific Intermountain Express Co.

30 Colo.

Ct. App. 60 , 536 P.2d 1160 (1975) for the proposition that it applies Colorado s Common Plan
statute to an accident occurring in Iowa. The Sabell

decision did not involve a Common Plan or

Design claim. Rather ,

it involved the application of Colorado s comparative negligence statute

to determine the breadth of liability of a Colorado defendant relative to a traffic accident in
Iowa.
The Sabell

court' s rationale in considering the choice of law question actually supports
not Colorado law - should apply

First Capital'

s argument here that New York law - and
against First

AIMCO' s claims

Capital.

In reaching its conclusion to apply Colorado

comparative negligence law to the accident in Iowa , the court made the following observation
regarding choice-of- Iaw principles for multi-state torts:

The manner in which one citizen may seek redress from another and the rules under which such disputes are resolved are evolved by a state to aid in the resolution of private differences between its citizens or its citizens and those of other states. The relationship the parties have with a particular state has the greatest effect upon which of such rules of recovery should apply. In distinction , rules
regulating conduct , as an exercise of the police power , are designed to protect the public in general from acts committed within the
welfare. Thus

state which represent a danger to the public health , safety and rules of conduct' are more closely related to the

state where the conduct occurs while 'rules of recovery ' relate more clearly to the state with which a party is identified.

36 Colo. Ct. App. 60 , 69 , 536 P.2d 1160 ,

1165- 66. Thus ,

applying that rationale to AIMCO'

claims against First Capital where all of the relevant conduct took place in New York, New York

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law and not Colorado law should apply.
Finally, AIMCO cites to Anderson v.

State Farm Mut. Auto. Inc. Co. , 2004

US. Dist.

LEXIS 27305 (D. Colo.

2004)

for the proposition that this Court applied the CCP A to an out of

state insurer.

Actually, in that decision , this Court adopted the Magistrate Judge
R. Civ. P. 12(b)(6) for

recommendation that the plaintiffs CCPA claim be dismissed under Fed.
failure to state a claim for relief.

at *3- 4. Thus , the

Anderson

decision provides no authority

in support of AIMCO' s position here.

Not surprisingly, AIMCO utterly fails to address

the long-standing legal

principal

followed by the decisions First Capital cited in its brief - namely that "the law appears to be well
settled that a statute cannot be presumed to have any extraterritorial effect " but rather " a contrary
presumption prevails and statutes are generally
so construed.

See ,

e. g., Peerless Ins. Co.

Clark 29 Colo. App. 436 , 439 , 487 P.2d 574 , 575 (1971),
of Revenue
Supp. 371 ,
194 Colo.

cited in Frontier Airlines,

Inc.

v.

Dept.

230 233 , 571 P.2d 1088 , 1090.

See also Hanseman

v.

Hamilton 176 F.

374 (D.

Colo. 1959). AIMCO does not even address the most compelling authority
Slater v.

cited by First Capital on the issue -

Mexican National R. Co. 194 US. 120 , 126 (1904).

Given the presumption

that state statutes do not have extraterritorial effect unless

explicitly stated , in addition to AIMCO' s utter failure to demonstrate any basis for extraterritorial
application of the CCP A or

Common Plan or Design statute

to First Capital' s

conduct that

occurred only in New York , AIMCO' s CCPA and Common Plan or Design claims fail as a
matter of law.

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CONCLUSION

For all of the reasons discussed above and in First Capital' s opening motion and brief
First Capital respectfully requests that this Court dismiss AIMCO' s Fourth , Sixth , Seventh and

Eighth Claims for Relief, and dismiss this case as against First Capital with prejudice.
Dated: June 23

2005.

s/ Julie M. Walker
John R. Trigg

Julie M. Walker
Melissa C. Collins

Wheeler Trigg Kennedy, LLP 1801 California Street , Suite 3600 Denver , CO 80202
c. Box 19

Telephone: 303- 244- 1800 Facsimile: 303- 244- 1879

walker~wtklaw. com
Attorneys for

Defendant First Capital Group

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CERTIFICATE OF SERVICE (CM/ECF)
I hereby certify that on June 23 , 2005 DEFENDANT FIRST CAPITAL GROUP' S REPLY IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT ON AIMCO' with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e, I electronically filed the foregoing S CLAIMS AGAINST FIRST CAPITAL

mail addresses:

Nicholas Aidan Brady
nick. brady~bakerbotts. com

Jeffrey A. Chase
j chase~j ctkk. com vlsanders~j ctkk. com

Melissa C. Collins collins~wtklaw. com Paul E. Collins pcollins~tamblaw. com cjones~tamblaw. com

Karma Micaela Giulianelli Karma. Giulianelli~Bartlit- Beck. com Lester C. Houtz
lester. houtz~bartlit - beck. com

Steven Matthew Kelso kelso~wtklaw. com hand~wtklaw. com John D. Martin
j martin~ostermartin. com bgadison~ostermartin. com

Michael C. Massengale
michael. massengale~bakerbotts. com patti. barker~bakerbotts. com

James M. Miletich
j miletich~msfuc. com mdavis~msfuc. com

John Paul Mitzner
j mitzner~allman- mitzner. com renztimr~msn. com

Thomas Leroy Roberts tlr~rlplaw. com kjh~rlplaw. com Barry Alan Schwartz
bschwartz~j ctkk. com dpugh~j ctkk. com

John R. Trigg

trigg~wtklaw. com testa~wtklaw. com Charles R. Tumey

crt~gd- llc. com acs~gd- llc. com Julie M. Walker walker~wtklaw. com Robert James Zavaglia, Jr
rzavaglia~tamblaw. com jyencho~tamblaw. com

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and I hereby certify that I have mailed or served the document or paper to the following
name:

non-

CM/ECF participants in the manner (mail , hand- delivery, etc. ) indicated by the non- participant's

Todd B. Denenberg
Grotefeld & Denenberg, LLC 30800 Telegraph Road #3858 Bingham Farms , MI 48025

Donna B. Howard
Grotefeld & Denenberg, LLC 30800 Telegraph Road #3858 Bingham Farms , MI 48025

William H. Jeffress, Jr
Baker & Botts1299 Pennsylvania Avenue , N. #1300 Washington , DC 20004- 1109

Scott Andrew Martin
Baker & Botts1299 Pennsylvania Avenue , N. #1300 Washington , DC 20004- 1109
Jed Reeg

Lathrop & Gage , LC- Kansas City Missouri
2345 Grand Boulevard

#2800 Kansas City, MO 64108
J. Evans Rice,

III

Baker & Botts1299 Pennsylvania Avenue , N. #1300 Washington , DC 20004- 1109

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Leonard B. Rose

Lathrop & Gage , LC- Kansas City Missouri
2345 Grand Boulevard

#2800 Kansas City, MO 64108

Elizabeth Leigh Thompson
Bartlit, Beck , Herman , Palenchar & Scott- Illinois 54 West Hubbard Street #300 Chicago , IL 60610
John

T. Wolak

Gibbons , Del Deo , Dolan , Griffinger & Vecchione One Riverfront Plaza Newark , NJ 07102

s/ Julie M. Walker by Deborah 1. McGuire
John R. Trigg

Julie M. Walker Attorneys for Defendant First Capital Group Wheeler Trigg Kennedy LLP 1801 California Street , Suite 3600 Denver , CO 80202
c. Box 19

Telephone: 303- 292- 2525 Facsimile: 303- 294- 1879

walker~wtklaw. com