Updates on Insurance Coverage, Construction Defect
and Commercial Auto Law Developments
in Colorado, Utah and Wyoming
Greetings from Evans & Co. Counselors and Litigators, with another Case Notes series. We write this month with updates on insurance, construction defect, and commercial auto law in the states of Colorado, Utah, and Wyoming
Past Case Notes are archived at and we would be pleased to bring current the decisions on which we've reported previously, at your request.
The Colorado Supreme Court ruled that a co-owner of a vehicle with “apparent authority” may reject UM/UIM coverage for the other owner. You will see a “war on UIM” theme in these case notes, which deserves the attention of underwriting, claims, and perhaps, legislative liaisons.  This case is followed by the 10th Circuit Court of Appeals in a second case on the subject which we digest within.
The Colorado Court of Appeals holds that where a claimant is injured at work and entitled to a worker’s compensation recovery, to the extent the worker’s compensation recovery falls short of providing complete compensation, the workers own UM/UIM insurance is required to pay the balance to assure complete compensation. “Complete compensation” includes of course, pain and suffering, the part of lost wages not paid by WC, and the difference between actual medicals paid (the discounted, real amount, typically the amount paid by WC insurers) and the “sticker price” for medicals. The Colorado Legislature and Supreme Court in the last couple of years have precluded defendants from presenting evidence of the amounts actually accepted as payment for medical services. All of those workers’ compensation plaintiffs’ attorneys, formerly limited to the small fees authorized under those statutes, now have a right to full contingency fees in claims against UM/UIM. 
Readers of this newsletter will recall modest joy we expressed when the Tenth Circuit Court of Appeals carved a narrow exception to the Colorado “eight corners” rule [1] for insurance policy construction, in regard declaratory judgment actions brought during the pendency of the underlying liability case. The exception permitted extrinsic evidence that “plainly” showed there was no coverage. No Colorado state appellate court has since followed this (or overruled it). Now a Federal District Court weighs in saying that the extrinsic evidence presented, was not sufficiently “plain” because it was contested. Rare is evidence that cannot be contested.  So we see the sun setting on the Tenth Circuit rule unless a Colorado state court adopts it soon.
Turning to Utah law, their Supreme Court continues the war on UM/UIM insurance, holding, like the Colorado Court of Appeals case noted above, that where a worker’s compensation claim does not fully compensate a claimant (they never do, it is part of the “Grand Bargain” that they do not) that the claimant in a qualifying truck or automobile case, can claim against her own UM/UIM for the part of the value of the claim not paid by workers’ compensation. The Supreme Court specifically noted that ambiguity in the UM/UIM lead to this conclusion; legislative action seems the only course to achieve a different result.
A breath of fresh air for construction defect insurers, the Tenth Circuit Court of Appeals affirms Utah law that the result of an insured’s negligence or unworkmanlike conduct in construction, is not itself an occurrence under CGL policy terms. Our digest of this case also addresses important issues regarding the general contractor’s insurers’ exposure for the negligence of subcontractors.
We also digest a case dealing with limitation on discovery of the insurer, in a declaratory judgment action alleging bad faith, and a case awarding spoliation remedies where a subrogated insurer did not properly preserve evidence. We wind up Utah with a case that finds that homeowners’ insurance does not respond for allegations of unwanted sexual contact, supplying alcohol to a minor, and verbal and sexual harassment.
In Wyoming, we digest a Federal District Court case, applying Wyoming law, which underscores the continuing application of the Wyoming oilfield anti-indemnity act to void defense and indemnity contract obligations where the contract has a sufficient nexus with oilfield work.  We have previously noted that insurance obligations are not voided by the statute, and many contracts choose law other than Wyoming, which choice-of-law provision have been upheld.

[1] The rule is that the court can consider only the complaint and the text of the insurance policy in determining coverage in contemporaneous dec actions. This leaves it to the plaintiff (and often, the cooperative defendant/insured) to craft complaint language that rules out early determination of coverage issues.
Click here for our Case Notes for all three states (31 pages).
Click here for Colorado only (12 pages).
Click here for Utah only (16 pages).

Click here for Wyoming only (4 pages).
Click here to go to the Evans & Co. law firm website for firm information and access to prior case digests.

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