Free Brief in Opposition to Motion - District Court of Colorado - Colorado

Case 1:00-cv-02098-REB-MJW

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 00 B 2098 KELLY FINCHER, by her guardian, JAMES FINCHER, on behalf of herself and all others similarly situated, Plaintiff, v. PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, Defendant. ________________________________________________________________________ DEFENDANT'S MEMORANDUM IN OPPOSITION TO PLAINTIFF'S MOTION FOR LEAVE TO AMEND THE AMENDED COMPLAINT ________________________________________________________________________

INTRODUCTION Years after her initial complaint was filed and discovery closed, plaintiff now moves to amend her complaint and expand her class definition from Prudential insureds who were injured in accidents and allegedly are entitled to additional extended PIP benefits to all Prudential insureds who were injured in accidents and received any PIP benefits.1 Finchers' motion should be denied. Fincher has not demonstrated the "good cause" required by Rule 16, Fed. R. Civ. P., to change the Court's deadline for amending the pleadings.
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The class definition in the Complaint (¶9) includes: "All injured persons covered under a Prudential automobile insurance policy who were not offered extended coverage as required by C.R.S. §10-4-710 of the Colorado Accident Reparations Act, and who were not provided the additional benefits provided for therein." The proposed new class definition includes: "All persons who received medical or wage-loss personal injury protection benefits under a Prudential Colorado car insurance policy, and received those benefits no earlier than August 25, 1992."

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Fincher has displayed a lack of diligence in filing this motion and has shown absolutely no justification for this delay, nearly six years after the complaint was filed and more than five years after the Court-ordered deadline for amendments. There is no injustice in denying the motion because the proposed amendment does not change Fincher's substantive claims or those of the putative class as originally defined. The proposed amendment is futile and does nothing more than improperly expand the class to include members who, by definition, have no claim to additional benefits. Finally, Prudential would be prejudiced by the proposed amendment because it would allow Fincher's counsel to use these proceedings as a fishing expedition and complicate and further delay these already complicated and protracted proceedings. For these reasons, Fincher's motion for leave to amend should be denied. In addition, because Prudential's response to Fincher's Amended Motion for Class Certification is dependent upon the class she is seeking to certify, Prudential is filing separately a request for additional time to file its class certification opposition. ARGUMENT The standards of Rule 16, not Rule 15 as Fincher argues, govern Fincher's request for leave to amend. Rule 16 (b) limits the time to amend the pleading and

provides that once the court has entered a scheduling order, that "schedule shall not be modified except upon a showing of good cause and by leave of the district judge. E.g., O'Connell v. Hyatt Hotels, 357 F.3d 152, 154 (1st Cir. 2004); S&W Enters v. South Trust Bank, 315 F.3d 533, 535 (5th Cir. 2003). The "good cause" standard requires that the party seeking to avoid the deadline show that the deadline could not reasonably have been met despite that party's diligence. S&W Enters v. South Trust Bank, supra, at 535.

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The Supreme Court has identified a number of reasons to deny leave even under the "freely given" standard of Rule 15(a) that are applicable here--undue delay, futility, and undue prejudice to the other party. Foman v. Davis, 371 U.S. 178, 182 (1962). Similar factors are used in deciding to grant or deny a motion for leave to amend under Rule 16, including: (1) the explanation for the failure to timely move to amend; (2) the importance of the amendment; and (3) potential prejudice in allowing the amendment. S&W Enters v. South Trust Bank, 315 F.3d at 536. Fincher has not met her burden and satisfied the standard for granting leave to amend her complaint at this late date. (1) Fincher Offers No Legitimate Reason For This Five Year Delay And Has Displayed A Lack Of Diligence In Filing This Motion. Fincher offers no plausible or even specific explanation for the delay of over five years. Frank v. U.S. West, Inc., 3 F.3d at 1365; S&W Enters v. South Trust Bank, 315 F.3d at 536. She does not claim to have discovered new facts necessitating the requested amendment, or new claims or newly identified class members. The only excuse she offers for the delay is that "other cases and case law have developed on the issues of class certification and the substantive issues raised in this case." Motion, ¶4. She does not identify these developments in the law. In fact, the only such development is the

accumulation of rulings, including by this Court in Biby v. Titan Indemnity Co.,2 denying class certification of similarly defined classes. This explanation in no way supports an amendment years after the scheduling order was entered. Fincher filed her initial complaint in September 2000. Pursuant to Rule 16, the Court established February 16, 2001, as the deadline for filing amended pleadings. Scheduling Order, dated January 8, 2001.
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Copy attached as Ex. B.

The parties

Order Denying Motion for Class Certification, No. 04-CV-00293-REB-MJW, U.S. District Court, D. Colo. (June 13, 2005). Copy attached as Ex. A.

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conducted class discovery. Fincher filed her original Motion for Class Certification, based on the class definition in the Complaint, on December 5, 2001. She did not attempt to assert a new class definition when the Court merged the Complaint and other pleadings into its Amended Final Pretrial Order of May 14, 2002. Copy attached as Exhibit C. Over the next four years, the Court granted summary judgment, the Tenth Circuit reversed and remanded, discovery was completed and closed, and the Court conducted proceedings on Fincher's reformation claim--all without any mention from Fincher of a need to amend the Complaint to change the proposed class definition. This is not the diligence required to satisfy the "good cause" standard of Rule 16(b). See Bradford v. DANA Corp., 249 F.3d 807, 809 (8th Cir. 2002). Fincher claims she has a right to amend the class definition based on a footnote in her initial complaint purporting to reserve the right to "supplement the appropriate class periods for each count, after preliminary discovery, and as is determined appropriate for each count based on state law and the facts of the case." Motion, ¶3. First, Fincher is not asking the Court to change the class period. More importantly, however, her unilateral reservation of right to amend does not trump the standards of Rule 16 and this Court's scheduling order. The primary measure of the Rule 16(b) "good cause" standard is the moving party's diligence in attempting to meet the scheduling order's requirements. Bradford v. DANA Corp., 249 F.3d at 809. It also is well settled in the Tenth Circuit that, even under Rule 15(a), untimeliness alone is a sufficient reason to deny leave to amend, especially when the party seeking leave has no adequate explanation for the delay. Frank v. U.S. West, Inc., 3 F.3d 1357, 1365 (10th Cir. 1993). See, e.g., Jin v. Metropolitan Life Ins.

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Co., 295 F.3d 335, 352 (2d Cir. 2002) (denying request for leave to add new claims filed fours years after case filed and three years after close of discovery). standards, Fincher's motion should be denied. (2) There Is No Injustice In Denying The Motion. There is no injustice in denying Fincher's motion because Fincher's rights are not in any way impaired. The proposed amendment does not add newly found causes of action or even add newly identified individual members to the class who may be entitled to additional benefits.3 The current definition encompasses a class of all Prudential insureds who were injured in an accident and received PIP benefits but also allegedly are entitled to additional PIP benefits under the policies as reformed. The proposed amended definition (all injured insureds who received any amount of PIP benefits) encompasses these same individuals but also purports to sweep in any insured injured in an accident who, by virtue of the definition itself, admittedly is not entitled to any more benefits. Leave should not be granted to amend the Complaint again for the sole purpose of adding class members without claims. See Enters v. South Trust Bank, 315 F.3d at 536 Under these

(importance of amendment is factor to be considered in granting leave).4 (3) The Proposed Amendment Is Futile. The proposed amendment is futile because it would define an improper class that should not be certified--a much larger and overbroad class made up primarily of
3

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Indeed, Fincher's Amended Motion for Class Certification eliminates the request in her Complaint and original class certification motion for certification of the causes of action for benefits and damages. See id. at 1. In fact, some of those added to the class by the proposed new definition are individuals who not only have no claim to extended benefits under the policies as reformed but would be entitled to lower benefits than they previously received. This results from the fact that insureds receive a higher percentage of wage loss benefits for the first $250.00 per week (100% of first $125.00 of wage loss) of income under basic PIP than they would under extended PIP, which only provides coverage for 85% of all lost wages, including the first $250.00 per week. Compare C.R.S. §10-4706 with C.R.S. §10-4-710(2)(a)(II).

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individuals who could not possibly have a claim for extended PIP benefits because Prudential already has fully reimbursed their medical and rehabilitation expenses and wage losses. These individuals would include, for example: (1) those whose claims did not exceed the limits of basic PIP coverage because they were not seriously injured; (2) those who had extended PIP coverage that, although non-compliant, was sufficient to cover all of their claims; (3) those who would be entitled to lower benefits under reformed policies than they previously had received; and (4) those to whom an adequate offer of extended PIP benefits was made.5 Certification of this proposed new class would be improper. See, e.g., J.B. ex rel. Hart v. Valdez, 186 F.3d 1280, 1290 (10th Cir. 1999)(class that included children who actually received all services required by state statutes and, therefore, have no claim under those statutes is too broad to certify); Pagan v. Dubois, 884 F. Supp. 25, 28 (D. Mass. 1995) (class of all Latino prisoners too broad to be certified for claims of lack of staff who speak Spanish because those who speak and write English are not harmed); O'Neill v. Gourmet Systms of Minnesota, Inc., 219 F.R.D. 445, 451 (W.D. Wis. 2002) (class of all members of Indian tribe overly broad because it included many not at risk of suffering injury plaintiff sustained). See also Biby v. Titan Indemnity Co., supra at 2 (definition so broad it may include time-barred and unripe claims). Even the limited reformation proceedings that Fincher is asking the Court to conduct initially for this very broad class, which allegedly would contain many hundreds of members, would be an unmanageable nightmare. To provide any meaningful relief,

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This latter category includes Kimberly Stapish, whose case was brought by Fincher's counsel and dismissed by this Court on summary judgment, and others like her. See Order Concerning Motions for Summary Judgment dated March 7, 2005, Stapish v. Prudential Property & Casualty Ins. Co., D. Colo., Civ. No. 03-RB-718 (MJW).

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the Court would have to go beyond the policy forms and consider, for example, "whether a proper offer of extended PIP benefits was made to the insured, which in turn depends on the totality of the circumstances in each given instance," on an individual basis for the entire class. Biby v. Titan Indemnity Co., supra at 3. The offers the Court would have to examine would include oral offers correcting the statement of extended PIP coverage in the policy forms that Prudential instructed its agents and representatives to make. See Order Denying Plaintiff's Motion for Partial Summary Judgment and Granting Defendant's Motion for Summary Judgment, Padhiar v. State Farm Automobile Ins. Co., Civ. No. 03-CV-1969-CAB-(OES) (D. Colo. March 2, 2006) at 7-8. Copy attached as Ex. C. Prudential was not able to introduce definitive evidence of such an offer to the purchaser of the policy under which Fincher is claiming but would be entitled to do so for other members of the proposed class. Fincher Reformation Order at 15. This individual inquiry would be wasted effort for all of the additional members of the proposed expanded class because, by definition, they would not have suffered injuries sufficient to reach the threshold necessary to qualify for extended coverage. Moreover, there is no need for an order reforming the policies prospectively. The No-Fault Act was repealed in 2003, Prudential was sold in 2004 and no longer has policies with such coverage in Colorado, and no new claims for extended PIP benefits can possibly accrue. There is no benefit to reforming an expired policy to make it compliant with an expired statute for someone who has no possible claim for benefits or damages. Colorado courts will not entertain civil actions which seek useless orders and will not reform long-expired policies under which there are no benefit claims. Lego v. Schmidt, 805 P.2d 1119, 1125 (Colo. App. 1990).

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(4) Prudential Would Be Prejudiced By The Requested Definition. Prejudice to the non-moving party is a factor to be considered, but it is not a prerequisite to denial of a motion to amend. Bradford v. DANA Corp., 249 F.3d at 809. The strategy of Fincher's counsel in requesting this change in the class definition is to get a large class of Prudential insureds certified now and worry later which, if any, members of the class other than Fincher had injuries significant enough to qualify for extended benefits. At most, Fincher's proposed broader definition of the class would only

postpone the inevitable need to determine who actually has a viable claim to additional benefits; and, in the interim, there would be no value gained by certifying such an overbroad class without determining whether any individual in it actually has a claim. Fincher's counsel apparently envision a two-stage process for this phase of this multi-phase litigation. They want to get a foot in the door with certification of a broad class of all injured insureds, regardless of whether any has a real claim for additional benefits. Once a class is certified, they plan to use notice to the class to find out if anyone in the broader group actually has such a claim.6 In effect, Fincher's counsel would be using the notice to identify which class members have a claim, something Rule 23 requires a class representative to have done already as a prerequisite to having the class certified. To the extent granting the motion to amend would aid this strategy, it would be improper and unfair to Prudential. These proceedings have been complex, protracted, and expensive enough already.

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Significantly, Fincher requests notice even if the class is certified under Rule 23(b)(2), which does not require notice, so that insureds can be told "of the potential additional coverage at issue." Amended Motion for Class Certification at 12, n. 7.

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REQUEST FOR EXTENSION Prudential cannot respond to Fincher's Amended Motion for Class Certification until the issue of amending the complaint is decided. Accordingly, Prudential is seeking, in a separate motion, an extension of its time to file an opposition until 20 days after the Court decides this motion for leave to amend. CONCLUSION For all the foregoing reasons, Prudential respectfully requests that Plaintiff's Motion for Leave to Amend be denied. Respectfully submitted this 24th day of April, 2006.

Campbell, Latiolais & Ruebel, P.C.

By: s/ Clifton J. Latiolais, Jr._____________ Clifton J. Latiolais, Jr., #13765 825 Logan Street Denver, CO 80203-3114 (303) 861-7760 (phone) (303) 861-7767 (fax) Bryan Cave LLP Bruce C. Oetter 211 N. Broadway, Suite 3600 St. Louis, Missouri 63102-2750 (314) 259-2000 Attorneys for Defendant

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CERTIFICATE OF SERVICE I hereby certify that on this 24th day of April, 2006, a true and correct copy of the above and foregoing DEFENDANT'S MEMORANDUM IN OPPOSITION TO PLAINTIFF'S MOTION FOR LEAVE TO AMEND THE AMENDED COMPLAINT was filed and served electronically via CM/ECF to the following: Robert B. Carey, #1717 L. Dan Rector, #7568 Leif Garrison, #14394 Steve W. Berman, c/o The Carey Law Firm 2301 East Pikes Peak Avenue Colorado Springs, CO 80909 Courtesy copy to: Magistrate Judge Michael J. Watanabe United States District Court U.S. Courthouse, Room C-337 1929 Stout Street Denver, CO 80294

s/Denise L. Albares

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