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CIBER, Inc. v. Federal Insurance Co.

United States District Court, D. Colorado

March 8, 2018

CIBER, INC., Plaintiff,


          PHILIP A. BRIMMER United States District Judge.

         This matter is before the Court on Plaintiff's Motion for Partial Summary Judgment Regarding Chubb's Duty to Defend [Docket No. 49] and Defendants' Motion for Summary Judgment [Docket No. 51]. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332.

         I. BACKGROUND[1]

         Plaintiff Ciber, Inc. is an information technology (“IT”) consulting company. Plaintiff's Response to Defendants' Statement of Undisputed Material Facts 1; Docket No. 57 at 4, ¶ 1. Defendant Great Northern Insurance Company (“Great Northern”) issued three primary insurance policies to plaintiff that together provided general liability coverage from July 1, 2013 until July 1, 2016 (collectively, the “primary policies”). Defendants' Statement of Undisputed Material Facts (“DSUMF”) 6; Docket No. 51 at 8- 9, ¶ 6. Defendant Federal Insurance Company (“Federal”) issued plaintiff three umbrella insurance policies (collectively, the “umbrella policies”) that together provided excess coverage for the same periods and used some of the same definitions as the primary policies. DSUMF 13-15, 17-18.[2]

         On September 30, 2008, plaintiff entered into a contract with the Hawai'i Department of Transportation (“HDOT”) to replace its legacy financial management computer system with a new system (the “project”). Ciber did not successfully complete the project and HDOT terminated the contract. DSUMF 2-3. On September 25, 2015, plaintiff filed a lawsuit against HDOT alleging, in part, that plaintiff had been improperly terminated for default and seeking breach of contract damages. DSUMF 3. Ciber Inc. v. State of Hawaii Department of Transportation, et al., No. 15-1-1881-09 ECN (Haw. 1st Cir. Ct.).

         On November 16, 2015, HDOT filed counterclaims against plaintiff (the “HDOT counterclaims”), including breach of contract and fraud. DSUMF 4; Plaintiff's Statement of Undisputed Material Facts (“PSUMF”) 10; Docket No. 50 at 3-4, ¶ 10; Docket No. 51-11 at 60, 68. On November 18, 2015, plaintiff tendered HDOT's counterclaims to defendants. PSUMF 13; DSUMF 23. On December 22, 2015, defendants denied coverage. PSUMF 14; DSUMF 24. Plaintiff requested reconsideration of defendants' decision, but was again rebuffed on July 14, 2016. PSUMF 19.

         On August 1, 2016, plaintiff filed its complaint against defendants. Docket No. 1. On April 20, 2017, plaintiff filed its motion for partial summary judgment. Docket No. 49. Plaintiff seeks declaratory judgment that defendants have a duty to defend the HDOT's counterclaims. Id. at 10. On the same day, defendants filed their motion for summary judgment, seeking summary judgment on all of plaintiff's claims. Docket No. 51.


         Summary judgment is warranted under Federal Rule of Civil Procedure 56 when the “movant shows that there is 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); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986). A disputed fact is “material” if under the relevant substantive law it is essential to proper disposition of the claim. Wright v. Abbott Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). Only disputes over material facts can create a genuine issue for trial and preclude summary judgment. Faustin v. City & Cty. of Denver, 423 F.3d 1192, 1198 (10th Cir. 2005). An issue is “genuine” if the evidence is such that it might lead a reasonable jury to return a verdict for the nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir. 1997).

         The nonmoving party may not rest solely on the allegations in the pleadings, but instead must designate “specific facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324; see Fed. R. Civ. P. 56(e). “To avoid summary judgment, the nonmovant must establish, at a minimum, an inference of the presence of each element essential to the case.” Bausman v. Interstate Brands Corp., 252 F.3d 1111, 1115 (10th Cir. 2001) (citing Hulsey v. Kmart, Inc., 43 F.3d 555, 557 (10th Cir. 1994)). “In applying this standard, we view all facts and any reasonable inferences that might be drawn from them in the light most favorable to the nonmoving party.” Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994).

         III. ANALYSIS

         A. Duty to Defend

         Under Colorado law, [3] the duty to defend is separate and distinct from an insurer's obligation to indemnify its insured. See Hecla Mining Co. v. N.H. Ins. Co., 811 P.2d 1083, 1086 n.5 (Colo. 1991). While “[t]he duty to indemnify relates to the insurer's duty to satisfy a judgment entered against the insured, . . . [t]he duty to defend concerns an insurance company's duty to affirmatively defend its insured against pending claims.” Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294, 299 (Colo. 2003) (internal quotations and citations omitted). As noted by the Colorado Supreme Court,

[T]he duty to defend arises where the alleged facts even potentially fall within the scope of coverage, but the duty to indemnify does not arise unless the policy actually covers the alleged harm. Where there is no duty to defend, it follows that there can be no duty to indemnify. However, where ...

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