First Mercury Insurance Company, v. Stephenson Construction Inc.
ORDER granting Plaintiff's 14 Motion for Partial Summary Judgment. When the remaining claims have been disposed of, the Clerk shall enter judgment in favor of Plaintiff on Count I of its Complaint, by Judge William J. Martinez on 9/19/12.(lygsl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 12-cv-0862-WJM-KMT
FIRST MERCURY INSURANCE COMPANY,
STEPHENSON CONSTRUCTION INC.,
ORDER GRANTING PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
Plaintiff First Mercury Insurance Company brings this declaratory judgment
action against Defendant Stephenson Construction Inc. (“Stephenson) asking the Court
to declare the rights of the parties under an insurance policy issued by Plaintiff to
Defendant. (ECF No. 1.) Before the Court is Plaintiff’s Motion for Summary Judgment
(“Motion”) on Count I of its Complaint seeking a declaration that Plaintiff owes no duty
to defend Stephenson in two cases pending in the Colorado state courts. (ECF No.
14.) Defendant has not opposed the Motion.1 For the reasons set forth below,
Plaintiff’s Motion is granted.
I. LEGAL STANDARD
When a nonmoving party fails to respond to a motion, the Court still must
examine the motion to determine if the moving party has met its initial burden of
demonstrating that no material issues of fact remain for trial and that the moving party
Defendant’s failure to oppose the Motion for Summary Judgment appears to be part of
a an agreed-upon settlement of this action. (ECF No. 14 at 1.)
is entitled to judgment as a matter of law. Reed v. Bennett, 312 F.3d 1190, 1194-95
(10th Cir. 2002). If it has not, summary judgment is not appropriate because “[n]o
defense to an insufficient showing is required.” Id.
Summary judgment is appropriate only if there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem
Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). Whether there is a genuine dispute
as to a material fact depends upon whether the evidence presents a sufficient
disagreement to require submission to a jury or conversely, is so one-sided that one
party must prevail as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 248-49
(1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132 (10th Cir. 2000); Carey v. U.S. Postal
Service, 812 F.2d 621, 623 (10th Cir. 1987).
A fact is “material” if it pertains to an element of a claim or defense; a factual
dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a
reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248.
The Court must resolve factual ambiguities against the moving party, thus favoring the
right to a trial. Houston v. Nat’l General Ins. Co., 817 F.2d 83, 85 (10th Cir. 1987).
This action arises out an insurance policy—policy number FMTX007924
(“Policy”)—issued by Plaintiff to Defendant in September 2010.2 (ECF No. 14 at 2.)
Since 2004, Defendant has also been insured under a policy issued by non-party
As Plaintiff’s Motion for Summary Judgment is unopposed, the Court considers the
facts set forth therein as undisputed for purposes of the Motion. See Fed. R. Civ. P. 56(e).
CICNA. (Id. at 6.) Defendant is currently litigating two cases in the Colorado State
Courts involving construction defect claims (the “Underlying Actions”). (Id.) CICNA is
providing a defense for Stephenson in both of those actions. (Id. at 8.)
Count I of Plaintiff’s Complaint alleges that Plaintiff owes no duty to defend
Stephenson in the Underlying Actions. (ECF No. 1 at 8-9.) Plaintiff moves for summary
judgment on this Count and argues that the Policy at issue here is “excess” to a
Defendant’s policy issued by CICNA and, therefore, under the terms of the Policy, it
owes no duty to defend. (Id. at 10.)
Since federal jurisdiction is founded on diversity of citizenship, the Policy must be
interpreted under Colorado law. Erie R. Co. v. Tompkins, 304 U.S. 64 (1938). In
Colorado, interpretation of insurance contract terms is based upon the familiar
principles of contract interpretation. Hecla Mining Co. v. New Hampshire Ins. Co., 811
P.2d 1083, 1090 (Colo. 1991). Contract language is to be interpreted according to its
plain and ordinary meaning whenever possible. Chacon v. American Family Mutual Ins.
Co., 788 P.2d 748, 750 (Colo. 1990). If language is ambiguous, it must be construed
against the insurer. Hecla, 811 P.2d at 1090. Terms are ambiguous when they are
susceptible to more than one reasonable interpretation. Id. at 1091.
The Policy states that “[w]hen this insurance is excess, we will have no duty . . .
to defend the insured against any ‘suit’ if any other insurer has a duty to defend the
insured against that ‘suit’.” (ECF No. 14 at 4-5.) It is undisputed that CICNA has a duty
to defend Stephenson in the Underlying Actions and is providing such defense. (Id.at
8.) Therefore, the sole issue remaining is whether the Policy is “excess” to the CICNA
The Policy is “excess” when there is any other insurance policy that provides
coverage for the damages at issue and where such damages existed before the
inception of the Policy. (Id. at 4-5.) As set forth above, CICNA’s policy provides
coverage for the damages at issue in the Underlying Actions. Moreover, it is
undisputed that the loss at issue in the Underlying Actions existed before the Policy’s
term began. (Id. at 10-11.) Therefore, Plaintiff’s Policy is excess to CICNA’s policy.
Because Plaintiff’s Policy is excess, per the terms of the Policy, the Court
concludes that Plaintiff owes no duty to defend Defendant in the Underlying Actions and
summary judgment in favor of Plaintiff on Count I of its Complaint is appropriate.
For the reasons set forth above, Plaintiff’s Motion for Summary Judgment (ECF
No. 14) is GRANTED. When the remaining claims have been disposed of, the Clerk
shall enter judgment in favor of Plaintiff on Count I of its Complaint.
Dated this 19th day of September, 2012.
BY THE COURT:
William J. Martínez
United States District Judge
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