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Summit Bank & Trust v. American Modern Home Insurance Co.

United States District Court, D. Colorado

October 9, 2014

SUMMIT BANK & TRUST, a Colorado Corporation, Plaintiff,
v.
AMERICAN MODERN HOME INSURANCE COMPANY, an Ohio Corporation, Defendant

Page 1169

For Summit Bank & Trust, a Colorado corporation, Plaintiff: Adam F. Aldrich, Kenneth Ronald Bennington, Bennington, Johnson, Biermann & Craigmile, LLC, Denver, CO.

For American Modern Home Insurance Company, an Ohio corporation, Defendant: Christopher John Shannon, Patrick Quinn Hustead, LEAD ATTORNEYS, The Hustead Law Firm, P.C., Denver, CO.

Page 1170

ORDER DENYING AHMIC'S MOTION FOR SUMMARY JUDGMENT FOR FAILURE TO COMPLY WITH INSURANCE POLICY TERMS

John L. Kane, United States Senior District Judge.

This case involves a disputed insurance claim for losses incurred by the burglary of a large vacant building in Greeley, Colorado. Defendant American Modern Home Insurance Company (" AMHIC" ) moves for summary judgment, Doc. 55, against Plaintiff Summit Bank & Trust (" Summit" ), which brings the following four claims: bad faith breach of insurance contract, breach of contract, violations of C.R.S. § 10-3-1115 and 1116, and declaratory judgment per 28 U.S.C. § 2201 and Fed.R.Civ.P. 57. AMHIC argues that Summit's claims must fail because Summit did not comply with terms of the insurance policy. Based on the following, I DENY the Motion.

I. JURISDICTION AND VENUE

I have personal jurisdiction over AMHIC as: (a) it did business in the State of Colorado at times material to this action; (b) it purposefully availed itself of the rights and privileges of the State of Colorado at times material to this action; and (c) it committed the acts described below with resulting consequences in the State of Colorado.

I have subject matter jurisdiction over this matter per 28 U.S.C. § 1332 as the amount in controversy exceeds the sum of $75,000, and Summit and AMHIC are citizens of different states. I have supplemental jurisdiction over all other claims per 28 U.S.C. § 1367 as they form part of the same case or controversy. Per 28 U.S.C. § 1391, venue is proper in the District of Colorado as: (a) AMHIC transacted business in the State of Colorado, and (b) the events and omissions giving rise to Summit's claims occurred in the State of Colorado.

II. SUMMARY JUDGMENT STANDARD AND RULES OF INSURANCE CONTRACT INTERPRETATION

I repeat the catechism that summary judgment is appropriate where " there is

Page 1171

no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); Adamson v. Multi. Cmty. Diversified Servs., Inc., 514 F.3d 1136, 1145 (10th Cir. 2008). A fact is material if it could affect the outcome of the suit under governing law; a dispute of fact is genuine if a rational jury could find for the nonmoving party on the evidence presented. Adamson, 514 F.3d at 1145. In weighing these standards, I draw all reasonable inferences in favor of the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

The meaning of each term in an insurance contract is to be determined as a matter of Colorado law, with any ambiguity resolved in favor of Summit, as the insured. See Pompa v. Am. Family Mut. Ins. Co., 520 F.3d 1139, 1141 (10th Cir. 2008). Mere disagreement between the parties about the meaning of a term, however, does not create ambiguity. Union Rural Elec. Ass'n v. Public Utils. Comm'n, 661 P.2d 247, 251 (Colo.1983). One may not read an ambiguity into a term where none exists in order then to resolve the resulting ambiguity against the insurer. Martinez v. Hawkeye-Sec. Ins. Co., 195 Colo. 184, 576 P.2d 1017,1019 (1978) (" [C]ourts will not force an ambiguity in order to resolve it against an insurer." ). Also, the mere fact that a term may be susceptible to multiple interpretations, or that it may have different dictionary definitions in different contexts, does not alone create an ambiguity. See id.; see also Allstate Ins. Co. v. Juniel, 931 P.2d 511, 513 (Colo.App.1996). To the contrary, and as a matter of basic semantics, a term is only ambiguous when it is reasonably susceptible to multiple interpretations in the context in which it is used. Juniel, 931 P.2d at 513; Terranova v. State Farm Mut. Auto. Ins. Co., 800 P.2d 58, 60 (Colo. 1990).

To ascertain whether a certain provision is ambiguous, " the instrument's language must be examined and construed in harmony with the plain and generally accepted meaning of the words employed, and reference must be made to all the provisions of the agreement." Radiology Professional Corp. v. Trinidad Area Health Ass'n, 195 Colo. 253, 256, 577 P.2d 748, 750 (1978)( citing Christmas v. Cooley, 158 Colo. 297, 406 P.2d 333 (1965)). While exclusionary clauses exempting the insurer from providing coverage in certain circumstances must be written in clear and specific language and construed in favor of coverage, a court may not add, delete, or rewrite terms to extend coverage. McGowan v. State Farm Fire & Cas. Co., 100 P.3d 521, 523 (Colo. App. ...


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