United States District Court, D. Colorado
ORDER AND OPINION ON MOTION FOR DECLARATORY
L. KANE SENIOR U.S. DISTRICT JUDGE.
matter is before me on Plaintiffs' Motion for Declaratory
Judgment or in the Alternative for Partial Summary Judgment.
Doc. 16. For the reasons stated below, I interpret the motion
solely as one for partial summary judgment and find summary
judgment inappropriate. Accordingly, Plaintiffs' motion
Peter and Leticia Munroe (“Plaintiffs”) own a
home in Monument, Colorado, which they purchased in April
2015 and insured through CSAA General Insurance Company
(“Defendant”). Compl. at ¶ 4; Pls.' Ex.
1 at ¶¶ 2-3. On or around May 16, 2018, water began
to leak from the roof near a skylight after a series of heavy
rainstorms. Compl. at ¶ 5; Doc. 16 at 1; Pls.' Ex. 1
at ¶¶ 5-6. Plaintiffs retained Campbell Roofing on
May 18 to identify and caulk the leak. Compl. at ¶ 6;
Doc. 16 at 1-2; Pls.' Ex. 1 at ¶ 7. They submitted a
claim to Defendant on May 21. Compl. at ¶ 7; Doc. 16 at
2; Pls.' Ex. 1 at ¶ 7; Pls.' Ex. 2. Ultimately,
Defendant determined that the damage to the roof was not
covered because it was considered “wear and tear,
” but the resulting water damage would be covered.
Pls.' Ex. 5.
hired Top Gun Restoration to dry the ceiling while Plaintiffs
were away on a fifteen-day trip. Compl. at ¶ 8; Def. Ex.
B at 1. While Plaintiffs were out of town, Top Gun notified
them that the ceiling was not drying properly. Compl. at
¶ 9; Def. Ex. B at 1. Plaintiffs returned home at the
end of their trip to find that Top Gun failed to dry out the
ceiling and removed its equipment from Plaintiffs' home
with no explanation. Def. Ex. B at 1.
thereafter, Plaintiffs noticed a new leak in the master
bedroom, which had evidently existed for a while given there
were stains on the ceiling near the source of the leak and on
the carpet below. Id. Plaintiffs attempted to
contact Top Gun about it but did not receive an answer.
Id. They then contacted Servpro, another home-repair
inspected Plaintiffs' home on June 12, 2018 and
determined that the ceiling was at risk of collapse if the
wet insulation was not dried properly. Id. Servpro
planned to remove the master bedroom closet and living room
ceilings and set up drying equipment by July 5. Id.
at 2, 4. Campbell Roofing was still repairing the roof and
expected to be done by June 27. Id. at 4. It was
around this time that Plaintiffs decided to move to a hotel
pending completion of all repairs. Id. at 5; Compl.
at ¶ 12; Doc. 16 at 2; Pls.' Ex. 1 at ¶ 10.
Resource, LLC, an environmental testing corporation,
inspected the home on July 3. See Pls.' Ex. 3.
It is not clear from the record who hired LTS Resource or
why, but its investigation found visual evidence of mold
growth and a dangerous level of spores in the air.
Id. at 3-4; Doc. 16 at 2; Pls.' Ex. 1 at ¶
11. On August 15, Defendant informed Plaintiffs that it would
cover up to $10, 000 of any mold-remediation costs subject to
the policy's mold-coverage limit. Pls.' Ex. 6 at 1.
Defendant also offered to cover all additional living
expenses accrued while the mold was being removed.
Id. In conveying this offer, Defendant included a
report from Gardner Roofing that found there was old water
damage around the skylight and that the roof lacked any
ventilation, which “possibly caused long term moisture
issues in the ceiling joint cavities as evidenced by the
damages seen after the drywall ceilings and insulation were
removed inside the home.” Def. Ex. A.
appears that Defendant has paid Plaintiffs $31, 915.90 up to
this point. It sent a $7, 927.62 check to cover Servpro's
work in drying out the ceiling. Def. Ex. C at 2; Def. Ex. D
at 1. Defendant paid out the entire mold-remediation limit in
two checks-one for $625.00 to cover the mold testing done on
July 3 and another for $9, 375.00 to cover the balance of the
policy limit. Def. Ex. H; Def. Ex. I. Finally, Defendant sent
Plaintiffs a check for $13, 988.28 on October 12 to cover all
of Plaintiffs' hotel bills incurred up to that point.
Def. Ex. C at 1; Def. Ex. E.
has not provided any compensation for living expenses besides
the hotel bills because it allegedly has questions regarding
how much more Plaintiffs were spending than normal. Doc. 20
at 4; Def. Ex. C at 1; Def. Ex. D at 1. It also has not paid
hotel bills or other living expenses incurred after October
2018 because Plaintiffs have failed to provide the necessary
documentation. See Def. Ex. G at 2 (identifying
hotel receipts dated only through October 16, 2018 and living
expense receipts through October 29, 2018 in Plaintiffs'
initial disclosures). Plaintiffs are currently living in an
apartment because there are still nearly $17, 000 worth of
repairs to complete before they may return home. Compl. at
¶ 2; Doc. 16 at 2; Pls.' Ex. 1 at ¶¶ 12,
move for a declaratory judgment or, in the alternative,
partial summary judgment. Doc. 16. In their words, they
“are asking the Court to declare that the expenses and
repairs are covered under their insurance policy so that they
can be reimbursed for their out of pocket and ongoing
expenses, and complete repairs so that they can finally move
back into their home.” Id. at 3. As the
Advisory Committee noted in promulgating Federal Rule of
Civil Procedure 57:
A declaratory judgment is appropriate when it will
‘terminate the controversy' giving rise to the
proceeding. Inasmuch as it often involves only an issue of
law on undisputed or relatively undisputed facts, it operates
frequently as a summary proceeding, justifying docketing the
case for early hearing as on a motion.
Fed. R. Civ. P. 57. Plaintiffs ask for a determination of
what they perceive to be undisputed material facts- the scope
of the insurance policy. Because of the nature of a
declaratory judgment and the remedy Plaintiffs seek, I
interpret their motion as one exclusively for partial summary
judgment is only appropriate if the “movant shows that
there is no genuine dispute as to any material fact”
and that it is “entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(a). A fact is
“material” if it could influence the
determination of the suit. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986); Adler v. Wal-Mart
Stores, Inc., 144 F.3d 665, 670 (10th Cir. 1998). An
issue is “genuine” if “there is sufficient
evidence on each side so that a rational trier of fact could
resolve the issue either way.” Adler, 114 F.3d
moving party bears the initial burden of making a prima facie
demonstration of the absence of any genuine issues as to any
material fact and entitlement to judgment as a matter of law.
Id. at 670-71; Bacchus Indus., Inc. v. Arvin
Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991). If the
movant meets this initial threshold, the burden shifts to the
nonmoving party to “go beyond the pleadings and by her
own affidavits, or by the depositions, answers to
interrogatories, and admissions on file, designate specific
facts showing that there is a genuine issue for trial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
In applying this standard, a trial court views the evidence
and all reasonable inferences therefrom in the light most
favorable to the nonmoving party, which is the Defendant
here. Adler, 114 F.3d at 670.
motion focuses almost entirely on how their insurance policy
should be interpreted. Courts should interpret the terms of
an insurance policy by “their plain meaning according
to common usage.” Shean v. Farmers Ins. Exch.,
934 P.2d 835, 837 (Colo.App. 1996). If there are provisions
that conflict with one another, the court should construe the
provisions in favor of the insured. Id. However,
courts should not attempt to rewrite insurance policy
provisions that are clear and unambiguous. Cyprus Amax
Minerals Co. v. Lexington Ins. Co., 74 P.3d 294, 299
(Colo.App. 2003). If an insurer seeks to limit or exclude
coverage under the terms of the policy, it has “the
burden of proving that a particular loss falls within an
exclusion in the contract.” Colo. Intergovernmental
Risk Sharing Agency v. Northfield Ins. Co., 207 P.3d
839, 842 (Colo.App. 2008).
have two major arguments-first, the plain language of the
policy unambiguously provides them with unlimited
mold-remediation coverage, and second, the efficient
proximate cause doctrine nonetheless requires complete
coverage. Defendant, on the other hand, argues that the
policy unambiguously excludes Plaintiffs' mold damage
from any coverage, and it made nothing more than a business
decision in offering them any money for the mold remediation
or additional living expenses. Doc. 20 at 11.
offer two possible readings of the policy that would provide
for complete coverage of the mold remediation. I do not find
either reading to be persuasive. Their first argument is that
any damages resulting from wear and tear are covered under an
exception to the policy; because the mold was caused by wear
and tear to the roof, it should be covered in full. Doc. 16
at 5-6. The policy unambiguously excludes wear and tear from
coverage. Pls.' Ex. 7 at 34. Plaintiffs are correct that
the policy covers some damages that ...