861 F. Supp. 2d 1274
D. Colo.2012Background
- Keslings bought a Colorado home in 2007 and renewed an American Family homeowner’s policy since 2007.
- Deck problems were discovered in 2008–2009; BornEngineering produced reports in 2008 and 2009.
- July 2009, Keslings filed state court construction-defect suit against Dulaneys, JLM, architect, and subs alleging six damage categories.
- Insurance disputes arose: notice of loss in 2008, multiple denials (Sept 2009, Oct 2009, and thereafter), and eventual 2010 federal suit asserting coverage, breach, and bad-faith claims.
- Four motions were pending in the district court: Nos. 28, 30, 42, and 45; court issued rulings on each.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff fees can be pursued under the wrong of another theory | Keslings seek fees from bad-faith denial as a wrong of another. | No such claim was pleaded in the complaint. | Denied as moot; no wrong of another claim pleaded. |
| Whether the breach-of-contract claim is time-barred by the policy's one-year limitation | Accrual and ongoing damage raise factual issues; policy limitation should not bar. | Contract claim barred by one-year limitations for deck-related damage. | Partially granted; deck/related damages barred; unrelated damages may survive. |
| Whether the 'any resulting loss' exception to the defective construction exclusion covers non-defective-damage | Exception could cover damages beyond the deck, e.g., roof, crawlspace. | Exception does not clearly cover such damages; more narrow reading favored. | Ambiguous; the exception is construed against insurer; denial of summary judgment on this issue. |
| Whether plaintiff cross-motion for partial summary judgment should be granted as moot | Seek binding interpretation of 'any resulting loss' as decided. | No separate ruling needed. | Denied as moot. |
Key Cases Cited
- Grant Family Farms, Inc. v. Colorado Farm Bureau Mut. Ins. Co., 155 P.3d 537 (Colo.App.2006) (one-year contract limitations upheld; accrual timing relevant to copendent claims)
- Sapiro v. Encompass Ins., 221 F.R.D. 513, 221 F.R.D. 513 (N.D. Cal.2004) (enforcing or denying broad 'resulting loss' exceptions to defective-construction exclusions)
- Elijah v. Fender, 674 P.2d 946, 674 P.2d 946 (Colo.1984) (recovery of attorney’s fees as damages for wrong of another doctrine)
- International State Bank of Trinidad v. Trinidad Bean & Elevator Co., 245 P. 489 (Colo.1926) (recognition of damages for tort-induced litigation costs)
- Thompson v. Maryland Cas. Co., 84 P.3d 496 (Colo.2004) (ambiguous policy terms construed against insurer; burden-shifting in exclusions)