Bolt Factory Lofts Owners Association Inc., a Colorado nonprofit corporation, Plaintiff-Appellee,
Auto-Owners Insurance Company, Intervenor-Appellant.
and County of Denver District Court No. 16CV33608 Honorable
J. Eric Elliff, Judge.
Simpson Eldredge Hersh & Jardine, P.C., Mari K. Perczak,
Thomas W. Henderson, Joseph F. Smith, Nelson Boyle,
Englewood, Colorado, for Plaintiff-Appellee
Hustead Law Firm, A Professional Corporation, Patrick Q.
Hustead, Connor L. Cantrell, Denver, Colorado, for
1 Insurer, Auto-Owners Insurance Company (AOIC), appeals the
trial court's order denying its motion to intervene
following a settlement agreement reached by its insured,
Sierra Glass Co., Inc. (Sierra Glass), and plaintiff, Bolt
Factory Loft Owners Association Inc. (the Association). We
affirm the trial court's order.
2 This insurance dispute originated from a construction
defects case in which the Association sued six contractors
for alleged construction defects at one of its Denver
condominium projects. Two of those contractors then asserted
negligence and breach of contract third-party claims against
several subcontractors, including Sierra Glass, on November
7, 2016. Following a series of settlement agreements, the
only remaining claims were those the Association, as assignee
of the two contractors, asserted against Sierra Glass.
3 AOIC had issued insurance policies to Sierra Glass and
defended Sierra Glass under a reservation of rights. AOIC
refused to pay a $1.9 million settlement demand the
Association presented to Sierra Glass on or about May 2,
2018. As a result, Sierra Glass entered into an agreement
with the Association under which, according to AOIC, Sierra
Glass would refrain from offering a defense at trial (and the
scheduled fifteen-day jury trial was reduced to a two-day
bench trial) in exchange for the Association's promise
that it would not pursue recovery against Sierra Glass.
Sierra Glass also agreed to assign any bad faith claims it
had against AOIC to the Association. AOIC learned of this
agreement the day before the jury trial was scheduled to
start on May 4, 2018.
4 On May 9, 2018, when the bench trial actually started, AOIC
filed a motion to intervene, continue the trial, contest the
settlement agreement, and protect its rights under the
insurance policies. Following a hearing,  the trial court
determined that the settlement agreement was valid under
Nunn v. Mid-Century Insurance Co., 244 P.3d 116
(Colo. 2010). The court denied AOIC's motion to
intervene, concluding that AOIC's claims were contingent
on the outcome of trial and that AOIC could test coverage
issues in a subsequent declaratory judgment action.
5 During the bench trial, the Association called four
witnesses and delivered opening and closing statements.
Sierra Glass did not present a defense. The trial court found
in favor of the Association and entered a judgment for $2,
6 The Association then obtained a writ of garnishment against
AOIC, and AOIC removed that action to federal district court.
On June 11, 2019, the district court stayed the motion for
garnishment pending the resolution of this appeal challenging
the trial court's denial of its motion to intervene. AOIC
also filed a declaratory judgment action in federal district
court against Sierra Glass seeking a declaration that (1) it
did not owe obligations or payments under the insurance
policies; (2) Sierra Glass breached the policy by failing to
cooperate with AOIC; and (3) the state court judgment is not
enforceable. The Association and Sierra Glass asserted
counterclaims for breach of contract and third-party
statutory and common law bad faith claims. Because of this
pending appeal, the federal district court dismissed the
declaratory relief claim and the counterclaims without
7 We first conclude that our jurisdiction over this appeal is
proper. While there was a question if the removal of the
garnishment action to federal district court constituted a
removal of the entire case, see 28 U.S.C. §
1446(d) (2018) (after filing a notice of removal of a civil
action, the state court shall proceed no further), the
garnishment action is a separate proceeding and the federal
district court has stayed the proceeding. Therefore, we have
jurisdiction over the appeal of this proceeding. See
Mascarenas Enters., Inc. v. City of Albuquerque, 494
Fed.Appx. 846, 850 (10th Cir. 2012) ("Removal of a state