Apartment Income REIT Corp. v. Certain Underwriters At Lloyds London Subscribing To Policy No. B0713MEDTE2202301
1:24-cv-01285
D. Colo.Jun 16, 2025Background
- Plaintiff Apartment Income REIT Corp. (AIR) was named in an antitrust multidistrict litigation regarding alleged price-fixing using software for rental housing.
- AIR holds primary and excess data protection liability insurance policies with Defendants Certain Underwriters at Lloyd's London and Everest National Insurance Company.
- The primary insurance policy contains a New York choice-of-law provision; the excess policy follows the terms of the primary policy but lacks an explicit choice-of-law clause.
- AIR submitted a claim for coverage related to the antitrust litigation; both insurers denied coverage, leading AIR to file suit.
- AIR asserted several claims, including breach of contract, declaratory judgment, common law bad faith, and a statutory Colorado bad faith claim under Colo. Rev. Stat. § 10-3-1115. Defendants moved to dismiss the bad faith claims based on the New York choice-of-law provision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which state’s law governs the bad faith claims | Colorado law applies under Restatement’s most significant relationship test | New York law applies because of policy’s broad choice-of-law provision | Common law claim uses Restatement test; not overridden by the policy’s provision |
| Applicability of statutory Colorado bad faith claim | CO statute reflects fundamental policy; choice-of-law isn’t enforceable | Statutory claim flows from policy; provision enforceable | NY law applies to statutory claim; Colorado statute cannot be asserted |
| Whether NY law precludes common law bad faith claims | Restatement test should allow Colorado tort law to apply to bad faith | NY law governs all, including tort (bad faith), thus no such claim | Choice-of-law does not reach tortious bad faith; motion denied as to common law bad faith |
| Whether public policy overrides choice-of-law clause | Colorado’s policy to protect insureds overrides NY selection | No countervailing policy; parties should be held to contract choice | Plaintiff failed to show policy conflict; NY law enforced as to statutory claim |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standards for Rule 12(b)(6) motions)
- Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard under Rule 12(b)(6))
- Am. Fam. Mut. Ins. Co. v. Allen, 102 P.3d 333 (describing insurer’s duty of good faith under Colorado law)
- Goodson v. Am. Standard Ins. Co. of Wis., 89 P.3d 409 (nature of common law bad faith tort claim in insurance)
- Farmers Grp., Inc. v. Trimble, 691 P.2d 1138 (insurer’s duty to deal in good faith with insureds in Colorado)