Hartford Cas. Ins. Co. v. Samuel Eng'g, Inc.
Decision Date | 12 March 2014 |
Docket Number | Civil Action No. 13-cv-00594-REB-KMT |
Parties | HARTFORD CASUALTY INSURANCE COMPANY, an Indiana corporation, Plaintiff, v. SAMUEL ENGINEERING, INC., a Colorado corporation, Defendant. |
Court | U.S. District Court — District of Colorado |
This matter is before me on the following: (1) Plaintiff/Counterclaim Defendant Hartford Casualty Insurance Company's Motion for Summary Judgment [#20]1 filed July 22, 2013; and (2) Samuel Engineering Inc.'s Cross-Motion for Determination of Law [#21] filed July 22, 2013. Both parties filed responses [#22], and [#23] and the plaintiff filed a notice of supplemental authorities [#27]. I deny the motion filed by Hartford and grant the motion filed by Samuel Engineering.2
I have jurisdiction over this case under 28 U.S.C. § 1332 (diversity). The plaintiffasserts claims under the common law of the state of Colorado. Colorado law controls the resolution of the substantive issues in this diversity case. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 78 (1938); Royal Maccabees Life Insurance Co. v. Choren, 393 F.3d 1175, 1180 (10th Cir. 2005). Federal law controls procedural issues. See, e.g., Sims v. Great American Life Ins. Co., 469 F.3d 870, 877 (10th Cir. 2006).
Summary judgment is proper when there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A dispute is "genuine" if the issue could be resolved in favor of either party. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Farthing v. City of Shawnee, 39 F.3d 1131, 1135 (10th Cir. 1994). A fact is "material" if it might reasonably affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Farthing, 39 F.3d at 1134.
A party who does not have the burden of proof at trial must show the absence of a genuine fact issue. Concrete Works, Inc. v. City & County of Denver, 36 F.3d 1513, 1517 (10th Cir. 1994), cert. denied, 115 S.Ct. 1315 (1995). Once the motion has been properly supported, the burden shifts to the nonmovant to show, by tendering depositions, affidavits, and other competent evidence, that summary judgment is not proper. Concrete Works, 36 F.3d at 1518. All the evidence must be viewed in the light most favorable to the party opposing the motion. Simms v. Oklahoma ex rel Department of Mental Health and Substance Abuse Services, 165 F.3d 1321, 1326(10th Cir.), cert. denied, 120 S.Ct. 53 (1999). However, conclusory statements and testimony based merely on conjecture or subjective belief are not competent summary judgment evidence. Rice v. United States, 166 F.3d 1088, 1092 (10th Cir.), cert. denied, 120 S.Ct. 334 (1999); Nutting v. RAM Southwest, Inc., 106 F.Supp.2d 1121, 1123 (D. Colo. 2000).
This case hinges on an interpretation of two Hartford insurance policies to determine if Hartford has a duty to defend the defendant in two other lawsuits. In this diversity action, Colorado law provides the principles by which the policies must be interpreted. Leprino Foods Co. v. Factory Mut. Ins. Co., 453 F.3d 1281, 1287 (10th Cir. 2006).
Under Colorado law, insurance contracts are to be construed in accordance with the general laws of contracts. Federal Deposit Ins. Corp. v. American Casualty Co., 843 P.2d 1285, 1289 (Colo. 1992); Marez v. Dairyland Ins. Co., 638 P.2d 286, 288 - 289 (Colo. 1981), overruled on other grounds, Friedland v. Travelers Indem. Co., 105 P.3d 639, 642-643 (Colo. 2005). An insurance contract must be interpreted according to the plain and ordinary meaning of its language. Kellogg v. Metro. Life Ins. Co., 549 F.3d 818, 829 (10th Cir. 2008); Chacon v. American Family Mut. Ins. Co., 788 P.2d 748, 750 (Colo. 1990). When the language used in a contract is plain and its meaning is clear, the agreement must be enforced as written. In re May, 756 P.2d 362, 368 (Colo. 1998); Fire Ins. Exch. v. Rael by Rael, 895 P.2d 1139, 1142 (Colo. App. 1995).
Courts should be wary of rewriting contract provisions and should give the wordscontained in the contract their plain and ordinary meaning, unless contrary intent is evidenced within the contract itself. See, e.g., Lovell v. State Farm Mut. Auto. Ins. Co., 466 F.3d 893, 902 (10th Cir. 2006) ( )(citations omitted); Cyprus Amax Materials Co. v. Lexington Ins. Co., 74 P.3d 294, 299 (Colo. 2003) ( ). Courts may neither add provisions to extend coverage beyond that contracted nor delete provisions to limit coverage. Cyprus Amax, 74 P.3d at 299. When interpreting a policy's provisions, a court's construction "must be fair, natural, and reasonable rather than strained and strictly technical." Massingill v. State Farm Mut. Auto. Ins. Co., 176 P.3d 816, 825 (Colo.App. 2007) (citing Pub. Serv. Co. v. Wallis & Cos., 986 P.2d 924, 939 (Colo. 1999)).
When an insurance company seeks to limit or exclude coverage under the terms of an insurance policy, the insurer bears the burden or proving that a particular loss falls within an exclusion in the contract. Colorado Intergovernmental Risk Sharing Agency v. Northfield Ins. Co., 207 P.3d 839, 842 (Colo. App. 2008). If a limitation or exclusion in an insurance contract is unambiguous, then that limitation or exclusion must be enforced. Id.
In a dispute concerning an insurer's duty to defend against a claim asserted against its insured in a civil suit, Colorado applies the "complaint rule." This rule provides that the allegations of the relevant complaint against the insured, together with the language of the relevant insurance policy, provide the bases for evaluating whether an insurer has a duty to defend. Lopez v. American Family Mut. Ins. Co.,148 P.2d 438, 439 (Colo. App. 2006); Cotter v. American Empire Sur. Lines, Ins. Co., 90 P.3d 814 (Colo. 2004).
We have long held that to determine whether a duty to defend exists, courts must look no further than the four corners of the underlying complaint (the "four corners" or "complaint" rule). See Hecla Mining Co. v. N.H. Ins. Co., 811 P.2d 1083, 1089 (Colo.1991). An insurer is not excused from this duty "unless there is no factual or legal basis on which the insurer might eventually be held liable to indemnify the insured." Id. at 1090. Hence, if the alleged facts even potentially trigger coverage under the policy, the insurer is bound to provide a defense. Constitution Assoc. [v. N.H. Ins. Co., 930 P.2d [556, 563 (Colo 1986)]; Hecla, 811 P.2d at 1089.
Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294, 299 (Colo. 2003).
Hecla Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083, 1089 - 1090 (Colo. 1991) (internal quotations, citations, and footnote omitted).
III. FACTS
In December 2009, the defendant, Samuel Engineering, Inc., was working on the expansion of the Sifto salt mine in Ontario, Canada. Included in the project was thedesign and construction of a salt storage facility known as Dome #5. On December 10, 2009, during high winds, the partially constructed Dome #5 catastrophically failed and collapsed. As a result of the collapse of Dome #5, Samuel is named as a defendant in two lawsuits filed in December 2011 in the Ontario Superior Court of Justice, Toronto, Ontario (the Canadian Litigation).
Samuel tendered the claims in the Canadian Litigation to CNA, its professional liability insurer. CNA issued a reservation of rights letter and appointed defense counsel for Samuel, but declined to pay for defense costs until Samuel meets its 250,000 dollar deductible.
Samuel then tendered the claims against Samuel in the Canadian Litigation to plaintiff, Hartford Casualty Insurance Company. Hartford had issued commercial general liability insurance policies to Samuel. Hartford is defending Samuel in the Canadian cases under a reservation of rights. In the present case, Hartford seeks declaratory judgments concerning coverages under the Hartford policies.
In its motion for summary judgment, Hartford seeks judgment on its third claim for relief. In that claim, Hartford seeks a judgment declaring that Hartford does not have a duty to defend or a duty to indemnify Samuel on the claims asserted against Samuel in the Canadian Litigation.
Hartford issued two commercial general liability insurance policies to Samuel, effective from January 5, 2009, through ...
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