United States District Court, D. Colorado
PACIFIC SPECIALTY INSURANCE COMPANY, a California corporation, Plaintiff,
SAVANNA POIRIER and JASON MENDOZA, Defendants.
A. BRIMMER CHIEF UNITED STATES DISTRICT JUDGE
matter is before the Court on Plaintiff’s Motion for
Summary Judgment on the Duty to Defend [Docket No. 26] and
Defendants Poirier’s and Mendoza’s Motion for
Partial Summary Judgment on the Issue of Coverage [Docket No.
46]. The Court has jurisdiction pursuant to 28 U.S.C. §
case arises out of an ATV accident. On the evening of June 25,
2016, defendant Jason Mendoza (“Mendoza”),
defendant Savanna Poirier (“Poirier”), and two
other individuals went camping in the Roosevelt National
Forest in Bellevue, Colorado. Docket No. 51 at 9, ¶ 5;
Docket No. 46 at 1-2. Mendoza’s plan was to camp for
just one night. Docket No. 51 at 10, ¶ 10. The campsite
was on a short spur off Pingree Park Road and was not in a
campground. Id. ¶ 14. At some point between
1:00 a.m. and 2:00 a.m. on June 26, the four campers decided
to go on a night ride on an ATV owned by Mendoza.
Id. at 11, ¶ 17; Docket No. 46 at 3, ¶ 4.
At approximately mile marker 2 on Pingree Park Road, the four
campers drove off the edge of the road and fell about twenty
yards over a cliff. Docket No. 51 at 9-10, ¶ 2, 6. The
accident occurred at least two miles from the campsite.
Id. at 11, ¶ 20.
March 14, 2017, Poirier filed a civil complaint (the
“state court complaint”) against Mendoza in the
District Court for Larimer County, Colorado. Docket No. 26 at
5, ¶ 3. As relevant here, the state court complaint
alleges the following:
2. Upon information and belief, at all times material hereto,
[Mendoza] was a resident of the City of Loveland and County
of Larimer, State of Colorado.
5. On June 26, 2016, at approximately 2:08 a.m., [Poirier]
was a passenger on a Kawasaki ATV (hereinafter “the
ATV”) traveling on Pingree Park Road near mile marker
2, in Bellvue, Colorado.
6. At the time of the crash, [Mendoza] was the owner and
operator of the ATV.
7. At the time of the accident, [Mendoza] unlawfully drove
the ATV in a careless and imprudent manner, without due
regard for the width, grade, curves, corners, traffic, and
use of the streets or highways causing him to lose control,
leave the road, and roll the ATV and its occupants down a
Id. In the state court complaint, Poirier
brought claims against Mendoza for negligence and negligence
per se. Docket No. 26-2 at 2-3.
time of the accident, plaintiff Pacific Specialty Insurance
Company (“Pacific”) had issued a
homeowner’s insurance policy (the “Policy”)
to Mendoza, insuring the address of 615 Suntrail Drive,
Loveland, Colorado. Docket No. 26 at 3, ¶
The Policy has a personal liability limit of $300, 000.
Id. As relevant here, the Policy provides, under a
section titled “Exclusions, ” that coverage for
personal liability and medical payments to others does not
apply to “bodily injury or property damage . . .
[a]rising out of the ownership, maintenance, use, loading, or
unloading of motor vehicles or all other motorized land
conveyances.” Id. at 3-4, ¶ 2 (citing
Docket No. 26-1 at 13, ¶ II.1.g(1)). The Policy further
provides that this exclusion “does not apply to . . . a
motorized land conveyance designed for recreational use off
public roads not subject to motor vehicle registration and .
. . [o]wned by an insured, but only on an insured
location.” Id. at 4, ¶ 2 (citing Docket
No. 26-1 at 13, ¶ II.1.g(2)(b)). One of the
Policy’s definitions for “insured location”
is “[a]ny part of a premises not owned by an insured
and where an insured is temporarily residing.”
Id. at 4-5, ¶ 2 (citing Docket No. 26-1 at 8,
April 13, 2018, Pacific initiated this lawsuit. Docket No. 1.
Pacific seeks a declaratory judgment that (1) “the
accident location did not occur on an insured
location;” (2) Mendoza “was not temporarily
residing at the camp site;” (3) “bodily injury
arising out of the ownership or use of  Mendoza’s ATV
is excluded” under the Policy; (4) “bodily injury
arising out of the violation of a criminal law or local or
municipal ordinance, whether or not an insured is charged or
convicted, is excluded” under the Policy; (5)
“there is no coverage under the Policy for the
accident;” (6) Pacific “had no duty to
defend” Mendoza against Poirier’s lawsuit, and
(7) Mendoza made false statements on his application
entitling Pacific to cancel or rescind the Policy and that
Pacific has no duty to perform any obligation under the
policy. Docket No. 59 at 9-10, ¶ 40. On August 3, 2018,
Mendoza and Poirer asserted counterclaims against Pacific for
(1) bad faith and (2) breach of contract. Docket No. 19 at
8-9, ¶¶ 19-26. Mendoza and Poirier allege that
Pacific “wrongfully denied either providing a defense
to or obligating itself to indemnify [Mendoza] for any
judgment.” Docket No. 19 at 6, ¶ 8. Mendoza and
Poirier further allege that they entered into an agreement
(the “Nunn agreement”) based on the
Colorado Supreme Court’s decision in Nunn v.
Mid-Century Ins. Co., 244 P.3d 116 (Colo. 2010).
Id. at 7-8, ¶¶ 13-17. In the Nunn
agreement, Mendoza agreed to prosecute claims against Pacific
and assign all proceeds recovered to Poirier in exchange for
an agreement from Poirier not to execute on the judgment
except against Pacific, allowing judgment to be entered
against Mendoza in the amount of $950, 000. Id.
January 31, 2019, Pacific filed this motion for partial
summary judgment on its claim that it had no duty to defend
Mendoza under the policy. Docket No. 26. On July 12, 2019,
defendants filed a motion for partial summary judgment on the
duty to defend. Docket No. 46. On July 17, 2019, Pacific
filed a motion for partial summary judgment on the duty to
indemnify. Docket No. 49. On August 12, 2019, Pacific filed
an amended complaint, adding claims for recission and breach
of contract against Mendoza. Docket No. 59 at 10-12,