Colorado Defense Lawyers Association Elects New Board Members

I am proud of the two years I served as an At-Large Director for the CDLA and am happy to have been part of the team responsible for reinvigorating the CDLA's Trial Academy. As I now rotate off of the Board of Directors, I would like to recognize and encourage those who will be leading the CDLA over the next year. Below is the recent announcement regarding next year's Board. - David M. McLain

Denver, CO (PRWEB) May 18, 2012

The Colorado Defense Lawyers Association (CDLA) today announced that Kristin Caruso, Esq., McElroy, Deutsch, Mulvaney & Carpenter, LLP, Gregg Rich, Esq., Lambdin & Chaney, LLP, Jane Mitchell, Esq., Hall & Evans, LLC, Brendan O. Powers, Esq., Spies, Powers & Robinson, P.C., Tanner Walls, Esq., Jaudon & Avery, LLP, have joined the Association’s Board of Directors. Ms. Caruso will serve on the Executive Committee as Secretary of the organization, Mr. Rich was elected as an At-Large Board member, Ms. Mitchell as Ex-Officio member, Mr. Powers was elected as the DRI State Representative, and Tanner Walls will serve as Co-Chair of the Young Lawyers Committee.

“These appointments reflect CDLA’s continued commitment to find the best civil defense attorneys to lead and guide CDLA,” commented Teresa Seymour, CDLA Vice-President. “Their knowledge, professionalism and expertise will be invaluable to CDLA’s future as we collectively defend the interests of business and individuals in civil litigation”.

The appointments of, Mr. Rich, Mr. Powers and Mr. Walls will fill seats vacated by At-Large Director David McLain, Esq., Higgins, Hopkins, McLain & Roswell, LLC; DRI State Representative Janet Spies, Esq., Spies, Powers & Robinson, P.C.; and Young Lawyer Jody Haskins, White and Steele, P.C. CDLA thanks Ms. Salg, Harris, Karstaedt, Jamison & Powers, P.C. and for her contribution to our organization as Communications Director.

Kristin A. Caruso, Esq.

Ms. Caruso, Of Counsel, McElroy, Deutsch, Mulvaney & Carpenter, LLP, holds a B.S. from Cornell University’s School of Hotel Administration, an M.B.A. from the University of Denver, and a J.D. from the University of Denver, where she served as an editor of the Denver Journal of International Law and Policy. She is also a Medicare Set-Aside Consultant, Certified. She practices litigation in the area of general civil litigation, including workers' compensation defense. There is no issue or claim in Workers’ Compensation law or procedure that Ms. Caruso has not analyzed for employers and their insurers. She is a member of the American Bar Association, Colorado Bar Association (CBA), Denver Bar Association (DBA), CBA/DBA Interprofessional Committee, Cornell Hotel Society, the National Alliance of Medicare Set Aside Professionals, and the Defense Research Institute.

Gregg Rich, Esq.

Mr. Rich received a B.A. from California State Polytechnic University, and a J.D. from the University of Denver. His areas of expertise include construction defect, personal injury, employment and telecommunications. Currently, his practice focuses on litigation, with a special emphasis on the defense of general contractors and subcontractors in defect actions, representation of contractors in their pursuit of payment, and coverage issues. He has tried several bench trials, jury trials and arbitrations and has argued three times to the Colorado Court of Appeals. Mr. Rich is licensed to practice law in Colorado state and federal courts, the Tenth Circuit Court of Appeals and the U.S. Supreme Court. He is a member of the American Bar Association (ABA), Colorado Bar Association (CBA), Denver Bar Association (DBA), Defense Research Institute and William E. Doyle Inn of Court.

S. Jane Mitchell, Esq.

Ms. Mitchell practices in the areas of medical malpractice defense, medical device and pharmaceutical products liability, and professional licensing. She obtained a B.S. from the University of South Florida and a J.D. from the University of Florida. Ms. Mitchell is trained and experienced as a critical care nurse, and applies her extensive knowledge of all aspects of medicine in her defense of medical professionals. She has successfully defended physicians, hospitals and nurses in medical malpractice cases throughout Colorado and Florida.

Brendan O. Powers, Esq.

Mr. Powers has served as lead counsel in state and federal trials involving insurance bad faith, arson, fraud, environmental hazards, personal injury and product liability. His commercial litigation practice focuses upon contract disputes, client ownership, non-competition, trade secrets, business dissolution and landlord-tenant issues.

While the bulk of this experience naturally involves fraud and arson in the area of property and casualty insurance, Mr. Powers has been called upon to resolve questions concerning errors and omissions, business losses, fidelity bonds, forgery claims, excess and umbrella coverages, theft losses, product failure and automobile claims. He has acted as a consulting expert, including the post-litigation defense of claim denials with attendant allegations of bad faith. Mr. Powers is a frequent lecturer on these topics throughout the insurance community.

Tanner J. Walls, Esq.

Mr. Walls received his B.S. from the University of Colorado and J.D. from University of Denver Sturm College of Law and graduated in May of 2009. The majority of his practice focuses on legal and medical malpractice defense, as well as other forms of complex civil litigation. Mr. Walls’ practice also includes defending attorneys involved in disciplinary actions in front of Attorney Regulation Counsel, and representing physicians in peer review proceedings and other professional licensing matters.

About Colorado Defense Lawyers Association:

CDLA is a statewide organization of attorneys defending the interests of business and individuals in civil litigation. CDLA provides numerous educational and informational resources to its members and offering many opportunities for connections among defense trial lawyers. The following are CDLA's goals:

• Education: To teach and educate and to improve the skills of the civil defense law practitioner.

• Justice: To strive for improvement in the civil justice system.

• Balance: To be a counterpoint to the plaintiff's bar and seek balance in the justice system.

• Economics: To assist members in dealing with the economic realities of the defense law practice.

• Professionalism and Service: To urge members to practice ethically and responsibly, keeping in mind the lawyer's responsibilities that go beyond the interest of the client to the good of society as a whole.

An Analysis of the District Court Order on TCD v. AmFam.

Recently, this blog posted several articles regarding HB 10-1394, codified at C.R.S. § 13-20-808. As mentioned in those posts, C.R.S. § 13-20-808 has gathered an increasing amount of attention. Part of the interest is due to the ambiguous nature of how the trial courts are interpreting the statute. The following post analyzes the District Court of Summit County rulings in TCD, Inc. v. American Family Mutual Insurance Company, 2009CV148, which ultimately gave rise to the Court of Appeals' affirmation of the District Court's order that C.R.S. § 13-20-808 does not apply retroactively. The blog entry on that decision can be found here.

The TCD, Inc. case stems from construction of the Rio Grande Building at 333 Main Street, Frisco, Colorado (the “Project”). On or about September 15, 2006, TCD, Inc. (“TCD”) as general contractor, entered into an agreement with Frisco Gateway Center, LLC (“Gateway”), as developer, regarding construction of the Project. TCD then entered into a subcontract with Petra Roofing and Remodeling Company (“Petra”). The subcontract required Petra to “indemnify, hold harmless, and defend” TCD against claims arising out of the performance of Petra’s work on the Project. The subcontract also called for Petra to be named as an additional insured on the commercial general liability (“CGL”) insurance policy.

American Family Mutual Insurance Company (“AmFam”) issued a CGL insurance policy to Petra, effective August 22, 2006. It was amended on January 22, 2007 to add TCD, as an additional insured. The court found that the policy was cancelled, effective June 10, 2007, because of Petra’s failure to pay its premium.

A dispute eventually arose on the Project over performance and payment, which led to TCD filing a lawsuit against Gateway, (the “Underlying Action”). The Underlying Action’s purpose was to perfect and establish TCD’s right to a mechanic’s lien against the property. The Underlying Action also included counterclaims by Gateway which alleged, inter alia, that the roof installed by Petra leaked, failing to comply with the architect’s plans and specifications.

TCD demanded that AmFam defend and indemnify it in the Underlying Action, in accordance with the subcontract agreement with Petra and the insurance policy. Once AmFam denied that the policy provided TCD with any coverage, TCD initiated the present case, TCD, Inc. v. American Family Mutual Insurance Company, 2009CV148, in the District Court of Summit County, Colorado. TCD’s complaint sets forth claims for relief grounded in declaratory judgment, breach of insurance contract, breach of contract, and negligence. The issues raised, via summary judgment, are typical of insurance disputes: (1) does AmFam actually owe a duty to defend TCD regarding the counterclaims in the Underlying Action?; and (2) does AmFam actually have a duty to indemnify TCD regarding damages arising from the counterclaims in the Underlying Action?

The court decided that, as a matter of law, an insurer’s duty to defend arises solely from the complaint in the underlying action. To begin with, the court analyzed specific language of the CGL policies at issue, including the phrase “property damage,” which was caused by an “occurrence” during the policy period.[1] The policies also had an additional insured endorsement with exclusions for bodily injury or property damage.[2]

Upon review of the counterclaims in the Underlying Action, the court found that no claims of actual physical injury to tangible property existed, and especially none that purportedly occurred before the policy was canceled on June 10, 2007. The court found that none of the counterclaims in the Underlying Action set forth any averments, which fell within the property damage definition of the policy and which may have triggered a duty to defend TCD by AmFam.

TCD also argued that the damage itself manifested in the form of loss of use of tangible property that is not physically injured. According to the definition of property damage (see Footnote No. 1), loss of use would be deemed to occur at the time of the “occurrence” that caused it. The policy defines “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”

Here is where the court began its discussion and analysis of General Security Indemnity Company of Arizona v. Mountain States Mutual Casualty Company, 205 P.3d 529 (Colo. App. 2009) and C.R.S. § 13-20-808 (also known as HB 10-1394). The court quoted General Security saying, “a claim for damages arising from poor workmanship, sanding alone, does not allege an accident that constitutes a covered occurrence, regardless of the underlying legal theory pled.” General Security, 205 P.3d at 534. TCD counter-argued that HB 10-1394, recently codified as C.R.S. § 13-20-808, was enacted by the legislature to overrule the General Security decision.

While the court agreed with the intention of C.R.S. § 13-20-808, it still found the statute wanting in relation to TCD’s position. The court found that the applicability clause of the statute provided that the statute would apply to all insurance policies “currently in existence” or issued on or after the effective date of May 21, 2010. Focusing on the phrase currently in existence, the court found that the policy at issue became effective in August 2006 and ended in June 2007. The court concluded that by the ordinary meaning of the plain language, the policy at issue was not currently in existence in May 2010, when the statute was enacted.

The court explained why C.R.S. § 13-20-808 did not apply to policy at issue, stating that statutes in general are presumed to be prospective. Only clear legislative intent must appear from the statute to overcome the presumption of prospective effect. The court found no clear legislative intent in the language of the statute, pointing out specifically the “currently in existence” language, that would overcome the presumption and demonstrate retrospective application was intended.

In sum, the court found that the counterclaims in the underlying complaint contained no allegations of property damage, which fell under the policy definitions or took place before the policy was cancelled in June 2007. The court granted AmFam’s motion for summary judgment, concluding that there was no issue of material fact as to both the lack of duty to defend and the duty to indemnify owed by AmFam to TCD, regarding the counterclaims in the Underlying Action.

For additional information regarding Colorado construction litigation, please contact David M. McLain at (303) 987-9813 or by e-mail at mclain@hhmrlaw.com.

---

[1] Property damage means: “(a) physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it; or (b) loss of use of tangible property that is not physically injured. All such loss of use shall be deemed to occur at the time of the ‘occurrence’ that caused it.”

[2] Additional Insured Endorsement: Insurance does not apply to “property Damage” occurring after: “(1) All work, including materials, parts or equipment furnished in connection with such work, on the project (other than service, maintenance or repairs) to be performed by or on behalf of the additional insured(s) at the location of the covered operations has been completed; or (2) that portion of “your work” out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operation for a principal as a part of the same project.”

Colorado Senate Bill 12-181: 2012's Version of a Prompt Pay Bill.

A potentially important legislative bill has been introduced in waning days of the 2012 legislative session, which would change many of the commercial practices that prevail in the construction industry. Senate Bill 12-181 applies to all building and construction contracts and would prohibit any contract provision that requires a contractor, subcontractor, or supplier to waive their lien in advance of payment. It also would ban any “choice of law” provisions that make a Colorado-based construction contract subject to enforcement only in another state, or under the laws of another state. 

The bill also seeks to change many existing commercial practices between contractors, subcontractors, and suppliers. It is presently unclear whether the bill allows parties to contract around these payment procedure provisions, or whether these requirements are simply “gap filling” provisions that pertain if there are no written contract terms specified on these issues.  The proposed statute would mandate payment to subcontractors and material suppliers due within seven days in the absence of a dispute about the work or materials being billed. After this seven day period, the bill would require the payment of interest at the rate of 1.5% monthly (18% annually).  In any later suit for payment, the creditor would also be able to collect reasonable attorneys’ fees.  Additionally, non-payment to a subcontractor or supplier who is later found to be entitled to prompt payment would excuse the subcontractor or supplier, and its surety bond provider, from any further performance under the contract.

It is presently unclear whether the bill allows parties to contract around these payment procedure provisions. However, it is clear that the bill provides some leeway for change orders, as long as there is (1) negotiation in good faith between the parties concerning the changed scope of work, and (2) a 50% payment of a subcontractor’s costs by the changing party within 30 days of the change order work being done. Additionally, the bill provides for retainage, but in an amount of no more than 5%.

 

For additional information regarding Colorado construction litigation, please contact David M. McLain at (303) 987-9813 or by e-mail at mclain@hhmrlaw.com.