United States District Court, D. Colorado
ORDER DENYING UNDERWRITERS' MOTION FOR SUMMARY
JUDGMENT, GRANTING HOLCIM'S CROSS MOTION FOR SUMMARY
JUDGMENT, AND GRANTING IN PART AND DENYING IN PART HARTFORD
AND TRAVELERS' CROSS MOTIONS FOR SUMMARY
CHRISTINE M. ARGUELLO, UNITED STATES DISTRICT JUDGE
matter is before the Court on Plaintiffs Certain Underwriters
(“Underwriters”) at Lloyd's, London's
Motion for Summary Judgment. (Doc. # 73.) Pursuant to the
briefing procedure established by Magistrate Judge Nina Y.
Wang (Doc. # 60), Defendants Hartford Accident and Indemnity
Company (“Hartford”), Travelers Casualty and
Surety Company (“Travelers”), and Holcim (US)
Inc. (“Holcim”) filed combined Responses to
Underwriters' Motion and Cross Motions for Summary
Judgment. (Doc. ## 81, 82, 84.) Underwriters' Motion and
Defendants' Cross Motions have been fully briefed in
accordance with the procedure that Magistrate Judge Wang
established for this case. (Doc. ## 89, 95, 97, 100, 102,
104, 106, 108.) Having thoroughly reviewed the underlying
briefing, pertinent record, and applicable law, the Court
denies Underwriters' Motion, grants Holcim's Cross
Motion, and grants in part and denies in part Hartford and
Travelers' Cross Motions.
case involves an insurance coverage dispute. In 1967,
Holcim's predecessor entity-Ideal Cement Company
(“Ideal Cement”)-built a cement manufacturing
plant in Seattle, Washington, which later became implicated
in state and federal regulatory actions arising out of
alleged environmental contamination. See (Doc. # 73
at 2; Doc. # 81 at 3 n.1). From 1958 to 1987, Ideal Cement
and/or Holcim were insured by three different insurance
• Underwriters issued
policies that were in effect from 1958 to
• Hartford issued policies that were in
effect from 1973 to 1979; and
• Travelers issued policies that were
in effect from 1979 to 1987.
(Doc. # 73 at 4-8; Doc. # 81 at 6.)
April 2009, the Environmental Protection Agency sent Holcim a
Request for Information pursuant to § 104(e) of the
Comprehensive Environmental Response, Compensation, and
Liability Act, which sought information regarding a
particular site related to the environmental contamination
allegations-the Lower Duwamish Site (the “LDW
Site”). (Doc. # 81 at 3-4); see 42 U.S.C.
§ 9604(e). Subsequently, in May 2009, Holcim requested a
defense and indemnification from Underwriters for the LDW
Site. (Doc. # 81 at 3.) In February 2010, Underwriters
confirmed receipt of the LDW Site claim, and they requested
further information about the Site, but Underwriters did not
indicate whether they would provide a defense for Holcim.
(Doc. # 81-1 at 27-31.)
November 2012, the EPA sent Holcim a letter informing Holcim
that the EPA considered it a Potentially Responsible Party
(“PRP”) for either the cleanup of the LDW Site or
the costs the EPA incurred in cleaning up the Site.
(Id. at 32-33.) Notably, the PRP letter did not
specify an exact date or range of dates on which the alleged
environmental contamination took place. See
(id.). Rather, the letter indicated only that
“the EPA has reason to believe that hazardous
substances have been or are being released
from the facility(ies) located in Seattle, Washington, as
identified in the 104(e) Information Request response.”
(Id. at 32) (emphasis added). Holcim forwarded the
PRP letter to Underwriters, Hartford, and Travelers. Based on
the PRP letter, Hartford and Travelers agreed to participate
in Holcim's defense under reservations of rights, but
Underwriters did not respond to the letter.
and federal regulatory proceedings regarding the LDW Site
have been ongoing. See (Doc. # 73 at 2). From 2014
to 2018, Hartford and Travelers sent Underwriters multiple
requests for Underwriters to participate in Holcim's
defense. However, Underwriters did not begin to participate
until June 2018. At that time, Underwriters agreed to defend
Holcim, subject to a reservation of rights, under the
policies that were issued from 1964-1970. Additionally,
Underwriters disclaimed any defense obligation for the time
period of 1961-1964, but they did not address the time period
prior to 1961. (Doc. # 81-1 at 81.)
Underwriters initiated the instant case seeking a declaratory
judgment regarding the existence and extent of
Underwriters' duty to defend Holcim based on the policies
that Underwriters issued to Ideal Cement. Specifically,
Underwriters request this Court to order
• By operation of the “other insurance”
provision in the Underwriters Policy, Underwriters' duty
to defend Holcim . . . operates excess of Hartford's and
Travelers' duties to defend Holcim . . ., and
Underwriters defense obligation is not implicated until the
limits of liability in the Hartford and Travelers policies
have been exhausted;
• By operation of the “other insurance”
provision . . ., Underwriters have no legal or equitable
obligation to share in or contribute to any defense provided
to or on behalf of Holcim . . . by Hartford or Travelers . .
• Underwriters defense obligation to Holcim . . . is
further contingent on Holcim's full satisfaction of its
annual $25, 000 self-insurance obligation . . .
(Doc. # 73 at 20-21).
Cross Motion for Summary Judgment, Holcim
seeks an order from this Court that:
• Underwriters, Travelers[, ] and Hartford each has a
current, joint-and-several duty to Holcim to provide a full
and complete defense, and . . .
• Underwriters breached [the duty to defend] when they
denied all defense costs before June 8, 2018.
(Doc. # 81 at 20.)
in their Cross Motions for Summary Judgment,
Hartford and Travelers
request for the Court to enter an order finding that:
• Underwriters must contribute to Holcim's past and
future defense costs; and
• Holcim's defense costs incurred in connection with
the PRP Letter should be apportioned among the three insurers
based on a “time on the risk” (“TOR”)
See (Doc. # 82 at 20; Doc. # 84 at 20).
DECLARATORY JUDGMENT & SUMMARY JUDGMENT
the Declaratory Judgment Act, 28 U.S.C. §§
2201-2202, the Court may enter a judgment declaring
“the rights and other legal relations of any interested
party seeking such declaration. . . .” 28 U.S.C. §
2201. Such a judgment or decree is reviewable as a final
judgment. Id. In the instant case, the parties do
not dispute that the issues can be resolved as a matter of
law through a declaratory judgment.
judgment is warranted 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). A fact is “material” if it is
essential to the proper disposition of the claim under the
relevant substantive law. Wright v. Abbot Labs.,
Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). A dispute
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, Okl., 118 F.3d
837, 839 (10th Cir. 1997).
reviewing motions for summary judgment, a court may not
resolve issues of credibility, and must view the evidence in
the light most favorable to the nonmoving party-including all
reasonable inferences from that evidence. Id.
However, conclusory statements based merely on conjecture,
speculation, or subjective belief do not constitute competent
summary judgment evidence. Bones v. Honeywell Int'l,
Inc., 366 F.3d 869, 875 (10th Cir. 2004).
INSURANCE POLICY INTERPRETATION & THE DUTY TO
Colorado law,  terms of an insurance policy are construed
according to the principles of contract interpretation.
Thompson v. Md. Cas. Co., 84 P.3d 496, 501 (Colo.
2004). In interpreting a contract, courts seek to “give
effect to the intent and reasonable expectations of the
parties.” Id. (citation omitted). Therefore,
courts assign terms in an insurance policy their plain and
ordinary meaning, unless it is evident that the parties
intend otherwise. Id. (citing Compass Ins. Co.
v. City of Littleton, 984 P.2d 606, 613 (Colo. 1999));
see, e.g., Hecla Mining Co. v. N.H. Ins.
Co., 811 P.2d 1083, 1090-92 (Colo. 1991) (analyzing case
law and dictionary definitions to clarify the undefined term,
“sudden and unexpected”); Cyprus Amax
Minerals Co. v. Lexington Ins. Co., 74 P.3d 294, 304-06
(Colo. 2003) (analyzing case law and dictionary definition to
explain the ambiguous term, “property damage”).
also “recognize that unlike a negotiated contract, an
insurance policy is often imposed on a
‘take-it-or-leave-it' basis” and, therefore,
courts “assume a ‘heightened responsibility'
in reviewing insurance policy terms to ensure that they
comply with ‘public policy and principles of
fairness.'” Id. (citations omitted). As a
result, ambiguous terms in an insurance policy are construed
against the insurer. Id. (citing State Farm Mut.
Auto. Ins. Co. v. Nissen, 851 P.2d 165, 166 (Colo.
regard to the duty to defend in particular, the Colorado
Supreme Court has explained that the duty “provides
notice to an insurer so that it can adequately defend against
third party claims.” Id. (citation omitted).
The source of the duty to defend is contractual, and it
derives from the insurance policy itself. Id.
(citation omitted). To analyze an insurer's duty to
defend, courts consider whether the factual allegations in
the underlying complaint trigger coverage under an insurance
policy's terms. Id. (citing Cyprus, 74
P.3d at 299 (citing Hecla, 811 P.2d at 1089)).
insurer has a duty to defend where a complaint against its
insured “alleges any facts that might fall within the
coverage of the policy, ” even if allegations only
“potentially or arguably” fall within the
policy's coverage. Id. (footnote omitted)
(quoting Hecla, 811 P.2d at 1089). The duty to
defend is “designed to cast a broad net in favor of
coverage, ” and it must be construed “liberally
with a view toward affording the greatest possible protection
to the insured.” Id. (quoting Cyprus,
74 P.3d at 297). It follows that an insurer seeking to avoid
its duty to defend bears a “heavy burden.”
Id. (quoting Hecla, 811 P.2d at 1089). The
weight of the insurer's burden “comports with the
insured's legitimate expectation of a defense, and
prevents the insurer from evading coverage by filing a
declaratory judgment action.” Id. (quoting
Hecla, 811 P.2d at 1090). Once the duty to defend
has been established, then the insurer must defend its
insured unless an exclusion in the insurance policy precludes
coverage. Id. (quoting Hecla, 811 P.2d at
accordance with the case plan approved by Magistrate Judge
Wang, this Order is limited to analyzing central policy
construction issues regarding Underwriters' potential
duty to defend and the related issue of the insurers'
contribution in connection with the LDW Site. See
(Doc. # 52) (adopting the parties' proposed scheduling
order). The Court will also address Holcim's argument
that the insurers are jointly and severally liable for its
defense. Therefore, the Court will first consider the meaning
and effect of the Underwriters' “other
insurance” and self-insurance provisions in order to
determine whether Underwriters have breached their duty to
defend Holcim. The Court will subsequently consider the issue
of joint and several liability as well as the proper method
of allocating Holcim's defense costs among the insurers.
POLICY PROVISIONS RELEVANT TO UNDERWRITERS' DUTY TO
Underwriters policies at issue, the following provisions are
relevant to Underwriters' duty to defend an insured:
COVERAGE. From and against all loss which the Assured may
sustain or incur by reason of or in consequence of:
(a) Any and all liability imposed by law against the Assured
for loss of or damage to or destruction of property of others
(including but not limited to, damage resulting from loss of
use of property damaged or destroyed and all other indirect
and consequential damage for which legal liability exists in
connection with such damage to or destruction of property of
others) sustained or alleged to have been sustained during
the currency of this Certificate and arising from any
cause whatsoever out of the operations, activities, work
and/or business of the Assured in the United ...