National Interstate Insurance v. National Helium
2014 U.S. App. LEXIS 8891
| 10th Cir. | 2014Background
- Higby and DCP entered a crane-service contract at the National Helium plant.
- Paragraphs 9.1–9.3 required Higby to carry CGL, name DCP as an additional insured, and waive subrogation rights.
- A fire damaged Higby’s crane; National paid Higby under a CIM policy and suits followed against DCP.
- DCP counterclaimed that Higby breached by failing to obtain a CGL policy indemnifying DCP for its negligence.
- The district court granted summary judgment for Higby and National; on appeal, the Tenth Circuit reversed and remanded to determine if the CGL policy would have protected DCP.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the contract unambiguously requires CGL coverage | Higby contends the contract does not unambiguously require CGL | DCP argues the contract requires Higby to obtain CGL | Ambiguous; remand for fact-finding |
| Whether the CGL policy would cover DCP’s liability to Higby | CGL would cover DCP’s liability arising out of Higby’s operations | CGL may not cover DCP’s liability to Higby | Ambiguous; remand for further construction of policy scope |
| Whether DCP is an intended additional insured under the CGL | Additional insured status extends to DCP | Language does not clearly guarantee such coverage | Ambiguous; remand to evaluate intent and extrinsic evidence |
| Whether ambiguity should be construed against the drafter and related rules apply | Ambiguity should be construed against DCP | Colorado law governs use of extrinsic evidence, not a broad drafter rule | Not decided on appeal; remand to district court for resolution |
Key Cases Cited
- Capstone Building Corp. v. American Motorists Insurance Co., 67 A.3d 961 (Conn. 2013) (additional insured coverage not limited to third-party claims)
- Hoang v. Assurance Co. of Am., 149 P.3d 798 (Colo. 2007) (CGL policy often excludes coverage for property owned by insured to avoid duplicative coverage)
- Travelers Property Casualty Co. v. Farmers Insurance Exchange, 240 P.3d 521 (Colo. App. 2010) (coverage depends on nexus between insured property and injuries and whether injury would not occur but for use of insured property)