United States District Court, D. Colorado
OPINION AND ORDER ON JOINT MOTION FOR SUMMARY
S. Krieger, Senior United States District Judge
MATTER comes before the Court upon the parties'
Joint Motion for Summary Judgment (## 25,
26), the Stipulated Facts (#
24), the parties' Responses (##
27, 28), and the parties'
Replies (## 29, 31). For
the reasons that follow, the Plaintiff's Motion is
Court exercises jurisdiction under 28 U.S.C. § 1332.
a case in which the Plaintiff, KB Home Colorado Inc., seeks
to recover insurance benefits from Defendant Peerless
Indemnity Insurance Co. KB Home is a general contractor that
built and sold condominium units at the First Creek
Condominium development in Denver, Colorado. Beginning in
2002 for the First Creek project, KB Home subcontracted with
Metco Landscape Inc. for landscaping work.
beginning of their contractual relationship, the subcontracts
required Metco to maintain commercial general liability (CGL)
insurance and to name KB Home as additional insured.
Beginning in 2007, the subcontracts created a “Wrap-Up
Insurance Program” that “relieved”
Metco's obligation to maintain CGL insurance in favor of
KB Home for the duration of the Wrap-Up. Participation in the
Wrap-Up applied only to CGL insurance and did not affect
Metco's obligation to maintain other types of insurance.
The 2007 subcontract lasted for a year and a half, the 2008
subcontract lasted for a year, and the 2009 subcontract was
executed on December 1, 2009. Though the 2009 subcontract
does not specify the end of its term, the Wrap-Up ended on
November 30, 2010.
issued Metco a CGL policy (the Policy) from 2012 to 2015. KB
Home was not listed as an insured. In October 26, 2014,
during the term of the Policy, the First Creek Owners
Association sued KB Home in state court for construction
defects. KB Home, in turn, filed third-party claims against
its subcontractors, including Metco. KB Home requested that
Peerless defend it. Peerless denied the request in August
The Commercial General Liability policy is not a substitute
for a Performance Bond. It does not guarantee that the
insured's products or services will perform in a
workmanlike manner, or whether they will perform in any
particular manner, or, indeed, that they will perform at all.
Accidents involving “bodily injury” or
“property damage” to third persons are covered,
but not reimbursement for the failure of the insured's
own products or services. It is the insured that bears the
risk of repairing or replacing allegedly defective products
or faulty workmanship, while the insurer bears the risk of
damage to the property of others. Damages predicated or
premised on the insured's product or its work are not
covered by the Policy. . . .
While [the Peerless Policy] included a Blanket Additional
Insured Contractors endorsement that provided a basis to
extend additional insured status with respect to all persons
with whom you have entered into a requirement to provide
additional insured status, the contract that KB Home drafted
and that Metco executed simply did not contain a requirement
for Metco to maintain insurance coverage beyond the period in
which Metco was performing work on the project.
(# 24-13 at 8, Ex. M at
518.) Peerless again denied coverage upon
reconsideration for the same reasons.
action, KB Home seeks: (1) a declaratory judgment stating
that Peerless is obligated to defend KB Home (2) damages for
Peerless' breach of the implied covenant of good faith
and fair dealing, (3) damages for Peerless' breach of
contract based on KB Home's status as a third-party
beneficiary of the Policy, (4) damages for a violation of
C.R.S. §§ 10-3-1115, 1116 based on unreasonable
delay of the claim, and various equitable remedies.
parties jointly move for summary judgment on a discrete issue
- whether Peerless had a duty to defend KB Home in the state
court action. They have submitted stipulated facts and
exhibits (# 24), which the Court considers
as the complete record on the issue.