Courts Continue to Split on Whether Defense Obligation Is a First Party Benefit Under Colorado Law, but Agree Duty to Defend Is a Joint and Several Obligation

more+
less-

In D.R. Horton, Inc.—Denver v. Mountain States Mutual Casualty Co., No. 12-cv-01080 (February 25, 2013), another U.S. District Court judge for the District of Colorado determined a liability insured seeking defense costs from its insurer may qualify as a “first-party claimant” for purposes of Colorado’s Unfair Claim Settlement Practices Act, potentially entitling the insured to recover unpaid defense costs, attorneys’ fees in prosecuting the recovery action and two times the unpaid defense costs as a penalty.

D.R. Horton, Inc. — Denver and D.R. Horton, Inc. (collectively Horton) developed a residential community in Arapahoe County, Colo., known as Windemere. Following construction, the homeowners’ association sued Horton based upon alleged construction defects resulting from work performed by subcontractors. Each of Horton’s subcontractors was insured under a liability insurance policy provided by one or more of the defendant-insurers and each policy named Horton as an additional insured. Although the defendant-insurers had allegedly accepted Horton’s tender of the underlying suit, they had either refused to pay or only paid a small portion of defense costs billed to them. Consequently, Horton filed suit, asserting three claims: (1) declaratory judgment of the respective rights and obligations of the parties; (2) breach of contract on the basis that each insurer had a joint and several contractual obligation to defend; and (3) bad faith liability under C.R.S. § 10-3-1116, Colorado’s Unfair Claim Settlement Practices Act.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cozen O'Connor | Attorney Advertising

Written by:

more+
less-

Cozen O'Connor on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×