May 20, 2013

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Colorado Court of Appeals: Roofer Entitled to Sue Insurer as First-Party Claimant When Insurer Refused to Pay Roofer’s Claims

October 4, 2012 by Leave a Comment

The Colorado Court of Appeals issued its opinion in Kyle W. Larson Enterprises, Inc. v. Allstate Insurance Co. on September 27, 2012.

First-Party Claimant—Repair Vendor—CRS §§ 10-3-1115 and -1116.

Plaintiff Kyle W. Larson Enterprises, Inc., doing business as The Roofing Experts, (roofer) appealed only a portion of the trial court’s summary judgment in favor of defendant Allstate Insurance Company (Allstate). The judgment against the roofer on its claim under CRS § 10-3-1116 was reversed and the case was remanded for further proceedings on that claim.

The roofer contracted with the owners of four homes insured by Allstate to repair their roofs. The contracts provided that the repair costs would be paid from insurance proceeds and granted the roofer full authority to communicate with Allstate regarding all aspects of the insurance claims. The roofer met with Allstate adjustors to discuss the four homes and to determine the amount of each claim, and began each repair after receiving approval from Allstate for the claims. It later was determined that additional repairs were necessary to comply with applicable building codes and to maintain certain manufacturers’ warranties. The roofer made the repairs and invoiced Allstate for them. Allstate paid the claim amounts that were agreed to during the original adjustment, but refused to pay for the additional repairs. Pursuant to CRS §§ 10-3-1115 and -1116, the roofer filed suit as a first-party claimant against Allstate for unreasonable delay and denial of benefits. The trial court ruled that the roofer was not a first-party claimant entitled to seek relief under the statutes, and granted Allstate’s summary judgment motion.

On appeal, the roofer contended that the trial court erred in granting summary judgment for Allstate because the roofer is a first-party claimant. A repair vendor that brings a claim against an insurer on behalf of its insured qualifies as a first-party claimant under § 10-3-1115 and is entitled to sue the insurer under § 10-3-1116. CRS § 10-3-1115(1)(b). This includes vendors such as the roofer, which is authorized to assert, and do assert, claims on behalf of insureds.

Summary and full case available here.

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Tenth Circuit: Dismissal of Complaint for Declaratory and Injunctive Relief Affirmed Because Claims Were Not Yet Ripe

August 28, 2012 by Leave a Comment

The Tenth Circuit published its opinion in Los Alamos Study Group v. US Department of Energy on August 27, 2012.

Plaintiff Los Alamos Study Group filed a complaint for declaratory and injunctive relief under the National Environmental Policy Act (NEPA) and the Administrative Procedure Act (APA). Defendants were the National Nuclear Security Administration (NNSA), the United States Department of Energy (DOE), and the DOE secretary. The complaint alleged that the design proposed for construction of a nuclear facility at the Los Alamos National Laboratory had changed so much since the original environmental analysis that a new analysis was required and that all work on the facility should be halted until the conclusion of such analysis.

The district court dismissed the claims on two grounds: (1) that the case was not yet ripe because agency action (the Supplemental Environmental Impact Statement (SEIS)) was ongoing when the complaint was filed; and (2) that the plaintiff’s claims were prudentially moot because Defendants refrained from all construction on the Nuclear Facility until the SEIS analysis was complete. The Tenth Circuit agreed with the district court on the ripeness issue, and therefore did not need to address mootness.

 

 

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Tenth Circuit: Alleged Clean Air Act Violations Could Not Be Expected to Recur, so Case Is Moot

August 13, 2012 by Leave a Comment

The Tenth Circuit Court of Appeals published its opinion in WildEarth Guardians v. Public Service Co. of Colorado on Friday, August 10, 2012.

The Tenth Circuit dismissed the appeal. Petitioner claims that Respondent’s “construction of a new coal-fired power plant in Pueblo, Colorado violated the [Clean Air Act] because [Respondent] failed to obtain a valid construction permit. . . . Although the project initially complied with all applicable federal and state laws when construction commenced in 2005, the regulatory landscape changed in 2008. A decision of the D.C. Circuit required regulators to impose additional Clean Air Act requirements upon new power plant construction. After the decision, [Respondent] worked with the relevant agencies to come into compliance with the modified regulatory regime while construction of the plant continued. [Petitioner] sued [Respondent] pursuant to the Act’s citizen-suit provisions, seeking civil penalties and an injunction to halt construction until [Respondent] complied with the Act.”

“While this litigation was pending, [Respondent] finished constructing the plant and came into compliance with the new regulatory regime. The district court dismissed the suit, reasoning that to find a Clean Air violation under the circumstances would be to give unwarranted retroactive effect to the decision of the D.C. Circuit. [Respondent] argues that [the Court lacks] jurisdiction to hear this appeal. It contends that since it is now in compliance with the Act, a court ruling could not redress any injuries [Petitioner] has suffered as a result of [Respondent]’s alleged violation. [Respondent] also argues [Petitioner] in effect has received the injunctive relief it requested because [Respondent] is now in compliance.”

Although the Court found redressability to be an inappropriate basis for dismissal here, Petitioner’s “claims nonetheless should be dismissed under the related jurisdictional doctrine of constitutional mootness. In most Clean Air citizen suits, mootness is difficult to establish because the plaintiff’s interest in deterring the defendant from future violations is sufficient to sustain a constitutional case or controversy between the parties. Under the unusual circumstances of this case, however, [the Court found Respondent]’s alleged Clean Air violations could not reasonably be expected to recur, and thus no deterrent effect could be achieved.”

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Colorado Court of Appeals: Homeowners’ Liability to Injured Contractor Limited by Statutory Damages Cap

July 24, 2012 by Leave a Comment

The Colorado Court of Appeals issued its opinion in Cavaleri v. Anderson on July 19, 2012.

Premises Liability—CRS § 8-41-401(3).

In this premises liability case, Chris Cavaleri (contractor) and Magdalena Cavaleri (wife) appealed the trial court’s judgment dismissing their personal injury claims against Aaron and Heidi Anderson (homeowners) with prejudice. The judgment was affirmed.

Contractor was the sole proprietor of a business and did not carry workers’ compensation insurance on himself. He was hired by homeowners to do some tiling work on their home. As he walked down their front steps after completing the work, he leaned on a wooden railing and it gave way, causing him to fall and sustain injuries. Contractor and his wife brought this premises liability action, seeking economic and noneconomic damages.

Before trial, the court asked the parties about the impact of CRS § 8-41-401(3) on contractor’s claims. The court ruled that the $15,000 limitation on damages applied to contractor’s claims. Homeowners immediately tendered the statutory limit. The trial court dismissed the action with prejudice and contractor appealed.

Contractor argued that CRS § 8-41-401(3) did not apply because homeowners were not required to obtain workers’ compensation insurance covering contractor and, because no coverage was required, homeowners were not among the individuals protected by the statutory damages cap. The Court of Appeals disagreed. The Court noted that “the purpose of the section is to encourage participation in the workers’ compensation system and limit exposure of contractors who obtain coverage from lawsuits or claims brought by uncovered independent contractors injured on the job.” [Snook v. Joyce Homes, Inc., 215 P.3d 1210, 1215 (Colo.App. 2009).]

Here, homeowners are not general contractors and are excluded from the Workers’ Compensation Act. However, contractor provided no support for his argument that this somehow kept him from obtaining workers’ compensation insurance for himself. Contractor’s argument failed to address the express inclusion of “sole proprietor[s] who [are] not covered under a policy of workers’ compensation insurance” among the individuals who may bring an action against a negligent third party, but whose damages will be limited to $15,000 if they elect to forego workers’ compensation insurance. The dismissal with prejudice was affirmed.

Summary and full case available here.

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Colorado Supreme Court: Public Utilities Commission Did Not Abuse Discretion by Striking Substantial Portions of Testimony

June 26, 2012 by Leave a Comment

The Colorado Supreme Court issued its opinion in Glustrom v. Colorado Public Utilities Commission on June 25, 2012.

Recovery of Costs—Unjust and Unreasonable Rate Order—“Used and Useful”—Exclusion of Testimony.

In 2005, with the approval of the Public Utilities Commission (PUC), the Public Service Company of Colorado (Xcel) began constructing a coal-fired electric power unit known as Comanche 3. When Xcel sought to recover a portion of its construction costs nearly four years later during a rate proceeding, Leslie Glustrom intervened. Glustrom sought to introduce testimony that Xcel acted improperly and, consequently, should not recover its costs. The PUC excluded most of her testimony, a ruling that Glustrom challenged. Glustrom separately challenged the depreciation rate and the possibility that Comanche 3 might not be “used and useful” at the time rates went into effect. The PUC denied her challenges, and the district court affirmed.

The Supreme Court held that the PUC did not abuse its discretion when it struck substantial portions of Glustrom’s testimony pursuant to the Colorado Rules of Evidence. Further, the depreciation rate approved by the PUC was established pursuant to law and in accordance with the evidence. The Court also held that the PUC was free to exercise its discretion in departing from a strict application of the “used and useful” principle. Glustrom failed to meet her burden in showing why such a departure here would result in a rate that is unjust and unreasonable in its consequences.

Summary and full case available here.

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Colorado Court of Appeals: District Court Erred in Denying Class Certification Where Homeowners’ Damages Were Different but Nexus Existed Between Claims

May 29, 2012 by Leave a Comment

The Colorado Court of Appeals issued its decision in Devora v. Strodtman on May 24, 2012.

Class Action—Homeowners—Notice of Appeal—Typicality—Adequacy—CRCP 23(a)—Damages.

In this case involving allegations of deceptive trade practices, civil theft, and racketeering, plaintiffs Jesus Devora, Julian Martinez, and Manuel Moreno (collectively, homeowners) appealed the district court’s order denying their motion to certify the case as a class action lawsuit against defendants J. Mark Strodtman and JS Real Estate LLC. The judgment was vacated and the case was remanded.

Defendants built homes in Weld County that were purchased by homeowners. Homeowners alleged in their complaint that defendants induced them to buy homes under prices and terms they could not afford, misrepresented and failed to disclose loan financing terms, engaged in a pattern of racketeering, and intended to permanently deprive mortgage lenders of the proceeds defendants had received from the loans.

The Court of Appeals first determined whether plaintiffs’ notice of appeal was timely filed. Where a named plaintiff chooses not to file an interlocutory appeal of an order denying class certification under CRS § 13-20-901(1), the plaintiff does notwaive the right to appeal that order by requesting and obtaining a CRCP 54(b) certification of final judgment, or on a final judgment on the merits. Because homeowners chose not to appeal the district court’s order under CRS § 13-20-901(1), they had the option of awaiting a final judgment on the merits of their individual claims or requesting a CRCP 54(b) order. Homeowners obtained a Rule 54(b) order and filed a timely notice of appeal. Therefore, this Court had jurisdiction to consider plaintiffs’ appeal.

Homeowners contended that the district court erred in finding they did not meet the typicality and adequacy requirements of CRCP 23(a) because the class members had differing damages from one another. The class representatives, however, need to establish only “a nexus between the class representatives’ claims or defenses and the common questions of fact or law which unite the class” to meet the typicality requirement. The typicality requirement may be satisfied even though there is disparity in the damages claimed by the class representatives and the putative class members. Here, the district court erred as a matter of law in finding that homeowners had failed to prove the typicality element of CRCP 23(a), because their damages might or would be different from those of the potential class members. The district court did not make specific findings regarding the remaining requirements of CRCP 23(a) and (b)(3). Thus, it is unknown whether homeowners established those requirements. Therefore, the case was remanded to the district court for further findings of fact and a determination whether homeowners’ class action lawsuit should be certified.

Summary and full case available here.

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Colorado Supreme Court: General Assembly Did Not Grant Condemnation Authority to Companies to Construct Petroleum Pipelines

May 21, 2012 by Leave a Comment

The Colorado Supreme Court issued its opinion in Larson v. Sinclair Transportation Co. on May 21, 2012.

Real Property—Eminent Domain—Condemnation.

The Supreme Court held that the Colorado General Assembly did not grant, either expressly or by clear implication, condemnation authority to companies to construct petroleum pipelines. Accordingly, Sinclair Transportation Company was not entitled, under CRS § 38-5-105, to immediate possession of easements for the construction of its gasoline pipeline. The judgment of the court of appeals was reversed.

Summary and full case available here.

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SB 12-184: Allowing Owners of Special Mobile Machinery Fleets to Register Their Vehicles Once a Year and Have Special Tags

May 14, 2012 by Leave a Comment

On May 4, 2012, Sen. Bill Cadman introduced SB 12-184 – Concerning the Registration of Special Mobile Machinery Fleets, and, In Connection Therewith, Making an Appropriation. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill allows an owner of more than 10 pieces of special mobile machinery to register all new special mobile machinery quarterly with the county and to obtain and use special mobile machinery plates, stickers, or certificates to designate that the registration for the machinery is pending. This allows the owner to renew the registrations for all of the machinery on the same date each year. If the machinery is not intended for highway use, its plate is not required to have an annual validating tab or sticker. Fees are set to implement the bill.

The bill is assigned to the Transportation Committee and is scheduled for committee review today at a time and place to be determined.

Since this summary, the  bill passed out of the Senate, and was assigned to the House Finance Committee. It was unamended in Finance and referred to Appropriations, then referred unamended to the House Committee of the Whole.

Summaries of other featured bills can be found here.

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HB 12-1357: Providing for Use of Unspent Funds for Capital Construction Projects at State Sponsored Institutes of Higher Education

May 11, 2012 by Leave a Comment

On April 30, 2012, Rep. J. Paul Brown and Sen. Scott Renfroe introduced HB 12-1357 – Concerning the Use of Unspent Moneys After Completion of Capital Construction Projects at State-Supported Institutions of Higher Education Authorized by a 2008 Federal Mineral Lease Revenues Lease-Purchase Agreement. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

Capital Development Committee bill.

The bill specifies that the state treasurer shall ensure that each state-supported institution of higher education submits a certificate of completion no later than August 1, 2012, for each project funded by the lease-purchase agreement entered into by the state treasurer in 2008. The bill specifies that after such certificates of completion are received by the state treasurer, the state treasurer and the state controller shall calculate the unspent proceeds raised through the 2008 lease-purchase agreement. The bill requires the state treasurer and state controller to provide that calculation to the capital development committee in writing by a specified date and requires the capital development committee to hold a public meeting during the interim to decide what the unspent proceeds should be used to fund, limited to capital construction projects at state-supported institutions of higher education or, so long as such projects are identified as eligible by bond counsel, controlled maintenance projects at state-supported institutions of higher education.

The bill requires the capital development committee’s decision to be communicated to the state treasurer in writing and requires the state treasurer to ensure that the approved project or projects are funded from the unspent proceeds raised through the 2008 lease-purchase agreement as soon as possible.

The bill also makes transfers necessary to provide state-supported institutions of higher education a proportionate refund of their cash contributions toward the cost of the project.

On May 2, the Finance Committee referred the unamended bill to the full Senate for consideration it to the Committee on Appropriations. On May 4, the Senate approved the bill on 2nd Reading.

Since this summary, the bill passed a 3rd Reading in the Senate and is headed to the Governor’s desk.

Summaries of other featured bills can be found here.

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SB 12-179: Requires All Schools to Comply with Building and Fire Code Regulations; Bars Individuals With Financial Interest from Serving on PSCCA Board

May 4, 2012 by Leave a Comment

On April 26, 2012, Sen. Gail Schwartz and Rep. Tom Massey introduced SB 12-179 – Concerning Governmental Oversight of Public School Capital Construction Projects. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

On and after July 1, 2012, the bill prohibits an individual who has any financial interest in a potential or funded “Building Excellent Schools Today Act” (BEST) project from serving as a member of the public school capital construction assistance board. The bill requires the BEST board to include information regarding assistance fund revenues and the assistance fund balance in the annual report that it presents to specified committees of the general assembly and to make the report available electronically on the web site of the department of education.

Under current law, the state division of fire safety generally adopts building standards for public school capital construction, conducts plan reviews, permitting, and inspections for public school buildings and structures, and issues certificates of occupancy for the buildings and structures. The division may, however, qualify a local building department to conduct those activities within the department’s jurisdiction, and a school board, a charter school, or the state charter school institute may go to a prequalified appropriate building department rather than the division for required plan reviews, permitting, inspections, and certificate of occupancy issuance. An appeals board considers appeals of the division’s administrative decisions. The bill:

  • Encourages the division to prequalify appropriate building departments whenever feasible and requires a school board that has buildings or structures only within the territory of one municipality or only within the unincorporated territory of one county, a charter school, or the state charter school institute to go to a prequalified appropriate building department, if one is available, in lieu of the division for required plan reviews, permitting, inspections, and certificate of occupancy issuance;
  • Adds the director of the division of public school capital construction assistance in the department of education to the appeals board and clarifies the scope of the board’s powers;
  • Requires the BEST division to conduct supplemental plan reviews for any BEST-funded public school capital construction project for which a prequalified appropriate building department, rather than the division, is conducting necessary plan reviews, issuing building permits, conducting inspections, and issuing a certificate of occupancy; and
  • Requires the BEST division to ensure that the owner’s representative for any BEST–funded project to be constructed pursuant to a design-build contract is wholly independent of the contractor.

The bill is assigned to the Education Committee; committee review is scheduled for Wednesday, May 2 Upon Adjournment.

Since this summary, the bill was amended in the Senate Education Committee and referred to Appropriations, but was recalled for reconsideration by the Education Committee.

Summaries of other featured bills can be found here.

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Colorado Court of Appeals: Insurance Company Had No Duty to Provide Coverage to Third Party Under Lapsed Commercial General Liability Policy

April 17, 2012 by Leave a Comment

The Colorado Court of Appeals issued its decision in TCD, Inc. v. American Family Mutual Insurance Co. on April 12, 2012.

Summary Judgment—Duty to Defend.

Plaintiff TCD, Inc. appealed the district court’s summary judgment in favor of defendant American Family Mutual Insurance Company (American Family), on the ground that the insurance company had no duty to defend TCD under a commercial general liability (CGL) insurance policy. The judgment was affirmed.

The developer, Frisco Gateway Center, LLC (Gateway), entered into a contract with TCD, the general contractor, to construct a building. TCD subcontracted with Petra Roofing and Remodeling Company (Petra) to install the roof. The subcontract required Petra to “indemnify, hold harmless, and defend” TCD against claims arising out of or resulting from the performance of Petra’s work on the project. Petra also was to name TCD as an additional insured on its CGL policy. American Family issued a CGL policy to Petra, with TCD as an additional insured. The policy was cancelled on June 10, 2007 for nonpayment of the premium.

TCD sued Gateway, seeking payment on the project. Gateway counterclaimed for breach of contract, negligence, and violation of the Consumer Protection Act. This action proceeded to arbitration and resulted in a binding award. As an additional insured under the CGL policy, TCD demanded that American Family defend and indemnify it in the underlying action, but American Family denied coverage.

TCD sued Petra and American Family, asserting claims for declaratory judgment, breach of insurance contract, breach of contract, and negligence. The district court entered a default judgment against Petra and granted summary judgment in favor of American Family.

On appeal, TCD argued that Gateway’s counterclaims were sufficient to raise a genuine issue as to whether American Family had a duty to defend it against those counterclaims. Alternatively, TCD argued it was entitled to have the Court of Appeals consider evidence not contained in the counterclaims that purportedly shows the insurance company had a duty to defend. Finally, TCD argued that CRS § 13-20-808, enacted three years after the CGL policy was cancelled, requires reversal. The Court rejected all three arguments.

TCD argued that Gateway’s claims constituted “property damage” covered by the CGL policy. The Court stated that defense and liability coverage in CGL policies issued to subcontractors generally is limited to property damage caused by an “occurrence.” In this policy, an “occurrence” is “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” In analyzing the counterclaims made by Gateway, the Court found no alleged “accident,” but found that Petra improperly installed the roof, resulting in defects that caused TCD to breach its contract with Gateway.

TCD argued that it should be allowed to go outside the “four corners” of the counterclaims and offer other evidence. The Court found the argument unpersuasive.

In May 2010, the legislature enacted HB 10-1394, codified as CRS § 13-20-808. The Court held that the statute was not retroactive, and therefore was inapplicable. The judgment was affirmed.

Summary and full case available here.

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SB 12-038: Protecting Consumers by Preventing Fraud by Roofing Contractors

February 10, 2012 by Leave a Comment

On January 11, 2012, Sen. Lois Tochtrop and Rep. Glenn Vaad introduced SB 12-038 – Concerning Measures to Protect Consumers Who Engage a Roofing Contractor to Perform Roofing Services on Residential Property. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill requires residential roofing contractors to sign a written contract with customers that details the following:

  • The scope of roofing services and materials to be provided;
  • The approximate dates of service;
  • The costs of the services;
  • The roofing contractor’s contact information;
  • Identification of the roofing contractor’s surety and liability coverage insurer and their contact information, if applicable;
  • The roofing contractor’s policy regarding cancellation of the contract and refund of any deposit, including a rescission clause allowing the client to rescind the contract and obtain a full refund of any deposit within 72 hours after entering the contract; and
  • A written statement that if the client plans to use the proceeds of a property or casualty insurance policy to pay for the roofing work, the roofing contractor cannot pay, waive, rebate, or promise to pay, waive, or rebate all or part of any deductible applicable to the claim for payment for roofing work on the covered residential property.

A person who enters into a contract with a roofing contractor to perform roofing work on his or her residential property and who submits a claim to his or her property and casualty insurer for payment for the roofing work may rescind the contract for the roofing work if the insurer denies the claim in whole or in part, as long as the person notifies the roofing contractor within 72 hours after the claim is denied. The roofing contractor must refund any moneys paid by the customer within 10 days after receipt of the cancellation notice.

When residential roofing work will be paid from the proceeds of a property and casualty insurance policy covering the residential property, the roofing contractor is prohibited from paying, waiving, rebating, or offering or promising to pay, waive, or rebate all or part of any deductible that applies to the claim.

Assigned to the Business, Labor and Technology Committee.

Summaries of other featured bills can be found here.

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