2012 COA 65
Colo. Ct. App.2012Background
- Frisco Gateway Center contracted with TCD to build; Petra Roofing subcontracted to install the roof and name TCD as an additional insured.
- Petra’s CGL policy covered TCD as an additional insured but was canceled for nonpayment on June 10, 2007.
- An underlying arbitration resulted in a binding award against Gateway; Petra’s insurer refused to defend or indemnify TCD as additional insured.
- TCD brought suit seeking declaratory relief and damages for breach of contract/insurance; district court granted summary judgment for the insurer.
- The court ruled Gateway’s counterclaims against TCD did not raise a duty to defend or trigger coverage; TCD’s additional arguments invoking the four-corners rule and section 13-20-808 were rejected.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Gateway’s counterclaims trigger a duty to defend | TCD—Gateway’s counterclaims allege property damage. | American Family—claims allege contract/workmanship, not property damage. | No duty to defend; counterclaims do not allege covered property damage. |
| Whether the four-corners rule may be broadened to use outside evidence | TCD—outside evidence should be considered. | Gateway argues exceptions to the four-corners rule exist. | Rule limited to the complaint; outside evidence not considered. |
| Whether § 13-20-808 applies to the policy | TCD—statute applies retroactively to current policy. | Statute not retroactive; not applicable to expired policy. | Statute not retroactive; not applicable to the CGL policy here. |
Key Cases Cited
- Hecla Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083 (Colo. 1991) (duty to defend depends on policy exclusions and allegations)
- Union Ins. Co. v. Hottenstein, 83 P.3d 1196 (Colo. App. 2003) (breach of contract generally not an accident for coverage)
- General Security Indemnity Co. v. Mountain States Mutual Casualty Co., 205 P.3d 529 (Colo. App. 2009) (consequential damages and faulty workmanship not always covered)
- Continental Western Ins. Co. v. Shay Construction, Inc., 805 F.Supp.2d 1125 (D. Colo. 2011) (analysis of construction-defect coverage and occurrences)
- Cotter Corp. v. American Empire Surplus Lines Ins. Co., 90 P.3d 814 (Colo. 2004) (determines scope of insurer’s defense obligations)
- Compass Ins. Co. v. City of Littleton, 984 P.2d 606 (Colo. 1999) (liberal construction of coverage in favor of insured)
- Fire Ins. Exchange v. Bentley, 953 P.2d 1297 (Colo. App. 1998) (coverage interpretation principles for CGL policies)
- Village Homes of Colorado, Inc. v. Travelers Casualty & Surety Co., 148 P.3d 293 (Colo. App. 2006) (discussion of policy in force and applicability of later statutes)
- Greystone Construction, Inc. v. National Fire & Marine Ins. Co., 661 F.3d 1272 (10th Cir. 2011) (interpretation of occurrence and property damage in construction context)