Chancellor et al v. State Farm Mutual Automobile Insurance Company

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Nina Y. Wang
Civil Action No. 23-cv-02115-NYW-TPO
PAUL CHANCELLOR, and
NATALIE MAKARA,
Plaintiffs,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,
Defendant.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendant’s Fed. R. Evid. 702 Motion to Limit
the Opinions of Plaintiffs’ Expert Aaron Castillo (the “Motion to Exclude”), [Doc. 63], and
Defendant’s Motion for Summary Judgment, [Doc. 64]. 	The Court has reviewed the
Motions and concludes that oral argument would not materially assist in their resolution.
For the reasons set forth below, the Motion to Exclude is GRANTED in part and DENIED
in part and the Motion for Summary Judgment is GRANTED in part and DENIED in part.
BACKGROUND
At all relevant times, Plaintiffs Paul Chancellor and Natalie Makara (together,
“Plaintiffs”) were insured through Defendant State Farm Mutual Automobile Insurance
Company (“Defendant” or “State Farm”). 	[Doc. 6 at ¶¶ 3–4]. In 2023, their vehicle was
damaged in a collision, and Plaintiffs took the car to Nylund’s Collision Center (“Nylund’s”)
for repairs. 	[Id. at ¶¶ 3, 5]. 	State Farm only reimbursed Plaintiffs for a portion of the
amount charged by Nylund’s. 	[Doc. 64 at ¶¶ 16, 21; Doc. 66 at ¶¶ 16, 21]. 	Plaintiffs
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 1 of 30

2
subsequently sued State Farm, asserting one breach of contract claim, one claim of
unreasonable delay or denial of insurance benefits under Colo. Rev. Stat. §§ 10-3-1115
and -1116, and one claim of common law bad faith. [Doc. 6 at 3–4].
In its Motion for Summary Judgment, State Farm asks the Court to enter summary
judgment in its favor on each of Plaintiffs’ claims. [Doc. 64]. State Farm also moves to
exclude the testimony of Plaintiffs’ insurance industry expert, Aaron Castillo. 	[Doc. 63].
The Motions are fully briefed and ripe for resolution.
I. 	The Motion to Exclude
A. 	Legal Standard
Rule 702 of the Federal Rules of Evidence states:
A witness who is qualified as an expert by knowledge, skill, experience,
training, or education may testify in the form of an opinion or otherwise if the
proponent demonstrates to the court that it is more likely than not that:
(a) the expert’s scientific, technical, or other specialized knowledge will help
the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert’s opinion reflects a reliable application of the principles and
methods to the facts of the case.
Fed. R. Evid. 702. “Rule 702 permits a court to admit expert testimony that is ‘both reliable
and relevant.’” Sanderson v. Wyo. Highway Patrol, 976 F.3d 1164, 1172 (10th Cir. 2020)
(quoting United States v. Rodriguez-Felix, 450 F.3d 1117, 1122 (10th Cir. 2006)). 	The
proponent 	of 	expert 	testimony 	has 	the 	burden 	to 	show 	its 	admissibility 	by 	a
preponderance of the evidence. 	Squires ex rel. Squires v. Goodwin, 829 F. Supp. 2d
1041, 1048 (D. Colo. 2011).
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 2 of 30

3
Trial courts are charged with the responsibility of acting as gatekeepers to ensure
that expert testimony is reliable and relevant. 	See Kumho Tire Co. v. Carmichael, 526
U.S. 137, 147–52 (1999); Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 588–89
(1993). 	To fulfill that gatekeeper function, the trial court first analyzes whether the
proffered expert is qualified “by knowledge, skill, experience, training, or education” to
render their opinions. Fed. R. Evid. 702; Bill Barrett Corp. v. YMC Royalty Co., 918 F.3d
760, 770 (10th Cir. 2019). If the expert is qualified, the court must determine whether the
expert’s opinions are reliable by assessing the underlying reasoning and methodology.
Bill Barrett Corp., 918 F.3d at 770. The court must also determine whether the expert’s
opinions are “applicable to a particular set of facts,” i.e., are relevant to the case at hand.
Dodge v. Cotter Corp., 328 F.3d 1212, 1221 (10th Cir. 2003). This inquiry “encompasses
Rule 702’s requirement that the evidence help the trier of fact to understand the evidence
or to determine a fact in issue.” Sanderson, 976 F.3d at 1172 (cleaned up).
B. 	Analysis
Plaintiffs designated Mr. Castillo to testify about “State Farm’s errors in the
estimating and supplemental estimating processes, State Farm’s use of improper use of,
and disregarding of, manufacturer and industry common repair standards, [and] State
Farm’s bad faith and unfair claims practice issues.” [Doc. 63-2 at 4]. Defendant moves
to exclude “the opinions and conclusions contained in Mr. Castillo’s expert report.” [Doc.
63 at 2].1
1 In its Motion to Exclude, State Farm refers to the Practice Standards of Judge Philip A.
Brimmer. [Doc. 63 at 1]. Judge Brimmer is not, nor has he ever been, the presiding judge
on this action. This Court’s Civil Practice Standards state that all motions under Rule 702
“shall . . . specify, with particularity, the opinion(s) that the moving party seeks to exclude
and the specific ground(s) on which each opinion is challenged, e.g., relevancy,
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 3 of 30

4
1. 	Qualifications
State Farm’s first argument is that Mr. Castillo “does not demonstrate the requisite
familiarity with the standards of the industry to qualify as an ‘insurance industry standard
expert.” 	[Id. at 4 (emphasis omitted)]. 	While framed as an attack on Mr. Castillo’s
qualifications, State Farm does not contend that Mr. Castillo is unqualified based on his
“knowledge, skill, experience, training, or education.” 	Fed. R. Evid. 702. 	Rather, State
Farm relies on Mr. Castillo’s deposition testimony from a different case to argue that Mr.
Castillo lacks familiarity with insurance industry standards. [Doc. 63 at 4].
State Farm cites no legal authority demonstrating that the Court may properly
consider Mr. Castillo’s deposition testimony from a different case in assessing his
qualifications here. See [id.]. In any event, the Court is not persuaded that Mr. Castillo’s
extraneous deposition testimony provides a basis for exclusion. State Farm’s argument
asks the Court to reflexively adopt State Farm’s subjective belief that Mr. Castillo’s
knowledge of industry standards is inadequate—and fails to meet some unknown
standard set by State Farm itself—without any objective or legal basis to support its
position. 	For example, State Farm suggests that Mr. Castillo is unqualified because he
could not describe, in his deposition in another case, “what constitutes a valid and
complete claim file according to the Colorado Division of Insurance.” [Doc. 63-4 at 38:20–
23; Doc. 63 at 4]. 	Accepting State Farm’s argument that this renders Mr. Castillo
unqualified requires the Court to accept that an insurance industry expert must be able to
articulate the Colorado Division of Insurance’s specific definition of “valid and complete
sufficiency, or methodology.” 	NYW Civ. Practice Standard § 7.1C(b). 	The Court’s
analysis is thus limited to the specific opinions challenged in the Motion and the specific
grounds for exclusion asserted by Defendant.
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 4 of 30

5
claim file.” But just as an “expert’s opinions are not admissible merely because the expert
says, in effect, ‘trust me, I know,’” Mooring Cap. Fund, LLC v. Phoenix Cent., Inc., No.
06-cv-00006-HE, 2009 WL 4263359, at *5 (W.D. Okla. Feb. 12, 2009), aff’d, 388 F. App’x
814 (10th Cir. 2010), a party cannot obtain the exclusion of expert testimony by simply
insisting that the expert does not know what he should know—particularly when it is
unclear how this purported lack of knowledge relates to the circumstances presented in
this instant action.
State Farm also insists that the contents of Mr. Castillo’s rebuttal report “highlight
his lack of knowledge about the applicable insurance industry standards.” [Doc. 63 at 5–
6]. 	But this attack on Mr. Castillo’s qualifications goes to the testimony’s weight, not its
admissibility. See Northmarq Fin., LLC v. Fid. Nat’l Title Ins. Co., No. 22-cv-02839-WJM-
TPO, 2025 WL 2780917, at *8 (D. Colo. Sept. 30, 2025) (concluding that if expert “lack[ed]
sufficient knowledge to explain” certain aspects of his opinions, “such deficiencies go to
the weight to be afforded his opinions rather than their admissibility”). 	Similarly, State
Farm’s reliance on its own expert’s report to challenge the correctness of Mr. Castillo’s
opinions, see, e.g., [Doc. 63 at 12–13], is not a proper basis to exclude an opinion under
Rule 702, see Thompson v. State Farm Mut. Auto. Ins. Co., 457 F. Supp. 3d 998, 1005
(D. Colo. 2020) (“Competing expert opinions present the classic battle of the experts and
it is up to a jury to evaluate what weight and credibility each expert opinion deserves.”
(cleaned up)). The Court will not exclude Mr. Castillo’s testimony on these bases.
Alternatively, State Farm attacks specific opinions asserted by Mr. Castillo. 	It
contends 	that 	certain 	opinions 	should 	be 	excluded 	because 	(1) 	some 	are 	legal
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 5 of 30

6
conclusions couched as expert opinions, [Doc. 63 at 7–8]; and (2) others fail to meet the
reliability and methodology standards of Rule 702, [id. at 8–14].
2. 	Impermissible Legal Conclusions
Although an expert may “refer to the law in expressing their opinion,” United States
v. Schneider, 704 F.3d 1287, 1294 (10th Cir. 2013) (cleaned up), it is well-settled that an
expert may not “state legal conclusions drawn by applying the law to the facts,” A.E. ex
rel. Evans v. Indep. Sch. Dist. No. 25, 936 F.2d 472, 476 (10th Cir. 1991). For instance,
an expert may not opine that an insurance company violated the law or its legal duties,
O’Sullivan v. Geico Cas. Co., 233 F. Supp. 3d 917, 930 (D. Colo. 2017), or that an
insurance company acted in bad faith or acted unreasonably, Masters v. Safeco Ins. Co.
of Am., No. 20-cv-00631-PAB-NRN, 2021 WL 4317112, at *10 (D. Colo. Sept. 23, 2021).
An expert may, however, “‘articulate what he believes were the relevant industry
standards applicable’” to the plaintiff’s claim and “may opine whether he believes [the
insurer] departed from those standards.” George v. Metro. Prop. & Cas. Ins. Co., No. 18-
cv-01663-PAB-SKC, 2020 WL 70424, at *13 (D. Colo. Jan. 2, 2020) (quoting O’Sullivan,
233 F. Supp. 3d at 929).
Defendants challenge a number of Mr. Castillo’s opinions as legal conclusions that
are improper under Rule 702. 	[Doc. 63 at 7–8, 11–14]. 	In their Response, “Plaintiffs
concede that Mr. Castillo’s opinions that explicitly conclude State Farm’s conduct violated
the law [are] likely impermissible, but not all of his opinions contain such conclusions.”
[Doc. 67 at 9 (emphasis omitted)]. They argue that “the appropriate remedy for this Court
is to provide limiting instructions to prohibit express references to statutory violations, not
to exclude any references to a legal statute or regulation.” [Id.].
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 6 of 30

7
Although an expert witness may reference the law in offering their opinions,
Schneider, 704 F.3d at 1294, the Court finds that the following opinions, as framed in Mr.
Castillo’s reports, are impermissible legal conclusions that must be excluded:
• 	“If [State Farm sent a letter about the potential lack of coverage for repairs only to
Nylund’s customers, and not to all customers], this would be an unfair claims
practice and borderline defamation.” [Doc. 63-1 at 5].
• 	“Failure to invoke the appraisal clause and charge the customer directly is in
breach of the insuring agreement per the auto policy contract. It would also be a
violation of C.R.S 10-4-120(3)(f) failing [sic] to adopt and implement reasonable
standards for the prompt investigation of claims arising under insurance policies.”
[Id. at 6].
• 	“I believe State Farm acted in bad faith and violated C.S.R 10-4-120(3)(c) pay [sic]
for repair services and products based on a prevailing competitive price, as
established by competitive bids, generally accepted insurer-based methodology,
or market surveys that determine a fair and reasonable market price for similar
services.” [Id.].
• 	“State Farm also failed to pay all reasonable costs sufficient to pay for the
beneficiary’s 	or 	claimant’s 	repairs 	including 	materials 	or 	parts 	C.R.S 	10-4-
120(3)(e) [sic].” [Id. at 6].
• 	“State Farm had a duty to notify the customer and review any and all items not
approved. . . . 	Not doing so is in violation of C.R.S 10-3-1104(1)(h)(XIV) failing
[sic] to promptly provide a reasonable explanation of the basis in the insurance
policy in relation to the facts or applicable law for denial of a claim or for the offer
of a compromise settlement.” [Id. at 7].
• 	“In my professional opinion, State Farm failed to act in good faith by sending out a
letter that Nylund’s Collision Center may charge more than State Farm will approve
before they even inspected the vehicle. This . . . is a steering technique engaging
[sic] in unfair claims practice.” [Id.].
• 	“Failure to invoke the appraisal clause and charging the customer the difference is
acting in bad faith. 	By not following the appraisal clause process outlined in the
insuring agreement, it is my professional opinion that State Farm acted in bad faith
and is engaging in unfair claims practices.” [Id.].
• 	“In my opinion this [letter] is a . . . also clear violation of Title 10.” [Doc. 63-5 at 7].
• 	“By definition of the statute this would be nonpayment of a claim.” [Id.].
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 7 of 30

8
• 	“A blanket letter targeting a shop that it [sic] may charge more than what State
Farm deems adequate is in direct violation and willfully disregarding the steering
regulation set forth by the state of Colorado.” [Id.].
• 	“State Farm acted in bad faith with regards to denying repair procedure costs in
line with the collision repair industry standards 10-4-120(3)(e).” [Id. at 9].
• 	“[State Farm] also engaged in unfair claims practice by recklessly disregarding
Amended regulation 5-1-14. . . . State Farm acted in bad faith when they failed to
follow C.R.S 10-3-1104(1)(h)(XIV).” [Id.].
All of these opinions are framed as legal conclusions and are therefore impermissible.
The cure, contrary to Plaintiffs’ suggestion, is not a limiting instruction but exclusion. Mr.
Castillo will not be permitted to opine that State Farm acted unreasonably, acted in bad
faith, failed to act in good faith, or violated any Colorado statute. A.E., 936 F.2d at 476.
Nor will Mr. Castillo be able to state that State Farm owed any sort of legal duty to
Plaintiffs. See Baumann v. Am. Fam. Mut. Ins. Co., 836 F. Supp. 2d 1196, 1202 (D. Colo.
2011) (An opinion that an insurer owed a legal duty “usurp[s] the function of the trial judge
to instruct the jury on the law.”). 	However, to the extent these opinions are intertwined
with, or may be re-framed as, opinions about whether State Farm’s conduct complied with
articulable insurance industry standards, Mr. Castillo may present such opinions so long
as they are properly framed. 	See, e.g., George, 2020 WL 70424, at *9, *13 (permitting
expert testify that insurer’s conduct “did not conform with” or “departed from” insurance
industry standards); Canyon Club Condo. Owners Ass’n v. Am. Fam. Mut. Ins. Co., No.
18-cv-00683-DDD-STV, 2023 WL 10410009, at *4 (D. Colo. Sept. 29, 2023) (concluding
that expert’s opinions about whether insurer complied with industry standards “may assist
the jury in its determination of whether or not the insurance claim was investigated
reasonably”).
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 8 of 30

9
3. 	Other Bad Faith Opinions
State Farm also attacks some of Mr. Castillo’s bad faith opinions on other grounds,
such as reliability and methodology. [Doc. 63 at 10–14].
Steering Opinions. 	First, State Farm attacks Mr. Castillo’s “steering” opinions,
see [id. at 10], which relate to a letter State Farm sent to Plaintiffs stating that “Nylund’s
Collision Center may not agree with [State Farm’s repair] estimate and any supplements
to it. You may be personally responsible for the differences,” [Doc. 64-8 at 2]. Mr. Castillo
opines that this letter was intended to steer the customer away from using Nylund’s:
• 	“This letter sent to the insured appears to have the very specific intention of
steering the customer away from using Nylund’s Collision Center for repairs. . . .
This letter seems to indirectly intimidate the insured[.]” [Doc. 63-1 at 5].
• 	“[The letter] clearly has the intention of swaying the customer from utilizing their
shop of choice.” [Doc. 63-5 at 7].
State Farm moves to exclude these opinions because they improperly opine about
State Farm’s state of mind. [Doc. 63 at 11]. Plaintiffs concede that Mr. Castillo “may not
testify to State Farm’s purported intent.” 	[Doc. 67 at 13]. 	The Court agrees with the
Parties that Mr. Castillo may not speculate or opine about State Farm’s intent, see
Northmarq Fin., LLC, 2025 WL 2780917, at *6, and any such opinions will be excluded,
see Pacheco v. State Farm Mut. Auto. Ins. Co., No. 23-cv-00305-NYW-SBP, 2024 WL
3834166, at *7 (D. Colo. Aug. 15, 2024) (excluding opinion that insurer’s conduct
“seem[ed] intentionally designed to create the foundation for a value dispute”). However,
Mr. Castillo may “testify about facts and his observations from which the jury can then
infer motive or intent.” Northmarq Fin., LLC, 2025 WL 2780917, at *6 (quotation omitted).
State Farm also moves to exclude Mr. Castillo’s opinions that “State Farm failed
to act in good faith” by sending the letter and that the letter constituted “a steering
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 9 of 30

10
technique engaging in unfair claims practice.” [Doc. 63 at 11 (quoting Doc. 63-1 at 7)].2
State Farm argues that these opinions should be excluded because although Mr. Castillo
“alleges violation of an insurance industry standard,” he “fails to describe and apply that
standard.” 	[Doc. 63 at 11]. 	The Court respectfully disagrees with this argument. 	In
conjunction with his opinion, Mr. Castillo quotes Colo. Rev. Stat. § 10-4-120(2), [Doc. 63-
1 at 7], which states that a property insurer “shall not . . . [d]irectly or indirectly require that
appraisals or repairs to the property be made or not be made by a specified repair
business,” Colo. Rev. Stat. § 10-4-120(2)(a). Courts in this District recognize that some
insurance industry standards “are expressly stated in statute.” 	Gribowski v. State Farm
Mut. Auto. Ins. Co., No. 21-cv-03115-MEH, 2022 WL 16855688, at *4 (D. Colo. Nov. 10,
2022); see also Martin-Harker v. State Farm Mut. Auto. Ins. Co., No. 23-cv-00629-PAB-
STV, 2025 WL 914297, at *2 (D. Colo. Mar. 26, 2025) (“An expert may testify as to
insurance industry standards codified in Colorado statute and ones that are ‘generally
accepted’ within the Colorado insurance industry.”). Though Mr. Castillo’s report is not a
model of clarity, the Court finds that it can be readily understood that Mr. Castillo believes
that State Farm, in sending the letter, violated an industry standard prohibiting an insurer
from requiring insureds to use or not use specific repair shops. The Court will not exclude
this opinion, so long as it is framed in the context of industry standards and does not touch
on State Farm’s compliance with the law or reasonableness.
2 As explained above, Mr. Castillo may not opine that State Farm “failed to act in good
faith” or “engag[ed] in unfair claims practice,” but he may opine that State Farm failed to
comply with industry standards. 	George, 2020 WL 70424, at *9, *13. 	Accordingly, the
Court addresses Defendant’s additional arguments for exclusion in the event Mr. Castillo
attempts to frame his opinions in this way.
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 10 of 30

11
Appraisal Clause. State Farm next moves to exclude Mr. Castillo’s opinions that
State Farm’s “[f]ailure to invoke the appraisal clause and charge the customer directly is
in breach of the insuring agreement per the auto policy contract,” is “a violation of C.R.S.
10-4-120(3)(f),” and “is acting in bad faith.” 	[Doc. 63 at 12 (quoting Doc. 63-1 at 6–7)].
The Court has already excluded these opinions as impermissible legal conclusions to the
extent Mr. Castillo opines that State Farm violated any law, breached the policy, or acted
in bad faith; this ruling does not apply to any opinion properly framed as an opinion that
State Farm failed to comply with industry standards.
State Farm argues that these opinions should be excluded because “there is no
industry standard that stands for the proposition that the insurer acts in bad faith when it
does not invoke the appraisal clause,” relying on its own expert’s report and Mr. Castillo’s
extraneous deposition testimony in support. 	[Doc. 63 at 12–13]. 	However, these
arguments go to the correctness or weight of Mr. Castillo’s opinions and do not
demonstrate that exclusion under Rule 702 is appropriate. Thompson, 457 F. Supp. 3d
at 1005; Squires, 829 F. Supp. 2d at 1055. To the extent State Farm disagrees with this
opinion, it may explore this disagreement during cross-examination.
State Farm’s Explanation of Denial and Duty to Notify. Mr. Castillo opines that
State Farm “failed to clearly explain what was denied in the repair estimate or why it was
denied” and that “[s]imply stating it was clear in the estimate is not sufficient to explain
the differences to the insured who is a layperson . . . and would not know how to properly
read the repair estimate.” [Doc. 63-5 at 9–10]. State Farm moves to exclude this opinion
on several grounds: 	(1) it is an impermissible legal conclusion; (2) Mr. Castillo “fails to
state what the insurance industry standard is and how exactly this conduct by State Farm
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 11 of 30

12
deviated from that industry standard”; (3) the opinion is inconsistent with State Farm’s
expert’s opinions; and (4) because “Plaintiff Chancellor testified that he has 30 years of
experience as a mechanic,” Mr. Castillo’s statement that Mr. Chancellor is a layperson “is
not grounded in fact.” [Id. at 13–14].
The Court is respectfully unpersuaded by Defendant’s first, third, and fourth
arguments. 	The challenged opinion does not constitute a legal conclusion; that Mr.
Castillo’s testimony is inconsistent with Defendant’s expert’s opinion is not a basis for
exclusion; and any argument about whether or not Mr. Chancellor is properly deemed a
“layperson” goes to the weight of Mr. Castillo’s testimony, not its admissibility.
As for Defendant’s second argument—that Mr. Castillo’s opinion lacks reliability
because 	he 	does 	not 	explain 	why 	State 	Farm’s 	conduct 	deviated 	from 	industry
standards—the Court respectfully agrees. 	To be sure, although Mr. Castillo does not
expressly identify the industry standard in the clearest terms, he provides enough
information to identify the applicable insurance industry at issue: Mr. Castillo references
Colorado’s Unfair Claims Practices Act, which describes an insurer’s “[f]ail[ure] to
promptly provide a reasonable explanation of the basis in the insurance policy in relation
to the facts or applicable law for denial of a claim” as an unfair claims practice. [Doc. 63-
5 at 9]; Colo. Rev. Stat. § 10-3-1104(1)(h)(XIV). 	And the Unfair Claims Practices Act
provides 	“valid,” 	albeit 	inconclusive, 	“evidence 	of 	[insurance] 	industry 	standards.”
Wheatridge Off., LLC v. Auto-Owners Ins. Co., 578 F. Supp. 3d 1187, 1209 (D. Colo.
2022) (quoting Am. Fam. Mut. Ins. Co. v. Allen, 102 P.3d 333, 344 (Colo. 2004)). In this
instance, Mr. Castillo has identified an insurance industry standard—that an insurance
company must promptly and reasonably explain the basis of its denial of a claim.
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 12 of 30

13
State Farm also asserts, however, that Mr. Castillo “fails to state . . . how exactly
. . . State Farm deviated from th[is] industry standard.” [Doc. 63 at 13]. Plaintiffs do not
directly respond to this argument. See [Doc. 67 at 15]. At best, Plaintiffs assert that “Mr.
Castillo 	explains 	State 	Farm’s 	conduct 	did 	not 	satisfy 	this 	insurance 	industry
requirement,” directing the Court to two sentences in Mr. Castillo’s report: 	“State Farm
had a duty to notify the customer and review [any and] all items not approved. . . . 	Not
doing so is in violation of C.R.S. 10-3-1104(1)(h)(XIV).” See [id. (quoting Doc. 63-1 at 7)].
But contrary to Plaintiffs’ assertion, these statements do not explain with sufficient
particularity how State Farm’s notice of denial failed to comply with insurance industry
standards. 	Mr. Castillo does not, for example, discuss what would constitute a prompt
and reasonable explanation of a claim denial or identify any specific deficiencies in State
Farm’s notice. 	In fact, Mr. Castillo does not engage in a meaningful analysis of State
Farm’s notice of denial at all.
Moreover, an expert witness who relies primarily on his or her experience in
forming an opinion3 “must explain how that experience leads to the conclusion reached,
why that experience is a sufficient basis for the opinion, and how that experience is
reliably applied to the facts.” United States v. Medina-Copete, 757 F.3d 1092, 1104 (10th
3 Mr. Castillo states that his opinions are “based on a thorough review of the State Farm
Car Policy Booklet,” the insurance policy, State Farm’s notice of denial, Colorado statutes,
and “[his] extensive expertise and experience in the insurance industry.” [Doc. 63-1 at 8];
see also [id. at 1–2 (“Given my extensive experience in the field of insurance, I firmly
believe that my qualifications render me well-suited to provide professional insight on the
issue at hand. 	Through years of dedicated study, practical application, and continuous
learning, I have developed a deep understanding of the complexities surrounding this
case. My background equips me with the necessary knowledge, skills and critical thinking
abilities to offer valuable perspectives on this issue.”)].
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 13 of 30

14
Cir. 2014) (quoting Fed. R. Evid. 702 advisory committee’s note to 2000 amendment).
Mr. Castillo does not do so here.
“[C]onclusory opinions, which require blind acceptance of the expert’s ipse dixit,
are never helpful.” Huang v. Marklyn Grp. Inc., No. 11-cv-01765-REB-BNB, 2014 WL
3559367, at *5 (D. Colo. July 18, 2014). 	Plaintiffs have not demonstrated that Mr.
Castillo’s opinion is reliable, and for this reason, this opinion will be excluded. 	See
Nosewicz v. Janosko, No. 16-cv-00447-PAB-KLM, 2019 WL 1442988, at *4 (D. Colo.
Mar. 31, 2019) (excluding opinion that was “nothing more than an assertion without
explanation”).
4. 	Prevailing Competitive Pricing
Next, State Farm moves to exclude a number of opinions related to State Farm’s
“denial of the full repair amount.” [Doc. 63 at 8].
Relevant here, the insurance policy states that State Farm’s repair estimate may
be based on “[t]he prevailing competitive price,” which is defined as “prices charged by a
majority of the repair market in the area.” [Doc. 64-2 at 26]. Mr. Castillo opines that “the
repairs that were denied by State Farm are fair and reasonable and in line with the
prevailing competitive price for the market.” [Doc. 63-1 at 6]. Elsewhere in his report, he
asserts that “most insurance companies . . . pay the prevailing rate of $62 for body labor,
$62 for paint labor[,] and $48 for paint supplies in the local market.” [Id. at 3]. He states
that he is “not sure where State Farm is getting their prevailing competitive price from as
it was not presented” to him. [Id.].
State Farm argues that Mr. Castillo’s opinion should be excluded because
“although Mr. Castillo purports to know the prevailing competitive price for the market, he
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 14 of 30

15
explicitly observes that he did not have the data in order to accurately opine on the
prevailing competitive price,” such that his opinion is not based on accurate facts and
data. 	[Doc. 63 at 8–9]. 	Plaintiffs respond by relying on (1) Mr. Castillo’s deposition
testimony from another case, in which he stated “that he and other insurance companies
[sic] use LaborRateHero to survey competitive labor prices,” [Doc. 67 at 10 (citing Doc.
63-9 at 55:13–56:1)]; and (2) Defendant’s expert’s testimony that Nylund’s rate of $62 per
hour is “consistent with applicable body shop industry standards,” [id. (citing Doc. 66-4 at
¶ 16)].
The problem with Plaintiffs’ argument is that it relies on information not contained
in Mr. Castillo’s report—for example, there is no indication that Mr. Castillo used
LaborRateHero to form his opinions in this case, let alone any explanation or information
demonstrating that LaborRateHero provides a reliable basis for his opinion. 	With that
said, the Court is not persuaded that exclusion of this opinion is warranted on the basis
asserted by Defendant.4 “As a general rule, the factual basis of an expert opinion goes
to the credibility of the testimony, not the admissibility, and it is up to the opposing party
to examine the factual basis for the opinion in cross examination.” Squires, 829 F. Supp.
4 State Farm does not argue that exclusion is proper based on a violation of the disclosure
requirements under Rule 26 of the Federal Rules of Civil Procedure, Rule 37, or the
factors set forth by the Tenth Circuit in Woodworker’s Supply, Inc. v. Principal Mutual Life
Insurance Co., 170 F.3d 985, 993 (10th Cir. 1999). 	See generally [Doc. 63]. The Court
respectfully declines to speculate about, or craft, any argument that might justify exclusion
on another basis, particularly given that Defendant has been represented by able counsel
since the inception of this case, see United States v. Davis, 622 F. App’x 758, 759 (10th
Cir. 2015) (“[I]t is not this court’s duty, after all, to make arguments for a litigant that he
has not made for himself.”), and simply notes that any such argument is untimely at this
juncture, given that discovery closed on July 2, 2025, cf. Grays v. Blackhawk Acquisition,
LLC, No. 20-cv-00451-SKC, 2024 WL 3179541, at *3 (D. Colo. June 26, 2024) (observing
that the timeliness of the Rule 37 motions is generally measured from the close of
discovery); [Doc. 56].
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 15 of 30

16
2d at 1056 (quoting Bonner v. ISP Techs., Inc., 259 F.3d 924, 929 (8th Cir. 2001)). “Only
if the expert’s opinion is so fundamentally unsupported that it can offer no assistance to
the jury must such testimony be excluded.” 	Id. (quoting Bonner, 259 F.3d at 929–30).
The Court concludes that State Farm’s challenge goes to the weight of Mr. Castillo’s
opinion, not its admissibility. To the extent State Farm asserts that Mr. Castillo’s opinions
were formed without considering all relevant facts or data, they can press this point on
cross-examination. See Squires, 829 F. Supp. 2d at 1056; Bloomer v. HMG Park Manor
of Westwood, LLC, No. 24-cv-02059-JAR, 2025 WL 2444146, at *4 (D. Kan. Aug. 25,
2025).
5. 	Repair and Finish
State Farm next seeks to exclude Mr. Castillo’s “opinions about the repair
processes.” [Doc. 63 at 9]. Specifically, it challenges the following opinions related to the
repair and finish of Plaintiffs’ vehicle:
• 	“Per the paint manufacturer and common industry practice the clear coat must
continue until there is a proper break in the panel.” [Doc. 63-1 at 3].
• 	“A proper refinish per the paint manufacturer guidelines would be to continue the
blend until there is a clear break to stop the clear coat.” [Id. at 3–4].
• 	“Per the proper manufacturer repair procedure and industry standards it was
sectioned in at the sail panel and the dog leg.” [Doc. 63-5 at 3].
• 	“When replacing the quarter panel, there is no break between the uniside panel
and the quarter panel and thus per the collision industry standard laid out by both
the paint manufacturer PPG and the Toyota vehicle manufacturer the clear coat
must extend until there is a break in the panel.” [Id.].
See [Doc. 63 at 9]. For additional context, the Court notes that Mr. Castillo states in his
report that “[a] large portion of the repair estimate that was denied deals specifically with
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 16 of 30

17
the repair and refinish of the pinch welds due to the setup and measure of the unibody
structure.” [Doc. 63-1 at 3].
State Farm moves to exclude these opinions as unreliable because they “confuse
the relevant industry standards and are plainly contrary to the law,” as “Title 10 [of the
Colorado Revised Statutes] does not require an insurer to follow manufacturer repair
procedures and position statements.” 	[Doc. 63 at 9]. 	The Court is respectfully
unpersuaded by this argument. 	Mr. Castillo does not appear to opine that insurance
industry 	standards 	require 	an 	insurance 	company 	to 	“follow 	manufacturer 	repair
procedures and position statements,” as Defendant suggests. In his rebuttal report, Mr.
Castillo clarifies that “[t]he insurance industry does not dictate the standards for collision
repair. It is the collision repair industry that dictates the collision repair standards.” [Doc.
63-5 at 5 (emphasis omitted)]. 	The Court therefore construes Mr. Castillo’s report as
discussing 	collision 	repair 	industry 	standards, 	not 	insurance 	industry 	standards.
Moreover, State Farm’s argument simply challenges the correctness of Mr. Castillo’s
opinion, which is not a proper basis to exclude under Rule 702. 	See Squires, 829 F.
Supp. 2d at 1055. The Court will not exclude these opinions.
6. 	Miscellaneous Charges
Mr. Castillo states that “State Farm failed to pay for miscellaneous charges
presented by Nylund’s Collision Center” and opines that “most shops do not charge for
these repairs or materials.” [Doc. 63-1 at 4]. State Farm argues that this opinion is “not
supported by the facts of the case (i.e., the policy language) nor the insurance industry
standard.” [Doc. 63 at 10]. In support of this argument, State Farm relies on (1) its own
expert’s report that State Farm’s actions with respect to miscellaneous charges “were
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 17 of 30

18
consistent with the language of the policy,” and (2) Mr. Castillo’s deposition testimony
from another case wherein he stated that insurance companies “don’t typically” pay for
these charges. [Id. (citing Doc. 63-9 at 86:1–10; Doc. 63-10 at 10)].
As explained above, exclusion is not appropriate simply because a competing
expert disagrees with the challenged expert’s conclusions. Thompson, 457 F. Supp. 3d
at 1005. 	State Farm’s challenge goes to the weight of this opinion, not its admissibility,
and exclusion is not a proper remedy. Squires, 829 F. Supp. 2d at 1056; Tuft v. Indem.
Ins. Co. of N. Am., No. 19-cv-01827-REB-KLM, 2021 WL 1037863, at *3 (D. Colo. Jan.
29, 2021) (“Assuming . . . [the expert’s] deposition testimony does in fact contradict the
opinion expressed in his expert report, that is a matter which goes to the weight, not the
admissibility, of his opinion and can be explored on cross-examination.”).
For all of these reasons, the Motion to Exclude is GRANTED in part and DENIED
in part, as set forth in the above analysis.
II. 	The Motion for Summary Judgment
A. 	Legal Standard
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). “A dispute is genuine if there is sufficient evidence so that a rational
trier of fact could resolve the issue either way. A fact is material if under the substantive
law it is essential to the proper disposition of the claim.” Crowe v. ADT Sec. Servs., Inc.,
649 F.3d 1189, 1194 (10th Cir. 2011) (cleaned up). “There is no genuine issue of material
fact unless the evidence, construed in the light most favorable to the non-moving party,
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 18 of 30

19
is such that a reasonable jury could return a verdict for the non-moving party.” Bones v.
Honeywell Int’l, Inc., 366 F.3d 869, 875 (10th Cir. 2004).
At summary judgment, a movant that does not bear the ultimate burden of
persuasion at trial does not need to disprove the other party’s claim; rather, the movant
must only point the Court to a lack of evidence for the other party on an essential element
of that party’s claim. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998).
Once this movant has met its initial burden, the burden then shifts to the nonmoving party
to “set forth specific facts showing that there is a genuine issue for trial.” 	Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).
When considering the evidence in the record, the Court cannot and does not weigh
the evidence or determine the credibility of witnesses. See Fogarty v. Gallegos, 523 F.3d
1147, 1165 (10th Cir. 2008). 	At all times, the Court views the record in the light most
favorable to the nonmoving party. Banner Bank v. First Am. Title Ins. Co., 916 F.3d 1323,
1326 (10th Cir. 2019).
B. 	Undisputed Material Facts
The following undisputed material facts are drawn from the summary judgment
record.
1. 	Plaintiffs’ vehicle was damaged in a motor vehicle collision on January 3,
2023. [Doc. 64 at ¶ 10; Doc. 66 at ¶ 10; Doc. 6 at ¶¶ 3–5].
2. 	At the time of the loss, Plaintiffs had comprehensive insurance coverage
through State Farm. [Doc. 64 at ¶ 1; Doc. 66 at ¶ 1; Doc. 64-1]
3. 	Plaintiffs elected to have their vehicle repaired at Nylund’s Collision Center.
[Doc. 64 at ¶ 13; Doc. 66 at ¶ 13; Doc. 64-7 at 19:12–15].
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 19 of 30

20
4. 	Nylund’s exclusively uses Original Equipment Manufacturer (“OEM”) “parts
and procedures.” [Doc. 64 at ¶ 4; Doc. 66 at ¶ 4; Doc. 65-1 at 77:13–18].
5. 	At the time of the collision, every part of Plaintiffs’ vehicle was an OEM part.
[Doc. 66 at ¶ 30; Doc. 74 at ¶ 30; Doc. 65-1 at 163:20–24].
6. 	The vehicle repairs were completed on May 23, 2023, and Nylund’s charged
approximately $21,173.84 for the repairs. [Doc. 64 at ¶¶ 13, 16, 17; Doc. 66 at ¶¶ 13, 16,
17; Doc. 64-7 at 32:6–9].5
7. 	State Farm paid Plaintiffs a total of $13,793.41, made in four installments,
to reimburse the repair costs. [Doc. 64 at ¶¶ 18, 21; Doc. 66 at ¶¶ 18, 21; Doc. 64-6 at 1].
8. 	State Farm’s repair estimate accounted for use of aftermarket parts. [Doc.
66 at ¶ 31; Doc. 74 at ¶ 31; Doc. 65-1 at 122:15–18].
9. 	The insurance policy states:
1. 	We have the right to choose to settle with you or the owner of the
covered vehicle in one of the following ways:
a. 	Pay the cost to repair the covered vehicle minus any applicable
deductible.
(1) We have the right to choose one of the following to determine the
cost to repair the covered vehicle:
(a) The cost agreed to by both the owner of the covered vehicle
and us;
(b) A bid or repair estimate approved by us; or
(c) A repair estimate that is written based upon or adjusted to:
(i) the prevailing competitive price;
(ii) the lower of paintless dent repair pricing established by an
agreement we have with a third party or the paintless dent
repair price that is competitive in the market; or
(iii) a combination of (i) and (ii) above.
5 The Motion for Summary Judgment lists the amount charged as both $21,173.84 and
$21,173.85. [Doc. 64 at ¶¶ 16, 18; id. at 6]. The specific amount charged is not material
to the Court’s resolution of the Motion.
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 20 of 30

21
The prevailing competitive price means prices charged by a
majority of the repair market in the area where the covered
vehicle is to be repaired as determined by a survey made by
us. 	If asked, we will identify some facilities that will perform
the repairs at the prevailing competitive price. 	The estimate
will include parts sufficient to restore the covered vehicle to its
pre-loss condition.
[Doc. 64 at ¶ 2; Doc. 66 at ¶ 3; Doc. 64-2 at 26 (emphasis omitted)].6
10. 	The policy also states: 	“You agree with us that the repair estimate may
include new, used, recycled, and reconditioned parts. Any of these parts may be either
original equipment manufacturer parts or non-original equipment manufacturer parts.”
[Doc. 64 at ¶ 3; Doc. 66 at ¶ 3; Doc. 64-2 at 26].
11. 	State Farm takes the position that it paid a sufficient amount to put Plaintiffs’
vehicle as close to pre-loss condition as possible. [Doc. 64 at ¶ 15; Doc. 66 at ¶ 15; Doc.
64-9 at 32:10–14].
12. 	In addition to the cost of repairs, Plaintiffs claim that Defendant owes them
$1,961.28 for “car payments” and $447.15 for insurance payments Plaintiffs made when
their vehicle was unusable, plus $1,920 in taxes and interest related to a loan Plaintiffs
took out to pay for the repairs. [Doc. 64 at ¶ 19; Doc. 66 at ¶ 19; Doc. 64-11 at 3].
C. 	Analysis
State Farm argues that it is entitled to summary judgment on each of Plaintiffs’
three claims. See [Doc. 64]. The Court addresses each claim, and the Parties’ competing
arguments, in turn.
6 When the Court quotes directly from the insurance policy in this Order, it omits all
emphasis contained therein without further note.
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 21 of 30

22
1. 	Breach of Contract Claim
To succeed on their breach of contract claim, Plaintiffs must demonstrate “(1) the
existence of a contract; (2) performance by the plaintiff[s] or some justification for
nonperformance; (3) failure to perform the contract by the defendant, and (4) resulting
damages to the plaintiff[s].” 	TBL Collectibles, Inc. v. Owners Ins. Co., 285 F. Supp. 3d
1170, 1197 (D. Colo. 2018).
State Farm argues that Plaintiffs cannot succeed on their contract claim because
they cannot demonstrate any breach of the policy based on State Farm’s repair estimate
of approximately $13,000. [Doc. 64 at 6]. It focuses on the policy provision stating that
State Farm’s repair estimate “may include new, recycled, and reconditioned parts,”
including “non-original equipment manufacturer parts.” [Id. at 7 (emphasis omitted)]; see
also [Doc. 64-2 at 26]. State Farm contends that, based on this language, the OEM parts
used in the Nylund’s repairs are “not compensable under the Policy.” [Doc. 64 at 7]. In
their Response, Plaintiffs direct the Court to other language in the policy—specifically, the
guarantee that State Farm’s repair estimate “will include parts sufficient to restore the
covered vehicle to its pre-loss condition.” [Doc. 66 at 8; Doc. 64-2 at 26]. In their view,
State Farm failed to provide a repair estimate “that would restore the Vehicle to pre-loss
condition.” [Doc. 66 at 8]. In its Reply, State Farm “agrees that [the] insurance contract
requires it to pay to restore the vehicle to its pre-loss condition,” but asserts that, under
Colorado law, insurers are only “required to restore the vehicle to pre-loss condition ‘in
accordance with applicable policy provisions.’” 	[Doc. 74 at 5 (quoting Colo. Rev. Stat.
§ 10-4-120(3)(b))]. It then reiterates the policy language permitting the use of non-OEM
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 22 of 30

23
parts, but it presents no further argument explaining why the statute overrides the policy
language. See [id.].
Defendant’s unexplained reliance on § 10-4-120(3)(b) does not change the policy
language or the facts of this case. 	The policy plainly states that State Farm’s repair
estimate “will include parts sufficient to restore the covered vehicle to its pre-loss
condition.” [Doc. 64-2 at 26]. The fact that the policy permits State Farm to include non-
OEM parts in its repair estimate “does not mean that non-OEM parts will in all instances
be sufficient to satisfy [its] contractual obligations.” 	Nick’s Garage, Inc. v. Progressive
Cas. Ins. Co., 875 F.3d 107, 118 (2d Cir. 2017). 	Restoring the vehicle to its pre-loss
condition “may or may not be possible using non-OEM parts for a particular repair,” and
the policy provision permitting the use of non-OEM parts does not allow State Farm to
“limit its payments to the cost of non-OEM parts regardless of whether the use of such
parts will, in the particular circumstance, repair the damaged property to its pre-loss
condition.” Id.
The Parties do not argue that this Court must interpret the meaning of “pre-loss
condition” as a matter of law, see [Doc. 64; Doc. 66], and courts in other contexts have
suggested that whether or not property was restored to pre-loss condition is a question
of fact for the jury, see, e.g., Smith v. Am. Fam. Mut. Ins. Co., 289 S.W.3d 675, 683 (Mo.
Ct. App. 2009); Nick’s Garage, 875 F.3d at 119–20. Therefore, limiting its analysis to the
argument presented by Defendant, the Court finds that Defendant has not shown it is
entitled to judgment as a matter of law based on the policy’s language.
Defendant also asserts that some of the non-repair costs that Plaintiffs claim are
owed by Defendant, such as “the loan taken against Plaintiff Makara’s 401k account,” are
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 23 of 30

24
“not compensable under the Policy.” 	[Doc. 64 at 8]. 	It asserts that “[t]here is . . . no
coverage under the Policy for the loan or its fees/expenses that Plaintiffs seek as
damages in this lawsuit.” 	[Id. at 9].7 	Plaintiffs counter by asserting that the loan was
necessary to pay for the vehicle’s repairs, and if State Farm had compensated them for
the entirety of the repairs performed by Nylund’s, they would not have needed the loan.
[Doc. 66 at 10–11]. While Plaintiffs criticize Defendant for “not citing any part of the Policy”
that excludes the loan payment and associated fees from coverage, [id. at 10], Plaintiffs
themselves fail to cite any policy provision that requires State Farm to compensate
Plaintiffs for their private loan and related fees, see [id. at 10–11].
In insurance cases, “[t]he insured bears the initial burden of demonstrating
coverage under the policy.” Rocky Mountain Prestress, LLC v. Liberty Mut. Fire Ins. Co.,
960 F.3d 1255, 1260 (10th Cir. 2020) (citing Rodriguez ex rel. Rodriguez v. Safeco Ins.
Co. of Am., 821 P.2d 849, 853 (Colo. App. 1991)). If the insured meets this burden, then
it becomes the insurer’s burden to “prove the applicability of an exclusion from coverage;
if the insurer makes this showing, the burden shifts back to the insured to show an
exception to any coverage exclusion.” Id.
Contrary to Plaintiffs’ suggestion, State Farm need not point to policy language to
prove a negative—i.e., that the policy does not provide coverage for the loan payment.
Rather, it is Plaintiffs’ burden to point to policy language affording coverage under the
policy. See id. Plaintiffs do not do so here, and thus, the Motion for Summary Judgment
is GRANTED to the limited extent Plaintiffs argue that State Farm breached the insurance
7 	Because 	Defendant’s 	argument 	is 	limited 	specifically 	to 	the 	loan 	and 	related
“fees/expenses,” see [Doc. 64 at 8–9], the Court’s analysis is similarly limited.
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 24 of 30

25
policy by not reimbursing Plaintiffs for the loan payment and associated fees or interest.
However, this ruling should not be construed as a suggestion that Plaintiffs are unable to
recover those amounts as consequential damages related to the alleged breach of
contract, should Plaintiffs prove a breach and resulting damages at trial.8 Cf. DSCO, Inc.
v. Warren, 829 P.2d 438, 442 (Colo. App. 1991) (“In a breach of contract action, the
measure of damages is the benefit of the bargain, . . . including consequential losses
which are the natural, probable, and reasonably foreseeable consequence of a party’s
failure to perform his contract.” (quotation omitted)).
2. 	Bad Faith Claims
Under Colorado law, there are two types of insurance-based bad faith claims
available to an insured party: 	(1) common law bad faith and (2) unreasonable delay or
denial of insurance benefits under Colo. Rev. Stat. §§ 10-3-1115 and -1116 (or “statutory
bad faith”). 	McKinney v. State Farm Mut. Auto. Ins. Co., No. 20-cv-01651-CMA-KLM,
2021 WL 4472921, at *4 (D. Colo. Sept. 30, 2021). 	To succeed on a statutory claim of
unreasonable delay or denial, an insured must establish that (1) the insurer delayed or
denied payment of benefits to the insured, and (2) the delay or denial was without a
reasonable basis. 	Am. Fam. Mut. Ins. Co. v. Barriga, 418 P.3d 1181, 1185–86 (Colo.
2018).
The 	requirements 	for 	success 	on 	a 	common 	law 	claim 	are 	similar, 	but
“heightened.” 	Butman Fam. Inv. Ltd. P’ship v. Owners Ins. Co., No. 19-cv-01638-KLM,
2020 WL 1470801, at *8 (D. Colo. Mar. 25, 2020). In addition to demonstrating that the
8 To be clear, the Court does not pass on whether the amounts associated with the loan
would properly be considered consequential damages. The Court makes this statement
only to avoid disagreements about the scope of this Court’s summary judgment ruling.
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 25 of 30

26
insurer delayed or denied the payment of benefits without a reasonable basis, “a common
law insurance bad faith claim requires the insured to [prove] . . . that the insurer knowingly
or recklessly disregarded the validity of the insured’s claim.” Id. (quoting Fisher v. State
Farm Mut. Auto. Ins. Co., 419 P.3d 985, 990 (Colo. App. 2015), aff’d, 418 P.3d 501 (Colo.
2018)).
Thus, to succeed on either type of bad faith claim, Plaintiffs must show that State
Farm acted unreasonably. 	“The reasonableness of the insurer’s conduct is determined
objectively and is ‘based on proof of industry standards.’” 	Schultz v. GEICO Cas. Co.,
429 P.3d 844, 847 (Colo. 2018) (quoting Goodson v. Am. Standard Ins. Co. of Wis., 89
P.3d 409, 415 (Colo. 2004)). So long as the insurer had a reasonable basis for its action,
it did not act unreasonably. 	See Wagner v. Am. Fam. Mut. Ins. Co., 569 F. App’x 574,
580 (10th Cir. 2014) (“We find nothing unreasonable about American Family’s denial of
her claim because it had a reasonable basis for its action.”); Ayala v. State Farm Mut.
Auto. Ins. Co., 628 F. Supp. 3d 1075, 1082 (D. Colo. 2022) (“An insurer’s denial of a claim
does not constitute statutory bad faith if the insurer has a reasonable basis for the
denial.”). The insurer’s decision to deny benefits is evaluated “based on the information
before the insurer at the time of that decision.” Schultz, 429 P.3d at 847.
“What constitutes reasonableness under the circumstances is ordinarily a question
of fact for the jury.” Vaccaro v. Am Fam. Ins. Grp., 275 P.3d 750, 759 (Colo. App. 2012).
But “in appropriate circumstances,” such as “when there are no genuine issues of material
fact, reasonableness may be decided as a matter of law.” Id.
Defendant argues that it is entitled to summary judgment on both of Plaintiffs’ bad
faith claims because “there is no record evidence that State Farm acted without a
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 26 of 30

27
reasonable basis or otherwise contrary to industry standards.” [Doc. 64 at 13]; see also
[id. at 14]. 	First, with respect to the statutory claim, Defendant asserts that this case
involves a simple valuation dispute, which it says “is not a sufficient basis upon which to
maintain a statutory unreasonable denial claim.” 	[Id. at 10]; see also [id. at 9–13].
Plaintiffs respond that this case is not a “mere valuation dispute”; in their view, State Farm
acted unreasonably “by refusing to pay for necessary repairs to restore the Vehicle to
pre-loss condition.” [Doc. 66 at 13 (emphasis omitted)].
To be sure, “[u]nreasonable conduct cannot be established by virtue of a mere
disagreement of value between the insured and insurer.” 	Yale Condos. Homeowner’s
Ass’n v. Am. Fam. Mut. Ins. Co., No. 19-cv-02477-KMT, 2021 WL 1222518, at *7 (D.
Colo. Apr. 1, 2021). 	Under Colorado law, an insurer may permissibly challenge claims
that are “fairly debatable.” Vaccaro, 275 P.3d at 759 (quotation omitted). But “an insurer
cannot rely on the mere fact that the claim was fairly debatable in order to prove that it
acted reasonably as a matter of law,” Wheatridge Off., 578 F. Supp. 3d at 1206, or “avoid
liability for unjustified denials of benefits simply by framing each denial as a valuation
dispute,” Vaccaro, 275 P.3d at 760. After all, “every lawsuit over insurance coverage is
a valuation dispute to the extent that the parties disagree about how much should be paid
under a policy,” and if insurers could escape liability by framing the issue as a valuation
dispute, then they could always “refuse to pay any claim where money is at issue.” Id.
Although the Court has excluded a large number of Mr. Castillo’s opinions, some
still remain, including Mr. Castillo’s opinion that State Farm denied payments for repairs
that were necessary to restore Plaintiffs’ vehicle to its pre-loss condition as required by
the policy. 	See [Doc. 63-1 at 4, 6]. 	Plaintiffs have thus cited evidence from which a
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 27 of 30

28
reasonable jury could conclude that State Farm lacked a reasonable basis for the denial,
and the reasonableness of State Farm’s decision cannot be decided as a matter of law.
Cf. Aurzadniczek v. Humana Health Plan, Inc., No. 15-cv-00146-RM-KMT, 2016 WL
1266972, at *12 (D. Colo. Apr. 1, 2016) (finding that a reasonable jury could conclude
that insurer’s interpretation of the policy was not reasonable, such that insurer lacked a
reasonable basis to deny claim); Calfox, Inc. v. Certain Underwriters at Lloyd’s, London,
No. 20-cv-02443-RM-KMT, 2024 WL 1051948, at *7 (D. Colo. Mar. 11, 2024) (same).
The Motion for Summary Judgment is DENIED with respect to Plaintiffs’ statutory claim.9
As for the common law claim, State Farm argues that there is no evidence that
State Farm acted unreasonably because (1) Mr. Castillo “engages in virtually no
discussion as to what the industry standards are and how they apply to the present facts,”
so there is no evidence of insurance industry standards and no evidence that State Farm’s
conduct violated industry standards, [Doc. 64 at 15]; (2) the evidence shows that State
Farm acted reasonably, [id. at 15–18]; and (3) there is no evidence that State Farm knew
that 	its 	conduct 	was 	unreasonable 	or 	acted 	with 	reckless 	disregard 	of 	its
unreasonableness, [id. at 18–19]. The Court is respectfully unpersuaded by Defendant’s
arguments and concludes that it has not shown entitlement to summary judgment as a
matter of law.
First, the Court has not excluded Mr. Castillo’s testimony in its entirety, and a
number of his opinions regarding industry standards remain, either because the Court
was unpersuaded by Defendant’s arguments or because they went unchallenged by
9 State Farm also lists a number of reasons why it believes its conduct or claim decision
was reasonable. 	See [Doc. 64 at 11–12]. 	However, this list simply identifies factual
disputes about Defendant’s reasonableness that cannot be resolved by this Court.
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 28 of 30

29
Defendant. 	For example, Mr. Castillo opines that State Farm’s steering letter violated
industry standards; thus, at the very least, genuine issues of fact exist as to the
reasonableness of this aspect of State Farm’s claims-handling conduct. 	Second, State
Farm’s arguments defending the reasonableness of its conduct do not warrant judgment
in its favor; 	rather, they simply highlight factual disputes that this Court cannot resolve.
And third, the Court disagrees with State Farm that there is no evidence that State Farm
acted with knowledge or reckless disregard of its allegedly unreasonable conduct.
Specifically, Mr. Castillo has opined that State Farm’s letter violated insurance industry
standards, and as Plaintiffs point out, [Doc. 66 at 19], this standard is codified by Colorado
statute, which prohibits insurers from “[r]epresent[ing] to a beneficiary or claimant who is
making a claim under a policy that the use of, or the failure to use, a particular repair
business may result in the nonpayment or delayed payment of a claim,” Colo. Rev. Stat.
§ 10-4-120(2)(b). 	Since Colorado law prohibits State Farm’s alleged conduct, a
reasonable jury could conclude that State Farm knew or recklessly disregarded the
unreasonableness of its conduct. 	See Jones v. Am. Fam. Mut. Ins., No. 15-cv-00631-
WYD-MEH, 2017 WL 4350362, at *5 (D. Colo. Feb. 22, 2017) (relying on Unfair Claims
Settlement Practices Act, which sets forth industry standards that insurer “arguably knew
or should have known of,” to deny summary judgment on this element).
Defendant has not demonstrated that it is entitled to summary judgment on either
bad faith claim. The Motion for Summary Judgment is DENIED as to those claims.
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 29 of 30

30
CONCLUSION
For the reasons set forth in this Order, IT IS ORDERED that:
(1) 	Defendant’s Fed. R. Evid. 702 Motion to Limit the Opinions of Plaintiffs’
Expert Aaron Castillo [Doc. 63] is GRANTED in part and DENIED in part;
(2) 	Defendant’s Motion for Summary Judgment [Doc. 64] is GRANTED in part
and DENIED in part; and
(3) 	A Telephonic Status Conference is SET for April 14, 2026 at 2:00 P.M. to
set the Final Pretrial/Trial Preparation Conference and trial in this case.
Counsel 	for 	the 	Parties 	shall 	participate 	using 	the 	following 	dial-in
information: 571-353-2301; Access Code: 783456374.
DATED: March 31, 2026 	BY THE COURT:
_________________________
Nina Y. Wang
United States District Judge
Case No. 1:23-cv-02115-NYW-TPO Document 79 filed 03/31/26 USDC Colorado
pg 30 of 30