213 F. Supp. 3d 1333
D. Colo.2016Background
- Intrawest purchased consecutive National Union general liability policies (1998–2002) with a $5,000,000 completed-operations aggregate and an optional 10-year completed-operations extension.
- During negotiations Willis (broker for Intrawest) exchanged emails with National Union; National Union initially stated the limit “will apply per project but the total aggregate for all losses in the Extension will remain $5,000,000.”
- Endorsement 9 (finalized) extended completed-operations coverage and stated: the limit is $5,000,000 each occurrence and $5,000,000 aggregate for the extended period, and “the Products and Completed Operations Aggregate is not reinstated annually, however, it does apply separately on a per project basis.”
- The Indemnity Agreement and attached Schedule (part of the negotiated Program) listed both a $5,000,000 "Per Project" completed-operations aggregate and a $5,000,000 "All Projects" completed-operations aggregate, creating apparent tension in interpretation.
- National Union sued for a declaratory judgment that the $5,000,000 completed-operations aggregate is a single total for all projects; Federal sought a declaration that each project had its own $5,000,000 completed-operations aggregate. Cross-motions for summary judgment followed.
Issues
| Issue | National Union's Argument | Federal's Argument | Held |
|---|---|---|---|
| Whether the policies provide a single $5,000,000 completed-operations aggregate for all projects or a separate $5,000,000 aggregate for each project | The $5,000,000 aggregate is a single, total aggregate for all projects; the "per project" language only clarifies application at locations with multiple projects and does not create independent $5M aggregates per project | The endorsement’s phrase "separately on a per project basis" unambiguously gives each project its own $5,000,000 completed-operations aggregate not shared with other projects | Court: The endorsement and the Program (including the Schedule and Indemnity Agreement) read together show the $5,000,000 completed-operations aggregate is a single total for all projects; National Union entitled to summary judgment |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard for genuine disputes of material fact)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary-judgment burden-shifting principles)
- Bausman v. Interstate Brands Corp., 252 F.3d 1111 (10th Cir.) (movant can show lack of evidence on essential element)
- Tynan’s Nissan, Inc. v. Am. Hardware Mut. Ins. Co., 917 P.2d 321 (Colo. App.) (insurance policy interpretation is question of law)
- Cotter Corp. v. Am. Empire Surplus Lines Ins. Co., 90 P.3d 814 (Colo.) (contract interpretation and enforcing parties’ intent)
- Hoang v. Assurance Co. of Am., 149 P.3d 798 (Colo.) (apply plain language unless ambiguous)
- Copper Mountain, Inc. v. Industrial Systems, Inc., 208 P.3d 692 (Colo.) (interpret contract as whole to harmonize provisions)
- Hecla Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083 (Colo.) (ambiguity exists when language permits more than one reasonable interpretation)
- Ad Two, Inc. v. City & County of Denver, 9 P.3d 373 (Colo.) (extrinsic evidence admissible only if terms ambiguous)
- Simon v. Shelter Gen. Ins. Co., 842 P.2d 236 (Colo.) (policy and endorsement construed together; endorsement prevails if conflict)
- Cheyenne Mountain School Dist. No. 12 v. Thompson, 861 P.2d 711 (Colo.) (definition of ambiguity; consider surrounding circumstances)