Vincent et al v. Certain Underwriters at Lloyd's, London et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
District Judge S. Kato Crews
Civil Action No. 1:23-cv-00096-SKC-KAS
MIKE VINCENT, and
KIM VINCENT,
Plaintiffs,
v.
CERTAIN UNDERWRITERS AT LLOYDS, LONDON, et al.,
Defendants.
ORDER RE: SUMMARY JUDGMENT MOTIONS (DKTS. 66 & 68)
This case arises from Plaintiffs Mike and Kim Vincent’s attempts to recover
payments under their homeowner’s insurance policy. Relevant here, they assert
claims against their insurer, Defendant Certain Underwriters at Lloyd’s London,
Subscribing to Policy No. W3986519PNYH (“Defendants” or “Underwriters”) for
breach of contract, breach of the duty of good faith and fair dealing, and violations of
Colo. Rev. Stat. §§ 10-3-1115 and -1116.1 Before the Court are the parties’ respective
motions seeking either full or partial summary judgment. Defendants have filed a
Motion for Summary Judgment seeking judgment in their favor on all claims for relief
1 Plaintiffs assert a negligence claim against their insurance agents, who have also
filed a Motion for Summary Judgment. Dkt. 70. The Court will address that Motion
in a separate Order.
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asserted by Plaintiffs. Dkt. 66. Plaintiffs have filed a Motion for Partial Summary
Judgment seeking a finding that additional money is afforded them under their
insurance policy despite the limits of liability stated in the declarations pages. Dkt.
68. Both motions are fully briefed.
The 	Court 	has 	carefully 	considered 	the 	parties’ 	motions 	and 	respective
briefing, their exhibit attachments, pertinent matters from the Court’s own docket,
and applicable law and legal authorities. No hearing is necessary. Because, when
considering 	the 	undisputed 	material 	facts, 	no 	reasonable 	jury 	could 	conclude
Defendants breached the insurance contract, Defendants’ motion is GRANTED and
Plaintiffs’ motion is DENIED.
UNDISPUTED MATERIAL FACTS
On November 21, 2019, Defendants issued Policy Number W3986519PNYH
(the Policy), with effective dates of November 25, 2019, to November 25, 2020, to
Plaintiffs as coverage for their residential property located in Grand Lake, Colorado.
Dkt. 89 at ¶23. The property included a “two-story home atop a full walkout
basement, a garage, and caretaker’s quarters, in addition to landscaping and
numerous outdoor features such as flagstone walkways, well, sewer lifting stations,
propane tank, lighting, and other improvements, as well as personal property.” Dkt.
4 at ¶11. The residence, however, was destroyed by the East Troublesome Fire in
October of 2020. Id. at ¶19.
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Pertinent here, the Policy’s declaration pages include the following coverage
information:
Dkt. 68-2 p.1. The Policy includes language specifically defining what types of claims
can be made under Coverages A – E. Id. at pp. 373-74. It also has a section titled
“Other Coverages,” detailing miscellaneous other claims that can be made under the
Policy, but which do not fall specifically under Coverages A – E. See Id. at pp. 374-77.
On October 26, 2020, Plaintiffs—via their insurance agent—submitted a
property loss notice related to the fire damage. Dkt. 89 at ¶28. Following an
inspection, Defendants paid Plaintiffs the full amounts listed under Coverages A, C,
and D of the Policy. Id. at ¶¶39-44. Defendants also paid Plaintiffs an additional
$41,250 for trees, shrubs, and other plants. Id. at ¶46. Plaintiffs seek an additional
$379,000 in insurance benefits. Id. at ¶47.
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SUMMARY JUDGMENT STANDARD
The purpose of summary judgment is to assess whether a trial is necessary.
White v. York Int’l Corp., 45 F.3d 357, 360 (10th Cir. 1995). Summary judgment is
appropriate “when there is no genuine issue as to any material fact and the moving
party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The movant
bears the “responsibility of informing the district court of the basis for its motion, and
identifying those portions of [the record] which it believes demonstrate the absence
of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
If the movant meets this burden, then the nonmoving party must identify material
facts showing there is a genuine dispute for trial. Id. at 324. A fact is “material” if it
has the potential to affect the outcome of a dispute under applicable law. Ulissey v.
Shvartsman, 61 F.3d 805, 808 (10th Cir. 1995). An issue is “genuine” if a rational
trier of fact could find for the nonmoving party on the evidence presented. Adams v.
Am. Guarantee & Liab. Ins. Co., 233 F.3d 1242, 1246 (10th Cir. 2000). In performing
this analysis, the factual record and any reasonable inferences from it are construed
in the light most favorable to the nonmoving party. Id.
Moreover, when the Court is faced with cross-motions for summary judgment,
the “filing of cross motions does not mean that the material facts are undisputed even
if the parties focus on the same claim or defense.” In re Ribozyme Pharm., Inc. Secs.
Litig., 209 F. Supp. 2d 1106, 1112 (D. Colo. 2002). And denying one does not
automatically require granting the other. Where, as here, the parties have filed cross-
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motions for summary judgment (at least in part), the motions must be treated
separately. See Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138,
1147 (10th Cir. 2002) (quoting Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th
Cir. 1979)).
ANALYSIS AND FINDINGS
All of Plaintiffs’ claims against Underwriters are based on their contention
that, despite having been paid the full “Sum Insured” amount as specified in the
declaration pages, additional money is available to them under the “Other Coverages”
sections of the Policy. These sections state that the various “Other Coverages”
constitute “additional insurance.” For example, subsection 1 of the “Other Coverages”
provision provides:
Dkt. 66-1 at p.374. Based on this language, Plaintiffs contend they are entitled to
claim up to $82,500—10% of Coverage A’s $825,000—beyond the $957,500 policy
limits for damages done to structures other than the residential home. See Dkt. 68 at
p.8. 	Plaintiffs 	argue 	similar 	phrasing 	in 	the 	“Improvements, 	Alterations 	And
Additions,” “Rental Value And Additional Living Expense,” and “Ordinance or Law”
sections also affords them additional money outside the “Sum Insured” limits. Id. And
they rely on a debris removal endorsement which states that costs related to removal
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of debris shall be added to the amount of damages to or destruction of property. Id.
at 6.
In their Motion for Summary Judgment and their Response to Plaintiffs’
competing Motion, Defendants contend the Policy is unambiguous and that payments
pursuant to the “Other Coverages” provisions are not available where an insured has
already been paid the full policy limits. The Court agrees with Defendants.
A. 	Breach of Contract
Under Colorado law, “[a]n insurance policy is merely a contract that courts
should interpret in line with well-settled principles of contract interpretation.”
Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294, 299 (Colo. 2003). When
interpreting a contract, the goal is to determine and effectuate the intent and
reasonable expectations of the parties. Thompson v. Md. Cas. Co., 84 P.3d 496, 503
(Colo. 2004). Absent any ambiguity in the Policy, the Court will not look beyond the
four corners of the contract to determine the parties’ intentions. Ad Two, Inc. v. City
& Cnty. of Denver ex rel. Manager of Aviation, 9 P.3d 373, 376 (Colo. 2000).
To establish a claim for breach of contract, Colorado law requires the plaintiff
to demonstrate “(1) the existence of a contract; (2) performance by the plaintiff or
some justification for nonperformance; (3) failure to perform the contract by the
defendant; and (4) resulting damages to the plaintiff.” Western Distrib. Co. v.
Diodosio, 841 P.2d 1053, 1058 (Colo. 1992). Similarly, to establish a claim of statutory
bad faith under Colo. Rev. Stat. § 10-13-1115, a plaintiff must establish that a benefit
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to which he was entitled under an insurance policy was unreasonably delayed or
denied. Vaccaro v. Am. Family Ins. Grp., 275 P.3d 750, 756 (Colo. App. 2012). Here,
Plaintiffs claim Underwriters breached the insurance contract by denying their claim
for an additional $379,000 in insurance benefits.
To 	support 	their 	arguments 	in 	favor 	of 	additional 	payments, 	Plaintiffs
primarily rely on the phrase “additional insurance” that appears in the “Other
Coverages” subsections. Taken in insolation, “additional insurance” could suggest a
claimant is entitled to money above the stated policy limit. However, the Court must
“interpret a contract in its entirety with the end in view of seeking to harmonize and
to give effect to all provisions so that none will be rendered meaningless.” Copper
Mountain, Inc. v. Indus. Sys., Inc., 208 P.3d 692, 697 (Colo. 2009) (cleaned up). The
Court must not view clauses or phrases in isolation. Id. (quoting U.S. Fidelity & Guar.
Co. v. Budget Rent–A–Car Sys., Inc., 842 P.2d 208, 213 (Colo. 1992)).
The Court begins by considering the Policy’s declaration pages, which are
undisputedly part of the insurance contract. Am. Fam. Mut. Ins. Co. v. Hansen, 2016
CO 46, ¶ 23, 375 P.3d 115, 120 (Colo. 2016) (citing 16 Williston on Contracts § 49:25
(4th ed. 2016) (“The contents of a declarations sheet, or the declarations page, of an
insurance policy is regarded as part of the insurance contract.”)). Colorado law is also
clear that a declaration page “defines the coverage available under the policy.” Id.
The declaration pages involved here state the limit of liability is $957,500, and that
the specific subsets of coverage are “part of and not in addition to” the foregoing
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aggregate sum. Dkt. 68-2 at p.1 (emphasis added). Plaintiffs’ interpretation that more
money is available runs contrary to this plain language.
The Court also concludes the specified dollar amounts assigned to Coverages
A – E in the declaration pages weigh against Plaintiffs’ position. Plaintiffs argue the
“Other Structures,” “Improvements, Alterations And Additions,” “Rental Value And
Additional Living Expense,” and “Ordinance or Law” provisions provide clearly
defined and predetermined amounts of 	additional insurance. Specifically, they
contend they are entitled to use up to $82,500 for other structures (10% of Coverage
A), $82,500 for improvements, alterations and additions (10% of Coverage C),
$165,000 for rental value and additional living expenses (20% of Coverage A), and
$82,500 (10% of Coverage A) for costs incurred due to the enforcement of ordinances
or laws. But if these amounts were in fact predetermined as Plaintiffs theorize, it
would stand to reason that they would be listed along with the other defined sub-
limits. But they are not, which instead supports Defendants’ position that any
payment pursuant to these “Other Coverages” is contingent on unused funds
remaining within the Coverage A – E sub-limits. See DA Mountain Rentals, LLC v.
The Lodge at Lionshead Phase III Condo. Ass’n Inc., 409 P.3d 564, 571 (Colo. App.
2016) (discussing application of the rule of expressio unius exclusio alterius to contract
interpretation).
The fact that the Policy refers to these “Other Coverages” as “additional
insurance” does not change the Court’s conclusion or render the contract ambiguous.
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Rather, it is clear the language “additional insurance” means that a remaining
balance from one sub-limit can be used to supplement the limits in other sections,
thus providing additional insurance up to the Policy limit. For example, the Policy
limits recovery for “Fair Rental Value” to $50,000, but assuming any money remained
with respect to Coverage A, Plaintiffs could use up to $165,000 as additional
insurance for fair rental values. Similarly, although Plaintiffs did not have predefined
coverage for damage to “Other Structures,” if Coverage A had any unused funds,
Plaintiffs 	could 	nevertheless 	apply 	up 	to 	$82,500 	for 	these 	buildings. 	This
interpretation harmonizes the language of the Policy as a whole and does not render
any part meaningless, whereas Plaintiffs’ interpretation is inconsistent with the
declaration pages statement that recovery is limited to $957,500.
The Court’s conclusion is further buttressed by the Policy’s “Conditions”
section, which states:
Dkt. 66-1 at p.381. Likewise, the debris removal endorsement states that it will
provide payments for removal, but only “within the Sum insured.” Id. at p.390. If the
Court were to accept Plaintiffs’ interpretation of the Policy, it would directly
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contradict the foregoing limiting language and run afoul of the rules of contract
interpretation.
Construing the insurance contract as a whole, the Court concludes it does not
provide for payments above the Policy’s $957,500 limits of liability. Thus, there is no
genuine dispute of material fact as to whether Defendants breached the insurance
contract when they refused to pay an additional $379,000 in insurance benefits above
and beyond the “Sum Insured.” Defendants are entitled to judgment in their favor on
Plaintiffs’ breach of contract claim.
B. 	Statutory and Common Law Bad Faith Claims
Because 	there 	is 	no 	disputed 	question 	of 	material 	fact 	as 	to 	whether
Defendants 	breached 	the 	insurance 	contract, 	Defendants 	are 	also 	entitled 	to
judgment on Plaintiffs’ claims for breach of the duty of good faith and fair dealing as
well as their claims under Colo. Rev. Stat. §§ 10-3-1115 and -1116. See MarkWest
Hydrocarbon, Inc. v. Liberty Mut. Ins. Co., 558 F.3d 1184, 1193 (10th Cir. 2009) (“It
is settled law in Colorado that a bad faith claim must fail if, as is the case here,
coverage was properly denied and the plaintiff’s only claimed damages flowed from
the denial of coverage.”).
* 	* 	*
For the reasons shared above, IT IS ORDERED:
1. 	Defendants’ Motion for Summary Judgment is GRANTED and the
claims against them are dismissed;
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2. 	Plaintiffs’ Motion for Partial Summary Judgment is DENIED; and
3. 	The Court finds as MOOT the Parties’ competing motions (Dkts. 55, 56)
to exclude experts.
SO ORDERED.
DATED: 	January 31, 2025
BY THE COURT:
S. Kato Crews
United States District Judge
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