D.R. Horton, Inc. v. Travelers Indem. Co. of Am.

• Decision Date: 14 March 2012
• Docket Number: Civil Action No. 10–cv–02826–WJM–KMT.
• Citation: 860 F.Supp.2d 1246
• Court: U.S. District Court — District of Colorado
• Parties: D.R. HORTON, INC.-DENVER d/b/a Trimark Communities, a Delaware corporation, and D.R. Horton, Inc., a Delaware corporation, Plaintiffs, v. The TRAVELERS INDEMNITY COMPANY OF AMERICA, a Connecticut corporation, Travelers Indemnity Company, a Connecticut corporation, Travelers Indemnity Company of Connecticut, a Connecticut corporation, St. Paul Fire and Marine Insurance Company, a Minnesota corporation, and Charter Oak Fire Insurance Company, a Connecticut corporation, Defendants/Third–Party Plaintiffs, v. AAA Waterproofing, Inc., a Colorado Corporation, Admiral Insurance Company, a Delaware Corporation, American International Specialty Lines Insurance Company, a New York Corporation, Ark Construction Services, Inc., a dissolved Colorado Corporation, C & C Seamless Gutter Company, was a trade name of Williams Consolidated I Ltd., a Texas corporation, Concrete Management Corporation, a Colorado Corporation, D.A.S.H. Concrete, Inc., a Colorado Corporation, Dove Creek Enterprises, Inc., a Colorado Corporation, Foster Frames, Inc., a Colorado Corporation, J & K Pipeline, Inc., a Colorado Corporation, Jorge Romero, d/b/a Specialist Paint, Level Masonry, Inc., a dissolved Colorado Corporation, Mid–Century Insurance, a California Corporation, National Union Fire Insurance Company of Pittsburgh, PA, a Pennsylvania Corporation, Proto Construction And Paving, Inc., a Colorado Corporation, R.G. Insulation Co., Inc., is a trade name of G.H. & W, Incorporated, a Missouri Corporation, TIG Insurance, a California Corporation, The Cooler Company, a Colorado Corporation, Tri–Star Drywall, Inc., a Colorado Corporation, WB Landscaping, Inc., a dissolved Colorado Corporation, and Zurich Specialties London, Ltd., a non-incorporated re-insurer, Third–Party Defendants.

860 F.Supp.2d 1246

D.R. HORTON, INC.-DENVER d/b/a Trimark Communities, a Delaware corporation, and D.R. Horton, Inc., a Delaware corporation, Plaintiffs,

v.The TRAVELERS INDEMNITY COMPANY OF AMERICA, a Connecticut corporation, Travelers Indemnity Company, a Connecticut corporation, Travelers Indemnity Company of Connecticut, a Connecticut corporation, St. Paul Fire and Marine Insurance Company, a Minnesota corporation, and Charter Oak Fire Insurance Company, a Connecticut corporation, Defendants/Third–Party Plaintiffs,

v.AAA Waterproofing, Inc., a Colorado Corporation, Admiral Insurance Company, a Delaware Corporation, American International Specialty Lines Insurance Company, a New York Corporation, Ark Construction Services, Inc., a dissolved Colorado Corporation, C & C Seamless Gutter Company, was a trade name of Williams Consolidated I Ltd., a Texas corporation, Concrete Management Corporation, a Colorado Corporation, D.A.S.H. Concrete, Inc., a Colorado Corporation, Dove Creek Enterprises, Inc., a Colorado Corporation, Foster Frames, Inc., a Colorado Corporation, J & K Pipeline, Inc., a Colorado Corporation, Jorge Romero, d/b/a Specialist Paint, Level Masonry, Inc., a dissolved Colorado Corporation, Mid–Century Insurance, a California Corporation, National Union Fire Insurance Company of Pittsburgh, PA, a Pennsylvania Corporation, Proto Construction And Paving, Inc., a Colorado Corporation, R.G. Insulation Co., Inc., is a trade name of G.H. & W, Incorporated, a Missouri Corporation, TIG Insurance, a California Corporation, The Cooler Company, a Colorado Corporation, Tri–Star Drywall, Inc., a Colorado Corporation, WB Landscaping, Inc., a dissolved Colorado Corporation, and Zurich Specialties London, Ltd., a non-incorporated re-insurer, Third–Party Defendants.

Civil Action No. 10–cv–02826–WJM–KMT.

United States District Court,

D. Colorado.

March 14, 2012.

Patrick John Kanouff, Scott Warren Wilkinson, Davis & Ceriani, P.C., Denver, CO, for Plaintiffs.

Laura Trask Schneider, Nancy L. Pearl, Miletich Pearl, LLC, Denver, CO, for Defendants/Third–Party Plaintiffs.

Melissa A. Ogburn, Lasater & Martin, P.C., Highlands Ranch, CO, Jon F. Sands, William Blair Stanton, Sweetbaum Sands Anderson, P.C., Gregg S. Rich, Lambdin & Chaney, LLP, David Edward Kay, Tiffanie Dee Stasiak, Kutak Rock, LLP, Benjamin Elwood Tracy, Justin Michael Curry, Michael Robert Lancto, Nathan, Bremer, Dumm & Myers, PC, Andrew D. Peterson, Rachel Ann Morris, Wood, Ris & Hames, P.C., Colin C. Campbell, Campbell, Latiolais & Ruebel, P.C., Cathleen Hopfe Heintz, Michael Allen Paul, Hall & Evans, LLC, James K. Green, John T. Mauro, Markusson, Green & Jarvis, P.C., Bruce Norman Shibles, Joel N. Varnell & Associates, Suanne Marie Dell, Wells, Anderson & Race, LLC, Denver, CO, Jeffrey A. Goldwater, Robert Craig Thurston, Lewis Brisbois Bisgaard & Smith, LLP, Chicago, IL, Bolor Nyamaa, Bradley N. Shefrin, Pryor Johnson Carney Karr Nixon, P.C., Marc Robert Levy, Matthew Wesley Hall, Levy Wheeler & Waters, P.C., Ginger L. Giles, Jane E. Young, McElroy Deutsch Mulvaney & Carpenter, LLP, Greenwood Village, CO, for Third–Party Defendants.

ORDER ON CERTAIN THIRD–PARTY DEFENDANTS' MOTIONS TO DISMISS AND MOTIONS FOR SUMMARY JUDGMENT, AND THIRD–PARTY PLAINTIFFS' MOTION TO STRIKE

WILLIAM J. MARTINEZ, District Judge.

This matter is before the Court on:

(1) Motions to Dismiss filed by Third–Party Defendants TIG Insurance (ECF No. 58), Foster Frames, Inc. (ECF No. 60), Level Masonry, Inc. (ECF No. 129), Jorge Romero d/b/a Specialist Paint (ECF No. 159), and R.G. Insulation Co., Inc. (ECF No. 171). These Motions seek dismissal of the claims brought against these Third–Party Defendants by Defendants/Third–Party Plaintiffs The Travelers Indemnity Company of America, Travelers Indemnity Company, Travelers Indemnity Company of Connecticut, St. Paul Fire and Marine Insurance Company, and Charter Oak Fire Insurance Company (collectively, the “Travelers Defendants”);

(2) A motion to strike filed by the Travelers Defendants (ECF No. 160), which asks the Court to strike the Motion to Dismiss filed by Level Masonry, Inc.; and

(3) Motions for Summary Judgment filed by Third–Party Defendants AAA Waterproofing, Inc. (ECF Nos. 100) and Mid–Century Insurance (ECF No. 107). These Motions seek summary judgment on the claims brought against these Third–Party Defendants by the Travelers Defendants.¹

These motions are ripe for adjudication. ( See also ECF Nos. 93, 94, 98, 114, 121, 126, 140, 157, 158, 161, 165, 166, 185, 186, 187, 188, 200.)

I. BACKGROUND²

In 1999 or 2000, Plaintiff D.R. Horton, Inc.-Denver d/b/a Trimark Communities ³ was engaged as the general contractor for the construction of a residential community known as the Summit at Rock Creek located in Boulder County, Colorado (the “Project”). D.R. Horton engaged a number of subcontractors to perform certain construction work on the Project. The subcontracts between D.R. Horton and the subcontractors required each of the subcontractors to carry a commercial general liability insurance policy (“CGL policy”) naming D.R. Horton as an additional insured. (ECF No. 30, ¶ 34.) The Travelers Defendants are five insurers who collectively insured four of the subcontractors under such CGL policies. ( Id. ¶¶ 3–7.) The Third–Party Defendants brought into this action by the Travelers Defendants are either subcontractors who worked on the Project, insurers of subcontractors, or D.R. Horton's own insurers. ( Id. ¶¶ 8–28.)

On February 3, 2003, the homeowners association for the Summit at Rock Creek (the “HOA”) brought suit against D.R. Horton in state court based on alleged construction defects associated with the Project (“Construction Defects Litigation”). ( Id. ¶ 29.) D.R. Horton tendered the defense of the Construction Defects Litigation to all of the subcontractors that had worked on the Project. ( Id. ¶ 32.) On February 12, 2004, D.R. Horton filed a Third–Party Complaint in that litigation against the subcontractors, alleging that (1) the construction defects were caused by the subcontractors, (2) some of the subcontractors failed to obtain CGL policies or failed to name D.R. Horton as an additional insured under their CGL policies; and (3) the subcontractors are liable for the defense attorney's fees and costs incurred by D.R. Horton in defending the Construction Defects Litigation. ( Id. ¶¶ 37–39.) D.R. Horton ultimately settled the Construction Defects Litigation with the HOA for $39.5 million. ( Id. ¶ 40.) D.R. Horton incurred approximately $1.24 million in fees and costs defending the Construction Defects Litigation. ( Id. ¶ 42.)

D.R. Horton continued to pursue its third party claims against the subcontractors. ( Id. ¶ 41.) The success vel non of many of those claims is not entirely clear, although the record does indicate that D.R. Horton reached settlements with at least some of the subcontractors.

On October 20, 2010, D.R. Horton filed this action against the Travelers Defendants in Colorado District Court, Jefferson County, bringing four claims for relief: (1) declaratory judgment; (2) breach of contract; (3) bad faith breach of insurance contract; and (4) deceptive trade practices. (ECF No. 1–1.) In short, D.R. Horton's Complaint alleges that, although the Travelers Defendants purported to accept D.R. Horton's tender of the defense of the ConstructionDefects Litigation, the Travelers Defendants delayed payment of D.R. Horton's defense fees and costs, and ultimately made inadequately low payments to D.R. Horton for those fees and costs. ( Id.) On November 19, 2010, the Travelers Defendants removed the action to this Court on the basis of diversity jurisdiction (28 U.S.C. § 1332). (ECF No. 1.)

On April 4, 2011, the Travelers Defendants filed a Third–Party Complaint against certain subcontractors who worked on the Project, insurers of certain subcontractors, and D.R. Horton's own insurers. (ECF No. 30.) In short, the Travelers Defendants allege that, in this action, D.R. Horton is attempting to recover from the Travelers Defendants more than the Travelers Defendants' equitable share of D.R. Horton's defense fees and costs. ( Id. ¶ 70.) The Travelers Defendants allege that: (1) the Third–Party Defendants are liable for their own equitable share of D.R. Horton's defense fees and costs, and (2) the Third–Party Defendants should be required to compensate the Travelers Defendants for any liability the Travelers Defendants incur in excess of their own equitable share of D.R. Horton's defense fees and costs. ( Id. ¶¶ 71–86.) The Travelers Defendants bring claims against the Third–Party Defendants for equitable subrogation, contractual subrogation, equitable contribution, and declaratory judgment. ( Id. ¶¶ 71–89.)

The pending Motions to Dismiss are brought under Federal Rule of Civil Procedure 12(b)(6), while the Motions for Summary Judgment are, of course, brought under Federal Rule of Civil Procedure 56.

II. LEGAL STANDARDS

A. Motions to Dismiss Under Fed.R.Civ.P. 12(b)(6)

Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a claim in a complaint for “failure to state a claim upon which relief can be granted.” In evaluating such a motion, a court must “assume the truth of the plaintiff's well-pleaded factual allegations and view them in the light most favorable to the plaintiff.” Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir.2007). In ruling on such a motion, the dispositive inquiry is “whether the complaint contains ‘enough facts to state a claim to relief that is plausible on its face.’ ” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Granting a motion to dismiss “is a harsh remedy which must be cautiously studied, not only to effectuate the spirit of the liberal rules of pleading but also to protect the interests of justice.” Dias v. City & Cnty. of Denver, 567 F.3d 1169, 1178 (10th Cir.2009) (quotation marks...