Rodriguez v. Pinnacol Assurance
Bankruptcy

Answer to Third Party Complaint Filed by Douglas N. Marsh on behalf of Weston Auto Group, Inc., Weston Enterprises, Inc. (related document(s):[34] Answer to Complaint, Third-Party Complaint).

District of Colorado (Bankruptcy), cob-1:2018-ap-01393

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Case:18-01393-JGR Doc#:40 Filed:09/10/19 Entered:09/10/19 15:35:22 Page1 of 10 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF COLORADO In re:)) Case No. 16-21382-JGR WESTON EDUCATIONAL, INC.,) Chapter 7 Debtor.)))) SIMON E. RODRIGUEZ, Chapter 7 Trustee,)) Plaintiff,) v.)) PINNACOL ASSURANCE, a Political) Subdivision of the State of Colorado,) Adv. Pro. No.: 18-1393 JGR) Defendant.)))) PINNACOL ASSURANCE, a Political Subdivision of the State of Colorado,)) Third Party Plaintiff,)) v.)) WESTON ENTERPRISES, INC. and WESTON) AUTO GROUP, INC., Colorado corporations in) good standing,)) Third Party Defendants.) ANSWER BY WESTON ENTERPRISES, INC. AND WESTON AUTO GROUP, INC. TO PINNACOL ASSURANCE'S THIRD-PARTY COMPLAINT Third Party Defendants Weston Enterprises, Inc. ("Enterprises") and Weston Auto Group, Inc. ("Auto Group") (collectively, the "Weston Defendants"), for their Answer to the Case:18-01393-JGR Doc#:40 Filed:09/10/19 Entered:09/10/19 15:35:22 Page2 of 10 Third Party Complaint [Dkt. No. 34] of Third Party Plaintiff Pinnacol Assurance, state as follows. JURISDICTION AND VENUE 1. On November 16, 2016, debtor Weston Educational, Inc. (the "Debtor") filed a voluntary petition for relief under chapter 7 of title 11 of the United States Code case number Case No. 16-21382 JGR, with the United States Bankruptcy Court for the District of Colorado (the "Court"). RESPONSE: Admit. 2. The Court has jurisdiction over this adversary proceeding pursuant to §§ 157 and 1334 of title 28 of the United States Code ("Title 28"). RESPONSE: Admit. 3. This is a core proceeding under § 157(b)(2) of title 28 and/or arises in and is related to the Chapter 11 Case under § 157(b)(2) of Title 28. RESPONSE: Admit. 4. Venue in the Court is proper pursuant to §§ 1408 and 1409 of Title 28. RESPONSE: Admit. 5. Pinnacol consents to the entry of final orders and judgments by the Court on the Court on the core matters, to the extent such consent is necessary. RESPONSE: The Weston Defendants acknowledge that Third Party Plaintiff has consented to the entry of final orders and judgment by the Bankruptcy Court. GENERAL ALLEGATIONS 6. Pinnacol is a political subdivision of the State of Colorado and has its principal place of business at 7501 E. Lowry Boulevard, Denver, CO 80230. 2 Case:18-01393-JGR Doc#:40 Filed:09/10/19 Entered:09/10/19 15:35:22 Page3 of 10 RESPONSE: The Weston Defendants lack information sufficient to form a belief as to this allegation and therefore denies it. 7. Weston Enterprises, Inc. ("Enterprises") is a Colorado corporation, in good standing, having a principal office address of 2001 Lowe Street, Fort Collins, Colorado 80525. RESPONSE: Admit. 8. Weston Auto Group, Inc. ("Auto Group") is a Colorado corporation, in good standing, having a principal office address of 7928 Allott Avenue, Fort Collins, CO 80525. The Registered Agent of Auto Group is Earl Weston currently located at 7928 Allott Avenue, Fort Collins, Colorado 80525. RESPONSE: Admit. 9. Pinnacol provided a policy of workers compensation insurance to the Debtor, which also provided coverage to two other entities owned by Debtor's owner: Enterprises and Auto Group (the "Insurance Contract"). RESPONSE: Admit. 10. Pinnacol combined the three entities in one Insurance Contract at the debtor's request and pursuant to rules promulgated by the National Counsel on Compensation Insurance (NCCI), the Colorado licensed Rating Organization for Workers Compensation and Employers Liability. Pinnacol, like all other insurers licensed to issue policies of workers' compensation insurance in Colorado, is required to follow the rules promulgated by NCCI. RESPONSE: Admit that the Debtor and the Weston Defendants were covered by the Insurance Contract. As to the remaining allegations, including in particular allegations regarding obligations owed by Pinnacol, the Weston Defendants lack information sufficient to form a belief and therefore denies them. 11. Upon information and belief, payments for the Insurance Contract were primarily transferred from the Debtor to Pinnacol. 3 Case:18-01393-JGR Doc#:40 Filed:09/10/19 Entered:09/10/19 15:35:22 Page4 of 10 RESPONSE: Admit. 12. Upon information and belief, the Debtor, Enterprises, and Auto Group utilized a centralized cash management system to handle revenue and expense payment between and among the three entities. RESPONSE: Admit. 13. On November 15, 2018, nearly two years after commencement of the underlying bankruptcy case of the Debtor, plaintiff Simon E. Rodriguez (the "Plaintiff') commenced this adversary proceeding against Pinnacol by filing the Complaint, then suing Pinnacol for at least $662,881.38. Via an amended complaint, the amount now exceeds $670,000. RESPONSE: To the extent these allegations inaccurately describe the court filings referenced therein, which are a matter of public record and speak for themselves, other than as they actually are, the Weston Defendants deny those allegations. 14. Among other things, the Plaintiff is seeking to recover from Pinnacol funds paid to Pinnacol by the Debtor for premiums, deductibles, and other charges on the Insurance Contract associated with workers' compensation insurance coverage provided to the Debtor, Enterprises, and Auto Group. RESPONSE: To the extent these allegations inaccurately describe the court filings referenced therein, which are a matter of public record and speak for themselves, other than as they actually are, the Weston Defendants deny those allegations. 15. As Pinnacol provided the Insurance Contract that extended coverage to Enterprises and Auto Group, Pinnacol is entitled to payment of the premiums, deductibles, and other charges associated with insurance coverage extended to Enterprises and Auto Group. RESPONSE: Deny. 16. If, and to the extent that, Pinnacol is liable to the Plaintiff for funds received from the Debtor related to the insurance coverage Pinnacol extended to Enterprises and 4 Case:18-01393-JGR Doc#:40 Filed:09/10/19 Entered:09/10/19 15:35:22 Page5 of 10 Auto Group, Enterprises and Auto Group are liable to Pinnacol under the Insurance Contract. RESPONSE: Deny. First Claim for Relief (Breach of Express Contract) 17. Pinnacol incorporates by this reference the allegations contained in the above paragraphs. RESPONSE: The Weston Defendants incorporate by reference their answer to the allegations contained in the above paragraphs. 18. According to the terms of the Insurance Contract, Pinnacol agreed to provide workers' compensation insurance coverage to the Debtor, Enterprises, and Auto Group and the Debtor, Enterprises, and Auto Group agreed in return to pay the premiums, deductibles, and other charges due on the Insurance Contract. RESPONSE: To the extent these allegations inaccurately describe the Insurance Contract, which speaks for itself, the Weston Defendants deny those allegations. 19. Enterprises and Auto Group have failed and refused to pay the premiums, deductibles, and other charges due pursuant to the Insurance Contract. RESPONSE: Deny that the Weston Defendants have failed to make any payment due by them. To the extent any other allegations require a response, the Weston Defendants deny them. WHEREFORE, Pinnacol requests judgment in its favor and against Enterprises and Auto Group in an amount to be proven at trial, plus costs including expert witness fees, pre- judgment and post-judgment interest, attorneys' fees as may be allowed by statute or otherwise, and for such other and further relief as the Court deems just and proper. RESPONSE: To the extent this statement requires a response, the Weston Defendants deny that Pinnacol is entitled to relief of any kind from them. 5 Case:18-01393-JGR Doc#:40 Filed:09/10/19 Entered:09/10/19 15:35:22 Page6 of 10 Second Claim for Relief (Breach of Implied Contract) To the extent that conduct complained of below is not covered under the express terms of the Insurance Contract, Pinnacol also brings the following claim: 20. Pinnacol incorporates by this reference the allegations contained in the above paragraphs. RESPONSE: The Weston Defendants incorporate by reference their answer to the allegations contained in the above paragraphs. 21. Pinnacol provided insurance coverage to the Debtor, Enterprises, and Auto Group with the reasonable expectation that the Debtor, Enterprises, and Auto Group would pay Pinnacol the reasonable value of the insurance coverage provided. RESPONSE: Deny. 22. Enterprises and Auto Group accepted the insurance coverage expecting to pay for it or under such circumstances that they knew, or as a reasonable person should have known, that Pinnacol expected to be paid. RESPONSE: Deny. 23. Enterprises and Auto Group have failed and refused to pay the premiums, deductibles, and other charges due for the insurance coverage provided to Enterprises and Auto Group. RESPONSE: Deny that the Weston Defendants have failed to make any payment due by them. To the extent any other allegations require a response, the Weston Defendants deny them. WHEREFORE, Pinnacol requests judgment in its favor and against Enterprises and Auto Group in an amount to be proven at trial, plus costs including expert witness fees, pre- judgment and post-judgment interest, attorneys' fees as may be allowed by statute or otherwise, and for such other and further relief as the Court deems just and proper. 6 Case:18-01393-JGR Doc#:40 Filed:09/10/19 Entered:09/10/19 15:35:22 Page7 of 10 RESPONSE: To the extent this statement requires a response, the Weston Defendants deny that Pinnacol is entitled to relief of any kind from them. Third Claim for Relief (Unjust Enrichment) If this Court finds the Insurance Contract unenforceable, Pinnacol also brings the following claim: 24. Pinnacol incorporates by this reference the allegations contained in the above paragraphs. RESPONSE: The Weston Defendants incorporate by reference their answer to the allegations contained in the above paragraphs. 25. The insurance coverage extended to the Debtor, Enterprises, and Auto Group pursuant to the Insurance Contract conferred a benefit upon the Debtor, Enterprises, and Auto Group. RESPONSE: Deny. 26. The benefit so conferred was appreciated and enjoyed by Enterprises and Auto Group. RESPONSE: Deny. 27. The benefit so conferred and accepted by Enterprises and Auto Group was accepted under circumstances that it would be inequitable for Enterprises and Auto Group to retain the benefit without payment of its value. RESPONSE: Deny. WHEREFORE, Pinnacol requests judgment in its favor and against Enterprises and Auto Group in an amount to be proven at trial, plus costs including expert witness fees, pre- judgment and post-judgment interest, attorneys' fees as may be allowed by statute or otherwise, and for such other and further relief as the Court deems just and proper. 7 Case:18-01393-JGR Doc#:40 Filed:09/10/19 Entered:09/10/19 15:35:22 Page8 of 10 RESPONSE: To the extent this statement requires a response, the Weston Defendants deny that Pinnacol is entitled to relief of any kind from them. AFFIRMATIVE DEFENSES 1. Pinnacol is barred from any recovery against the Weston Defendants on the grounds that the Complaint fails to state claims against them. 2. Pinnacol's claims are barred in whole or in part to the extent there was no contract formed between Pinnacol and the Weston Defendants. 3. Pinnacol's claims are barred in whole or in part by the applicable statute of limitations. 4. Pinnacol's claims are barred in whole or in part by the doctrines of laches, waiver, and/or estoppel. 5. Pinnacol's claims are barred in whole or in part due to a lack of privity. 6. Pinnacol is barred from any recovery against the Weston Defendants because and to the extent that the Weston Defendants provided adequate consideration for any benefits they received, including but not limited to insurance coverage, and Pinnacol cannot meet its burden of proof that there was no adequate consideration given in exchange fo