City of Lakewood, Colorado, Plaintiff-Appellant and Cross-Appellee,
Safety National Casualty Corporation, Defendant-Appellee and Cross-Appellant.
County District Court No. 14CV32279 Honorable Christopher J.
Sherman & Howard, L.L.C., Christopher R. Mosley, Jennifer
Kirk Morris, Denver, Colorado, for Plaintiff-Appellant and
Alfrey Musat P.C., Paul E. Collins, Carol L. Thomson, Denver,
Colorado, for Defendant-Appellee and Cross-Appellant
1 The City of Lakewood (City) has an insurance policy that
covers losses arising from the workers' compensation or
employers' liability laws of any state on account of
bodily injury to an employee.
2 After a City police officer was killed by friendly fire,
his widow filed a lawsuit under 42 U.S.C. § 1983 (2012),
alleging that the City and various fellow officers had
violated the deceased officer's rights under the Federal
Constitution. The City sought indemnification for its own
defense costs and those of the officers named in the lawsuit,
which the City has an independent statutory duty to cover.
The insurance company, Safety National Casualty Corporation,
3 The district court concluded that a § 1983 claim does
not arise under an employer liability law of any state and
granted summary judgment for the insurance company. We agree.
And while the district court did not reach the separate
question of whether the officers' defense costs are
covered by the policy, we conclude that they are not.
Accordingly, we affirm the summary judgment in favor of the
4 The insurance company issued a "Specific Excess
Workers' Compensation and Employers' Liability
Insurance Agreement" to the City. The policy indemnified
the City, as an employer, for "Loss sustained by the
EMPLOYER because of liability imposed upon the EMPLOYER by
the Workers' Compensation or Employers' Liability
Laws of" Colorado or other states, "on account of
bodily injury by accident" to "Employees of the
EMPLOYER" engaged in job-related activities.
5 "Loss" included two categories of reimbursable
costs. First, the City could recoup from the insurance
company any "actual payments, less recoveries, legally
made by the EMPLOYER to Employees and their dependents in
satisfaction of: (a) statutory benefits, (b) settlements of
suits and claims, and (c) awards and judgments." Second,
the City could recoup its "Claim Expenses, " which
is defined as the City's own litigation expenses.
6 During the term of the policy, one of the City's police
officers was accidentally shot and killed by a fellow officer
while both were on duty. The slain officer's widow later
filed a lawsuit under 42 U.S.C. § 1983, alleging that
the fellow officer, two of his supervising officers, and the
City had violated her husband's federal constitutional
rights by subjecting him to the unreasonable use of deadly
7 The City sought indemnification under the policy for the
costs of its own defense and the defense of the individual
officers. When the insurance company denied the claim, the
City filed a declaratory judgment action.
8 On cross-motions for summary judgment, the district court
reasoned that § 1983 did not qualify as an
"employers' liability law" of the State of
Colorado or any other state, and therefore it concluded that
the policy did not cover the City's losses incurred in
connection with its defense of the lawsuit. The court did not
address the City's separate claim that it suffered
additional losses because of liability imposed by sections
24-10-110 and 29-5-111, C.R.S. 2016, which require the City
to cover defense costs for its peace officers.
9 On appeal, the City contends that the district court erred
in granting summary judgment to the insurance company because
the policy unambiguously covers all defense costs incurred ...