United States District Court, D. Colorado
OPINION AND ORDER GRANTING MOTION FOR SUMMARY
S. Krieger Chief United States District Judge
MATTER comes before the Court pursuant to the
for Summary Judgment (# 49), the
Plaintiff's (“Center”) response (#
52), and Travelers' reply (#
pertinent facts in this case are simple and largely
undisputed. Beginning in 2003, Center leased commercial
property located in Colorado Springs, CO, from a Landlord.
The terms of Center's lease with the Landlord provided
that Center would be “responsible for maintaining the
Property in good order and repair, and for maintaining,
repairing, and, as necessary, replacing the HVAC systems [and
roof].” In 2012, the region experienced multiple,
significant hailstorms. It is undisputed that these
hailstorms damaged the roof and HVAC system at the property.
However, it does not appear that Center made a claim against
its casualty insurer, Travelers, at this time.
2014, Center brought suit against the Landlord for breaches
of the real estate lease that are irrelevant here. In
response, the Landlord asserted a counterclaim against
Center, sounding in breach of contract and alleging that
Center had not repaired the damage to the roof and HVAC
system caused by the hail storms. Center tendered the
counterclaim to Travelers, requesting that Travelers defend
and indemnify Center in the underlying lawsuit (or, at the
very least, the counterclaim). Travelers refused both defense
and indemnification, contending that the counterclaim was not
an “occurrence” under the terms of the insurance
policies and did not allege “property damage”
sufficient to trigger coverage. Center proceeded to trial on
the counterclaim at its own expense and, ultimately,
prevailed on that counterclaim.
then commenced the instant action against Travelers, seeking
to recover the costs it incurred in defending itself against
the Landlord's counterclaim. Center asserts (#
47) claims for breach of contract, common-law bad
faith breach of contract, and breach of the duty of good
faith and fair dealing, all under Colorado law. Travelers now
moves (# 49) for summary judgment in its
favor on all claims, arguing that the counterclaim did not
trigger any duty to defend under the terms of its policies.
Standard of review
of the Federal Rules of Civil Procedure facilitates the entry
of a judgment only if no trial is necessary. See White v.
York Intern. Corp., 45 F.3d 357, 360 (10th Cir. 1995).
Summary adjudication is authorized when there is no genuine
dispute as to any material fact and a party is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(a). Substantive
law governs what facts are material and what issues must be
determined. It also specifies the elements that must be
proved for a given claim or defense, sets the standard of
proof and identifies the party with the burden of proof.
See Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986); Kaiser-Francis Oil Co. v.
Producer's Gas Co., 870 F.2d 563, 565 (10th Cir.
1989). A factual dispute is "genuine" and summary
judgment is precluded if the evidence presented in support of
and opposition to the motion is so contradictory that, if
presented at trial, a judgment could enter for either party.
See Anderson, 477 U.S. at 248. When considering a
summary judgment motion, a court views all evidence in the
light most favorable to the non-moving party, thereby
favoring the right to a trial. See Garrett v. Hewlett
Packard Co., 305 F.3d 1210, 1213 (10th Cir. 2002).
movant has the burden of proof on a claim or defense, the
movant must establish every element of its claim or defense
by sufficient, competent evidence. See Fed. R. Civ.
P. 56(c)(1)(A). Once the moving party has met its burden, to
avoid summary judgment the responding party must present
sufficient, competent, contradictory evidence to establish a
genuine factual dispute. See Bacchus Indus., Inc. v.
Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991);
Perry v. Woodward, 199 F.3d 1126, 1131 (10th Cir.
1999). If there is a genuine dispute as to a material fact, a
trial is required. If there is no genuine dispute as to any
material fact, no trial is required. The court then applies
the law to the undisputed facts and enters judgment.
moving party does not have the burden of proof at trial, it
must point to an absence of sufficient evidence to establish
the claim or defense that the non-movant is obligated to
prove. If the respondent comes forward with sufficient
competent evidence to establish a prima facie claim
or defense, a trial is required. If the respondent fails to
produce sufficient competent evidence to establish its claim
or defense, then the movant is entitled to judgment as a
matter of law. See Celotex Corp. v. Catrett, 477
U.S. 317, 322-23 (1986).
Colorado law, an insurer has the duty to tender a defense in
any circumstance where the insured is subjected to a claim by
another that “alleges any facts that might fall within
the coverage of the policy.” KF 103-CV, LLC v.
American Family Mut. Ins. Co., 630 Fed.Appx. 826, 830
(10th Cir. 2015), citing Thompson v. Maryland
Cas. Co., 84 P.3d 496, 502 (Colo. 2004). That assessment
is made based on the factual allegations in the underlying
complaint, not on the legal theory that is asserted based on
those allegations. Gerrity Co. v. CIGNA Property &
Cas. Co., 860 P.2d 606, 607 (Colo.App. 1993). If the
allegations “state a claim which is potentially or
arguably within the policy coverage, or there is some doubt