860 F. Supp. 2d 1246
D. Colo.2012Background
- D.R. Horton, Inc.-Denver d/b/a Trimark Communities acted as general contractor for Summit at Rock Creek in Boulder County, Colorado, hiring subcontractors who were required to carry CGL policies naming D.R. Horton as an additional insured.
- Travelers Defendants insured several subcontractors; the Travelers Defendants are the insurers that defended D.R. Horton’s interests by paying defense fees and costs in the underlying Construction Defects Litigation.
- HOA sued D.R. Horton in 2003 for construction defects; in 2004 D.R. Horton filed a Third-Party Complaint against subcontractors, claiming they caused defects and bore defense costs.
- D.R. Horton settled the Construction Defects Litigation with HOA for $39.5 million and incurred about $1.24 million in defense costs; this action was subsequently removed to federal court in 2010.
- Travelers filed a Third-Party Complaint in 2011 against subcontractors, insurers, and D.R. Horton’s insurers, seeking equitable subrogation, contractual subrogation, equitable contribution, and declaratory relief for defense costs and fees.
- The Court addressed multiple Third-Party Defendants’ motions to dismiss and motions for summary judgment, including issues of accrual, statutes of limitations, and applicability of CDARA to the insurance dispute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Travelers’ subrogation claims against Foster Frames time-barred? | Travelers accrued when Horton’s Third-Party Complaint was filed (2004). | Accrual or tolling may differ; some claims not clearly time-barred. | Subrogation claims against Foster Frames barred; dismissed with prejudice. |
| Are Travelers’ equitable contribution and declaratory judgment claims against Foster Frames time-barred? | Contribution/declaratory relief accrual can differ from subro claims; timely under separate rules. | Should be barred by accrual/limitations alongside subrogation. | Equitable contribution and declaratory judgment claims survive; not time-barred. |
| Should the Court dismiss Travelers’ subrogation claims against other subcontractors on its own motion? | Claims against all subcontractors should be allowed to proceed on same theory. | Accrual was before 2004 for subcontractors; many time-barred. | Travelers’ subrogation claims against most subcontractors dismissed with prejudice; contributions remain viable; insurer defendants’ claims retained due to unresolved accrual. |
| What is the status of TIG Insurance’s Rule 12(b)(6) motion to dismiss? | Claims against TIG are pled with sufficient factual allegations. | Few factual allegations; claims are conclusory. | TIG Insurance’s motion to dismiss denied. |
| Level Masonry’s motion to dismiss and Travelers’ motion to strike level Masonry’s motion | Settlement with Horton precludes Travelers’ claims against Level Masonry. | Settlement evidence should be considered; oral/summary judgment not appropriate on a Rule 12(b)(6) motion. | Level Masonry’s motion to dismiss denied (settlement evidence excluded); Travelers’ motion to strike denied as moot. |
| Do AAA Waterproofing and Mid-Century summary judgments bar Travelers’ claims? | Subrogation claims barred by settlements or CDARA defenses. | Settlements may bar subrogation or toll accrual; CDARA not applicable to insurance dispute. | AAA: summary judgment denied on moot grounds; Mid-Century: summary judgment denied; subrogation claims remain contested elsewhere. |
Key Cases Cited
- Union Ins. Co. v. RCA Corp., 72A P.2d 80 (Colo.App.1986) (subrogation accrues when insured’s claim accrues)
- Am. Family Mut. Ins. Co. v. DeWitt, 218 P.3d 318 (Colo.2009) (subrogation rights are derivative of insured)
- United Fire Grp. v. Powers Electric, Inc., 240 P.3d 569 (Colo.App.2010) (subrogation rights extend only as far as insured’s rights)
- Ins. Co. of N. Am. v. Aspen Alps, 915 F. Supp. 1122 (D. Colo. 1996) (accrual depends on nature of claim; breach accrues when injury occurs)
- Farmers Ins. Exch. v. Am. Mfrs. Mut. Ins. Co., 897 P.2d 880 (Colo. App. 1995) (breach accrual when breach and damages discovered)
- Daugherty v. Allstate Ins. Co., 55 P.3d 224 (Colo.App.2002) (duty to defend accrues when third party makes a claim that might fall within policy)
- Republic Ins. Co. v. U.S. Fire Ins. Co., 166 Colo. 513, 444 P.2d 868 (Colo. 1968) (contribution between insurers arising from defense costs)
- National Cas. Co. v. Great Sw. Fire Ins. Co., 833 P.2d 741 (Colo.1992) (contribution rights between insurers rise independently of subrogation)
- Fogle v. Pierson, 435 F.3d 1252 (10th Cir.2006) (court may dismiss sua sponte based on statute of limitations)
- State Farm Mut. Auto. Ins. Co. v. Sanditen, 701 P.2d 876 (Colo.App.1985) (settlements may bar subrogation when insurer not on notice)