947 F.3d 642
10th Cir.2020Background
- Marlena Whicker, living with but not related to the vehicle owner, rear‑ended a taxi in Aurora, Colorado; the vehicle was insured by Arizona Automobile Insurance Company and Whicker was not a named insured.
- The policy covered named insureds and persons using the covered auto with the named insured’s express or implied permission; it excluded users without permission.
- Arizona, while handling the claim, learned Whicker lived with a named insured but could not verify permissive use after unsuccessful attempts to contact the named insured and denied coverage.
- Georgiana Chavez sued Whicker in Colorado state court; neither Whicker nor Arizona defended and a default judgment (≈$700,000) was entered against Whicker.
- Whicker assigned her rights against Arizona to Chavez, who then sued Arizona in federal court for breaching a duty to defend, arguing Arizona knew Whicker might be a permissive user and thus an insured.
- The district court dismissed, holding the underlying complaint did not plausibly allege Whicker was insured under the policy so Arizona had no duty to defend; the Tenth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Arizona had a duty to defend Whicker in the underlying suit under Colorado’s complaint rule | Chavez: Arizona had actual knowledge Whicker might be a permissive user and therefore must defend despite the underlying complaint’s omissions | Arizona: Duty to defend is triggered only if the underlying complaint plausibly alleges insured status; extrinsic facts cannot supply missing allegations | Court: No duty to defend — the complaint’s four corners did not plausibly allege Whicker was an insured, so duty not triggered |
| Whether extrinsic evidence or insurer’s knowledge can create an exception to Colorado’s complaint rule | Chavez: Actual knowledge from the claims file should allow considering extrinsic facts to trigger duty | Arizona: Colorado’s complaint rule bars reliance on extrinsic evidence except narrow, recognized exceptions | Court: Declined to expand exceptions; Pompa and AIMCO limited and distinguishable; will not create a broader exception here |
Key Cases Cited
- Pompa v. Am. Family Mut. Ins., 520 F.3d 1139 (10th Cir. 2008) (recognizes narrow use of indisputable extrinsic facts but rejects broad exception to complaint rule)
- AIMCO v. Nutmeg Ins., 593 F.3d 1188 (10th Cir. 2010) (allows insurer to consider facts known from parallel proceedings in duty‑to‑defend analysis)
- United Fire & Cas. Co. v. Boulder Plaza Residential, LLC, 633 F.3d 951 (10th Cir. 2011) (cautions against creating state‑law exceptions not recognized by Colorado courts)
- Cotter Corp. v. Am. Empire Surplus Lines Ins., 90 P.3d 814 (Colo. 2004) (underlying complaint and policy four‑corners determine duty to defend)
- Compass Ins. v. City of Littleton, 984 P.2d 606 (Colo. 1999) (insured cannot rely on extrinsic evidence to establish duty to defend)
- Cyprus Amax Minerals Co. v. Lexington Ins., 74 P.3d 294 (Colo. 2003) (complaint rule interpreted to cast a broad net to trigger duty when complaint alleges facts that might fall within policy)
- Hecla Mining Co. v. N.H. Ins., 811 P.2d 1083 (Colo. 1991) (discusses complaint rule and notes Colorado did not create a general exception)