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					Case 1:04-cv-00865-REB-CBS        Document 204        Filed 01/17/2006   Page 1 of 14




                      IN THE UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF COLORADO

Civil Action No. 04-cv-O865-REB-CBS

SCOTT Hill, as Conservator for the Estate of Katelyn Hill

      Plaintiff,
v.
ALLSTATE INSURANCE COMPANY,

      Defendant.



AlLSTATE INSURANCE COMPANY

      CounterclaimPlaintiff,

v.
SCOTT Hill, as Conservator for the Estate of Katelyn Hill

      Counterclaim Defendant.



ALLSTATE INSURANCE COMPANY

      Third-Party Plaintiff,

v.
JOHN PAUL

      Third-Party Defendant.


                     SECOND AMENDED SCHEDULING ORDER
Case 1:04-cv-00865-REB-CBS          Document 204       Filed 01/17/2006       Page 2 of 14




           1. DATE OF CONFERENCE AND APPEARANCES OF COUNSEL



 January12,2006.at 4:15 p.rn


 counterclaim plaintiff John Paul ("Pau"') were represented by:

                                   Robert B. Carey
                                     Co Horgan
                       HAGENS BERMAN SOBOL SHAPIRO, LLP
                         2425 East Camelback Road, Suite 650
                                 Phoenix, AZ 85016
                              Telephone: 602-840-5900



Company (MAllstateM)was represented by:

                                   John M. Vaught
                                  Terence M. Ridley
                                     laMar F. Jost
                           WHEELER TRIGG KENNEDY LLP
                           1801 California Street, Suite 3600
                                  Denver, CO 80202
                              Telephone: 303-244-1800
                    2. STATEMENT OF CLAIMS AND DEFENSES




order), 73 (amended scheduling order). In addition, the parties supplement their

statement of claims and defenses with respect to the third-party complaint.

      a.




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process of a divorce at the time John Paul procured the Allstate Policy. John and April

Paul did not have any intention of reconciling at the time they procured the Allstate

Policy. John Paul falsely represented in the application for insurance and thereafter,

among other things, that he and April Paul resided together and were married when he

applied for the Allstate Policy. John Paul did not disclose on the application, or

otherwise, he was separated from April. Allstate, in turn, issued the Allstate Policy
         that

in reliance on John Paul's false representations. The representations were material to

the risk Allstate undertook in issuing a single-household policy to "John and April Paul."

Despite ample opportunity, John Paul never informed Allstate when the divorce was

finalized shortly after procurement of the Allstate Policy. Rather, John and April

continued to renew the Allstate Policy notwithstanding the divorce. Allstate ultimately

paid benefits under the fraudulently procured policy to John Paul after April Hill (f.k.a.

April Paul) was involved in an accident.

       Allstate's third-party complaint asserts that John Paul fraudulently procured the

Allstate Policy when he made false material statements and concealments during both

the application and renewal process. Allstate suffered damages, as explained below,

as a result of John Paul's fraud in the inducement of the Allstate Policy. Allstate seeks

a declaration that the Allstate Policy is void or voidable and that Allstate does not have

anyfurtherobligation under the Allstate Policy. Allstate also seeks a declaration that it
is entitled to damages from John Paul measured by the benefits paid under the

fraudulently procured policy.




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             b.     Third-Party Defendant: John Paul declares that no fraud occurred, and

      that no false statements occurred, certainly not as to a material fact. Paul contends that

      Allstate waived any claim based on fraud by paying on Katelyn's claim after an

      investigation, and giving no indication that an investigation was ongoing. Allstate is

      estopped from its claim by continuing to accept premiums on the policy long after the

      claim was filed. Allstate had a duty in August, 2000 under then C.R.S. § 10-1-127 to

      have a plan in place to investigate. detect, and prevent fraud, including training agents

      and adjusters in fraud detection. This duty was still in place in July, 2002. Allstate had

      a duty under Colorado Division of Insurance (001) Regulation 5-2-8 to investigation

      claims promptly, and if an investigation continued beyond thirty days, to send letters

      everythirty days explaining why the investigation was not completed, and requesting
      specific information needed to complete the investigation. Allstate knew, no later than

      July 26, 2002, of the fact that John Paul was divorced from April Hill on the date of the

      accident.Allstate never sent letters indicating an investigation was ongoing, and asking
      for additional, specific information. Further, Allstate is seeking rescission and

      disgorgement of all benefits paid, when the only damages Allstate properly alleged was

      assuming a two-householdrisk rather than a one-householdrisk. Under the No Fault
.,.

      Act, AJlstate could not have refused to issue a policy based on marital status, and

      Allstate couldnot have cancelled the policy. Allowing Allstate to retroactively refuse to

      issue, or cancel, the contract directly violates the No Fault Act.

             Third-Party Defendant John Paul counterclaims that Allstate notified him in late

      August, 2005, that it was going to sue him for fraud. Paul contends the lawsuit is



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without legal basis, given that Allstate had concluded its investigation by August, 2002,

and never requested additional, specific information. Paul claims that the anxiety

caused by the notice of the lawsuit, especially a lawsuit for fraud, when he is an honest

citizen, was so severe that it has impacted his life severely. The anxiety resulted in

numerous incidents of self-inflicted damage that required emergency medical

assistance, and extensive emotional health treatment. The anxiety has resulted in

numerous other negative effects on Paul's life, causing marital difficulties and missed

work. Allstate knew of Paul's emotional sensitivities from deposing him in June, 2005.

                                  3. UNDISPUTEDFACTS,

          The parties incorporate by reference their previous statements of undisputed

material facts. See dckt. nos. 37 (scheduling order). 73 (amended scheduling order).

                             4. COMPUTATION OF DAMAGES.

          The parties incorporate by reference their previous computations of damages.

See dckt. nos. 37 (scheduling order), 73 (amended scheduling order). The parties add

the following computation of damages with respect to the third-party complaint and

third-party counterclaims:

       8.       Third-party Plaintiff Allstate paid the following benefits pursuant to the

fraudulently procured Allstate Policy, thus entitling Allstate to damages based upon

benefits paid, net of premiums paid by the insureds, under the fraudulently procured

policy:
                i. $59,166 in UM/UIM benefits paid on behalf of Hope Paul;

                ii. $59,167 in UM/UIM benefits paid on behalf of Dennis Scoggins;



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              iii. $59,167 in UM/UIM benefits paid on behalf of Katelyn Hill;

              iv. $92,500 in UM/UIM benefits paid on behalf of April Hill;

              v. $100,000 in basic PIP benefits paid on behalf of Katelyn        Hill;

              vi. $1,000 in death benefits paid on behalf of April Hill.

Allstate is also entitled to its reasonable attorneys' fees and costs of suit.

       b.     Third-party Defendant John Paul computes damages as follows:

                        $1931.05 in medical expenses paid to Upper San Juan Health

                        Services (Ambulance)

                  ii    $772.00 in medical expenses paid to Mercy Medical Center

                        (Hospital)

                  iii   At least $90 in medical expenses paid to Southwest Colorado

                        Mental Health Center (Counseling)

                 iv. $95 in medical expenses paid to Dr. Mark Weinpahl (Personal

                        Physician)

                  v. $1181 in medical expenses paid to Mercy Medical Center (Hospital)
                 vi Other bills to be disclosed as discovery proceeds

                 vii    An amount to be determined at trial for pain and suffering, mental

                        anguish, and emotional distress proximately caused by Allstate's

                        conduct.
                5. REPORT OF PRE-CONFERENCE DISCOVERY AND
                      MEETING UNDER FED. R. CIV. P. 26(f).

       8.     The parties conducted an additional Rule 26(f) meeting by telephone on

January11, 2006, at 9:00 a.m. and January 12, 2006, at 2:30 p.m


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         b.     RobertCarey and Co Horgan appeared on behalf of the third-party

defendant John Paul. John Vaught, Terence Ridley, and laMar Jost appeared on

behalf of third-party plaintiff Allstate.

         c.     Rule 26(a)(1) disclosures related to the third-party complaint and third-

party counterclaims will be filed by January 13, 2006.

                                            6. CONSENT

         All parties have not consented to the exercise of jurisdiction of a Magistrate

Judge.

                        7. REVISEDCASE PLAN AND SCHEDULE

         The parties submit the following revised case plan and schedule, consistent with

the Court's January 11, 2006 order denying Allstate's motions to bifurcate and vacate

the trial date. See dckt. no. 198,

         a.     Deadline for joinder of parties and amendment of pleadings: not

applicable

         b.     Discoverycut-off: Wednesday, February 22, 2006.

         c.     Dispositive motion deadline: not applicable.

         d.     Expert witness disclosure:

                (1)    Anticipatedfields of expert testimony:

                       i.      For third-party plaintiff and defendant Allstate:

                               A.     Third-Party Complaint and Third-Party Counterclaims:

an expert in bad faith, proper claims handlingtechniques,and/or insurancefraud; and




                                                7.
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an expert in the field of psychiatryand/or psychologyor other medicalfield to provide

opinion testimony on John Paul's alleged emotional distress.

                             Bo     Katelyn Hill's Compensable Damages: experts

qualified to testify on Katelyn Hill's medical condition; an expert qualified to testify on a

life care plan prepared for Katelyn Hill; one or more experts qualified to testify on

Katelyn Hill's future earning capacity and life care costs.

                      ii.    For third-party Defendant John Paul:

                             A.     Third-Party Complaint and Third-Party     Counterclaims:

an expert in insurance bad faith, proper investigation techniques, and insurance fraud;

and an expert in the field of psychiatry or psychology.

              (2)     The parties propose to limit the number of expert witnesses on the

third-party complaint and third-party counterclaims to two per side and two rebuttal

experts per side.

              (3)     With respect to the third-party complaint, the parties shall designate

all experts and provide opposing counsel with all information specified in Fed. R. Civ. P.

26(a)(2) on or before February 10, 2006.

       In compliance with the Court's order of January 11, 2006, Allstate shall have until

January 20, 2006, to submit their non-insurance expert reports related to Plaintiff Scott

Hill's amended complaint, which shall conform in substance to the requirements of Fed

R. Civ. P. 26(a)(2)(A)and (8). See dckt. no. 198.

              (4)     With respect to the third-party complaint and third-party

counterclaims, the parties shall designate all rebuttal experts and provide opposing



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counsel with all information specified in Fed. R. Civ. P. 26(a)(2) on or before February

20, 2006.

              (5)    Notwithstanding the provisions of Fed. R. Civ. P. 26(a)(2)(B), no

exception to the requirements of the rule will be allowed by stipulation of the parties

unless the stipulation is approved by the court.

       e.     Deposition Schedule: With respect to the third-party complaint, the parties

will agree to an initial deposition schedule by January 20, 2006, and thereafter submit

the schedule to the Court.

       In compliance with the Court's order of January 11, 2006, the parties shall have

until February 10, 2006, to complete non-insurance expert depositions. See dckt. no.

198.

       f~     Interrogatory Schedule: With respect to the third-party complaint, all

interrogatories will be served by January17, 2006, and responses thereto will be due on

or before January 27, 2006.

       9      Schedule for Request for Production of Documents: With respect to the

third-party complaint, all requests for production will be served by January 17, 2006,

and responses thereto will be due on or before January 27. 2006.

       h.     Discoverylimitations:

              (1)    With respect to the third-party complaint and third-party

counterclaims, each side is entitled to take up to five (5) fact witness depositions,

exclusive of parties and experts.




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               (2)     The time limits prescribed in Fed. R. Civ. P. 30(d)(2) shall apply to

 any deposition by any side.

               (3)     With respect to the third-party complaint and third-party

 counterclaims,
             each side shall be entitled to ten (10) interrogatories.

               (4)     With respect to the third-party complaint and third-party

 counterclaims, each side shall be entitled to five (5) requests for production and neither

 side shall be entitled to any requests for admission

               (5)     Other planning or discovery orders: Each side shall complete all

 lay witness depositions by February 6, 2006.

                                      8. SETTLEMENT

        The parties certify that, as required by Fed. R. Civ. P. 26(f), they have discussed

 the possibilities for settlement. There is some possibility of settlement.

                             9. OTHER SCHEDULING ISSUES

        8,     Third   party defendant shall have until February 15, 2006, to conduct an

 independent medical examination ("IME") and/or Rule 35 medical and/or psychiatric or

 psychological examination of John Paul. Allstate shall attempt to have its IME report

 and/or Rule 35 examination report filed by the same date; however I if necessary,

                   the Courtif the need arises because of difficulties in scheduling
 Allstate maycontact

 John Paul's examinations and/or testing

        It is Allstate's understanding that, based upon the telephonic conference call with

 Magistrate Shaffer on January 12, 2006, that John Paul would cooperate in the

 scheduling of a Rule 35 examination, including a place of examination, given the strict



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 deadlines of the Rule 26(a) reports concerning mental health, and that Allstate's expert

 is located in the Denver, Colorado metropolitan area and is very expensive. Given that

 John Paul asserted these claims in the United States District Court in Denver and

 Allstate requested to pay reasonable costs of travel to Denver for the examination, that

 testing shall, or should, occur in Denver, Colorado. Allstate is attempting to contact its

 psychiatrist and psychologist to determine their availability to travel to Durango and/or

 Pagosa Springs to conduct the psychological and/or psychiatric testing,

        It is Mr. Paul's position that Allstate first mentioned the subject of having the IME

 in Denver at the telephonic conference call on January 12th, much to the surprise of Mr.

 Paul's counsel.     Mr. Paul's counsel agreed to check with Mr. Paul. Third Party

 Defendant acted in good faith in agreeing that an IME should take place,               Allstate

 provided no notice during those discussions       that it expected the IME to occur in Denver,

 almost 300 miles away from Mr. Paul's residence. Because Allstate is aware of Mr.

 Paul's medical condition, it knows that it is very difficult for Mr. Paul to make trip of that

 length and stress. Mr. Paul was not initially receptive to the idea, and believes that he

 has a good faith basis to require the IME to occur at a more reasonable location.

        b.     The anticipated length of trial is eighteen (18) days.

                       10. DATES FOR FURTHER CONFERENCES

        So     Not applicable.

        b.     Not applicable.

        c.     A second final pretrial conference will be held in this case on February 28,

 2006, at 8:00 o'clock a.m. An Amended Final Pretrial Order shall be prepared by the



                                               f
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 partiesand submitted to the Court not later than February 27 I 2006,       after the dose of

 discoveryon the third-party complaint. The parties shall exchange exhibits listed in the

 pretrial order on March 1, 2006, and file any objections with the Court by March 3, 2006.

                                    11. OTHER MATTERS

        In addition to filing an appropriate   notice with the clerk's office, counsel must file

 a copy of any notice of withdrawal,   notice of substitution of counsel, or notice of change

of counsel's address or telephone number with the clerk of the magistrate judge

 assigned to this case.

        In addition to filing an appropriate   notice with the clerk's office, a pro se party

 must file a copy of a notice of change of his or her address or telephone number with

the clerk of the magistrate judge assigned to this case.

        With respect to discovery disputes, parties must comply with D.C. COLO. L. Civ.

 R.7.1A.

        The parties filing motions for extension of time or continuances       must comply with

 D.C.COLO. L. Civ. R 6.1 D. by submitting proof that a copy of the motion has been
servedupon the moving attorney's client, all attorneys of record, and all pro 5e parties.
       12. AMENDMENTS TO THE SECOND AMENDED SCHEDULING ORDER.

        This Second Amended Scheduling Order may be altered or amended only upon

a showing of good cause.




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 Case 1:04-cv-00865-REB-CBS      Document 204     Filed 01/17/2006   Page 13 of 14




DATED at Denver,Colorado,this 1~ day of January,
                                               2006.

                                            BY THE COURT:




                                            s/Crai~ B. Shaffer,
                                            Craig B. Shaffer
                                            United StatesMagistrateJudge
Case 1:04-cv-00865-REB-CBS        Document 204   Filed 01/17/2006    Page 14 of 14




 APPROVED:




 Is Co Horaan                             Is laMar F. Jost
 Robert B. Carey                          Terence M. Ridley
 Co Horgan                                laMar F. Jost
 Hagens Berman Sobol Shapiro. LLP         Wheeler Trigg Kennedy llP
 2301EastPikesPeak                        1801 CaliforniaStreet, Suite 3600Denver,
Colorado Springs, CO 80909                CO 80202-2617
719-635-0377                              303-244-1800
FAX: 719-635-2920                         Fax: 303-244-1879
Attorneys for Plaintiff/Counterclaim      Attorneys for Defendant/Counterclaim
DefendantIThirdPatty Defendant                    /Third-Party Plaintiff
                                          Plaintiff

				
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