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March 13, 2026 Get Citation Alerts Download PDF Add Note

Claudio De Castro and Dulce S. De Castro v. State Farm Fire and Casualty Company

District Court, D. Colorado

• Citations: None known
• Docket Number: 1:25-cv-00535

• Precedential Status: Unknown Status

• Opinion

• Authorities (27)

• Cited By (0)

• Summaries (0)

• Similar Cases (35.8K)

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Trial Court Document

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Judge Philip A. Brimmer

Civil Action No. 25-cv-00535-PAB-CYC

CLAUDIO DE CASTRO, and

DULCE S. DE CASTRO,

Plaintiffs,                                                          

v.

STATE FARM FIRE AND CASUALTY COMPANY,

Defendant.                                                           

                        ORDER                                        

This matter comes before the Court on defendant State Farm Fire and Casualty 

Company’s Motion to Dismiss Plaintiffs’ Amended Complaint Pursuant to F.R.C.P.
12(b)(6) [Docket No. 30]. Plaintiffs filed a response, Docket No. 31, and defendant filed
a reply. Docket No. 32.

I. BACKGROUND1

Plaintiffs Claudio and Dulce De Castro own property at 3969 S Argonne Way,
Aurora, CO 80013 (the “Property”). Docket No. 19 at 3, ¶ 12. Plaintiffs obtained
homeowner’s insurance for the Property from defendant State Farm Fire and Casualty
Company, leading to the creation of an insurance contract (the “Policy”). Id., ¶ 13. On
or about May 10, 2023, while the Policy was in effect, a hail storm caused damage to

1 The facts below are taken from plaintiffs’ amended complaint, Docket No. 19, 

and are presumed to be true, unless otherwise noted, for purposes of ruling on
defendant’s motion to dismiss. Brown v. Montoya, 662 F.3d 1152, 1162 (10th Cir.
2011).

the walls, ceilings, floors, and other items at the Property. Id., ¶ 15. Plaintiffs timely
reported the hail damage to defendant by filing a claim. Id., ¶ 16. Defendant assigned
adjuster Jalen Yocum to the claim. Id. at 3-4, ¶ 17. Mr. Yocum inspected the property
and found covered damage in the amount of $1,890.95. Id. This was less than
plaintiffs’ Policy deductible of $2,680.00. Id. Mr. Yocum sent a letter to plaintiff on May

7, 2024, explaining that because the loss was less than the deductible, no payment
would be made. Id. at 4, ¶ 18. Mr. Yocum also noted that, based upon the site
inspection and investigation, it was determined that there was no accidental direct
physical loss to the dwelling’s roof. Id.

Plaintiffs retained a public adjuster to inspect the property and submitted their
findings to defendant. Id., ¶ 19. Through their public adjuster, plaintiffs provided an
estimate and photos to defendant which showed widespread hail damage to various
parts of the Property, including to the roof. Id., ¶ 20. Plaintiffs estimate that there are
replacement cost damages in the amount of $86,201.42. Id. On or about July 11,

2024, defendant sent another letter claiming that the loss was not covered by the Policy.

Id., ¶ 21. To date, defendant has not paid plaintiffs for the hail damage claim.
On or about May 15, 2024, while the Policy was in effect, a discharge and
overflow of water from the kitchen caused damage to the walls, ceilings, floors, and
other items at the Property. Id. at 5, ¶ 29. Plaintiffs timely reported the water damage
to defendant by filing a claim. Id., ¶ 30. Defendant assigned adjuster Ronald Lee
Denney to the claim. Id., ¶ 31. Mr. Denney inspected the property. Id. Mr. Denney
sent plaintiffs a letter which stated that, through the site inspection and investigation, it
was determined that the predominate cause of loss was related to a failed plumbing
fixture beneath the kitchen sink. Id. at 5-6, ¶ 32. Mr. Denney explained that “this
continued/repeated seepage or leak resulted in deterioration of the kitchen cabinets”
and that damage resulting from this cause is not covered by the Policy. Id. Plaintiffs
retained a private adjuster to inspect the property and submitted those findings to
defendant. Id. at 6, ¶ 35.

Plaintiffs filed this lawsuit on February 20, 2025.  Docket No. 2.  On April 17, 

2025, plaintiffs amended their complaint. Docket No. 19. Plaintiffs bring claims for
breach of contract due to defendant’s denial of insurance coverage for the hail damage
claim and the water damage claim (Claims One and Two). Id. at 7-9, ¶¶ 44-57.

Plaintiffs also bring claims for unreasonable delay or denial of benefits under Colo. Rev.
Stat. §§ 10-3-1113 (3), 1115, and 1116 (Claim Three), and for common law bad faith
(Claim Four). Id. at 9-11, ¶¶ 58-76. Defendant moves to dismiss for failure to state a
claim under Fed. R. Civ. P. 12(b)(6). Docket No. 30.

II. LEGAL STANDARD

To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil

Procedure, a complaint must allege enough factual matter that, taken as true, makes
the plaintiff’s “claim to relief . . . plausible on its face.” Khalik v. United Air Lines, 671
F.3d 1188, 1190 (10th Cir. 2012) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The ‘plausibility’ standard requires that relief must plausibly follow from the
facts alleged, not that the facts themselves be plausible.” RE/MAX, LLC v. Quicken
Loans Inc., 295 F. Supp. 3d 1163, 1168 (D. Colo. 2018) (citing Bryson v. Gonzales, 534
F.3d 1282, 1286 (10th Cir. 2008)). Generally, “[s]pecific facts are not necessary; the
statement need only ‘give the defendant fair notice of what the claim is and the grounds
upon which it rests.’” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam)
(quoting Twombly, 550 U.S. at 555) (alterations omitted). A court, however, does not
need to accept conclusory allegations. See, e.g., Hackford v. Babbit, 14 F.3d 1457,
1465 (10th Cir. 1994) (“[W]e are not bound by conclusory allegations, unwarranted
inferences, or legal conclusions.”).

“[W]here the well-pleaded facts do not permit the court to infer more than the

mere possibility of misconduct, the complaint has alleged—but it has not shown—that
the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (quotations
and alterations omitted); see also Khalik, 671 F.3d at 1190 (“A plaintiff must nudge [his]
claims across the line from conceivable to plausible in order to survive a motion to
dismiss.” (quoting Twombly, 550 U.S. at 570)). If a complaint’s allegations are “so
general that they encompass a wide swath of conduct, much of it innocent,” then
plaintiff has not stated a plausible claim. Khalik, 671 F.3d at 1191 (quotations omitted).

Thus, even though modern rules of pleading are somewhat forgiving, “a complaint still
must contain either direct or inferential allegations respecting all the material elements

necessary to sustain a recovery under some viable legal theory.” Bryson, 534 F.3d at
1286 (alterations omitted).

III. ANALYSIS

A. Breach of Contract

Plaintiffs’ first and second claims allege that defendant breached its contractual
duties under the Policy by refusing to compensate plaintiffs for the losses caused by the
May 10, 2023 hailstorm and May 15, 2024 water damage. Docket No. 19 at 7-9, ¶¶ 44-
57. Under Colorado law, a plaintiff asserting a breach of contract claim must plead four
elements: (1) the existence of a contract; (2) performance by the claimant or some
justification for nonperformance; (3) failure to perform the contract by the defendant;
and (4) resulting damages to the claimant. W. Distrib. Co. v. Diodosio, 841 P.2d 1053,
1058 (Colo. 1992).2 The Court will first analyze the breach of contract claim as to the
May 10, 2023 hailstorm and then will analyze the breach of contract claim as to the May
15, 2024 water damage.

1. Hail Damage Claim

Defendant argues that plaintiffs’ complaint does not plausibly allege what policy

provision defendant violated, that defendant neglected to pay covered hail damage, and
the amount of damages plaintiff was owed. Docket No. 30 at 6-7. The Court interprets
this as an argument that plaintiffs failed to adequately plead the first, third, and fourth
elements of a breach of contract claim.3

When pleading a claim for breach of an insurance contract, “[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)). Thus, in order to survive a motion to dismiss, plaintiffs’ allegations that
damages were covered losses pursuant to the Policy must be supported by reference to

the Policy. See Ryals v. Am. Fam. Ins. Co., S.I., No. 20-cv-02736-NYW, 2021 WL
848195, at *4 (D. Colo. Mar. 5, 2021) (collecting cases). Defendant argues that

2 Both parties assume Colorado law applies in this case.  See generally Docket 

Nos. 30, 31. Accordingly, the Court will apply Colorado law. Grynberg v. Total S.A., 538 F.3d 1336, 1346 (10th Cir. 2008) (“Because the parties’ arguments assume that
Colorado law applies, we will proceed under the same assumption.”).

3 The Court finds that plaintiffs plausibly allege the second element for both
breach of contract claims—performance by the claimant—because plaintiffs state that
they “paid premiums and otherwise performed all conditions precedent to recover
benefits under the contract, i.e. the Policy.” Docket No. 19 at 7-8, ¶¶ 45-52.
plaintiffs did not identify any Policy provision which was breached. Docket No. 30 at 6.

The Court disagrees.

Plaintiffs allege that the Policy’s provisions covered losses to the Property
caused by hail. Docket No. 19 at 3, ¶ 14. While plaintiffs do not provide an exact
citation to the Policy in their complaint, they quote defendant’s adjuster’s letter, which

states: “Your homeowners policy provides coverage for accidental direct physical loss to
your structure.” Id. at 4, ¶ 18. These allegations plausibly establish that the Policy
covers accidental direct physical loss caused by hail damage. Moreover, defendant
concedes that the Policy “covers accidental and direct physical loss to the insured
property that is not otherwise excluded.” Docket No. 30 at 7 (citing Docket No. 2-2 at
33). Thus, plaintiffs have sufficiently pled the first element of their first breach of
contract claim—that a contract exists.

Defendant argues that plaintiffs have not plausibly alleged that State Farm
overlooked or ignored covered hail damage when adjusting the hail claim. Id. The

complaint, however, alleges that plaintiffs retained a public adjuster to inspect the
Property. Docket No. 19 at 4, ¶ 19. The complaint further alleges that the public
adjuster found and photographed “widespread hail damage” to various parts of the
Property, including widespread hail damage to the roof. Id., ¶ 20. Plaintiffs estimate
replacement cost damages in the amount of $86,201.42. Id. The complaint alleges that
plaintiffs sent the public adjuster’s findings to defendant, but that defendant has
nevertheless refused to cover the claim. Id., ¶¶ 20, 22. Thus, plaintiffs plausibly allege
that there is widespread hail damage to the Property, causing $86,201.42 worth of
covered damages, which defendant has refused to cover. The Court finds that plaintiffs
have sufficiently pled the third element of their first breach of contract claim—that
defendant failed to perform under the contract.4

Finally, defendant argues that plaintiffs fail to identify the amounts covered by the
Policy. Docket No. 30 at 7. But the complaint alleges that “Plaintiffs currently estimate
covered damages in the amount of $86,201.42 in replacement cost damages.” Docket

No. 19 at 4, ¶ 20 (emphasis added). Thus, plaintiffs do state the amount owed.

Accordingly, plaintiffs have sufficiently pled the fourth element of their first breach of
contract claim—that defendant’s failure to perform under the contract caused damages.

4 Defendant attaches to its motion State Farm’s July 11, 2024 denial letter, which 

states that the inspection revealed no accidental direct physical loss resulting from hail
to the roofing shingles. Docket No. 30 at 5; Docket No. 30-1. Rather, the inspection
revealed loss from wear and tear, which is not covered by the Policy. Docket No. 30 at
5; Docket No. 30-1 at 1-2. While the complaint references the July 11, 2024 denial
letter, it is not attached as an exhibit. Docket No. 19 at 4, ¶ 18. Generally, a court
should not consider evidence beyond the pleadings when ruling on a 12(b)(6) motion,
Waller v. City & Cnty. of Denver, 932 F.3d 1277, 1282 (10th Cir. 2019), and, if the court
does so, “the motion must be treated as one for summary judgment under Rule 56.”
Fed. R. Civ. P. 12(d). The Tenth Circuit, however, has recognized a “limited exception”
to this rule: the “district court may consider documents referred to in the complaint if the
documents are central to the plaintiff’s claim and the parties do not dispute the
documents’ authenticity.” Waller, 932 F.3d at 1282; see also GFF Corp. v. Associated
Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997) (recognizing that “if a
plaintiff does not incorporate by reference or attach a document to its complaint, but the
document is referred to in the complaint and is central to the plaintiff’s claim, a
defendant may submit an indisputably authentic copy to the court to be considered on a
motion to dismiss”). A court has “broad discretion in determining whether or not to
accept materials beyond the pleadings.” Lowe v. Town of Fairland, 143 F.3d 1378, 1381 (10th Cir. 1998). The July 11, 2024 denial letter is not central to the complaint and, at
best, would simply create a conflict of fact. The existence of conflicting evidence,
however, does not warrant dismissal of a complaint under Rule 12(b)(6). Plaintiffs need
only allege enough factual matter that, taken as true, makes their “claim to relief . . .
plausible on its face.” Khalik, 671 F.3d at 1190 (citing Twombly, 550 U.S. at 570).

Thus, the Court declines to consider the July 11, 2024 denial letter in ruling on the
motion to dismiss.

Plaintiffs have therefore stated a claim for breach of contract as to their hail damage
claim.

2. Water Damage Claim

The Court finds that plaintiffs fail to state a breach of contract claim as to the May
15, 2024 water damage occurrence. Plaintiffs plausibly allege that the Policy covers
water damage, stating that “a sudden discharge and overflow of water damages are

covered perils under the Policy.” Id. at 5, ¶ 30. However, plaintiffs do not plausibly
allege the third element of a breach of contract claim—that defendant failed to perform
under the contract. In the complaint, plaintiffs allege that defendant’s adjuster explained
that the site inspection revealed that the “predominate cause of loss is related to a failed
plumbing fixture beneath your kitchen sink, this continued/repeated seepage or leak
resulted in deterioration of the kitchen cabinets. Damage resulting from this case of
loss is not covered by your policy.” Id. at 5-6, ¶ 32.

The complaint alleges that plaintiffs retained a public adjuster to inspect the
Property regarding the water damage claim and that the public adjuster provided an
estimate and photos to defendant. Id. at 6, ¶¶ 34-35. Unlike the hail damage claim,

however, the complaint alleges no facts suggesting that defendant’s reason for denying
the water damage claim was unjustified. Instead, the complaint merely makes a
conclusory allegation that “[d]efendant has provided no reasonable basis for denying
the Plaintiffs’ water damages.” Id., ¶ 36. The Court need not accept conclusory
allegations as true. See Hackford, 14 F.3d at 1465. Moreover, the complaint alleges
that defendant “failed to perform an adequate investigation,” but alleges no supporting
facts as to how defendant’s investigation was inadequate. Docket No. 19 at 6, ¶ 38.

Thus, plaintiffs have not plausibly alleged that defendant failed to perform under the
Policy, and have therefore failed to state a claim for breach of contract as to the water
damage claim.

B. Statutory Bad Faith

Pursuant to Colo. Rev. Stat. § 10-3-1115, an insurer may not “unreasonably
delay or deny payment of a claim for benefits owed to or on behalf of any first-party

claimant.” Colo. Rev. Stat. § 10-3-1115 (1)(a). To prevail on a statutory bad faith claim,
plaintiffs must show that “(1) benefits were owed under the policy; and (2) defendant
unreasonably delayed or denied payment of plaintiff's claim.” TBL Collectibles, Inc. v.
Owners Ins. Co., 285 F. Supp. 3d 1170, 1201 (D. Colo. 2018). An insurer’s conduct is
unreasonable “if the insurer delayed or denied authorizing payment of a covered benefit
without a reasonable basis for that action.” Colo. Rev. Stat. § 10-3-1115 (2). The
determination of whether an insurer has breached its duties to the insured is one of
reasonableness under the circumstances. Estate of Morris v. COPIC Ins. Co., 192 P.3d
519, 523 (Colo. App. 2008). Acting “without a reasonable basis” has been construed to
mean pursuing a groundless position that is not supported by credible evidence.

Cooper v. Shelter Gen. Ins. Co., 653 F. Supp. 3d 873, 878 (D. Colo. 2023) (quoting
Masters v. Safeco Ins. Co. of Am., No. 20-cv-00631-PAB-NRN, 2021 WL 4326269, at
*5 (D. Colo. Sept. 23, 2021)). The question is whether a reasonable insurer under
similar circumstances would have denied or delayed payment of the claim. Estate of
Morris, 192 P.3d at 523.

The Court finds that plaintiffs plausibly allege a statutory bad faith claim as to hail
damage. As explained above, the complaint plausibly alleges that defendant breached
the policy by denying plaintiffs’ hail damage claim. The complaint alleges two grounds
for defendant’s bad faith denial. First, the complaint alleges that defendant’s adjuster
initially found covered hail damage in the amount of $1,890.95.5 Docket No. 19 at 3-4,
¶ 17. However, the complaint alleges that defendant subsequently sent a letter claiming
that there was no loss which was covered by the Policy. Id. at 4, ¶ 21. The complaint
alleges that defendant refused to reconsider its position. Id. at 5, ¶ 24. Next, the
complaint alleges that defendant’s adjuster, on reinspection, found no hail damage,

whereas plaintiffs’ public adjuster found widespread hail damage. Id. at 4, ¶¶ 18-20.

The complaint alleges that defendant failed to explain why the widespread hail damage
was not covered under the Policy. Id., ¶ 23. Ignoring widespread hail damage without
explaining why it is not covered under the Policy constitutes a plausible allegation that
defendant denied plaintiffs’ claims without a reasonable basis. Thus, plaintiffs have
sufficiently stated a cause of action for statutory bad faith as to the hail damage claim.
The Court finds, however, that plaintiffs have not stated a cause of action for
statutory bad faith as to the water damage claim. As noted above, plaintiffs have failed
to plausibly allege that they are entitled to benefits under the Policy for the water

damage claim. Thus, plaintiffs’ statutory bad faith claim fails. See Edge Construction,
LLC v. Owners Ins. Co., No. 14-cv-00912-MJW, 2015 WL 4035567, at *6 (D. Colo. June
29, 2015) (“[I]n order to prevail on its statutory unreasonable delay/denial claim,
[plaintiff] first has to prove entitlement to benefits.”); see also MarkWest Hydrocarbon,
Inc. v. Liberty Mut. Ins. Co., 558 F.3d 1184, 1192–93 (10th Cir. 2009) (“It is settled law
in Colorado that a bad faith claim must fail if ... coverage was properly denied and
the plaintiff's only claimed damages flowed from the denial of coverage.”).

5 The complaint alleges that defendant did not cover that loss because it was 

less than plaintiffs’ $2,680 policy deductible. Docket No. 19 at 3-4, ¶ 17.
Moreover, the complaint’s allegations that defendant acted unreasonably as to
plaintiffs’ water damage claim are conclusory. The complaint alleges that “Defendant’s
bad faith conduct in this matter includes, without limitation, its inadequate,
unreasonable, and improper investigation of Plaintiffs[’] insurance claims, its partial
denial of Plaintiffs’ insurance claims, and its unsubstantiated coverage decision that

forced Plaintiffs to pursue litigation to recover for legitimate claims.” Docket No. 19 at 7,
¶ 41. The complaint, however, does not allege facts supporting that defendant’s
investigation was inadequate, unreasonable and improper. Furthermore, as explained
above, plaintiffs do not explain why they are entitled to coverage for the water damage
claim under the policy or why defendant’s coverage decision was unsubstantiated.

Thus, plaintiffs have failed to plead nonconclusory allegations that defendant acted
without a reasonable basis when denying plaintiffs’ water damage claim. Conclusory
allegations are insufficient to state claims for bad faith. See Ryals, 2021 WL 848195, at
*7-8; Musel Master, LLC v. Am. Fam. Mut. Ins. Co., No. 18-cv-2725-RBJ, 2019 WL

9244886, at *3-4 (D. Colo. June 24, 2019). Accordingly, the Court will dismiss the
statutory bad faith claim to the extent it relates to the water damage claim.
C. Common Law Bad Faith

Lastly, plaintiffs bring a common law bad faith claim, alleging that defendant
unreasonably delayed or denied benefits to plaintiff with knowledge or in reckless
disregard of the unreasonableness of its actions. Docket No. 19 at 10-11, ¶¶ 67-76.
To prevail on a claim for bad faith delay or denial of insurance benefits under
Colorado common law, a plaintiff must establish that her insurer (1) acted unreasonably
under the circumstances; and (2) knew of, or had reckless disregard for, the
unreasonableness of its actions. Goodson v. Am. Standard Ins. Co. of Wisc., 89 P.3d
409, 415 (Colo. 2004). “The only element at issue in the statutory claim is whether an
insurer denied benefits without a reasonable basis.” Cooper, 653 F. Supp. 3d at 878
(alterations omitted) (quoting Williams v. Owners Insurance Co., 621 F. App’x 914, 919 (10th Cir. 2015) (unpublished)). “By contrast, to prove a first-party claim of common law
bad faith, a plaintiff must show not only that the insurer's conduct in processing or

denying a valid claim was unreasonable but also that the insurer knew its conduct was
unreasonable or recklessly disregarded the unreasonableness of its conduct.” Id. (citing
Travelers Insurance Co. v. Savio, 706 P.2d 1258, 1275–76 (Colo. 1985)). “Accordingly,
a claim of common law bad faith imposes a more exacting standard of proof than a
statutory claim.” Id. (citation omitted)); Kisselman v. Am. Family Mut. Ins. Co., 292 P.3d
964, 975 (Colo. App. 2011) (the “burden of proving th[e] statutory claim is less onerous
than that required to prove a claim under the common law for breach of the duty of good
faith and fair dealing”).

As explained when analyzing the statutory bad faith claim, the complaint

plausibly alleges that defendant acted unreasonably when denying plaintiffs’ hail
damage claim. Thus, plaintiffs have satisfied the first element of a common law bad
faith claim. The complaint also plausibly alleges that defendant had either knowledge or
reckless disregard for the unreasonableness of its actions. Specifically, the complaint
alleges that, through plaintiffs’ public adjuster, plaintiffs sent photographs of widespread
hail damage to the Property, along with an estimate for covered damages in the amount
of $86,201.42. Docket No. 19 at 4, ¶ 20. However, despite having received those
photographs and estimates, the complaint alleges that defendant denied coverage
under the Policy. Id., ¶ 23. Because the complaint alleges that defendant had
knowledge of widespread hail damage to the roof, the complaint plausibly alleges that
defendant acted in reckless disregard of the hail damage when denying plaintiffs’ claim.

Moreover, the complaint alleges that defendant claimed there was no covered hail
damage under the Policy even though defendant initially found some covered damage.

Id., ¶¶ 18, 21. Therefore, plaintiffs have plausibly alleged a common law bad faith claim

as to the hail damage claim.

The Court finds that the complaint does not plausibly allege that defendant acted
unreasonably when denying their water damage claim. Therefore, plaintiffs have not
met the first element of common law bad faith as to the water damage claim. The Court
will dismiss the common law bad faith claim to the extent it relates to the water damage
claim.

D. Leave to Amend

Plaintiffs argue in their response that, “should the Court determine that any of the
above outlined claims are somehow insufficiently pled, Plaintiffs respectfully request
and should be granted leave to amend any such deficient claims.” Docket No. 31 at 9.

Pursuant to the Local Rules, “[a] motion shall not be included in a response or 

reply to the original motion. A motion shall be filed as a separate document.”

D.C.COLO.LCivR 7.1(d). The Local Rules also require a party seeking to file an
amended pleading to attach the proposed amended pleading. D.C.COLO.LCivR
15.1(b). Plaintiff did not do so. The Tenth Circuit recognizes “the importance of Fed. R.
Civ. P. 7(b) and ha[s] held that normally a court need not grant leave to amend when a
party fails to file a formal motion.” Calderon v. Kan. Dep’t of Soc. & Rehab. Servs., 181
F.3d 1180, 1186 (10th Cir. 1999); see also Barnett v. Hall, Estill, Hardwick, Gable,
Golden & Nelson, P.C., 956 F.3d 1228, 1236 (10th Cir. 2020) (“[C]ases are not to be
litigated piecemeal. The court should not have to address repeated “improvements” to
the complaint. When a party faces a motion to dismiss and it believes that it can
overcome objections with an amendment to the pleading, it should seek leave to amend
at that time.”); Johnson v. Spencer, 950 F.3d 680, 721 (10th Cir. 2020) (“A district court
may deny leave to amend when a plaintiff fails to file a written motion and instead

merely suggest[s] she should be allowed to amend if the court conclude[s] her
pleadings [a]re infirm.” (quotations omitted; alteration in original); Albers v. Bd. of Cnty.
Comm’rs, 771 F.3d 697, 706 (10th Cir. 2014) (affirming prejudicial dismissal and denial
of request to amend made in response to motion to dismiss without formal motion);
Burnett v. Mortg. Elec. Registration Sys., Inc., 706 F.3d 1231, 1238 n.4 (10th Cir. 2013)
(“Where a plaintiff does not move for permission to amend the complaint, the district
court commits no error by not granting such leave.”). Accordingly, requesting leave to
amend in a response to a motion to dismiss is improper, and the Court will deny the
request.

However, the Court will dismiss plaintiffs’ second claim for relief, as well as 

plaintiffs’ statutory and common law bad faith claims to the extent they relate to the
water damage claim, without prejudice. “Generally, the dismissal of claims under Rule
12(b)(6) should be without prejudice.” Bereznak v. Arrow Elecs., Inc., No. 23-cv-01318-
DDD-JPO, 2024 WL 4268588, at *10 (D. Colo. Aug. 12, 2024), report and

recommendation adopted, 2024 WL 4267882 (D. Colo. Sept. 20, 2024) (citation
omitted). “However, dismissal with prejudice is appropriate ‘if it would be futile to allow
the plaintiff an opportunity to amend.’” Id. (quoting Serna v. Denver Police Dep’t, 58
F.4th 1167, 1172 (10th Cir. 2023)). Here, plaintiffs could potentially plead facts which
plausibly allege that they are entitled to coverage for the water damage claim, and that
denying such a claim was in bad faith. Plaintiffs, however, have failed to do so at this
stage.
IV. CONCLUSION
Therefore, it is
ORDERED that State Farm Fire and Casualty Company's Motion to Dismiss
Plaintiffs’ Amended Complaint Pursuant to F.R.C.P. 12(b)(6) [Docket No. 30] is
GRANTED in part and DENIED in part. It is further
ORDERED that plaintiffs’ second claim for relief is DISMISSED without
prejudice. It is further
ORDERED that plaintiffs’ third claim for relief is DISMISSED without prejudice
to the extent it relates to the water damage claim. It is further
ORDERED that plaintiffs’ fourth claim for relief is DISMISSED without prejudice
to the extent it relates to the water damage claim.

DATED March 13, 2026.
BY THE COURT:
a of
PHILIP A. BRIMMER
United States District Judge

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