FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT June 3, 2021
_________________________________
Christopher M. Wolpert
Clerk of Court
BEVERLY CRIBARI,
Plaintiff - Appellant/Cross -
Appellee,
No. 19-1270
v. (D.C. No. 1:16-CV-02450-NRN)
(D. Colo.)
ALLSTATE FIRE & CASUALTY
INSURANCE COMPANY,
Defendant - Appellee/Cross -
Appellant.
_________________________________
BEVERLY CRIBARI,
Plaintiff - Appellee,
v. No. 19-1343
(D.C. No. 1:16-CV-02450-NRN)
ALLSTATE FIRE AND CASUALTY (D. Colo.)
INSURANCE COMPANY,
Defendant - Appellant.
_________________________________
BEVERLY CRIBARI,
Plaintiff - Appellee,
v. No. 19-1425
(D.C. No. 1:16-CV-02450-NRN)
ALLSTATE FIRE AND CASUALTY (D. Colo.)
INSURANCE COMPANY,
Defendant - Appellant.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before MORITZ, BRISCOE, and CARSON, Circuit Judges.
_________________________________
Plaintiff Beverly Cribari sued her underinsured motorist insurance provider for
breach of contract and bad faith. A jury found in Defendant Allstate Fire & Casualty
Insurance Company’s favor on all counts. Plaintiff appealed the district court’s
denial of her summary judgment motion as well as various pretrial and trial rulings—
Case No. 19-1270. Post-trial, Defendant sought to claw back a payment it made
under a reservation of rights. After Plaintiff refused to return the check and filed a
notice of appeal, Defendant filed a motion for leave to amend its pleadings. The
district court denied that motion and Defendant appealed that ruling—Case No.
19-1343. Finally, the Clerk of Court for the United States District Court for the
District of Colorado entered a cost award for Defendant. After the Clerk declined to
tax any expert costs beyond a forty dollar per day appearance fee, Defendant sought
review of the Clerk’s award, which the district court denied. Defendant filed a
second appeal on this issue—Case No. 19-1425.
Our jurisdiction arises under 28 U.S.C. § 1291. We affirm the district court’s
decisions in Case Nos. 19-1270, 19-1343, and 19-1425.
*
This order and judgment is not binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. It may be cited, however, for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
2
I.
An underinsured motorist ran a red light and struck Plaintiff’s vehicle.
Plaintiff suffered a wrist injury in the collision and settled with the underinsured
motorist for his $100,000 policy limit. She later filed a claim with Defendant—her
underinsured motorist (“UIM”) insurance provider. Her UIM policy placed
obligations on Plaintiff to assist in an investigation of the claim—specifically the
policy required her to attend a medical examination, provide a medical authorization,
and cooperate with Defendant’s investigation.
Four months after Plaintiff’s filing of the UIM claim, Defendant asked
Plaintiff’s counsel to return a signed medical authorization and list of Plaintiff’s
treating providers. After not hearing from Plaintiff’s counsel, Defendant offered to
resolve the claim for $35,000, noting that it did not have evidence of future treatment
expenses. Defendant asked about Plaintiff’s surgical options, costs, and how long
Plaintiff would need to miss work. Plaintiff’s counsel responded that Plaintiff
required surgery. The parties met in person and agreed that Plaintiff would see her
surgeon to discuss her impairment rating, future surgical options, a cost estimate for
the potential future surgeries, and any resulting complications. Defendant again
asked for a medical authorization and a wage loss authorization. After a third
request, Plaintiff’s counsel provided the authorizations.
Plaintiff’s counsel provided Defendant with correspondence that purported to
summarize Plaintiff’s surgeon’s review of Plaintiff’s condition. Although it listed
two surgical possibilities, the correspondence lacked an impairment rating, surgical
3
cost estimate, or an estimate of how long Plaintiff would need to take off work.
Defendant re-evaluated the claim and offered to resolve it for $100,000. The offer
accompanied a note that Defendant still did not have the disability rating, cost
estimates for future surgeries, or corresponding wage loss. Despite the earlier
meeting, Plaintiff’s counsel responded that she did not anticipate Defendant needing
that information. She asked whether Defendant would pay for another appointment
to obtain that information. Defendant agreed. And Plaintiff’s counsel acknowledged
she would schedule an examination “to obtain the information Allstate needs to
evaluate her claim, including the impairment rating, the physician charges for the
future surgery, and the amount of time she is likely to miss from work.”
Plaintiff retained a vocational rehabilitation forensic expert to develop a life
care plan and analyze the cost and impact of Plaintiff’s future surgeries. She also
retained a second expert to estimate her future medical expenses—a figure the expert
calculated at $341,700. Plaintiff did not disclose these experts until litigation.
Plaintiff’s surgeon eventually sent Defendant a report that provided an
impairment rating and suggested Plaintiff may require surgery, but it did not provide
a cost estimate for any surgery or describe the potential complications and time
Plaintiff would need to recuperate. The surgeon later testified he could have
provided a cost estimate, but that Plaintiff’s counsel did not request one. Defendant
reassessed the claim without the information it had requested and without knowing
about the two expert reports. Defendant offered $115,000.
4
Plaintiff did not respond to the offer. Rather, Plaintiff believed Defendant
refused to make her a reasonable offer for underinsured motorist benefits and sued
Defendant in Colorado state court alleging, among other things, breach of contract
and bad faith. Defendant removed the civil action to the United States District Court
for the District of Colorado. In its Answer, Defendant asserted an affirmative
defense to the breach of contract claim that Plaintiff failed to cooperate with
Defendant’s investigation and comply with the policy’s terms. Defendant later
explained in discovery that it raised a failure to cooperate affirmative defense
because Plaintiff failed to provide it with a cost estimate for a possible future surgery
and associated wage loss. Defendant’s Rule 30(b)(6) corporate representative also
testified that Defendant suffered prejudice because it could not investigate the claim
and incurred expenses to defend the claim in litigation.
After a year of litigation, the parties mediated the case. Before that mediation,
one of Defendant’s claims adjusters made an entry in Defendant’s claim log. That
entry examined the claim, analyzed potential liability and Plaintiff’s potential
damages, referenced the mediation, and noted the policy limits of $250,000. That
adjuster noted a “gross tort value” up to policy limits. The day of the mediation, one
of Defendant’s managers authorized up to $250,000 to resolve the claim and noted
that authorization in the claim log.
The parties did not settle the litigation. But following the mediation,
Defendant drafted a $250,000 check to Plaintiff “on the possibility that it was owed.”
The adjuster who authorized the check testified he had no intention of advancing the
5
funds to Plaintiff. Defendant transmitted the check to its counsel, who determined
that Defendant did not have to pay the funds because Defendant authorized the
$250,000 to resolve all claims in the lawsuit, Defendant was still investigating the
UIM claim, and Defendant had asserted a coverage defense. As a result, Defendant’s
counsel did not forward the check to Plaintiff.1
Defendant made an offer of judgment for $200,000. Plaintiff rejected the
offer. Defendant ultimately completed its investigation of Plaintiff’s claim during
litigation and determined that, but for her failure to cooperate, Plaintiff’s claim would
be worth the full $250,000 policy limits. Defendant paid Plaintiff and her counsel
$250,000, but reserved the right to claw back the $250,000 should a jury determine
that Plaintiff had failed to cooperate in Defendant’s claim investigation.
The district court denied the parties’ cross motions for summary judgment on
Defendant’s failure to cooperate defense holding that a reasonable jury could
conclude that Plaintiff cooperated in the investigation of the claim, but that a
reasonable jury could also conclude that Plaintiff did not cooperate in the
investigation. The district court also determined that Defendant’s $250,000 payment
did not render its defense moot and its ability to adjust the claim followed by its
conditional payment did not preclude it from arguing prejudice from Plaintiff’s
alleged failure to cooperate.
1
Before trial, Defendant’s accounting department mailed a letter to Plaintiff
asking why she had not cashed the original $250,000 check that she had never
received—a routine function of Defendant’s accounting department if an insured has
not cashed an issued check.
6
In the proposed Pre-Trial Order, Defendant alleged that Plaintiff, through her
counsel, had intentionally “setup” Defendant for a bad faith case so she could obtain
additional damages. Also before trial, both parties filed motions in limine. Plaintiff
sought to preclude Defendant from presenting a “set-up” defense—in other words,
Plaintiff desired to prohibit Defendant from arguing that her counsel knowingly and
intentionally lied, concealed, and cheated Defendant for her own financial gain. The
district court denied that motion. Plaintiff also sought to limit Defendant’s failure to
cooperate defense to issues contained in Defendant’s discovery response. Plaintiff
objected to this defense because she claimed that Defendant failed to plead it with
particularity in its answer. The district court also denied Plaintiff’s motion to limit
Defendant’s failure to cooperate defense. Plaintiff next sought to preclude Defendant
from presenting a stealth fraud defense—meaning that Defendant could not argue
that Plaintiff did not just merely fail to cooperate, but actively concealed information
from Defendant. The district court denied in part and granted in part Plaintiff’s
motion to preclude Defendant from presenting a stealth fraud defense, stating,
“[t]here will be no mention of fraud.” Defendant moved to allow the jury to know
the measure of damages available in a bad faith claim in order to understand
Plaintiff’s motive for allegedly sabotaging Defendant’s investigation of her claim.
The district court allowed the jury to hear that additional damages were available
because of the bad faith claim. Defendant additionally sought to prevent Plaintiff
from referencing mediation, issuance of a potential settlement check, and settlement
negotiations. The district court excluded reference to mediation preparation, issuance
7
of the $250,000 potential settlement check, and settlement negotiations under Federal
Rule of Evidence 408.
At trial, the district court tasked the jury with deciding three claims: breach of
insurance contract, unreasonable delay or denial of insurance benefits, and bad faith
breach of insurance contract. At the close of evidence, Plaintiff moved for a
judgment as a matter of law on Defendant’s failure to cooperate defense and her
breach of contract claim. The district court denied that motion. A jury found for
Defendant on all three claims. Although the jury heard evidence on Plaintiff’s
alleged failure to cooperate, and although the district court permitted the jury to
consider that evidence in deciding whether Plaintiff should prevail, the district court,
over Defendant’s objection, did not give the jury an instruction asking if Plaintiff
failed to cooperate. Defendant asked Plaintiff to return the funds paid. Plaintiff
declined. So Plaintiff and her counsel remain in possession of the $250,000, despite
losing on all three affirmative claims against Defendant at trial. And Defendant does
not have an express jury finding that Plaintiff failed to cooperate, despite its request
for one.
After the district court entered judgment for Defendant, Plaintiff appealed
several of the district court’s rulings, including its denial of the motion for summary
judgment.
Post-judgment, Defendant sought to amend its answer to add counterclaims to
obtain a modified court judgment that would order Plaintiff to return the $250,000
that Defendant paid under the reservation of rights. The district court denied
8
Defendant’s motion, determining that it lacked jurisdiction to address the issue
because Plaintiff had filed her notice of appeal. Alternatively, the district court
determined that it would not have allowed Defendant to amend its answer. It
reasoned the jury could have found that Defendant acted reasonably, properly
investigated the claim, and properly paid Plaintiff the $250,000 for her injuries
without finding that she had failed to cooperate or had breached her contractual
obligations. Defendant filed an appeal on this issue.
Also post-judgment, the Clerk of Court for the United States District Court for
the District of Colorado taxed costs in the amount of $16,247.21 against Plaintiff.
Defendant sought review of the Clerk’s award, arguing that the Clerk erred in
refusing to tax expert fees above the $40 per day witness appearance fee. Defendant
argued that because it had served Plaintiff with an offer of judgment, which she
refused, it was entitled to fees under Colo. Rev. Stat. § 13-17-202 because she did not
recover a judgment in excess of the offer. The district court disagreed, stating the
$250,000 reservation of rights payment effectively amounted to a judgment.
Defendant filed a second appeal on this issue.
II.
We first address Plaintiff’s appeal—No. 19-1270—which presents five issues
for review. First, whether the district court erred in failing to grant summary
judgment for Plaintiff on either the failure-to-cooperate defense or Plaintiff’s breach-
of-contract claim. We review the district court’s denial of summary judgment de
novo. Wilson v. Union Pac. R.R. Co., 56 F.3d 1226, 1229 (10th Cir. 1995) (citation
9
omitted). Second, whether the district court erred in its interpretation of the policy’s
failure-to-cooperate language. We review a district court’s interpretation of policy
language de novo. Lexington Ins. Co. v. Precision Drilling Co., L.P., 951 F.3d 1185,
1194 (10th Cir. 2020) (citation omitted). Third, whether the district court erred in
allowing Defendant to present its “set-up” defense theory. We review evidentiary
rulings for abuse of discretion. Cavanaugh v. Woods Cross City, 718 F.3d 1244,
1249 (10th Cir. 2013) (citation omitted). Fourth, whether the district court erred in
excluding certain evidence under a theory of mediation privilege. We review a
district court’s rulings on motions in limine for abuse of discretion. Id. And fifth,
whether the district court erred in allowing Defendant to withdraw its stipulation that
it owed Plaintiff some amount of UIM benefits. District courts have “broad
discretion in determining whether to hold a party to a stipulation.” Wheeler v. John
Deere Co., 935 F.2d 1090, 1098 (10th Cir. 1991) (citation omitted).
A.
Plaintiff argues that the district court erred in denying her motion for summary
judgment and motion for judgment as a matter of law on Defendant’s failure-to-
cooperate defense or Plaintiff’s breach of contract claim. We first address whether
Plaintiff preserved this issue because of her failure to make a post-judgment motion
for judgment as a matter of law and whether we can hear the appeal of the denial of
her summary judgment motion after a trial on the merits. Because we determine that
we have jurisdiction to review a portion of the denial of the summary judgment
motion, we next turn to whether an insurer can, under Colorado law, make a payment
10
of benefits under a reservation of the right to claw back the payment. And, if so,
whether that payment constitutes a confession of an insured’s breach of contract
claim so that it moots an affirmative defense to that claim. Third, we discuss
Plaintiff’s argument that Defendant failed to show that it was prejudiced by her
alleged failure to cooperate. We then address Plaintiff’s contention that because no
policy provision required her to provide estimates of surgical costs and future wage
loss, her conduct did not violate a specific policy provision and Defendant cannot
allege failure to cooperate. Fifth, we turn to whether Colorado law required
Defendant to give Plaintiff notice of its intent to assert the cooperation defense, the
basis for that defense, and the opportunity to cure. Sixth, we discuss whether
Defendant failed to plead its affirmative defense with particularity in violation of
Federal Rule of Civil Procedure 9(c). Finally, we address Plaintiff’s argument that
the district court’s decision to allow Defendant to present the failure-to-cooperate
defense and instructing the jury on the defense was not harmless.
1.
“Federal Rule of Civil Procedure 50 sets forth the procedural requirements for
challenging the sufficiency of the evidence in a civil jury trial and establishes two
stages for such challenges—prior to submission of the case to the jury, and after the
verdict and entry of judgment.” Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 546
U.S. 394, 399 (2006). Plaintiff challenged the sufficiency of the evidence under
Rule 50(a) prior to submission of the case to the jury. The district court denied
Plaintiff’s motion. Plaintiff, however, failed to make a motion under Rule 50(b) to
11
renew her challenge to the sufficiency of the evidence after the jury verdict and entry
of judgment. Defendant contends Plaintiff failed to preserve her ability to appeal the
denial of her motions for summary judgment and directed verdict by not filing a post-
judgment Rule 50(b) motion. We agree.
Without a Rule 50(b) motion, we lack the power to direct the district court to
enter judgment contrary to the one it permitted to stand. Id. at 400–01 (citing Cone
v. W. Va. Pulp & Paper Co., 330 U.S. 212, 218 (1947)); see also Copar Pumice Co.,
Inc. v. Morris, 639 F.3d 1025, 1030 (10th Cir. 2011) (stating that a party cannot
appeal its entitlement to judgment as a matter of law unless that party renews its
motion under Rule 50(b)). Thus, Defendant correctly argues that Plaintiff cannot
appeal the district court’s denial of her Rule 50(a) motion.
Plaintiff contends that “well-established law” supports the proposition that a
party may appeal rulings on Rule 50(a) motions based on the interpretation of legal
questions. But the cases she cites for that proposition—Copar Pumice Co., Inc., 639
F.3d 1025 and Haberman v. Hartford Insurance Group, 443 F.3d 1257 (10th Cir.
2006)—state that summary judgment, not a Rule 50(a) motion, provides the only way
to preserve these “purely legal questions.” So we look not to her Rule 50(a) motion,
but to the summary judgment proceeding. A party generally may not appeal a district
court’s denial of a summary judgment motion. Ortiz v. Johnson, 562 U.S. 180, 184
(2011). But when the parties do not dispute the material facts and the district court
bases its denial of summary judgment on its interpretation of a purely legal question,
12
a party may appeal such a decision after a final judgment. Haberman, 443 F.3d
at 1264 (citations omitted).
Our jurisdiction turns on whether the district court denied the summary
judgment motions on purely legal grounds. Although the district court identified
various genuine issues of material fact in denying summary judgment, Plaintiff
contends that the district court made five determinations as a matter of law:
(1) Defendant permissibly made a payment subject to a reservation of rights that did
not render moot, waive, or foreclose its failure-to-cooperate defense; (2) a jury could
reasonably find that Plaintiff had breached the general contractual obligation of
cooperation without specific policy language requiring Plaintiff to provide the
estimated cost of future medical treatment and lost wages; (3) Defendant had no
requirement to provide notice and opportunity to cure; (4) Plaintiff’s alleged conduct
constituting the failure to cooperate could constitute substantial and material
prejudice; and (5) Defendant pleaded the failure-to-cooperate defense with sufficient
particularity. As noted in the previous paragraph, we have jurisdiction to review
purely legal issues the district court decided on summary judgment. Haberman, 443
F.3d at 1264. For the reasons discussed below, we conclude each issue, except for
the second, constitutes a purely legal issue we may review. We now turn to the
merits.
13
2.
Colorado has not spoken on the issue of whether an insurer may make a
payment to an insured subject to a reservation of rights and then seek to claw back or
recoup its payment. We hold that under Colorado law an insurer may do so.
The district court relied on our previous recognition that, under Colorado law,
an insurer has an entitlement to reimbursement of defense costs if a court determines
that insurer had no duty to defend. Valley Forge Ins. Co. v. Health Care Mgmt.
Partners, Ltd., 616 F.3d 1086, 1091–92 (10th Cir. 2010); see also Mt. Hawley Ins.
Co. v. Casson Duncan Constr. Inc., 409 P.3d 619, 623 (Colo. App. 2016) (citing
Valley Forge). In relying on that holding, the district court did not blaze a new trail.
Indeed, the District of Colorado previously extended our holding in Valley Forge to
determine that “an insurer may pay an insured under a reservation of rights and then
seek to recoup its payment.” Auto-Owners Ins. Co. v. Summit Park Townhome
Ass’n, No. 14-cv-3417, 2016 WL 1321507, at *4 (D. Colo. April 5, 2016) (citing
Valley Forge). And this extension is a natural application of the rule we divined in
Valley Forge.
We agree with the district court—and predict the Colorado Supreme Court
would hold—that a reservation of rights does not destroy the insured’s rights or
create new rights for the insurance company. Rather, the reservation of rights
“preserves that to which the parties had originally agreed.” Mut. of Enumclaw v.
Harvey, 772 P.2d 216, 220 (Idaho 1989). Indeed, just like the policy at issue in
Valley Forge, the policy here contains no contractual language referencing a right to
14
recoupment. Instead, the policy language provides that if Defendant and the insured
do not agree on the right to benefits and the amount payable, a court of competent
jurisdiction will resolve the disagreement. The policy also sets forth that Defendant
has a right to decline to pay a claim where the insured causes material prejudice to
Defendant by failing to cooperate. And Defendant also has the right to have that
dispute settled by a court. Thus, Defendant had the right to pay Plaintiff subject to a
reservation of rights and to claw back that payment should a court determine that
Plaintiff had no entitlement to the payment.
Because we answered the prior question in the affirmative, we now turn to
whether that payment constitutes a confession of Plaintiff’s breach of contract claim
so that it moots Defendant’s affirmative failure-to-cooperate defense to that claim.
We hold that it does not. Defendant made clear when it paid Plaintiff the policy
limits that it reserved the right to claw back the payment. Cases Plaintiff cites that
conclude the opposite lacked a reservation of rights letter. See Peden v. State Farm
Mut. Auto. Ins. Co., No. 14-cv-982, 2018 WL 3496735 (D. Colo. July 20, 2018)
(holding that the insurer could not assert a cooperation defense where it paid the
entire insured’s UIM claim without a reservation of rights). Here, the reservation of
rights letter shows that Defendant did not confess Plaintiff’s breach of contract claim.
Nor does the fact that Defendant eventually completed its investigation moot
Defendant’s affirmative failure-to-cooperate defense. In Colorado, an insured’s
failure to cooperate breaches the contract if the insurer suffers a material and
substantial disadvantage. State Farm Mut. Auto. Ins. Co. v. Secrist, 33 P.3d 1272,
15
1275 (Colo. App. 2001) (citation omitted). Often, the prejudice from a failure to
cooperate manifests in the insurer’s failure to complete an investigation. But the
prejudice here does not result from Defendant’s inability to complete an
investigation. Rather, the alleged failure to cooperate forced Defendant to defend a
bad faith suit. The Colorado Court of Appeals, albeit in an unpublished decision,
acknowledged this type of prejudice. See Windhorst v. State Farm Mut. Auto. Ins.
Co., No. 11CA1045, 2012 WL 1884652 (Colo. App. May 24, 2012) (providing that
the insurer receiving medical records did not cure the prejudice because by that time
the insurer was defending against claims based on its alleged failure to timely process
and pay UIM benefits); see also Pilgrim v. State Farm Fire & Cas. Ins. Co., 950 P.2d
479, 486 (Wash. Ct. App. 1997) (concluding insurer suffered prejudice when insured
failed to provide financial information in connection with a first party claim because
insurer could not evaluate the validity of the insurance claim without financial
documents from insured). Quite simply, under this theory, had Plaintiff cooperated,
Defendant would have had the relevant information to make an informed offer prior
to Plaintiff’s filing of the bad faith suit. Because Defendant claimed she did not, it
asserted that it could not make such an offer and had to litigate a bad faith claim.
Thus we agree with the district court that Defendant’s payment of the claim, subject
to a reservation of rights, did not moot, waive, or extinguish Defendant’s failure-to-
cooperate defense.
16
3.
Plaintiff contends that Defendant failed to demonstrate that it was prejudiced
by Plaintiff’s alleged failure to cooperate. As discussed in the previous section, the
district court properly held that a failure to cooperate that results in a bad-faith case
can be prejudicial. Plaintiff couched whether prejudice exists as a legal question,
arguing that in allowing the jury to determine whether Defendant was prejudiced
materially, the district court impliedly ruled that the conduct that Defendant claimed
constituted a failure to cooperate could result in substantial and material prejudice.
But rather than argue the law, Plaintiff’s briefing focus on the sufficiency of the
evidence. Plaintiff argues that the facts presented to the district court at summary
judgment and at trial could not possibly support a finding of prejudice. The district
court held in its order denying summary judgment that a jury reasonably could find
that Plaintiff complied with the terms of the policy, but also held that a jury could
find that she did not comply with those terms. Plaintiff contests the latter. For
instance, she asserts that no evidence showed that Plaintiff or her counsel withheld
any material information, that no evidence showed Defendant’s inability to do a
reasonable investigation, and that evidence overwhelmingly demonstrated that
Plaintiff did not prevent Defendant from investigating Plaintiff’s claim, particularly
the cost of the future surgery or associated future wage loss—all of which go to the
sufficiency of the evidence.
Indeed, whether Plaintiff’s conduct constituted noncooperation presented a
question of fact and of the sufficiency of the evidence. And perhaps the evidence of
17
noncooperation or of prejudice in this case was so lacking that the district court erred
in failing to grant summary judgment or Plaintiff’s Rule 50(a) motion. But we are
powerless to make that determination because of the procedural posture of this case.
Unitherm, 546 U.S. at 405. We will not second guess the district court’s
determination. As we discussed earlier, Plaintiff’s failure to make a Rule 50(b) post-
judgment motion for judgment as a matter of law precludes her sufficiency of the
evidence argument on appeal. Id.
4.
Plaintiff next argues that no policy provision required her to provide estimates
of future surgical costs and future wage loss. That lack of language, Plaintiff
contends, means her conduct could not have violated a specific policy provision and,
therefore, Defendant cannot assert a failure-to-cooperate defense. But we conclude
the district court did not err in determining that a jury could reasonably find that
Plaintiff failed to comply with the cooperation clause.
Plaintiff contends the policy explicitly required her only to provide a release
authorization, which she did, and to attend a medical examination if requested, which
Defendant did not. Plaintiff relies on a Colorado Court of Appeals case to argue that
the district court and Defendant have held her to a standard of conduct not set forth in
or required by the policy—Ahmadi v. Allstate Insurance Company, 22 P.3d 576
(Colo. App. 2001). In Ahmadi, the insurer requested examinations under oath of
three insureds, in accordance with the policy’s requirement that they submit to such
an examination upon request. Id. at 577. The policy also included a standard
18
cooperation clause. Id. The insureds, not all English speakers, appeared together for
the examinations and refused to allow the insurer to separate them from one another.
Id. at 577–78. The insurer insisted on separation to no avail, and the examinations
did not take place. Id. at 578. Because they would not submit separately to
examination, the insurer alleged failure to cooperate. Id.
On appeal, the insureds argued that by showing up together, they complied
with the policy language. The Colorado Court of Appeals agreed. In reaching that
conclusion, the court held that the policy “[did] not mandate that the examination to
which a claimant must submit shall be held outside the presence of other claimants.”
Id. The Colorado Court of Appeals held that “we must give effect to the plain
meaning of the policy terms” and “we are not at liberty to rewrite the policy.” Id.
(citations omitted). Thus, “had [the insurer] desired to impose [separation of
examinees], it could have done so by an express term in the policy.” Id. (citation
omitted). So the court rejected the insurer’s claim that the refusal to sequester
violated the examination clause. Id. at 579.
The Ahmadi court also rejected the insurer’s argument that failing to submit to
sequestration violated the cooperation clause. It held that “because the policy here
contains a requirement for an examination under oath, but does not impose an
additional requirement that the examination be held separately and without any other
claimants being present, we conclude that the trial court erred in holding that the
claimants had breached the cooperation clause.” Id. at 580. The court’s holding that
the insureds had not violated the cooperation clause was, therefore, because they had
19
not violated the examination clause. Plaintiff ignores the fact that her case does not
involve a second, more specific clause, such as an examination clause.
Defendant’s cooperation defense arises from Plaintiff’s conduct, not the failure
to provide information alone. The evidence shows that Plaintiff’s counsel agreed to
provide this information, never refused Defendant’s requests for the information, and
led Defendant to believe she was cooperating with the investigation. We agree with
the district court that Defendant could have reasonably relied on Plaintiff’s promises
to provide information and that Plaintiff’s subsequent failure to provide that
information without informing Defendant that she refused to do so could constitute
noncooperation. The district court did not err by sending the question to the jury.
5.
Plaintiff next contends that both the law and Defendant’s policy required that
Defendant provide her notice of its intent to assert the cooperation defense and the
basis for that defense as well as a chance to cure before it asserted she failed to
cooperate. But Plaintiff cites no Colorado law to support her contention. Instead,
Plaintiff cites a Tenth Circuit case applying Oklahoma law and a dissent from the
Colorado Supreme Court.
The Tenth Circuit case—State Farm Fire and Casualty Insurance Company v.
Payne, 982 F.2d 529 (10th Cir. 1992) (unpublished table decision)—involved an
insured’s pre-suit failure to cooperate, of which the insurer knew before the suit.
Here, Defendant did not know about Plaintiff’s failure to cooperate before the suit
because Plaintiff, in Defendant’s words, “presented a pretense of cooperation.” Thus
20
the prejudice to Defendant did not manifest, and the defense did not arise, until
Plaintiff sued. The Colorado case—Francom Building Corporation v. Fail, 646 P.2d
345 (Colo. 1982) (en banc)—is likewise inapposite. Plaintiff cites the dissent in that
case, which interpreted and applied the notice requirement of Colorado’s forcible
entry and detainer statute. Plaintiff acknowledges that Fail did not involve insurance
law but argues that the Colorado Supreme Court has imposed notice and opportunity
to cure requirements in other forfeiture contexts, so it would in this context as well.
Maybe so. But Plaintiff overlooks Defendant’s argument that inclusion of the
defense in the answer timely and sufficiently put Plaintiff on notice because the
prejudice of the failure to cooperate did not manifest until after Plaintiff sued. Thus,
the defense did not apply until after Plaintiff sued.
As to the policy, trial testimony showed that Defendant provides insureds
notice by a reservation of rights letter when it learns of a potential failure to
cooperate before suit is filed. But when an insured sues, Defendant provides such
notice in a responsive pleading. Trial testimony also revealed that the policy does
not require a chance to cure. Rather, Defendant may provide such an opportunity.
As we discussed above, in Colorado, an insured’s failure to cooperate breaches
the contract if the insurer suffers a material and substantial disadvantage. Secrist, 33
P.3d at 1275. Here, the district court held that “a jury could reasonably conclude that
[Defendant] suffered a material and substantial disadvantage by having its
investigation delayed and being sued for bad faith as a result.” We agree with the
district court. The prejudice from Plaintiff’s failure to cooperate did not arise until
21
Plaintiff filed the suit. And at that point, Defendant could not possibly give Plaintiff
a chance to cure. The only possible way to provide notice after suit is to respond in a
pleading.
No authority supports Plaintiff’s position. Here the suit itself was the
prejudicial result of Plaintiff’s failure to cooperate. The district court did not err in
determining that neither the law nor the policy required Defendant to provide pre-suit
notice and opportunity to cure.
6.
We now turn to Plaintiff’s contention that Defendant failed to plead the
affirmative defense with particularity. Plaintiff argues Defendant violated
Rule 9(c)’s command that when denying a condition precedent has occurred or been
performed, a party must do so with particularity. But Plaintiff’s argument assumes
that a cooperation defense is a conditions-precedent defense. We need not determine
whether a cooperation defense is a conditions-precedent defense because whether
Rule 9(c)’s standard or the general pleading standard for affirmative defenses applies
is immaterial here. And that is because, put plainly, Defendant insufficiently pleaded
its affirmative defense in failing to identify what policy provision Plaintiff violated
or how she had violated the provision. Given that, the material questions we must
consider are whether Plaintiff waited too long to move to strike the affirmative
defense and whether the district court correctly rejected Plaintiff’s arguments—
questions we answer in the affirmative.
22
Plaintiff never moved to strike the defense under Rule 12(f)—the proper
vehicle to challenge the pleading of a defense. Plaintiff had a chance to conduct
discovery into the defense. And Plaintiff had the ability to fully litigate the defense
at summary judgment and at trial. Courts, both in this Circuit and in others, regularly
decline to entertain Rule 9 arguments at the summary judgment stage. See Bank of
Albuquerque, N.A. v. Dykes, Civ. No. 07-44, 2008 WL 11417171, at *2 (D.N.M.
Jan. 16, 2008) (“the Court nevertheless declines to rule against Defendants on the
basis of this alleged procedural shortcoming. Plaintiff did not move to strike
Defendants’ answer on the pleadings, or ask for a more particular statement of
allegations.”); Burton v. R.J. Reynolds Tobacco Co., 181 F. Supp. 2d 1256, 1262 n.5
(D. Kan. 2002) (“To the extent defendants are suggesting that plaintiff’s fraudulent
concealment claim should be stricken for failure to comply with Rule 9(b), the
court’s rejects this belated challenge.”); Davsko v. Golden Harvest Prods., Inc., 965
F. Supp. 1467, 1474 (D. Kan. 1997) (“Here, defendants answered plaintiff’s
complaint without raising any objection under rule 9(b). Defendants cannot argue
almost a year later that plaintiff failed to plead fraud with particularity.”); United
Nat. Records, Inc. v. MCA, Inc., 609 F. Supp. 33, 39 (N.D. Ill. 1984) (“Defendants
have had a sufficient opportunity to respond to plaintiffs’ charges as contemplated by
Rule 9(b). Accordingly, defendants’ contentions regarding plaintiffs’ failure to
comply with Rule 9(b) have been waived.”); Power Application & Mfg. Co. v.
Moscow Agri-Indus., Inc., No. 86-1656-PFK, 1992 WL 363684, at *4 (D. Kan. Nov.
10, 1992) (the plaintiff, in its motion for summary judgment, “originally argued that
23
[the defendant’s] complaint does not meet the standards of the Federal Rules by
pleading fraud with any particularity.” In response, the defendant “correctly pointed
out that by waiting to make this motion until after the pretrial order and much
discovery, [the plaintiff] has effectively waived any right to obtain dismissal of the
fraud claim on procedural grounds.”).
We agree with Defendant that Plaintiff raised the issue too late in the process.
She suffered no prejudice and the district court did not err in refusing to consider her
belated arguments. Failure to plead with specificity is not a matter for summary
judgment.
7.
Finally, Plaintiff argues that we must remand this case because the district
court erred in permitting Defendant to present the failure-to-cooperate defense and
that instructing the jury on that defense was not harmless. She asserts that the court
instructed the jury on the elements of a failure to cooperate and to consider that
defense as to all claims, which resulted in a smear campaign against Plaintiff that
lasted throughout the trial. Plaintiff posits that Defendant supported none of its
argument surrounding the failure to cooperate by competent evidence of facts
showing a legally viable failure to cooperate. This argument, too, must fail. We
previously concluded that the district court did not err in any of the above legal
rulings. Thus the district court did not err in allowing Defendant to present its failure
to cooperate defense. We also concluded that Plaintiff’s failure to make a Rule 50(b)
motion precludes us from conducting any evidentiary review for sufficiency at trial
24
or in search of a genuine issue of fact at summary judgment. Thus, we hold the
district court did not err in refusing to grant summary judgment in Plaintiff’s favor on
either Defendant’s affirmative cooperation defense or on Plaintiff’s breach of
contract claim. Because we find no error, we do not consider Plaintiff’s argument
that the error was not harmless.
B.
Plaintiff also argues that the district court erred in its interpretation of the
policy’s failure-to-cooperate language. She asserts that the provision can apply only
to third-party claims, not first-party claims, and that the relevant policy provision is
ambiguous. The district court did not address these arguments. Defendant contends
that Plaintiff did not preserve this issue for appeal. We agree that Plaintiff raises
these arguments for the first time on appeal. Therefore, the district court did not
have the opportunity to rule on them.
We rarely consider an issue raised for the first time on appeal. Tele-
Commc’ns, Inc. v. C.I.R., 104 F.3d 1229, 1232 (10th Cir. 1997) (citations omitted).
The reasoning is simple enough. Review of issues parties did not raise below would
require “additional evidence gathering and findings; would undermine the need for
finality in litigation and conservation of judicial resources; would often have this
court hold everything accomplished below for naught; and would often allow a party
to raise a new issue on appeal when that party invited the alleged error below.” Id.
And our refusal to consider these newly raised issues “is particularly apt when
dealing with an appeal from a grant of summary judgment.” Id. At that point, the
25
district court considers only opposing legal theories—not factual disputes. Id. We
are not a second-shot forum. Id. at 1233. Thus, we require a party to present an
issue to the district court before raising that issue on appeal. Id.
But what about vague, arguable references to a point in the district court
proceedings? We have held that such passing references do not preserve an issue on
appeal. Id. We will not address new arguments on appeal regardless of “whether an
appellant is attempting to raise ‘a bald faced new issue’ or ‘a new theory on appeal
that falls under the same general category as an argument presented at trial.’”
McDonald v. Kinder-Morgan, Inc., 287 F3d 992, 999 (10th Cir. 2002) (quoting
Lyons v. Jefferson Bank & Trust, 994 F.2d 716, 722 (10th Cir. 1993)).
So we turn to whether Plaintiff preserved her argument. In Plaintiff’s opening
brief, she states that she preserved this argument at oral argument on her summary
judgment motion. That oral argument lasted about two hours. And Plaintiff raised
the ambiguity issue one time, arguing, “Allstate is relying 100 percent upon a
cooperation clause that does not apply in a first party case and it does not apply in a
first party case because it’s ambiguous, because it’s overbroad and it doesn’t make
any logical sense.” In context, the discussion before and after that statement centered
on interpreting Windhorst and the definition of prejudice—not on the ambiguity of
the provision. So the district court’s failure to rule on ambiguity, yet make a ruling
on Windhorst and whether Defendant had argued a cognizable prejudice, is no
surprise. This mere mention in the district court oral argument does not preserve
either the question of the applicability of the provision or of its ambiguity. See Folks
26
v. State Farm Mut. Auto. Ins. Co., 784 F.3d 730, 741 (10th Cir. 2015) (providing that
“vague, arguable references to a point in the district court proceedings do not
preserve the issue on appeal” (quoting Lyons, 994 F.2d at 721)).
Only after Defendant argued that Plaintiff did not raise this argument in her eighty-
three-page summary judgment briefing did Plaintiff cite the record in her appellate reply
brief. Plaintiff raised her applicability argument in a footnote in her summary judgment
motion:
This general cooperation language is applicable only to third party claims
where an insured is being defended by the insurer – not in first party claims
where the insured is making a claim to her insurer, as is the case here. . . .
The absurdity that would result in applying the general cooperation clause
language in a first party claim is readily apparent when considering that the
clause requires the insured to cooperate with the insurer in the insurer’s
attempts to “settle” the claim – read literally, this would require the insured
to “accept” any “settlement offer” made by the insurer, as refusing to do so
would not assist the insurer in settling the claim. This would be an absurd
result.
(internal citation omitted). In the introduction of her response to Defendant’s motion for
summary judgment, Plaintiff argued:
The Allstate narrative in fact shows a course of conduct of an adjuster making
what appear to be “social” requests for information, which Allstate then turns
into a claim of a contract violation, resulting in forfeiture, based upon a
“general” duty to cooperate with an “investigation”, in a cooperation section
clearly intended to apply to 3rd party liability claims (cooperate in the
“defense” of lawsuits), and not the specific first-party cooperation
requirements such as providing medial authorizations and medical
examinations. Allstate’s extremely overbroad interpretation and assertion of
cooperation clause violations violates Colorado public policy.
Later in the same response, while discussing her specific-provision argument,
Plaintiff recites, verbatim, the footnote quoted above. Finally, in her reply in support
27
of her motion for summary judgment, Plaintiff said, “an insurer cannot deny a claim
for failure to cooperate where the alleged failure is not in violation of a specific non-
ambiguous requirement of the insurance policy, and only then after a reasonable
request.” But Plaintiff recited that proposition of law for her specific-provision
argument, addressed below. She did not specifically argue that the provision was
ambiguous.
We conclude Plaintiff forfeited this argument. Her passing reference to
applicability and ambiguity at oral argument before the district court did not preserve
this issue. Nor did her single footnote and two sentences of argument in her
summary judgment briefing. These arguments, raised before the district court in a
perfunctory and undeveloped manner, parallel the kind of arguments we have refused
consistently to take up in the past. See Folks, 784 F.3d at 741 (noting that “minimal
development of an issue in the district court could well result in forfeiture” (citation
omitted)).
Because Plaintiff forfeited this argument by not raising it before the district
court, we review for plain error. Richison v. Ernest Grp., Inc., 634 F.3d 1123, 1128
(10th Cir. 2011) (Gorsuch, J.). Plaintiff, however, did not argue for plain error in her
brief, even in the alternative. Our “long-standing practice has been to review newly
raised (but not waived) legal arguments under what substantively amounts to (and
what we have more recently described as) the plain error standard.” Id. To be sure,
“[a]ffording plenary appellate review to newly raised legal theories would do much
to undermine this adversarial and appellate order.” Id. at 1130.
28
Plaintiff has not tried to show how her new legal theory satisfies the plain
error standard. “And the failure to do so—the failure to argue for plain error and its
application on appeal—surely marks the end of the road for an argument for reversal
not first presented to the district court.” Id. at 1131 (citation omitted). As a result,
we will not consider this issue.
C.
The district court allowed Defendant to present a theory of the case that
Plaintiff’s conduct “set-up” Defendant for a bad-faith lawsuit. Plaintiff argues the
district court erred because this argument constituted an unalleged affirmative
defense not recognized by Colorado law.2 She contends that under Colorado law, an
insured’s motivations or financial interests are irrelevant and do not present a defense
for an insurer alleged to have breached its duties to the insured. She argues that
Defendant’s theory constitutes “an accusation of deceit sounding in fraud” and that
Defendant was trying to make the case for insurance fraud. Defendant, on the other
hand, asserts that this “set-up” theory is not an affirmative defense. Rather, the
argument is a theory to explain Plaintiff’s and her counsel’s conduct and the pre-suit
interactions between the parties. We agree with Defendant. The theory is not an
2
Plaintiff also again relies on Rule 9(b)’s particularity requirement for an
allegation of fraud and her allegation that Defendant did not raise this defense until a
proposed final pretrial order in April 2019, right before trial. Plaintiff asserts she
was not able to investigate the grounds for the defense or know of the basis for it
until that time. But Defendant thoroughly alleged this defense in a November 2017
proposed final pretrial order, which gave Plaintiff enough time to conduct discovery
into the theory, including through her deposition of Defendant’s Rule 30(b)(6)
representative.
29
official “set-up” defense but is simply Defendant’s proffered motive for Plaintiff’s
failure to cooperate.
Defendant’s “set-up” theory is not an affirmative defense. We define an
affirmative defense as a “defendant’s assertion of facts and arguments that, if true,
will defeat the plaintiff’s . . . claim, even if all the allegations in the complaint are
true.” Black’s Law Dictionary at 451 (8th ed. 2004). Defendant did not argue its
theory of the case was dispositive. We agree with the district court that Defendant’s
setup argument—rather than constituting a defense to Plaintiff’s claims—explained
its theory of the case for why Plaintiff failed to cooperate.
Plaintiff directs us to case law to support her position. She cites Caldwell v.
Wal-Mart Stores, Inc., 229 F.3d 1162, at *4–5 (10th Cir. 2000) (unpublished table
decision), for the proposition that evidence, argument, and references to a plaintiff’s
financial motivation to bring a lawsuit are inappropriate absent evidence of fraud.
But in that case, the plaintiff had promised that he would give his partners in a failed
business some of the money from the suit against Wal-Mart. The court disallowed
the evidence because it was irrelevant and unfairly prejudicial. Id. at *5. Wal-Mart
did not offer the evidence as a theory of its defense but as an attack on the plaintiff’s
credibility and character. Plaintiff also cites Miller v. Byrne, 916 P.2d 566, 576
(Colo. App. 1995), for the proposition that an insured’s motivations or financial
interests are irrelevant to whether an insurer fulfilled its non-delegable duties owed in
good faith to its insured. But that is not what Miller holds. The court said that the
motivation or intent was not legally material or logically relevant on this record. Id.
30
Miller does not foreclose the idea that an insurer could put forth a financial
motivation as their theory of the case regarding why an insured failed to cooperate.
Plaintiff also references Heritage Village Owners Association, Inc. v. Golden
Heritage Investors, Ltd., 89 P.3d 513, 518–19 (Colo. App. 2004), for the proposition
that a court should not permit the jury to learn of the consequences for the defendant
from statutory trebling penalties and that such information could create unfair
prejudice. But the Colorado Court of Appeals did not draw a bright line rule in that
case. Rather it stated, “we do not deem it necessary to determine whether a jury may
never be advised of treble damages.” Id. at 519. Its conclusion simply was that the
trial court did not err by declining to instruct the jury of the trebling provision. Id.
Plaintiff’s cited cases lend no support to her contention that Defendant’s “set-
up” theory constitutes an affirmative defense. Thus, we hold the district court did not
err in allowing Defendant to present its theory of the case to the jury.
D.
We next address Plaintiff’s contention that the district court erred in excluding
certain evidence related to settlement of the claim. We review evidentiary rulings for
abuse of discretion and the trial court’s preliminary factual findings relating to the
admission of evidence for clear error. United States v. Williamson, 53 F.3d 1500,
1517 (10th Cir. 1995) (citations omitted). Defendant authorized a $250,000
settlement before mediation and later drafted a $250,000 check that its counsel never
provided Plaintiff. Defendant moved in limine to exclude the entries in the claim log
related to the mediation and the check, the original $250,000 check, and the letter
31
from the accounting department asking why Plaintiff had not cashed the check. The
district court held an evidentiary hearing on the issue and excluded the evidence
under Federal Rule of Evidence 408 and 403. The district court reasoned that
Defendant prepared the entries for and in the context of the mediation and, therefore,
the check and letter were “so causally connected” to the mediation that introduction
would unduly confuse the jury.
We find no error in the district court’s ruling. Rule 408 provides that
statements made in compromise negotiation are not admissible to prove or disprove
the validity or amount of a disputed claim. And the record the district court made at
the evidentiary hearing provides ample evidence that Defendant created the entries in
the context of and in preparation for mediation. Indeed, Defendant created the
entries two days before and the day of the mediation and the entries reference the
mediation. The district court did not commit clear error in its factual determination
that Defendant created the entries for mediation. The district court likewise did not
abuse its discretion in granting Defendant’s motion to exclude the ensuing check and
letter. The district court reasoned that Defendant could explain the documents only
while discussing the mediation. Thus, Defendant would have to explain that it issued
the documents because it authorized $250,000 to settle the litigation.
Plaintiff argues that she did not seek to offer the evidence to prove the amount
of her damages, but to prove Defendant’s knowledge that her damages exceeded the
available UIM limit, that it chose not to pay the benefits it knew that it owed to gain
some strategic advantage, and Defendant’s continuing bad faith. True, Rule 408 does
32
not exclude evidence offered for another purpose. And evidence of a party’s bad
faith may fall under another purpose. But we do not review this issue de novo. We
have said that “when the issue is doubtful, the better practice is to exclude evidence
of compromises or compromise offers.” Bradbury v. Phillips Petroleum Co., 815
F.2d 1356, 1364 (10th Cir. 1987). The district court conducted an evidentiary
hearing and determined that Rule 408 barred admission of the evidence because
Defendant made the entries about valuation of the claim in preparation for mediation.
See Eisenberg v. Univ. of N.M., 936 F.2d 1131, 1134 (10th Cir. 1991) (explaining
that Rule 408 is designed to encourage settlement of disputes). The district court’s
decision was reasonable, and we conclude it did not abuse its discretion in barring the
evidence pursuant to Rule 408.
But the district court also believed that admission of the letter and check
would confuse the jury from the relevant issues in the case and also barred it from
coming into evidence under Rule 403. Again, the district court’s decision was
reasonable and it did not abuse its discretion. Indeed, the “risks of prejudice and
confusion entailed in receiving settlement evidence are such that often . . . the
underlying policy of Rule 408 require[s] exclusion even when a permissible purpose
can be discerned.” E.E.O.C. v. Gear Petroleum, Inc., 948 F.2d 1542, 1546 (10th Cir.
1991) (alterations in original) (citation omitted). See also Weir v. Fed. Ins. Co., 811
F.2d 1387, 1395 (10th Cir. 1987) (“Although Rule 408 does not prohibit the
admission of evidence of the circumstances surrounding a settlement to prove
something other than liability—such as voluntariness—many of the same concerns
33
about prejudice and deterrence to settlements exist regardless of the purpose for
which the evidence is offered”). Thus, we hold the district court did not abuse its
discretion in excluding the evidence under Rules 408 and 403.3
E.
In the scheduling order, Defendant stipulated that it owed Plaintiff some
amount of UIM benefits. Specifically, “Allstate has determined that Ms. Cribari is
owed compensation for her injuries, damages and losses related to the . . . collision
under her underinsured motorist coverage.” This stipulation did not make the final
pretrial order. The district court ruled at trial that Plaintiff could not introduce the
stipulation to the jury. Plaintiff contends the district court erred.
“[I]f a party waits until trial to withdraw stipulations submitted in the pretrial order,
the recital of facts ‘may be modified at the trial only to prevent manifest injustice.’” In re
Durability Inc., 212 F.3d 551, 556 (10th Cir. 2000) (quoting United States v. Sommers,
351 F.2d 354, 357 (10th Cir. 1965)). “That standard comports with [Rule] 16, which
mandates that pretrial orders ‘shall be modified only to prevent manifest injustice.’” Id.
“If, however, the request to withdraw or amend the stipulation is made before significant
prejudice to the other parties would result, promotes important equitable and legal
considerations, and is not controlled by a rule of procedure, the party seeking to withdraw
3
In her reply brief, Plaintiff for the first time raises the argument that
Defendant waived any Rule 408 objections by introducing evidence of settlement
negotiations and offers itself. But a party waives issues and arguments raised for the
first time in a reply brief. Reedy v. Werholtz, 660 F.3d 1270, 1274 (10th Cir. 2011)
(citation omitted).
34
must simply show good reason for the request.” Id. (citation omitted). See also Uranium
Contracts Litigation, 570 F.2d 899, 902 (10th Cir. 1978) (holding that, where later events
“reveal[ed] a need for further discovery,” “we must hold that it would be inequitable to
enforce an agreement against further questioning of [a key fact witness], thus closing the
door to development of potentially critical facts.”); Fairfield Dev., Inc. v. J.D.I. Contractor
& Supply, Inc., 782 F. Supp. 2d 1205, 1211 (D. Colo. 2011) (finding that, where
“[p]laintiffs’ recent conduct . . . has caused [defendant] to question the foundation of
[p]laintiffs’ claims and suggested that [defendant] should look more closely at the
damages,” the court should relieve the defendant of a stipulation as to the amount of
damages).
“Ultimately, ‘the district court is vested with broad discretion in deciding
whether to enforce [the] parties[’] stipulation or not.’” Lincoln v. BNSF Ry. Co.,
900 F.3d 1166, 1188 (10th Cir. 2018) (alterations in original) (quoting Miller v. Eby
Realty Grp. LLC, 396 F.3d 1105, 1116 (10th Cir. 2005)). “A court will not always
enforce the terms of a stipulation in the rigid manner that a court typically enforces
the terms of a contract.” Id. “Even though a court may not overlook stipulations as a
matter of course, no rule of law requires a court to base the resolution of the case on
stipulations of the parties.” Id. (quoting O’Connor v. City & Cnty. of Denver, 894
F.2d 1210, 1226 n.12 (10th Cir. 1990)).
At the pretrial conference, the district court ruled that it would not read the
stipulation at trial. The district court reasoned that Defendant no longer agreed to its
previous stipulation based on Plaintiff’s alleged failure to cooperate. The district
35
court said that Plaintiff could ask about the stipulation at trial, subject to potential
objection. At trial, Plaintiff sought to introduce the stipulation and Defendant
objected. The district court decided to exclude the stipulation, stating that the
statement was not probative. Moreover, the district court found that Defendant had
an explanation for the change in position and allowing Plaintiff to introduce the
stipulation would be overly confusing for the jury.
The district court did not abuse its discretion in excluding Defendant’s
stipulation from the original scheduling order. During litigation, Defendant
discovered information which altered its position on the factual basis for the
stipulation. Plaintiff’s introduction of the stipulation would require the jury to hear
information about how parties enter into stipulations, the various types of pretrial
orders, the discovery process, and the decision-making process counsel employs.
Ultimately, the stipulated fact was not probative because even if Defendant at first
conceded it owed Plaintiff something, newly discovered evidence uncovered in
discovery explained its change in position. Allowing the jury to hear the stipulation
would have only confused the jury. The district court did not abuse its discretion in
excluding the stipulation.
III.
We next address Defendant’s first appeal—No.19-1343—challenging the
district court’s denial of Defendant’s motion for leave to amend or supplement its
pleading and add counterclaims. We review the district court’s denial of a motion for
leave to amend for abuse of discretion. Zisumbo v. Ogden Reg’l Med. Ctr., 801 F.3d
36
1185, 1195 (10th Cir. 2015) (citation omitted). But we review a district court’s
ruling on a jurisdictional question de novo. FDIC v. Hulsey, 22 F.3d 1472, 1479
(10th Cir. 1994) (citation omitted).
Following the jury’s verdict, Defendant asked Plaintiff to return the $250,000
pursuant to the reservation of rights. After Plaintiff refused, Defendant filed a
motion for leave to supplement its earlier pleading to add counterclaims for replevin,
unjust enrichment, breach of contract, and conversion. Although Plaintiff had filed
its notice of appeal, Defendant argued its motion was timely because it filed it “mere
days after the causes of action accrued.” Alternatively, Defendant said it sought to
amend its pleading to conform to the evidence because the jury’s verdict necessarily
found that Defendant had not breached the contract, did not unreasonably delay or
deny the benefits, and had not breached the contract in bad faith.
We begin our analysis with the premise that “a federal district court and a
court of appeals should not attempt to assert jurisdiction over a case simultaneously.”
Stewart v. Donges, 915 F.2d 572, 574 (10th Cir. 1990) (quoting Griggs v. Provident
Consumer Disc. Co., 459 U.S. 56, 58 (1982)). A party filing a notice of appeal
triggers “an event of jurisdictional significance—it confers jurisdiction on the court
of appeals and divests the district court of its control over those aspects of the case
involved in the appeal.” Id. (quoting Griggs, 459 U.S. at 58).
The district court correctly determined that it lacked jurisdiction to decide
Defendant’s motion. The filing of a notice of appeal generally divests the district
court of jurisdiction over the issues in the appeal. Lancaster v. Indep. Sch. Dist. No.
37
5, 149 F.3d 1228, 1237 (10th Cir. 1998) (citation omitted). The district court,
however, “retains jurisdiction over ‘collateral matters not involved in the appeal.’”
Id. (quoting Garcia v. Burlington N.R.R. Co., 818 F.2d 713, 721 (10th Cir. 1987)).
Defendant contends that the matters raised in its motion for leave are not involved in
Plaintiff’s appeal because the proposed counterclaims arose only after, and because
of, the final judgment. It argues that it became entitled to the funds under the
reservation of rights only because of the jury verdict and final judgment. We
disagree with Defendant’s argument that its new claims are separate from the claims
it asserted during the lawsuit. Indeed, Plaintiff’s appeal included the argument that
the district court should not have allowed Defendant to present the “failure to
cooperate” defense to the jury. Plaintiff also appealed whether the district court
should have included that defense in the jury instructions. Whether Plaintiff could
retain the check is intertwined with the issues Plaintiff raised in her notice of appeal
and is not a collateral matter not involved in the appeal. See Garcia, 818 F.2d at
721–22 (concluding a determination of prejudgment interest was not a collateral issue
where the plaintiff specifically asked permission to amend its complaint to include
prejudgment interest, and the trial court granted that motion by amending the pretrial
order, but the district court did not mention prejudgment interest in its final order and
did not reserve the matter and the plaintiff did not ask for reconsideration but instead
filed a notice of appeal). The district court did not err in its conclusion that it lacked
jurisdiction to consider Defendant’s motion for leave to amend.
38
IV.
Lastly, we address Defendant’s second appeal—No. 19-1425—appealing a
portion of the district court’s order denying Defendant’s motion for review of the
Clerk’s costs and fee award. We review an award of costs for abuse of discretion,
but whether costs provisions apply is a legal question we review de novo. Marx v.
Gen. Revenue Corp., 668 F.3d 1174, 1178 (10th Cir. 2011) (citations omitted).
Defendant contends that the district court erred in applying Colorado’s offer of
settlement statute, Colo. Rev. Stat. § 13-17-202(1)(a)(II). That statute provides that
If the defendant serves an offer of settlement in writing at any time more than
fourteen days before the commencement of the trial that is rejected by the
plaintiff, and the plaintiff does not recover a final judgment in excess of the
amount offered, then the defendant shall be awarded actual costs accruing
after the offer of settlement to be paid by the plaintiff. . . .
Defendant made an offer of settlement for $200,000. Plaintiff rejected that offer.
And Plaintiff did not obtain a judgment in excess of $200,000. But Plaintiff retained
the $250,000 check that Defendant paid to her under a reservation of rights. The
district court, reasoning that “the result of the judgment in the case is a net monetary
gain for Mrs. Cribari of $50,000 above the offer of settlement,” refused to award
Defendant actual costs under the Colorado offer of settlement statute.
After the parties briefed their appeal, but more than four months before oral
argument, we issued Stender v. Archstone-Smith Operating Tr., 958 F.3d 938 (10th
Cir. 2020). In that opinion, we held that “a valid Federal Rule of Civil Procedure
governs over a state procedural rule if the two rules ‘answer the same question.’”
Stender, 958 F.3d at 940 (quoting Shady Grove Orthopedic Assocs., P.A. v. Allstate
39
Ins. Co., 559 U.S. 292 (2010)). We specifically held that Rule 54’s prevailing party
costs provision displaced Colorado’s rule on prevailing party costs because those
provisions “answer the same question.” Id. at 945.
Relevant to this issue, there exists a Federal Rule of Civil Procedure that is
closely analogous to § 13-17-202. Federal Rule of Civil Procedure 68(d) provides:
“[i]f the judgment that the offeree finally obtains is not more favorable than the
unaccepted offer, the offeree must pay the costs incurred after the offer was made.”
Fed. R. Civ. P. 68(d). Before we reach the question of whether the district court
erred in refusing to apply § 13-17-202 because it found Plaintiff effectively recovered
$50,000 more than Defendant offered, we must determine whether Rule 68(d)
governs over § 13-17-202—thus mandating application of the federal rule.
Comparing Rule 68(d)’s language with § 13-17-202’s language, we conclude
that they answer the same question in this case, where Defendant made the offer of
judgment. The state and federal rules are, therefore, in conflict. See Goldberg v.
Pac. Indem. Co., 627 F.3d 752, 756 (9th Cir. 2010) (noting that because both Arizona
Rule of Civil Procedure 68 and Federal Rule of Civil Procedure 68 could apply and
result in a different award, the two rules are in conflict (citing Gil de Rebollo v.
Miami Heat Assoc., 137 F.3d 56, 66 (1st Cir. 1998)). Because Colorado’s offer of
settlement statute and Rule 68(d) answer the same question in this case, federal law
preempts state law and federal law limits Defendant’s witness fees. See Stender, 958
F.3d at 945.
40
In the posture of this case, then, the district court did err by applying
Colorado’s offer of judgment statute and not Federal Rule of Civil Procedure 68(d).
But its ultimate conclusion that Defendant could not recover its “actual costs” in
excess of the $40 per day allowed under federal law was correct. See 28 U.S.C.
§ 1821(b) (limiting a witness’s attendance fee to $40 per day). So, we affirm the
district court’s costs and fee award, albeit on other grounds. 4
V.
For the reasons set forth above, we AFFIRM the district court’s judgment in
appeal No. 19-1270, AFFIRM the district court’s judgment in appeal No. 19-1343,
and AFFIRM the district court’s judgment in appeal No. 19-1425.
Entered for the Court
Joel M. Carson III
Circuit Judge
4
Because Rule 68(d) preempts application of the state rule, we do not reach
Defendant’s argument that the district court’s novel interpretation of § 13-17-202
contradicted the statute’s text. We further recognize that no party argued that Rule
68 preempted Colorado’s statute—an issue which arose after the parties completed
briefing the issues in this case. And although affirming on legal grounds not
considered by the trial court is disfavored, any remand instructing the district court to
award costs pursuant to the plain language of § 13-17-202 would simply perpetuate
error.
41