Frie v. Davis et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 1:25-cv-00711-CNS-SBP
JOHN J. FRIE,
Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and
STATE FARM FIRE AND CASUALTY COMPANY,
Defendants.
ORDER
Susan Prose, United States Magistrate Judge
This insurance case is before the court on a narrow discovery issue: whether Plaintiff
must disclose to Defendants, his insurers, the amount of his settlement with the at-fault parties to
pursue his claim for underinsured motorist (“UIM”) benefits. For the reasons below, the court
finds disclosure is not required because Defendants consented to the settlement.
BACKGROUND
Plaintiff was injured in an auto accident on July 2, 2021. In June 2024, he filed an action
in state court asserting claims against the at-fault driver (who was acting in the scope of his
employment), the driver’s employer, and Defendants. Following a mediation in February 2025
that was attended by all parties, Plaintiff reached a settlement with the at-fault parties, who were
insured by Emcasco Insurance Company (“Emc Insurance”) under a policy with bodily injury
limits of $1 million. The parties to the settlement agreement agreed that the terms of the
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settlement would remain confidential. Once the at-fault parties were dismissed from the state
court action, Defendants removed the case to this court.
Plaintiff asserts claims for UIM benefits under auto and umbrella policies he carried with
Defendants and for unreasonable denial or delay of benefits under Colo. Rev. Stat. §§ 10-3-1115
and -1116. His pending motion to amend the Complaint by adding a common law bad faith claim
will be addressed in a subsequent order.
After Plaintiff refused Defendants’ request to produce a copy of the settlement agreement
with the at-fault parties, Defendants issued subpoenas to the at-fault parties seeking the same.
Plaintiff moved to quash the subpoenas. The court denied the motion without prejudice but
directed Defendants not to execute the subpoenas to allow the parties to confer in accordance
with the court’s joint discovery procedures. Plaintiff then provided Defendants with a copy of the
settlement agreement—with the settlement amounts redacted—but Defendants continue to insist
they are entitled to that information. After the parties submitted a Joint Dispute Statement, the
court held a discovery hearing on October 6, 2026, providing ample opportunity for the parties to
be heard on this matter. Additional background information is incorporated into the analysis.
LEGAL STANDARD
Rule 26(b)(1) permits discovery regarding any nonprivileged matter that is relevant to
any party’s claim or defense and proportional to the needs of the case. The party seeking
production has the initial burden of showing relevance. See Chung v. Lamb, No. 14-cv-03244-
KLM, 2017 WL 10619941, at *3 (D. Colo. Oct. 24, 2017) (citing Johnson v. Kraft Foods N.
Am., Inc., 236 F.R.D. 535, 539 (D. Kan. 2006)). Relevance under Rule 26(b)(1) is “broadly
construed” in relation to discovery, and a request is considered relevant “if there is ‘any
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possibility’ that the information sought may be relevant[.]” Stanton v. Encompass Indem. Co.,
No. 12-cv-00801-PAB-KLM, 2013 WL 2423094, at *2 (D. Colo. June 4, 2013) (quoting
Cardenas v. Dorel Juv. Grp., Inc., 232 F.R.D. 377, 382 (D. Kan. 2005)).
The party seeking discovery bears the initial burden of establishing relevance, but when
the moving party has established relevance, or the discovery appears relevant on its face, the
party resisting discovery bears the burden of supporting its objections. See generally JL v. Regis
Univ., No. 21-cv-00580-DDD-NYW, 2022 WL 1443059, at *2 (D. Colo. May 6, 2022); see also
Ehrlich v. Union Pac. R.R. Co., 302 F.R.D. 620, 624 (D. Kan. 2014) (holding that the party
resisting discovery bears the burden to show why a discovery request is improper); Martin K.
Eby Constr. Co., Inc. v. OneBeacon Ins. Co., Nos. 08-1250-MLB-KGG, 08-2392-MLB-KGG,
2012 WL 1080801, at *3 (D. Kan. Mar. 29, 2012) (“Once this low burden of relevance is
established, the legal burden regarding the defense of a motion to compel resides with the party
opposing the discovery request.”). The resisting party’s burden is not satisfied by merely
asserting “conclusory or boilerplate objections that discovery requests are irrelevant, immaterial,
unduly burdensome, or overly broad.” Sonnino v. Univ. of Kan. Hosp. Auth., 221 F.R.D. 661,
670 (D. Kan. 2004) (quotation omitted).
ANALYSIS
At the discovery hearing, the parties agreed that Plaintiff’s recovery from Defendants
hinges on whether he can demonstrate that his damages from the accident exceed the $1 million
in coverage that was available under the at-fault parties’ policy. See Jordan v. Safeco Ins. Co. of
Am., Inc., 348 P.3d 443, 449 (Colo. App. 2013) (concluding that pursuant to amendments to
Colorado’s UIM statutory regime in 2008, “UIM coverage is payable for damages exceeding the
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tortfeasor’s liability policy limit”); see also Tubbs v. Farmers Ins. Exch., 353 P.3d 924, 927
(Colo. App. 2015) (“Regardless of what amount, if any, the insured receives from the liable
party, the UIM insurer is only required to pay damages in excess of the tortfeasor’s legal liability
coverage limit.”). Thus, the underlying settlement amount does not bear directly on Defendants’
potential liability.
Defendants contend nonetheless that the settlement amount is critical information needed
for their investigation of Plaintiff’s UIM claim. Specifically, they argue that they need the
settlement amount to determine whether Plaintiff complied with policy provisions requiring him
to obtain consent before entering a settlement agreement and to cooperate with their
investigation. Neither rationale persuades the court that Plaintiff must disclose the settlement
amount.
A. 	Defendants Have Not Shown the Settlement Amount Implicates Plaintiff’s
Compliance with the Policies’ Consent Requirements.
Defendants’ contention that the settlement amount impacts their ability to determine
whether Plaintiff complied with the policies’ consent requirements lacks merit. There is no
dispute that Plaintiff was required to obtain Defendants’ consent before entering into a settlement
agreement with an underinsured party. On April 18, 2023, Defendants provided Plaintiff’s
counsel with a letter, stating, in pertinent part, as follows:
State Farm consents to the settlement of the $1,000,000 policy limits of Emc
Insurance’s Liability policy with our insured, John Joseph Frie. State Farm does
not intend to pursue subrogation against Emc Insurance or its insured(s) for any
payments made from the Underinsured Motorist coverage of State Farm Mutual
Automobile Insurance Company.
State Farm agrees that by settling the Liability claim with Emc Insurance, John
Joseph Frie does not prejudice his ability to present an Underinsured Motorist claim
with State Farm.
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ECF No. 82-3 at 2. Although Plaintiff did not reach a settlement with the at-fault parties until
nearly two years later, Defendants do not contend that they ever revoked this consent or imposed
any new conditions on Plaintiff’s ability to present a UIM claim after settling with the at-fault
parties.
At the discovery hearing, Defendants asserted that the consent provided in the April 18
letter was conditioned on Plaintiff obtaining a $1 million settlement. In their view, the amount of
Plaintiff’s settlement is relevant to the issue of whether Defendants provided valid consent. They
made a similar argument in a May 15, 2025, letter to Plaintiff, where they stated that “State Farm
previously gave permission for a policy limits settlement under different circumstances, but have
no record of a request for permission to enter into the settlement agreement after the file went
into litigation.” ECF No. 79-4 at 2. But under the circumstances, the court sees no reason
Plaintiff was not entitled to rely on the consent provided in the April 18 letter. Defendants’
strained interpretation of the April 18 letter is untenable for at least three reasons.
First, the April 18 letter lacks any express language prohibiting Plaintiff from accepting a
settlement of less than $1 million. The court expects that a reasonable insurer intending to
impose such a limitation on its consent would say so explicitly. Moreover, even if the letter could
be construed as ambiguous, the interpretation Defendants now endorse violates the principle that
in the insurance context “ambiguous terms are to be construed against the insurer that drafted the
policy and in favor of policy coverage.” Compass Ins. Co. v. City of Littleton, 984 P.2d 606, 619
(Colo. 1999). Thus, the court finds the language of the April 18 letter, which was never revoked
or modified, did not fairly place Plaintiff on notice that he did not have Defendants’ consent to
settle with the at-fault parties for less than $1 million.
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Second, the amount of any settlement between Plaintiff and the at-fault parties does not
bear directly on Defendants’ potential liability, which, as mentioned above, depends on the
policy limits of the Emc Insurance policy, not the amount Plaintiff accepted to settle his claims
against the at-fault parties. See Jordan, 348 P.3d at 449; see also Burkhart v. Am. Fam. Mut. Ins.
Co., No. 15-cv-0187-WJM-MEH, 2016 WL 11692345, at *8 (D. Colo. Oct. 11, 2016).
Defendants have provided no persuasive rationale for why the amount of the settlement matters
to them or why their consent would reasonably be conditioned on the amount of any settlement.
In other words, they have not explained how not knowing the settlement amount prejudices
them. Although knowing the settlement amount might be helpful to Defendants in litigating this
case, the court discerns no prejudice to their ability to investigate Plaintiff’s claim based on
Plaintiff’s unwillingness to disclose the settlement amount.
Third, Defendants’ other conduct in this case is not consistent with its current position
that the April 18 letter was intended to provide only limited consent to settle. For example, there
is no indication that Defendants expressed any concerns that they might have had about Plaintiff
reaching a settlement with the at-fault parties around the time of the February 2025 mediation.
And, even after learning about the settlement, there is no indication that Defendants informed
Plaintiff before their May 15 letter that the policies’ consent requirements might be at issue. If
Defendants believed Plaintiff violated the terms of the policy by entering into the settlement
agreement, the court expects they would have acted sooner instead of remaining silent around the
time of the mediation and for three months afterward.
Therefore, the court finds Plaintiff was entitled to rely on Defendants’ consent, as
expressed in the April 18 letter, when he entered the settlement agreement with the at-fault
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parties. Consequently, to the extent Defendants’ investigation into whether Plaintiff complied
with the policies’ consent requirements is at all relevant, the court is not persuaded that the
settlement amount is discoverable here.
B. 	Defendants Have Not Shown the Settlement Amount Implicates Plaintiff’s
Duty to Cooperate Under the Policies.
Defendants also argue that they need to know the settlement amount to support their
affirmative defense of failure to cooperate. But this argument is largely foreclosed by the court’s
determination that they gave Plaintiff consent to enter into the settlement agreement.
Further, to successfully assert the affirmative defense of failure to cooperate, Defendants
must show that (1) Plaintiff failed to cooperate in some material and substantial respect, and
(2) this materially and substantially disadvantaged Defendants. See Hall v. Allstate Fire & Cas.
Ins. Co., 20 F.4th 1319, 1323 (10th Cir. 2021). Because Defendants have not established the
settlement amount is relevant, the court is not persuaded that Plaintiff’s failure to disclose it
satisfies either factor.
Nor have Defendants shown that the settlement amount is relevant for purposes of Colo.
Rev. Stat. § 10-3-1118. Assuming without deciding that the statute may apply to post-litigation
conduct, Defendants have not shown that the settlement amount comprises “information a
reasonable person would determine the insurer needs to adjust the claim filed by the insured or to
prevent fraud.” Colo. Rev. Stat. § 10-3-1118 (1)(d). In addition, because Defendants first
requested a copy of the settlement in February 2025, their May 15 letter was well past the 60-day
deadline to notify Plaintiff of any failure to cooperate premised on his failure to produce the
settlement agreement. § 10-3-1118(1)(e)(I).
Under the circumstances, Defendants have failed to show that the settlement amount is
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relevant to their ability to assert a failure to cooperate defense.
CONCLUSION
Therefore, Defendants’ request for an order compelling Plaintiff to disclose the
settlement amounts is DENIED. The court hereby WITHDRAWS its previous Order denying
Plaintiff’s Motion to Quash without prejudice, and that Motion is now GRANTED for the
reasons stated in this Order.1
DATED: October 14, 2026 	BY THE COURT:
______________________________
Susan Prose
United States Magistrate Judge
1 Fed. R. Civ. P. 72 provides that within fourteen (14) days after service of a Magistrate Judge’s
order or recommendation, any party may serve and file written objections with the Clerk of the
United States District Court for the District of Colorado. 28 U.S.C. §§ 636(b)(1)(A), (B); Fed. R.
Civ. P. 72(a), (b). Failure to make any such objection will result in a waiver of the right to appeal
the Magistrate Judge’s order or recommendation. See Sinclair Wyo. Ref. Co. v. A & B Builders,
Ltd., 989 F.3d 747, 783 (10th Cir. 2021) (firm waiver rule applies to non-dispositive orders); but
see Morales-Fernandez v. INS, 418 F.3d 1116, 1119, 1122 (10th Cir. 2005) (firm waiver rule
does not apply when the interests of justice require review, including when a “pro se litigant has
not been informed of the time period for objecting and the consequences of failing to object”).
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