Garrison Property and Casualty Insurance Company v. Horton et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Nina Y. Wang
Civil Action No. 22-cv-03187-NYW-CYC
GARRISON PROPERTY AND CASUALTY INSURANCE COMPANY, and
USAA CASUALTY INSURANCE COMPANY,
Plaintiffs/Counterclaim Defendants,
v.
NICHOLAS S. HORTON, and
TAISHARA ABEYTA,
Defendants/Counterclaim Plaintiffs.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendant & Counterclaimant Nicholas Horton’s
Motion for Partial Summary Judgment (“Horton Motion for Partial Summary Judgment”),
[Doc. 131], and Plaintiffs/Counterclaim Defendants’ Motion for Summary Judgment
(“Plaintiffs’ Motion for Summary Judgment”), [Doc. 161]. 	The Court has reviewed the
Motions and concludes that oral argument would not materially assist in their resolution.
For 	the 	reasons 	herein, 	Plaintiffs’ 	Motion 	for 	Summary 	Judgment 	is 	respectfully
GRANTED and the Horton Motion for Partial Summary Judgment is respectfully DENIED.
BACKGROUND
In 2018, Nicholas Horton (“Mr. Horton”) was operating a motorcycle with Taishara
Abeyta (“Ms. Abeyta,” and with Mr. Horton, “Defendants”) as his passenger. [Doc. 29 at
¶ 9]. Defendants were involved in a collision and both were injured as a result. [Id.]. Ms.
Abeyta subsequently sued Mr. Horton for negligence in state court. [Id. at ¶ 12].
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The motorcycle was owned by Mr. Horton’s father, Daniel Horton,1 and was
insured through Progressive Casualty Insurance Company (“Progressive”). 	[Id. at ¶¶ 3,
9, 13]. 	In addition, during the relevant time period, Nicholas Horton held automobile
insurance 	through 	Plaintiff 	Garrison 	Property 	and 	Casualty 	Insurance 	Company
(“Garrison”), and Daniel Horton held automobile insurance through USAA Casualty
Insurance Company (“USAA,” and with Garrison, “Plaintiffs” or the “Insurers”). 	[Id. at
¶¶ 7–8]. Both Progressive and Garrison provided Mr. Horton a defense in Ms. Abeyta’s
state-court case, though Garrison did so under a reservation of rights. [Id. at ¶¶ 13–14].
The state case went to trial and resulted in a $42 million verdict in Ms. Abeyta’s favor,
with the jury finding Mr. Horton responsible for 5% of her damages. 	[Id. at ¶ 15].
Judgment was entered against Mr. Horton for just over $3 million. [Id. at ¶ 16].
On December 9, 2022, Garrison filed this declaratory judgment action. 	See
generally [Doc. 1]. Garrison later filed an Amended Complaint, which added USAA as a
Plaintiff. See [Doc. 29]. The Insurers seek a declaratory judgment that Daniel Horton’s
motorcycle was not covered under their Policies. 	[Id. at ¶ 22]. 	Mr. Horton asserted
counterclaims against Plaintiffs for (1) breach of contract; (2) “willful and wanton breach
of insurance contract”; and (3) unreasonable delay or denial under Colo. Rev. Stat. § 10-
3-1115 and -1116. [Doc. 63 at ¶¶ 32–50]. Mr. Horton assigned his common law bad faith
claim to Ms. Abeyta, see [Doc. 60 at ¶ 3], and Ms. Abeyta asserts that bad faith
counterclaim against the Insurers, as well, see [Doc. 62 at 22–23 ¶¶ 46–52].
1 When necessary for clarity’s sake, the Court refers to Nicholas and Daniel Horton using
their first names.
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On August 12, 2024, Mr. Horton moved for partial summary judgment in his favor,
asking the Court to find (1) “coverage in his favor,” and (2) that the Insurers “can’t claim
the benefit of any provision to avoid coverage, since they breached the policies first,
and/or since they are waived or estopped from asserting no coverage.” [Doc. 131 at 21].2
The 	Insurers 	subsequently 	moved 	for 	summary 	judgment 	in 	their 	favor 	on 	their
declaratory judgment claim and all of Defendants’ counterclaims, arguing that no
coverage exists under the relevant Policies and, as a result, Defendants cannot prevail
on their counterclaims. [Doc. 161 at 2].
LEGAL STANDARD
Summary judgment is appropriate “if 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 dispute is genuine if there is sufficient evidence so that a rational
trier of fact could resolve the issue either way. A fact is material if under the substantive
law it is essential to the proper disposition of the claim.” Crowe v. ADT Sec. Servs., Inc.,
649 F.3d 1189, 1194 (10th Cir. 2011) (cleaned up).
“Cross-motions for summary judgment are treated as two individual motions for
summary judgment and held to the same standard,” Banner Bank v. First Am. Title Ins.
Co., 916 F.3d 1323, 1326 (10th Cir. 2019), and “the denial of one does not require the
grant of another,” Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th Cir. 1979).
However, the burden at summary judgment slightly differs depending on which party
bears the ultimate burden at trial. 	A movant that does not bear the ultimate burden of
2 Ms. Abeyta filed a “Joinder in Defendant and Counterclaimant Nicholas Horton’s Motion
for Partial Summary Judgment,” wherein she “incorporates said Motion including all
attachments and exhibits by reference.” [Doc. 132 at 1].
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persuasion at trial does not need to disprove the other party’s claim; rather, the movant
must only point the Court to a lack of evidence for the other party on an essential element
of that party’s claim. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998).
Once this movant has met its initial burden, the burden then shifts to the nonmoving party
to “set forth specific facts showing that there is a genuine issue for trial.” 	Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). But “if the moving party has the burden of
proof [at trial], a more stringent summary judgment standard applies.” Pelt v. Utah, 539
F.3d 1271, 1280 (10th Cir. 2008). 	A moving party who bears the burden at trial “must
establish, as a matter of law, all essential elements of the issue before the nonmoving
party can be obligated to bring forward any specific facts alleged to rebut the movant’s
case.” Id. When considering the evidence in the record, the Court cannot and does not
weigh the evidence or determine the credibility of witnesses. 	See Fogarty v. Gallegos,
523 F.3d 1147, 1165 (10th Cir. 2008). At all times, the Court views the record in the light
most favorable to the nonmoving party. Banner Bank, 916 F.3d at 1326.
UNDISPUTED MATERIAL FACTS
These material facts are drawn from the summary judgment record and are
undisputed unless otherwise noted.3
3 On two occasions, this Court struck Ms. Abeyta’s Response to Plaintiffs’ Motion for
Summary Judgment for failure to comply with the undersigned’s Civil Practice Standards
and Rule 56. See [Doc. 174; Doc. 186]. The Court specifically called out, inter alia, Ms.
Abeyta’s improper attempt to incorporate into her Response “all her prior pleadings as
well as the pleadings of her co-defendant relating to these same issues, including
Horton’s Response to the Insurers’ MSJ,” [Doc. 174], as well as her failure to comply with
the requirement to set out additional statements of disputed fact in numbered paragraphs
with supporting citations to the record, [Doc. 186]. 	The Court warned Ms. Abeyta that
“[a]dditional non-compliance with the Court’s Practice Standards or the Federal Rules
may result in the Court considering a fact undisputed for purposes of the Motion.” 	[Id.].
Despite the Court’s admonitions, Ms. Abeyta’s Response commits the same violations
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The Collision:
1. 	On March 13, 2018, while Nathan Horton was operating a motorcycle and
Ms. Abeyta was his passenger, the two were involved in a collision. 	[Doc. 131 at ¶ 3;
Doc. 135 at 2 ¶ 3; Doc. 29 at ¶ 9].
2. 	The motorcycle was owned by Nathan Horton’s father, Daniel Horton, and
was insured through Progressive. [Doc. 131 at ¶¶ 4–5; Doc. 135 at 2 ¶¶ 4–5; Doc. 29 at
¶¶ 9, 13].
The Insurance Policies:
3. 	At the time of the collision, Nicholas Horton held an automobile insurance
policy through Garrison that insured his pickup truck, and Daniel Horton held an
automobile insurance policy that insured four automobiles (together, the “Policies”). [Doc.
161 at ¶ 1; Doc. 172 at 2 ¶ 1; Doc. 189 at ¶ 1]; see generally [Doc. 64-1 (the “Garrison
Policy”); Doc. 64-2 (the “USAA Policy”)].
4. 	The Policies each contain the following three exclusions, which the Court
refers to as “Exclusion B.1,” “Exclusion B.2,” and “Exclusion B.3,” respectively:
B. We 	do 	not 	provide 	Liability 	Coverage 	for 	the 	ownership,
maintenance, or use of:
1. 	Any vehicle that is not your covered auto unless that vehicle is:
a. 	A four- or six-wheel land motor vehicle designed for use on
public roads;
b. 	A moving van for personal use;
previously highlighted by the Court, as she (1) does not set forth her additional disputed
facts in numbered paragraph form or provide citations to the record; and (2) still attempts
to “incorporate[] the factual summations and opinions of” her experts and Mr. Horton’s
additional statement of facts. See, e.g., [Doc. 189 at 12]. These procedurally improper
arguments are insufficient to establish a dispute of material fact and the Court does not
consider them. See Fed. R. Civ. P. 56(c)(1)(A), (e)(2).
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c. 	A miscellaneous vehicle; or
d. 	A vehicle used in the business of farming or ranching.
2. 	Any vehicle, other than your covered auto, that is owned by you,
or furnished or available for your regular use. 	This exclusion
(B.2) does not apply to a vehicle not owned by you if the vehicle’s
owner has valid and collectible primary liability insurance or self-
insurance in force at the time of the accident.
3. 	Any vehicle, other than your covered auto, that is owned by or
furnished or available for the regular use of, any family member.
This exclusion (B.3) does not apply:
a. 	To your maintenance or use of such vehicle; or
b. 	To a vehicle not owned by any family member if the vehicle’s
owner has valid and collectible primary liability insurance or
self-insurance in force at the time of the accident.
[Doc. 161 at ¶ 6; Doc. 172 at 2 ¶ 6; Doc. 189 at ¶ 6; Doc. 64-1 at 26, Doc. 64-2 at 19].
5. 	The Policies define “your covered auto” to mean “[a]ny vehicle shown on
the Declarations” or “[a]ny newly acquired vehicle.” [Doc. 161 at ¶ 7; Doc. 172 at 2 ¶ 7;
Doc. 189 at ¶ 7; Doc. 64-1 at 23; Doc. 64-2 at 16].
6. 	“Newly acquired vehicle” is defined in the Policies as follows:
1. “Newly acquired vehicle” means a vehicle, not insured under
another policy, that is acquired by you or any family member
during the policy period and is:
a. 	A private passenger auto, pickup, trailer, or van;
b. 	A miscellaneous vehicle that is not used in any business or
occupation; or
c. 	A motorcycle, but only if a motorcycle is shown on the
current Declarations.
[Doc. 161 at ¶ 7; Doc. 172 at 2 ¶ 7; Doc. 189 at ¶ 7; Doc. 64-1 at 23; Doc. 64-2 at 16].
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7. 	A “miscellaneous vehicle” means a “motor home; golf car; snowmobile; all-
terrain vehicle; or dune buggy.” [Doc. 161 at ¶ 8; Doc. 172 at 3 ¶ 8; Doc. 189 at ¶ 8; Doc.
64-1 at 22; Doc. 64-2 at 15].
8. 	A “motorcycle” is defined as “a two or three-wheeled motor vehicle that is
subject to motor vehicle licensing in the location where the motorcycle is principally
garaged.” [Doc. 161 at ¶ 9; Doc. 172 at 3 ¶ 9; Doc. 189 at ¶ 9; Doc. 64-1 at 23; Doc. 64-
2 at 16].
9. 	Daniel Horton’s motorcycle was not listed as “Your Covered Auto” on either
of the Policies. [Doc. 161 at ¶ 4; Doc. 172 at 2 ¶ 4; Doc. 189 at ¶ 4; Doc. 64-1 at 6, 23;
Doc. 64-2 at 4, 16].
The Parties’ Dealings and the State-Court Litigation:
10. 	In July 2019, Ms. Abeyta sued BAS Rentals Inc., a traffic control company,
alleging that BAS Rentals negligently caused the collision. 	[Doc. 161 at ¶ 23; Doc. 172
at 4 ¶ 23; Doc. 189 at ¶ 23]; see generally [Doc. 64-3].
11. 	On October 28, 2019, Ms. Abeyta’s lawyer sent Plaintiffs a letter stating that
Ms. Abeyta was “offering to release your insured from any claims from this collision in
exchange for payment of th[e] liability limits.” 	[Doc. 131 at ¶ 8; Doc. 135 at 4 ¶ 8; Doc.
135-2 at 2].
12. 	On October 31, 2019, Plaintiffs responded to the letter stating that “the
USAA policy would not afford coverage to” Ms. Abeyta, specifically mentioning Exclusion
B.2. [Doc. 161 at ¶ 22; Doc. 172 at 3–4 ¶ 22; Doc. 189 at ¶ 22; Doc. 161-5 at 2–3].4
4 The Parties dispute whether this denial of coverage was based exclusively on Exclusion
B.2, but do not dispute the contents of the letter. [Doc. 161 at ¶ 22; Doc. 172 at 3–4 ¶ 22;
Doc. 189 at ¶ 22].
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13. 	On June 17, 2020, Ms. Abeyta offered to settle with USAA for $100,000.
[Doc. 131 at ¶ 14; Doc. 135 at ¶ 14; Doc. 131-6 at 1–4].
14. 	USAA rejected the offer and reiterated that the USAA Policy did not afford
coverage. [Doc. 131 at ¶ 15; Doc. 135 at 4 ¶ 15; Doc. 131-7 at 1].
15. 	In November 2020, after settling with BAS Rentals, Ms. Abeyta amended
her complaint to add a negligence claim against Mr. Horton. [Doc. 161 at ¶¶ 26, 31; Doc.
172 at 4–5 ¶¶ 26, 31; Doc. 189 at ¶¶ 26, 31; Doc. 64-8 at 1; Doc. 64-4 at 1].
16. 	Mr. Horton was served with Ms. Abeyta’s amended complaint on February
18, 2021. [Doc. 161 at ¶ 32; Doc. 172 at 5 ¶ 32; Doc. 189 at ¶ 32; Doc. 64-9 at 1].
17. 	In March 2021, Progressive requested that Garrison participate in the
defense of the state-court case, and that same month, Garrison sent a letter to Mr. Horton
stating that “if we believe it’s in your best interest to settle the claim, we’ll attempt to reach
a settlement within your policy limits.”5 [Doc. 161 at ¶¶ 34–35; Doc. 172 at 5 ¶¶ 34–35;
Doc. 189 at ¶¶ 34–35; Doc. 131-9 at 1; Doc. 161-8 at 1].
18. 	That same month, Garrison submitted a $100,000 settlement offer to Ms.
Abeyta. [Doc. 131 at ¶ 22; Doc. 135 at 5 ¶ 22; Doc. 131-10 at 1].
19. 	Ms. Abeyta rejected Garrison’s offer. [Doc. 131 at ¶ 25; Doc. 135 at 5 ¶ 25;
Doc. 131-11 at 1–2].
20. 	In August 2021, Garrison hired the law firm of Wheeler Trigg O’Donnell to
defend Mr. Horton against Ms. Abeyta’s case. [Doc. 161 at ¶ 40; Doc. 172 at 7 ¶ 40; Doc.
189 at ¶ 40; Doc. 63 at ¶ 21].
5 The Parties dispute the characterization of Garrison’s letter, but not the contents. See
[Doc. 131 at ¶ 21; Doc. 135 at 5 ¶ 21; Doc. 161 at ¶ 35; Doc. 172 at 6 ¶ 35].
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21. 	On October 4, 2021, Garrison sent a letter to Mr. Horton stating that
Garrison “reserve[s] the right the right to deny coverage under the policy as to Ms.
Abeyta’s claim against you for reasons including that no coverage is provided under the
policy for the ownership, maintenance, or use of the 2003 Harley Davidson motorcycle
you were operating at the time of the accident,” specifically mentioning Exclusion B.1 (the
“October 2021 Letter”). [Doc. 161 at ¶ 41; Doc. 172 at 7 ¶ 41; Doc. 189 at ¶ 41; Doc. 64-
12 at 3–4].
22. 	When Mr. Horton was asked if he would have done anything differently had
he received the October 2021 Letter earlier, he answered “I don’t know,” and stated that
it would be “fair” to say that he would have not done “anything different because of th[e]
letter.” 	[Doc. 161 at ¶ 43; Doc. 172 at 7 ¶ 43; Doc. 189 at ¶ 43;6 Doc. 135-1 at 128:8–
129:2].
23. 	In May 2022, Mr. Horton and Ms. Abeyta participated in mediation. 	[Doc.
161 at ¶ 44; Doc. 172 at 7 ¶ 44; Doc. 189 at ¶ 44; Doc. 63 at ¶ 23].
24. 	In July 2022, a jury determined that Mr. Horton was 5% at fault for the
collision and entered judgment against him in the amount of $3,014,602.59, plus post-
judgment interest. 	[Doc. 161 at ¶ 45; Doc. 172 at 8 ¶ 45; Doc. 189 at ¶ 45; Doc. 63 at
¶¶ 25–26; Doc. 64-6 at 3; Doc. 64-7 at 1].
6 Plaintiffs assert that Mr. Horton “did not identify anything he would have done differently
had he received the reservation-of-rights letter earlier.” 	[Doc. 161 at ¶ 43]. 	Mr. Horton
admits that this was his testimony, but denies Plaintiffs’ assertion for reasons “explained
in” Paragraphs 29 and 30 of his Response to Insurers’ Statement of Facts. [Doc. 172 at
7 ¶ 43]. 	The Court has reviewed those Paragraphs and finds that they do not contain
anything directly responsive to Plaintiffs’ assertion. See [id. at 5 ¶¶ 29–30].
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This Litigation:
25. 	Mr. Horton assigned his common law bad faith claim to Ms. Abeyta. [Doc.
161 at ¶ 13; Doc. 177 at ¶ 13; Doc. 189 at ¶ 13; Doc. 161-2 at 3 ¶ 17].
26. 	With respect to her bad faith counterclaim, Ms. Abeyta claims as damages
“the Excess on her assigned claim,” which consists of “the full amount of the principal and
cost judgments (with post-judgment interest that were entered against Horton which
exceed the policy limits of both the [Policies].” [Doc. 161 at ¶ 17; Doc. 189 at ¶ 17; Doc.
161-3 at 5, 8].
ANALYSIS
The Insurers move for summary judgment on their declaratory judgment claim,
seeking a declaration that the Policies’ Exclusion B.1 bars coverage for Ms. Abeyta’s
claim against Mr. Horton. 	[Doc. 161 at 21]. They also move for judgment in their favor
on each of Defendants’ counterclaims, also based on a lack of coverage. 	[Id.].
Meanwhile, Mr. Horton moves for summary judgment in that he asks the Court to find
(1) “coverage in his favor,” and (2) “that USAA and Garrison can’t claim the benefit of any
provision to avoid coverage.” [Doc. 131 at 21]. The Court addresses coverage first before
turning to the Parties’ remaining arguments.
I. 	Whether Plaintiffs Are Permitted to Assert Lack of Coverage
Before turning to the merits of the Parties’ arguments, the Court must first address
two threshold arguments. First, Mr. Horton argues that Plaintiffs “waived or are estopped
from asserting no coverage under the policies by their conduct and prejudice to Horton.”
[Doc. 172 at 16–17; Doc. 131 at 20–21]. 	In the alternative, in his affirmative Motion for
Partial Summary Judgment, Mr. Horton argues that the Insurers each breached their
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duties to indemnify (and thus breached the Policies) and, as a result, they “can’t claim the
benefit of any provision to avoid coverage.” [Doc. 131 at 19].
A. 	Waiver or Estoppel
Mr. Horton argues that Plaintiffs waived their lack of coverage argument, or should
be estopped from arguing that Exclusion B.1 bars coverage in this case, because
Plaintiffs did not disclaim coverage under Exclusion B.1 until years after the collision. [Id.
at 19–20; Doc. 172 at 16–17]. 	He relies on caselaw stating, in dicta, that “[a]n insurer
should raise (or at least reserve) all defenses within a reasonable time after learning of
such defenses, or those defenses may be deemed waived or the insurer may be estopped
from raising them.” U.S. Fid. & Guar. Co. v. Budget Rent-A-Car Sys., Inc., 842 P.2d 208,
210 n.3 (Colo. 1992) (citing Allan D. Windt, Insurance Claims and Disputes §§ 2.23–2.24
at 68–75 (2d ed. 1988)). 	Mr. Horton argues that, because the Insurers did not invoke
Exclusion B.1 within “a reasonable time,” they should not be permitted to now argue that
Exclusion B.1 bars coverage. See [Doc. 131 at 20; Doc. 172 at 16–17].
“[W]aiver and estoppel are distinct concepts.” 	Gosman v. State Farm Mut. Auto.
Ins. Co., No. 06-cv-00688-WDM-CBS, 2008 WL 239571, at *6 (D. Colo. Jan. 25, 2008);
7 Couch on Insurance § 101:8 (3d ed. Dec. 2024 update) (“Waiver involves an intentional
relinquishment of policy right. 	Estoppel applies where the insured has relied on the
insurer’s conduct to its detriment.” (footnote omitted)). 	Mr. Horton, however, does not
make clear arguments under the separate doctrines—rather, he merely asserts that
“USAA and Garrison waived or are estopped from asserting no coverage under the
policies by their conduct and prejudice to Horton.” 	[Doc. 131 at 20–21]; see also [Doc.
172 at 16–17]. 	To the extent he argues that the Insurers waived their no-coverage
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arguments, the Court respectfully disagrees. “[W]hile an insurer can waive a defense that
amounts to a ‘forfeiture of a policy,’ coverage and exclusion issues are not subject to
waiver.” 	Gallegos v. Safeco Ins. Co. of Am., 646 F. App’x 689, 695 (10th Cir. 2016)
(emphasis added) (quoting Hartford Live Stock Ins. Co. v. Phillips, 372 P.2d 740, 742
(Colo. 1962)). 	Neither waiver nor estoppel may “bring within the coverage of a policy
risks not covered by its terms, or risks expressly excluded therefrom.” McGowan v. State
Farm Fire & Cas. Co., 100 P.3d 521, 526 (Colo. App. 2004) (quoting Empire Cas. Co. v.
St. Paul Fire & Marine Ins. Co., 764 P.2d 1191, 1198 (Colo. 1988)).
However, in the context of estoppel, there is an exception to this rule that “exists
upon proof of three facts”: 	(1) the insurer “knew of the noncoverage”; (2) the insurer
“assumed defense of the action without a reservation of rights”; and (3) the insured “relied
to its detriment on the insurer’s defense.” 	Evanston Ins. Co. v. L. Off. of Michael P.
Medved, P.C., 890 F.3d 1195, 1201 (10th Cir. 2018) (citing Mgmt. Specialists, Inc. v.
Northfield Ins. Co., 117 P.3d 32, 37–38 (Colo. App. 2004)). But although Mr. Horton bears
the burden of showing that estoppel applies, see Nicholls v. Zurich Am. Ins. Grp., 244 F.
Supp. 2d 1144, 1157 (D. Colo. 2003), he never explains how he satisfies the elements of
this exception. Instead, he only argues that he was prejudiced. See [Doc. 131 at 20–21
(arguing that the Insurers should be estopped from denying coverage “by their conduct
and prejudice to Horton”); Doc. 152 at 14–15 (same); Doc. 172 at 16–17 (arguing that the
Insurers’ arguments about non-coverage were not raised “within a reasonable time, so
the Court should find waiver or estoppel as a matter of law” (quotation omitted))]. 	The
Court cannot act as Mr. Horton’s advocate or construct arguments on his behalf. 	Mays
v. Colvin, 739 F.3d 569, 575 (10th Cir. 2014).
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To the extent Mr. Horton’s prejudice-related argument could be construed as a
contention that this exception applies, the argument is still insufficient to demonstrate that
the Insurers should be estopped from arguing that Exclusion B.1 bars coverage. 	As a
preliminary matter, there is no evidence that USAA—which insured Daniel Horton, not
Nathan Horton—ever assumed a defense of Nathan Horton. 	See [Doc. 172 at 18 (Mr.
Horton asserting that “it is undisputed that USAA never defended Horton in the underlying
action”)]. 	Therefore, with respect to USAA, Mr. Horton cannot meet his burden of
establishing that the estoppel exception applies. 	Evanston Ins. Co., 890 F.3d at 1201;
see also Trujillo v. State Farm Mut. Auto. Ins. Co., No. 18-cv-00410-WJM-NRN, 2019 WL
3996882, at *7 (D. Colo. Aug. 23, 2019) (concluding that estoppel did not apply where the
insurer did not assume and conduct a defense of a third-party action against its insured);
14A Couch on Insurance § 202:56 (“[An] insurer may not be estopped to raise [a no-
coverage argument] if the insurer did not undertake the defense.”). The Court thus limits
its remaining analysis to Garrison.
To avoid Plaintiffs’ Motion for Summary Judgment as to lack of coverage due to
estoppel, Mr. Horton must demonstrate at least a genuine issue of material fact7 that
(1) Garrison knew of facts indicating noncoverage; (2) Garrison assumed its defense of
Mr. Horton without a reservation of rights; and (3) Mr. Horton relied, to his detriment, on
Garrison’s defense. Evanston Ins. Co., 890 F.3d at 1201. It is undisputed that, in October
2019, the Insurers disclaimed coverage and expressly mentioned Exclusion B.2. 	[Doc.
7 To prevail on his own Motion for Partial Summary Judgment as to estoppel, Mr. Horton
must meet a higher bar, i.e., he must establish that there is no genuine issue of material
fact as to any of the elements, thereby warranting judgment as a matter of law in his favor.
Pelt, 539 F.3d at 1280.
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161-5 at 2–3]. 	It is further undisputed that Garrison acknowledged Ms. Abeyta’s claim
against Mr. Horton in March 2021, [Doc. 131-9 at 1], hired Wheeler Trigg O’Donnell to
defend Mr. Horton in August 2021, [Doc. 62 at ¶ 21], and reserved its right to deny
coverage and specifically mentioned Exclusion B.1 in the October 2021 Letter, [Doc. 64-
12 at 3–4].
Because Mr. Horton must prove that he was prejudiced by Garrison’s assumption
of the underlying defense, Evanston Ins. Co., 890 F.3d at 1201, the relevant time period
for assessing prejudice is thus between Garrison’s assumption of the defense. 	See
Evanston Ins. Co., 890 F.3d at 1201 (in evaluating prejudice for estoppel purposes,
focusing on the nine-month period between when the insurer assumed the defense under
a reservation of rights, but “without explaining the reasons for the reservation,” and when
the insurer sent another reservation-of-rights letter “that supplied the[] reasons” for the
reservation of rights); see also Gulf Ins. Co. v. State, 607 P.2d 1016, 1019 (Colo. 1979)
(“In order to establish estoppel, it must appear, inter alia, that the [insured] relied upon
[the insurer’s] defense of the suit to its detriment.” (emphasis added)). Here, Mr. Horton
claims that Garrison assumed the defense in August 2021, see [Doc. 172 at 8 ¶ 46; id. at
19]—and it is undisputed that Garrison reserved its right to deny coverage under
Exclusion B.1 in the October 2021 Letter, [Doc. 64-12 at 3–4].
In his Motion for Partial Summary Judgment, Mr. Horton argues that he “is
prejudiced” and sets forth a nine-step timeline of some of Garrison’s conduct. [Doc. 131
at 20–21]. 	But while Mr. Horton certainly takes issue with Garrison’s handling of the
underlying claim, his arguments of “prejudice” read as a critique of Garrison’s claims-
handling and litigation conduct as a whole, without connecting the dots between
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Garrison’s assumption of the defense and any particularized prejudice. 	The relevant
inquiry is not whether Mr. Horton was prejudiced by Garrison’s pre-2021 erroneous
position about who owned the motorcycle, see [Doc. 131 at 20], Garrison’s purported
failure to alert Mr. Horton of Ms. Abeyta’s settlement offers, [id.], or Garrison’s purported
delay in invoking Exclusion B.1, [id. at 21]. 	Instead, Mr. Horton must show that he was
prejudiced by Garrison’s assumption of the defense against Ms. Abeyta’s claim. 	Mgmt.
Specialists, 117 P.3d at 38; cf. Bd. of Cnty. Comm’rs v. Guarantee Ins. Co., 90 F.R.D.
405, 409 (D. Colo. 1981) (mere delay in disclaiming coverage is insufficient to invoke
estoppel when the insured has an “adequate opportunity to defend,” including by
negotiating settlement). 	Moreover, the mediation and trial occurred after Garrison
informed Mr. Horton of its position that Exclusion B.1 precluded coverage, [Doc. 63 at
¶¶ 23, 25–26], and it is undisputed that when Mr. Horton was asked if he could identify
anything he would have done differently if he received the October 2021 Letter earlier, he
answered “I don’t know,” and stated that it would be “fair” to say that he would have not
done “anything different because of th[e] letter.” 	[Doc. 135-1 at 128:8–129:2]. 	Cf.
Evanston Ins. Co., 890 F.3d at 1201 (finding no prejudice where “[a]ll settlement
negotiations occurred after [the insured] knew the details of [the insurer’s] coverage
position, and there [was] no evidence that the parties could have agreed on a settlement
amount before [the insured] obtained [the insurer’s] explanation for its reservation of
rights”).
Focusing on the relevant timeframe, Mr. Horton asserts only that Garrison “delayed
hiring defense counsel for Horton until August 2021 (6 months after he was served).”
[Doc. 131 at 20–21]. This assertion, however, is unaccompanied by any explanation or
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evidence that Mr. Horton was actually prejudiced by this delay, and is thus insufficient to
create a genuine dispute of material fact. Cf. Guarantee Ins. Co., 90 F.R.D. at 409 (delay
insufficient to invoke estoppel when insured has adequate opportunity to negotiate
settlement). Indeed, again, Mr. Horton concedes that even if he had received the October
2021 Letter earlier (and thus had known of Garrison’s reliance on Exclusion B.1 at an
earlier time during Garrison’s defense), he did not know whether he would have done
anything differently, and that it would be “fair” to say that he would not have done
“anything different because of th[e] letter.” 	[Doc. 161 at ¶ 43; Doc. 172 at 7 ¶ 43; Doc.
189 at ¶ 43; Doc. 135-1 at 128:8–129:2].
In sum, Mr. Horton has not demonstrated that this Court may ignore the general
rule that estoppel “cannot create coverage for risks falling outside of the insurance policy,”
Evanston Ins. Co., 890 F.3d at 1200, or identified any dispute of fact that must be decided
by a jury. 	The Court agrees with Plaintiffs that they are not estopped from arguing that
there is no coverage under the Policies under Exclusion B.1.
B. 	Preclusion by Breach
Alternatively, Mr. Horton argues that Garrison and USAA each breached their
respective Policy first and, as a result, the Insurers are precluded from “holding the terms
of the Policies against Horton.” 	[Doc. 131 at 16 (emphasis omitted)]. 	Mr. Horton’s
argument relies on Coors v. Security Life of Denver Insurance Co., 112 P.3d 59 (Colo.
2005). 	In Coors, an insurer breached the insurance policy by overcharging its insured,
and the insured rescinded the policy. Id. at 62–63. The insurer then tried to enforce the
policy’s early termination penalty. Id. at 63. The Colorado Supreme Court concluded that
the insurer could not enforce the termination provision because “[u]nder contract law, a
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party to a contract cannot claim its benefit where he is the first to violate its terms.” Id. at
64.
“The ‘prior breach’ doctrine is an equitable argument typically asserted by a
defendant who has been sued for specific performance by a plaintiff who was the first to
breach the contract.” 	DTC Energy Grp. v. Hirschfeld, 912 F.3d 1263, 1274 (10th Cir.
2018) (first citing In re Country World Casinos, Inc., 181 F.3d 1146, 1150 (10th Cir. 1999),
and then citing Sci. Packages, Inc. v. Gwinn, 301 P.2d 719, 722 (Colo. 1956) (en banc)).
Mr. Horton does not cite any case law applying the “prior breach” doctrine to preclude an
insurance company from arguing that no coverage exists under an insurance policy due
to the insurer’s purported first breach of the policy. See [Doc. 131 at 16–19].
Coors does not apply here. 	Plaintiffs are not attempting to enforce a contractual
right in the Policies; rather, their argument is that the subject dispute is outside of the
scope of the Policies and there is no coverage. See DTC Energy Grp., 912 F.3d at 1274
(affirming district court’s conclusion that prior breach doctrine was inapplicable where the
plaintiff “[sought] to use the doctrine as a sword to create liability for [the defendant] where
the text of [the parties’] agreement provide[d] for none”); cf. Leprino Foods Co. v. Factory
Mut. Ins. Co., 653 F.3d 1121, 1134 (10th Cir. 2011) (“Coors is not on point because
Factory Mutual’s argument is based on the prohibition of double recovery under Colorado
law, not a contractual right in the policy.”). 	Accordingly, the Court is respectfully
unpersuaded by Mr. Horton’s argument. And having concluded that the Insurers are not
precluded from arguing that the Policies do not afford coverage, the Court turns to the
merits of those arguments.
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II. 	Whether Coverage Exists
A. 	Interpreting Insurance Policies Under Colorado Law
The interpretation of an insurance policy is a question of law for a court to decide.
FDIC v. Bowen, 865 P.2d 868, 870 (Colo. App. 1993). Because the Court has diversity
jurisdiction over this case pursuant to 28 U.S.C. § 1332, see [Doc. 29 at ¶ 5], the Court
applies the substantive law of the forum state, including the forum’s choice-of-law rules,
Berry & Murphy, P.C. v. Carolina Cas. Ins. Co., 586 F.3d 803, 808 (10th Cir. 2009)
(applying Colorado law). 	In Colorado, the interpretation of an insurance policy is
“governed by the law of the state with the most significant relationship to the insurance
contract.” Id. Here, the Parties raise arguments under Colorado law and appear to agree
that Colorado law applies. See, e.g., [Doc. 161 at 12; Doc. 172 at 11–12; Doc. 189 at 14].
The Court follows the Parties’ lead. 	See Grynberg v. Total S.A., 538 F.3d 1336, 1346
(10th Cir. 2008) (“Because the parties’ arguments assume that Colorado law applies, we
will proceed under the same assumption.”).
“An insurance policy’s terms are construed according to principles of contract
interpretation: 	a court seeks to give effect to the intent and reasonable expectations of
the parties.” Auto-Owners Ins. Co. v. High Country Coatings, Inc., 388 F. Supp. 3d 1328,
1333 (D. Colo. 2019). “[W]ords should be given their plain and ordinary meaning unless
the intent of the parties, as expressed in the contract, indicates that an alternative
interpretation is intended.” Chacon v. Am. Fam. Mut. Ins. Co., 788 P.2d 748, 750 (Colo.
1990). “In determining the plain and ordinary meaning of a term in an insurance policy,
the Colorado Supreme Court has eschewed the use of ‘technical readings’ and instead
looks to ‘what meaning a person of ordinary intelligence would attach to’ a policy term.”
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Sullivan v. Nationwide Affinity Ins. Co. of Am., 842 F. App’x 251, 254 (10th Cir. 2021)
(quoting Bailey v. Lincoln Gen. Ins. Co., 255 P.3d 1039, 1051 (Colo. 2011)); see also
Bush v. State Farm Mut. Auto. Ins. Co., 101 P.3d 1145, 1146 (Colo. App. 2004)
(explaining that courts interpreting insurance policies “give the words their plain meaning,
avoid strained and technical interpretations, and construe the contract as would a
reasonable person of ordinary intelligence”).
If the terms of an insurance policy are ambiguous, i.e., they are “susceptible to
more than one reasonable interpretation,” Cary v. United of Omaha Life Ins. Co., 108
P.3d 288, 288 (Colo. 2005), then the policy is construed against the drafter and in favor
of coverage, Cotter Corp. v. Am. Empire Surplus Lines Ins. Co., 90 P.3d 814, 820 (Colo.
2004). 	However, disagreement between the parties as to the meaning of policy
provisions does not render the policy ambiguous. Ad Two, Inc. v. City & Cnty. of Denver
ex rel. Manager of Aviation, 9 P.3d 373, 377 (Colo. 2000).
B. 	The Policies
The Insurers argue in their Motion for Summary Judgment that there is no
coverage under the Policies for Ms. Abeyta’s claim against Mr. Horton and they are
entitled to summary judgment on their declaratory judgment claim. [Doc. 161 at 12–13].
They focus on Exclusion B.1, which they say “excludes any vehicle that is not your
covered auto, unless it meets one of the four listed exceptions,” and because “motorcycle”
is defined elsewhere in the Policies and does not fall within one of Exclusion B.1’s
exceptions, there is no coverage. [Id. at 13].
Mr. Horton does not contest the Insurers’ argument that the motorcycle does not
fall within the definition of “your covered auto” and does not fall within one of Exclusion
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B.1’s four exceptions. [Doc. 172 at 9–10].8 Instead, he points to Exclusions B.2 and B.3
and argues that coverage exists under the exceptions to these Exclusions. 	[Id. at 10–
13]. He argues that the Policies “provide 2 different types of liability coverage”: first, there
is “primary coverage” for “your covered auto,” i.e., vehicles listed on the Declarations
page; and second, the Policies provide “excess coverage” for “a ‘non-owned vehicle’ that
is not listed on the declarations page.” 	[Id. at 9]. 	He contends that Exclusions B.2 and
B.3 “trigger[] coverage” for the motorcycle as a “non-owned vehicle.” 	[Id. at 10–11]. 	In
the alternative, Mr. Horton asserts that Exclusion B.1 conflicts with the exceptions in
Exclusions B.2 and B.3 and that this “conflict creates an ambiguity which must be
construed in favor of coverage.” [Id. at 11–12].
Exclusion B.1. Broadly speaking, the Policies provide coverage for bodily injury
or property damage for which a covered person becomes legally responsible; covered
person means, inter alia, a person using “your covered auto.” [Doc. 64-1 at 24; Doc. 64-
2 at 17]. 	And, pertinent here, “your covered auto” is defined to include “[a]ny vehicle
shown on the Declarations.” [Doc. 64-1 at 23; Doc. 64-2 at 16].
Exclusion B.1 excludes insurance coverage for “[a]ny vehicle that is not your
covered auto unless that vehicle is” either (a) a “four- or six-wheel land motor vehicle
designed 	for 	use 	on 	public 	roads”; 	(b) 	a 	“moving 	van 	for 	personal 	use”; 	(c) 	a
“miscellaneous vehicle”; or (d) a “vehicle used in the business of farming or ranching.”
[Doc. 64-1 at 26; Doc. 64-2 at 19 (emphasis omitted)]. It is undisputed that the motorcycle
was not listed on the Declarations page and was not classified as “your covered auto.”
8 Mr. Horton does argue that it was “not possible” for Daniel Horton to list the motorcycle
on the Declarations page. [Doc. 172 at 9–10]. However, this argument is not material to
the question of whether the motorcycle is insured under either of the Policies.
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[Doc. 161 at ¶ 4; Doc. 172 at 2 ¶ 4; Doc. 189 at ¶ 4]. And Mr. Horton does not argue that
the motorcycle is a four- or six-wheel vehicle, a moving van, a miscellaneous vehicle, or
a farming or ranching vehicle, so as to make it fit within one of the exceptions to Exclusion
B.1. See generally [Doc. 172]; see also [Doc. 64-1 at 22–23; Doc. 64-2 at 15–16 (defining
“motorcycle” and “miscellaneous vehicle”)]. Accordingly, on its face, Exclusion B.1 plainly
excludes coverage for Daniel Horton’s motorcycle.
Exclusions B.2 and B.3. Still, Mr. Horton argues that even if coverage is excluded
under Exclusion B.1, coverage is triggered again by the exceptions in Exclusions B.2 and
B.3. 	See [Doc. 172 at 10–11]. 	He argues that these Exclusions provide “excess
coverage” for “non-owned vehicles” that are not listed on the Declarations page and do
not fit within the “your covered auto” definition. [Id. at 9]. As a refresher, these Exclusions
state:
B. We 	do 	not 	provide 	Liability 	Coverage 	for 	the 	ownership,
maintenance, or use of:
. . .
2. 	Any vehicle, other than your covered auto, that is owned by you,
or furnished or available for your regular use. 	This exclusion
(B.2) does not apply to a vehicle not owned by you if the vehicle’s
owner has valid and collectible primary liability insurance or self-
insurance in force at the time of the accident.
3. 	Any vehicle, other than your covered auto, that is owned by or
furnished or available for the regular use of, any family member.
This exclusion (B.3) does not apply:
a. 	To your maintenance or use of such vehicle; or
b. 	To a vehicle not owned by any family member if the vehicle’s
owner has valid and collectible primary liability insurance or
self-insurance in force at the time of the accident.
[Doc. 64-1 at 26; Doc. 64-2 at 19].
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Mr. Horton argues that, under the Policies, “coverage is still triggered on an excess
basis if it is a ‘non-owned vehicle.’” [Doc. 172 at 10]. This assertion is not supported by
any direct citation to Policy language. Nevertheless, he contends that, under the Garrison
Policy, the exception to Exclusion B.2 “triggers coverage” for a vehicle not listed on the
Declarations page (and thus not a “your covered auto”) if it was (1) not owned by the
insured; and (2) the vehicle’s owner insured the vehicle with another carrier. 	[Doc. 172
at 10–11]. 	He also argues that the Garrison Policy provides coverage through the first
exception to Exclusion B.3, which he says “triggers coverage” for a vehicle not listed on
the Declarations page if (1) the vehicle was owned by a family member; and (2) the
insured was using the vehicle. 	[Id. at 11]. 	And as for the USAA Policy, he argues that
the second exception to Exclusion B.3 “triggers coverage” for a vehicle not listed on the
Declarations page if (1) the vehicle’s owner insured the vehicle through another carrier;
and (2) the vehicle was not owned by any family member. 	[Id.]. 	The Court respectfully
disagrees with these arguments.
An exclusion is an “insurance policy provision that excepts certain events or
conditions from coverage.” 	Dupre v. Allstate Ins. Co., 62 P.3d 1024, 1029 (Colo. App.
2002) (quotation omitted); see also Exclusion, Black’s Law Dictionary (12th ed. 2024)
(defining “exclusion” as “[a]n insurance provision that disclaims coverage for certain
property, losses, events, acts, omissions, parties, or conditions”). 	“Exceptions to
exclusions narrow the scope of the exclusion and, as a consequence, add back
coverage.” Greystone Constr., Inc. v. Nat’l Fire & Marine Ins. Co., 661 F.3d 1272, 1289
(10th Cir. 2011) (quotation omitted) (applying Colorado law). 	“But it is the initial broad
grant of coverage, not the exception to the exclusion, that ultimately creates (or does not
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create) the coverage sought.” Id. (quotation omitted); Black & Veatch Corp. v. Aspen Ins.
(Uk) Ltd, 882 F.3d 952, 958 (10th Cir. 2018) (explaining that “exclusions are . . . subject
to exceptions, which restore coverage—but only to the extent coverage was initially
included in the basic insuring agreement”). Therefore, to the extent Mr. Horton suggests
that these exceptions work to create “excess” coverage, the Court respectfully disagrees.
Moreover, 	the 	Policies’ 	plain 	language makes 	clear 	that 	the exceptions 	to
Exclusions B.2 and B.3 apply only to those Exclusions. The exception to Exclusion B.2
states: 	“This exclusion (B.2.) does not apply to a vehicle not owned by you if the
vehicle’s owner has valid and collectible primary liability insurance.” 	[Doc. 64-1 at 26;
Doc. 64-2 at 19 (emphasis altered)]. 	Similarly, Exclusion B.3 states: 	“This exclusion
(B.3.) does not apply . . . [t]o a vehicle not owned by any family member if the vehicle’s
owner has valid and collectible primary liability insurance.” [Doc. 64-1 at 26; Doc. 64-2 at
19 (emphasis altered)]. In other words, while Exclusions B.2 and B.3 generally exclude
from coverage a vehicle owned or regularly used by the insured or a family member that
is not listed on the Declarations page, the Exclusions contain a narrow carve-out for a
vehicle that is not owned by the insured or the family member if the vehicle is otherwise
covered by primary liability insurance. 	But these exceptions do not operate to create
coverage themselves, nor do they operate as an exception to Exclusion B.1. 	See Am.
Fam. Mut. Ins. Co. v. Am. Girl, Inc., 673 N.W.2d 65, 73 (Wis. 2004) (“An exception
pertains only to the exclusion clause within which it appears; the applicability of an
exception will not create coverage if the insuring agreement precludes it or if a separate
exclusion applies.”).
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There is No Conflict Between Exclusion B.1 and Exclusions B.2 and B.3. In
the alternative, Mr. Horton argues that Exclusion B.1 conflicts with the exceptions in
Exclusions B.2 and B.3 because Exclusion B.1 “purports to exclude coverage for a vehicle
that is not ‘Your Covered Auto,’ . . . [b]ut this ignores that coverage is restored for ‘non-
owned vehicles’ not listed on the declarations.” 	[Doc. 172 at 12]. But as the Court has
already explained, the exceptions to Exclusions B.2 and B.3 do not create coverage and
do not “restore[]” coverage excluded under Exclusion B.1.
All three Exclusions exclude coverage for vehicles that do not fall within the
definition of “your covered auto,” see [Doc. 64-1 at 26; Doc. 64-2 at 19], but they carve
out different kinds of exceptions to this coverage exclusion. Exclusion B.1 focuses on the
type of vehicle that is excepted from the coverage exclusion: certain land motor vehicles;
moving vans for personal use; miscellaneous vehicles; and farming or ranching vehicles.
[Doc. 64-1 at 26; Doc. 64-2 at 19]. Exclusions B.2 and B.3 relate to ownership and use:
they exclude from coverage the vehicles the insured (or a family member) owns or
regularly uses that are not listed in the “your covered auto” section, but except from that
exclusion vehicles that the insured does not own and that are otherwise covered by
primary liability insurance. [Doc. 64-1 at 26; Doc. 64-2 at 19]; see also Sheldon v. Hartford
Ins. Co., 189 P.3d 695, 699 (N.M. Ct. App. 2008) (explaining that the purpose of such
exclusions is to “prevent the insured from purchasing an insurance contract to cover the
risk of operating one vehicle, and obtaining coverage on another vehicle that is regularly
used in the household”).
These Exclusions can and must be read in harmony. 	Cyprus Amax Mins. Co. v.
Lexington Ins. Co., 74 P.3d 294, 299 (Colo. 2003) (“Courts should read the provisions of
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the policy as a whole, rather than reading them in isolation.”); Progressive Specialty Ins.
Co. v. Hartford Underwriters Ins. Co., 148 P.3d 470, 474 (Colo. App. 2006) (policies must
be construed “as a whole and . . . so that all provisions are harmonious and none is
rendered meaningless”). 	Because they relate to different subject matters and provide
different types of coverage limitations, Exclusion B.1 does not conflict with Exclusions B.2
or B.3. For coverage to attach, none of the three Exclusions can apply.
Take 	an 	undeclared, 	insured-owned, 	four-wheel 	land 	motor 	vehicle 	that 	is
designed for use on public roads. 	The vehicle would not be excluded from coverage
under Exclusion B.1, as it falls within one of the four enumerated exceptions to that
Exclusion. 	But the vehicle would still be excluded under Exclusion B.2 because it is
owned by the insured and not listed on the Declarations page. 	The opposite scenario
exists here: 	even assuming, without deciding, that the motorcycle would fall within an
exception to Exclusions B.2 or B.3, this does not negate the fact that the motorcycle is
excluded from coverage under Exclusion B.1.
The Court is respectfully unpersuaded by the authority cited by Mr. Horton in urging
the Court to find a conflict. 	See [Doc. 172 at 11; Doc. 131 at 11]. 	In Simon v. Shelter
General Insurance Co., 842 P.2d 236 (Colo. 1993), a general liability policy excluded
coverage for liability “assumed by the insured under any contract or agreement,” but also
contained an exception to this exclusion for warranties of fitness, quality, and workmanlike
performance. Id. at 238. The policy also contained separate endorsements that excluded
coverage for injuries or damage “arising out of . . . reliance upon a representation or
warranty.” Id. at 239. The Colorado Supreme Court concluded that these two provisions
were “in conflict respecting the policy’s coverage for liability resulting from product
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warranties.” 	Id. at 240. 	In Simon, and unlike here, the two conflicting provisions could
not be read in harmony: one exclusion purported to bar coverage for injuries arising out
of reliance on warranties, while another exclusion expressly exempted warranties,
thereby “adding back” coverage for warranties. 	It was thus impossible to give effect to
both, as giving effect to the endorsement exclusion would render the warranty exception
meaningless. 	This is distinguishable from the instant case, where the Policy provisions
can be read together so that each is given effect and none is rendered meaningless. See
Blackhawk-Cent. City Sanitation Dist. v. Am. Guarantee & Liab. Ins. Co., 214 F.3d 1183,
1190 (10th Cir. 2000) (finding Simon inapplicable where there was no conflict); United
Fire & Cas. Co. v. Boulder Plaza Residential, LLC, 633 F.3d 951, 963 (10th Cir. 2011)
(same).9
In sum, the Court finds as follows: (1) there is no conflict between Exclusions B.1
and Exclusions B.2 and B.3; and (2) Exclusion B.1 unambiguously bars coverage here.
For these reasons, Plaintiffs’ Motion for Summary Judgment is GRANTED to the
extent it seeks judgment in Plaintiffs’ favor on their declaratory judgment claim, and the
Horton Motion for Partial Summary Judgment is DENIED. 	See [Doc. 131 at 21 (Mr.
Horton moving the Court to “find: 1) coverage in his favor; and 2) that USAA and Garrison
can’t claim the benefit of any provision to avoid coverage, since they breached the policies
first, and/or since they are waived or estopped from asserting no coverage”)].
9 Similarly, the Court is respectfully unpersuaded by Mr. Horton’s reliance on State Farm
Mutual Automobile Insurance Co. v. Nissen, 851 P.2d 165 (Colo. 1993), which too
involved an irreconcilable conflict within the policy, see id. at 166–68.
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III. 	Defendants’ Counterclaims
The 	Insurers 	also 	seek 	summary 	judgment 	in 	their 	favor 	on 	Defendants’
counterclaims. [Doc. 172 at 17–21].
A. 	Breach of Contract
Mr. Horton brings a breach of contract counterclaim against both Plaintiffs. [Doc.
63 at ¶¶ 32–38]. Mr. Horton does not identify which provision of the Policies either Insurer
allegedly failed to perform. See [id.]; see also [Doc. 172]. Plaintiffs argue that, “[b]ecause
the Policies unambiguously exclude coverage, . . . the Court should enter judgment as a
matter of law in favor of Plaintiffs . . . and against Horton on his breach-of-contract
counterclaim.” 	[Doc. 161 at 14]. 	Mr. Horton does not respond to this argument. 	See
[Doc. 172 at 17–21 (arguing only with respect to “willful and wanton breach of contract”
and statutory bad faith)]. But elsewhere, Mr. Horton asserts that the Court “should find,
sua sponte, that USAA breached its contract as a matter of law, and allow [his] breach of
contract claim to proceed to determine the amount of damages.” [Id. at 21].10
“In order to prevail on a breach of contract claim pursuant to an insurance policy,
the insured must first show that there was coverage under the policy.” 	Jenkins v. State
Farm Fire & Cas. Co., No. 15-cv-02691-CMA-NYW, 2017 WL 11544767, at *2 (D. Colo.
May 31, 2017). Thus, “without coverage there can be no breach of contract.” Tom’s Urb.
10 This request is not properly before the Court. See D.C.COLO.LCivR 7.1(d) (“A motion
shall not be included in a response or reply to the original motion.”). Moreover, the Court
does not consider Mr. Horton’s arguments in his own Motion for Partial Summary
Judgment that the Insurers “materially breached the contract.” 	See [Doc. 131 at 16, 18
(emphasis omitted)]; see also Banner Bank, 916 F.3d at 1326 (cross motions for summary
judgment “are treated as two individual motions for summary judgment”). 	If Mr. Horton
sought to avoid summary judgment on his breach of contract claim, it was incumbent
upon him to raise arguments in response to Plaintiff’s affirmative motion.
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Master LLC v. Fed. Ins. Co., No. 20-cv-03407-PAB-SKC, 2022 WL 974654, at *7 (D. Colo.
Mar. 31, 2022); see also, e.g., Markel Ins. Co. v. Hollandsworth, 400 F. Supp. 3d 1155,
1160 (D. Colo. 2019) (finding that breach of contract claim “fail[ed] as a matter of law” as
a result of the court’s conclusion that there was no coverage); Wagner v. Am. Fam. Ins.,
968 F. Supp. 2d 1100, 1107 (D. Colo. 2013) (concluding that “there was no breach of the
contract because there was no coverage for [the insured’s] loss”), aff’d, 569 F. App’x 574
(10th Cir. 2014). 	The Court has concluded there is no coverage, Mr. Horton has not
identified any particular contractual provision he asserts the Insurers violated, and he
does not direct the Court to any genuine issues of material fact that would preclude
judgment in the Insurers’ favor. 	Accordingly, the Court finds that summary judgment in
Plaintiffs’ favor on Mr. Horton’s breach of contract claim is appropriate. 	See Larson v.
One Beacon Ins. Co., No. 12-cv-03150-MSK-KLM, 2013 WL 5366401, at *10 (D. Colo.
Sept. 25, 2013) (“Summary judgment is appropriate on the contract claim because
Plaintiff has failed to show nonperformance of the contract.”). 	Plaintiff’s Motion for
Summary Judgment is GRANTED with respect to Mr. Horton’s breach of contract claim.
B. 	Willful and Wanton Breach of Insurance Contract
Mr. Horton also brings a claim for “willful and wanton breach of insurance contract.”
[Doc. 63 at 7 (emphasis omitted)]. The Insurers argue that they are entitled to judgment
on this claim because no such claim exists under Colorado law. They contend that “‘the
willful-and-wanton rule’ under Colorado law concerns the measure of damages available
for a breach-of-contract claim but does not provide for a distinct cause of action.” [Doc.
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161 at 21]. In response, Mr. Horton argues that “Colorado specifically recognizes a claim
for willful and wanton breach of contract.” [Doc. 120 at 16 (citing cases)].11
The cases cited by Mr. Horton do not establish a standalone claim for “willful and
wanton breach of contract” that is separate and distinct from an ordinary breach of
contract action. 	First, Mr. Horton cites Giampapa v. American Family Mutual Insurance
Co., 64 P.3d 230 (Colo. 2003), and Decker v. Browning-Ferris Industries of Colorado,
Inc., 931 P.2d 436 (Colo. 1997), asserting that these cases “authoriz[e]” such a claim,
see [Doc. 120 at 16]. 	But “Giampapa and Decker contemplate the extent of damages
available for a breach of contract when such a breach is willful and wanton. 	The cases
do not create a distinct cause of action separate from common law breach of contract.”
Halprin v. Equitable Life Assurance Soc’y of U.S., 267 F. Supp. 2d 1030, 1033 (D. Colo.
2003). 	Other cases similarly refer to a claim for “willful and wanton breach of contract,”
but 	do 	not 	expressly 	recognize 	a 	standalone, 	separate 	claim. 	See 	Core-Mark
Midcontinent, Inc. v. Sonitrol Corp., 300 P.3d 963, 969 (Colo. App. 2012).12
11 This Court has previously admonished the Parties for incorporating arguments raised
in prior briefing as “an improper attempt to circumvent the Court’s page limitations.” See
[Doc. 174]; see also NYW Civ. Practice Standard 10.1(c)(2) (limiting summary judgment
motions and responses to 20 pages). Because both Plaintiffs and Mr. Horton incorporate
arguments with respect to the claim for willful and wanton breach, see [Doc. 161 at 21;
Doc. 172 at 17], and because they did so prior to the Court’s admonishments, the Court
will consider those limited extraneous arguments.
12 Mr. Horton also directs the Court to Allen v. American Family Mutual Insurance Co., 80
P.3d 799, 801 (Colo. App. 2002), aff’d in part, rev’d in part, 102 P.3d 333 (Colo. 2004),
recognizing that the plaintiffs in Allen “assert[ed] claims for both breach of contract and
willful and wanton breach,” [Doc. 120 at 16]. 	It is unclear whether the Allen plaintiffs
asserted a standalone claim for “willful and wanton conduct” or simply sought heightened
relief on that basis, but in any event, even if the Allen plaintiffs did so, neither the Colorado
Supreme Court nor the Colorado Court of Appeals engaged in any analysis about the
propriety of such a claim. See 80 P.3d 799; 102 P.3d 333.
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The Court agrees with other courts in this District who have concluded there is no
standalone claim for “willful and wanton breach of contract.” Halprin, 267 F. Supp. 2d at
1033; Aurzadniczek v. Humana Health Plan, Inc., No. 15-cv-00146-RM-KMT, 2016 WL
1266972, at *12 (D. Colo. Apr. 1, 2016). Moreover, as Plaintiffs argue, see [Doc. 161 at
21], such a claim is nonviable due to lack of coverage, see supra Section II.A.
Accordingly, Plaintiffs’ Motion for Summary Judgment is respectfully GRANTED as to Mr.
Horton’s claim for willful and wanton breach of insurance contract.
C. 	Bad Faith
There are two types of insurance-related bad faith claims available under Colorado
law. 	First, Colorado statutes impose certain obligations on insurance companies,
instructing that insurers “shall not unreasonably delay or deny payment of a claim for
benefits owed to or on behalf of any first-party claimant.” 	Colo. Rev. Stat. § 10-3-
1115(1)(a). A claim alleging an unreasonable delay or denial of insurance benefits under
this statute is often referred to as a “statutory bad faith” claim. 	Gardner v. State Farm
Mut. Auto. Ins. Co., 639 F. Supp. 3d 1158, 1163 (D. Colo. 2022). 	To succeed on this
claim, the insured must establish that (1) the insurer delayed or denied payment of
benefits to the insured, and (2) the delay or denial was without a reasonable basis. Am.
Fam. Mut. Ins. Co. v. Barriga, 418 P.3d 1181, 1185–86 (Colo. 2018).
Insurers also have a common law duty to deal in good faith with their insureds.
Am. Fam. Mut. Ins. Co. v. Allen, 102 P.3d 333, 342 (Colo. 2004). 	“Due to the ‘special
nature of the insurance contract and the relationship which exists between the insurer
and the insured,’ an insurer’s breach of the duty of good faith and fair dealing gives rise
to a separate cause of action arising in tort.” Goodson v. Am. Standard Ins. Co. of Wis.,
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89 P.3d 409, 414 (Colo. 2004) (quoting Cary, 68 P.3d at 466). “[A] claim of common law
bad faith imposes a more exacting standard of proof than a statutory claim.” 	Cooper v.
Shelter Gen. Ins. Co., 653 F. Supp. 3d 873, 878 (D. Colo. 2023). To prevail on a common
law claim, “the insured must prove that (1) the insurer’s conduct was unreasonable and
(2) the insurer either had knowledge of or reckless disregard for the fact that its conduct
was unreasonable.” Ayala v. State Farm Mut. Auto. Ins. Co., 628 F. Supp. 3d 1075, 1082
(D. Colo. 2022).
1. 	Statutory Bad Faith
Mr. Horton’s statutory bad faith claim alleges that the Insurers unreasonably
delayed and denied payments owed under the Policies. [Doc. 63 at ¶ 49]. The Insurers
argue that Mr. Horton’s statutory bad faith claim “depend[s] on the existence of coverage,”
and because there is no coverage, they are entitled to judgment in their favor on this
claim. [Doc. 161 at 3]; see also [id. at 21 (arguing that “[l]iability under Section 10-3-1115
depends on the existence of a ‘covered benefit’ that is ‘owed’”)]. 	Mr. Horton disagrees
with this assertion, arguing that his “damages do not flow solely from the Court’s coverage
determination[;] rather, his statutory bad faith claim rests on independent benefits owed
under the policy.” [Doc. 172 at 17]. Specifically, he argues that (1) Garrison unreasonably
delayed payment of defense fees it owed to Wheeler Trigg O’Donnell for over 300 days;
(2) Garrison unreasonably delayed payment of post-judgment interest; (3) both Plaintiffs
“unreasonabl[y] deni[ed] . . . their duty to investigate”; (4) both Plaintiffs “unreasonabl[y]
deni[ed] . . . their duty to settle”; and (5) USAA “unreasonabl[y] deni[ed] . . . a defense as
a matter of law.” [Id. at 17–18].
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Section 1115 states that an insurer “shall not unreasonably delay or deny payment
of a claim for benefits owed to or on behalf of any first-party claimant.” Colo. Rev. Stat.
§ 10-3-1115(1)(a). It is well-established that a claim for unreasonable delay or denial of
benefits requires a showing that benefits are indeed owed under the subject insurance
policy. 	See TBL Collectibles, Inc. v. Owners Ins. Co., 285 F. Supp. 3d 1170, 1201 (D.
Colo. 2018) (to prevail on the claim, the plaintiff must provide that “(1) benefits were owed
under the policy; and (2) defendant unreasonably delayed or denied payment of plaintiff’s
claim”); Edge Constr., LLC v. Owners Ins. Co., No. 14-cv-00912-MJW, 2015 WL
4035567, 	at 	*6 	(D. 	Colo. 	June 	29, 	2015) 	(“[I]n 	order 	to 	prevail 	on 	its 	statutory
unreasonable delay/denial claim, [the plaintiff] first has to prove entitlement to benefits.”),
aff’d sub nom. Sable Cove Condo. Ass’n v. Owners Ins. Co., 668 F. App’x 847 (10th Cir.
2016). “[W]here no benefits are owed, then payment of those benefits cannot, as a matter
of law, have been unreasonably delayed to the insured or denied by the insurer.” Keller
v. State Farm Mut. Auto. Ins. Co., No. 22-cv-00474-CMA-KAS, 2023 WL 6048790, at *9
(D. Colo. Sept. 15, 2023), report and recommendation adopted, 2023 WL 7458357 (D.
Colo. Oct. 2, 2023).13
Mr. Horton’s arguments to the contrary miss the mark. 	First, he relies on this
Court’s decision in Palm v. Esurance Property & Casualty Insurance Co., No. 20-cv-
13 This is also distinct from the circumstance where the insurer has paid the insured’s
benefits in full, thereby precluding a claim for breach of contract. 	In that scenario, the
insured could potentially proceed with a statutory bad faith claim based on the insurer
unreasonably delaying payment on the insured’s claim. 	See Brookshire Downs at
Heatherridge Condo. Ass’n v. Owners Ins. Co., No. 17-cv-00871-0WJM-NRN, 2019 WL
10946262, at *2 n.1 (D. Colo. Mar. 15, 2019) (“[A]n unreasonable delay claim could be
viable independent of a breach of contract claim—e.g., where the insurer has paid the
policy limits but only after an inordinate amount of time.”).
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02838-NYW-STV, 2023 WL 2503511 (D. Colo. Mar. 14, 2023), to argue that his statutory
claim can survive even if there is no coverage, see [Doc. 172 at 17]. 	But this Court’s
discussion in Palm addressed common law bad faith claims, not statutory ones. 	See
Palm, 2023 WL 2503511, at *5. 	In Colorado, a common law bad faith claim “exists
independently from the liability imposed by the insurance contract.” 	Flickinger v. Ninth
Dist. Prod. Credit Ass’n of Wichita, 824 P.2d 19, 24 (Colo. App. 1991). In other words,
“Colorado recognizes the viability of a [common law] claim of bad faith even if the express
terms of the contract have been honored by the insurer.” 	Dunn v. Am. Fam. Ins., 251
P.3d 1232, 1235 (Colo. App. 2010). A common law bad faith claim can survive a finding
of no coverage if the claim “is based not on the denial of coverage, but on the defendant’s
alleged bad faith in the investigation, defense, handling, or settling of a claim.” 	Palm,
2023 WL 2503511, at *5. The same is not true for statutory claims, which arise out of the
unreasonable delay or denial of covered benefits. See Colo. Rev. Stat. § 10-3-1115(1)(a).
On this same note, Mr. Horton’s arguments that Plaintiffs “unreasonabl[y] deni[ed] . . .
their duty to investigate” or settle are outside the scope of a statutory bad faith claim and
are more akin to arguments asserted in support of a common law claim. Cf. Palm, 2023
WL 2503511, at *5 (contemplating a common law claim based on the defendant’s “alleged
bad faith in the investigation, defense, handling, or settling of a claim”). Mr. Horton does
not maintain a common law claim; he has assigned his right to do so to Ms. Abeyta.
Because there is no coverage, Mr. Horton cannot succeed on a statutory bad faith
claim. Plaintiffs’ Motion for Summary Judgment is GRANTED with respect to Mr. Horton’s
statutory bad faith claim.
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2. 	Common Law Bad Faith
Finally, Plaintiffs seek judgment in their favor on Ms. Abetya’s common law bad
faith claim. [Doc. 161 at 16]. They argue that her “only claimed damages flow from th[e]
determination of no coverage” because it is undisputed that “[t]he only damages Abeyta
claims is the amount of the excess judgment allegedly caused by Plaintiffs’ failure to
settle.” [Id. at 16, 19]. In Plaintiffs’ view, their “tort liability depends on whether Plaintiffs
had a duty to settle in October 2019 and June 2020, which, in turn, depends on the
existence of coverage.” 	[Id. at 19]. And because there was no coverage, there was no
duty to settle, and Ms. Abeyta cannot prevail on her bad faith claim. 	[Id. at 19–20].
Plaintiffs do acknowledge Ms. Abeyta’s “assertion that Plaintiffs conducted an inadequate
investigation prior to rejecting coverage,” but argue that this does not change the relevant
analysis because this portion of the bad faith claim “still depends on the assertion that
Plaintiffs breached their duty to settle,” which “exists only if there is coverage under the
Policies.” [Id. at 20 (emphasis omitted)].
Ms. Abeyta does not contest that her bad faith claim is based on a failure to settle.
She asserts that, in Colorado, “the unreasonable failure to settle third-party liability claims
within the insurance policy limits is evidence of bad faith and may subject the insurer to
liability for a judgment beyond the policy limit and regardless of any policy limitations.”
[Doc. 189 at 16]. She argues that “between October 2019 and June 2020, . . . Insurers
were provided two separate opportunities to settle, . . . and . . . these offers were spurned
based on Insurers’ faulty investigation and erroneous determination that [Nicholas] Horton
owned the motorcycle in question rather than his father.” [Id. at 18–19]. She also argues
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that “neither settlement opportunity was communicated to [Nicholas] Horton, which is bad
faith in and of itself.” [Id. at 19].14
Ms. Abeyta is not incorrect that a bad faith claim may be viable even without
coverage. As explained above, a bad faith claim can exist even without coverage if the
claim “is based not on the denial of coverage, but on the defendant’s alleged bad faith in
the investigation, defense, handling, or settling of a claim.” Palm, 2023 WL 2503511, at
*5. But it is also “settled law in Colorado that a bad faith claim must fail if . . . coverage
was properly denied and the plaintiff’s only claimed damages flow[] from the denial of
coverage.” 	MarkWest Hydrocarbon, Inc. v. Liberty Mut. Ins. Co., 558 F.3d 1184, 1193
(10th Cir. 2009).
Insofar as Ms. Abeyta’s bad faith claim is based on a failure to settle, the Court’s
finding of no coverage forecloses that portion of the claim. 	There is no duty to “settle
claims or causes of action that fall outside policy coverage.” 	8 Colorado Practice,
Personal Injury Torts & Insurance § 48:25 (3d ed. Nov. 2024 update); 14A Couch on
Insurance § 203:26 (“An insurer’s duty to settle is dependent upon whether the policy
extends coverage for the circumstances underlying the harm sustained.”); Owners Ins.
Co. v. Dockstader, 861 F. App’x 210, 216 (10th Cir. 2021) (observing that “multiple
14 To the extent Ms. Abeyta generally cites two expert reports that she says “document[]
a litany of bad faith conduct on the part of Insurers,” [Doc. 189 at 19]; see also [Doc. 189-
1; Doc. 189-2], the Court does not address this argument. 	The Court already advised
Ms. Abeyta that it viewed her attempts to incorporate other filings into her response brief
as “an improper attempt to circumvent the Court’s page limitations.” [Doc. 174]. And it is
not this Court’s duty to read through the 38-page and 33-page expert reports in an attempt
to find support for Ms. Abeyta’s argument. 	See Eateries, Inc. v. J.R. Simplot Co., 346
F.3d 1225, 1232 (10th Cir. 2003) (a court “need not sift through the record to find evidence
to support a party’s argument, nor manufacture a party’s argument for [her]” (cleaned
up)); Aquila, Inc. v. C.W. Mining, 545 F.3d 1258, 1268 (10th Cir. 2008) (a court may
decline to consider an argument that fails to provide specific citations in support).
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authorities establish that an insurer has no duty to settle if no coverage exists” and citing
authority from numerous jurisdictions). 	Ms. Abeyta’s argument to the contrary is not
supported by any legal authority and is respectfully unpersuasive. See [Doc. 189 at 19–
20]. Because there was no duty to settle, the Insurers could not have acted in bad faith
by declining to settle Ms. Abeyta’s claim. See Lira v. Shelter Ins. Co., 913 P.2d 514, 517
(Colo. 1996) (finding that, where there was no contractual duty to indemnify the insured
for punitive damages, the insurer had no duty to settle with respect to punitive damages
and could not be held liable for excess judgment).
Ms. Abeyta also asserts that her bad faith claim is based on the Insurers’ “faulty
investigation and erroneous determination that [Nicholas] Horton owned the motorcycle”
and the fact that “neither settlement opportunity was communicated to [Nicholas] Horton.”
[Doc. 189 at 18–19]. However, “as with most tort claims, proof of actual damages is an
essential element of a bad faith breach of an insurance contract claim.” 	Nunn v. Mid-
Century Ins. Co., 244 P.3d 116, 121 (Colo. 2010). Here, it is undisputed that Ms. Abeyta
claims the following damages: “the Excess on her assigned claim,” which consists of “the
full amount of the principal and cost judgments (with post-judgment interest that were
entered against Horton which exceed the policy limits of both the [Policies].” 	[Doc. 161
at ¶ 17; Doc. 189 at ¶ 17; Doc. 161-3 at 5, 8]. These damages still flow from the denial
of coverage, and Ms. Abeyta does not identify any actual damages that separately arise
out of either (1) the Insurers’ investigation; or (2) the Insurers’ alleged failure to
communicate two settlement offers to Mr. Horton. See [Doc. 189 at 15–20]; see also Pac.
Specialty Ins. Co. v. Poirier, 408 F. Supp. 3d 1241, 1249 (D. Colo. 2019) (claimed
damages of excess judgment entered against insured flowed from denial of coverage).
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Because all of Ms. Abeyta’s claimed damages flow from the denial of coverage,
summary judgment in Plaintiffs’ favor is appropriate for this claim. Pac. Specialty Ins. Co.,
408 F. Supp. 3d at 1249; 5333 Mattress King LLC v. Hanover Ins. Co., 683 F. Supp. 3d
1188, 1200 (D. Colo. 2023) (“Because there is no coverage under the Policy for the
damage to the Slab in this case, and because all of Mattress King’s damages relate to
the denial of coverage for the damage to the Slab, Hanover is entitled to summary
judgment on each of Mattress King’s claims.”). Plaintiffs’ Motion for Summary Judgment
is respectfully GRANTED to the extent it seeks judgment on Ms. Abeyta’s common law
bad faith counterclaim.
CONCLUSION
For the reasons set forth above, it is ORDERED that:
(1) 	Plaintiffs/Counterclaim Defendants’ Motion for Summary Judgment [Doc.
161] is GRANTED;
(2) 	Defendant & Counterclaimant Nicholas Horton’s Motion for Partial Summary
Judgment [Doc. 131] is DENIED;
(3) 	Plaintiffs/Counterclaim Defendants’ Motion for Judgment on the Pleadings on
their Declaratory Claim and Nicholas Horton’s Counterclaims [Doc. 110] is
DENIED as moot;
(4) 	Judgment is ENTERED in Plaintiffs’ favor on their declaratory judgment claim
and Defendants’ counterclaims;
(5) 	Plaintiffs are awarded their costs under Rule 54 of the Federal Rules of Civil
Procedure and Local Rule 54.1; and
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(6) 	The Clerk of Court is directed to close this case.
DATED: February 25, 2025 	BY THE COURT:
_________________________
Nina Y. Wang
United States District Judge
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