APPENDIX 22

• Jurisdiction: Colorado

APPENDIX 22

Comment: This Verified Traverse was filed in response to a builder's insurer's answer denying any liability in response to a writ of garnishment similar to the answer to garnishment writ in Appendix 21. This Verified Traverse predates a number of important insurance coverage decisions that have issued since 2000. See Chapter 12 for a comprehensive discussion of these issues.

DISTRICT COURT, JEFFERSON COUNTY, COLORADO 100 Jefferson County Parkway GOLDEN CO 80419	▲ COURT USE ONLY ▲
Plaintiffs-Judgment Creditors-Garnishors: RODNEY D. and HOPE E. HABERER, RICKY J. and MICHELE B. MCCOY, MARV and KATHY MAZONE, and KENNETH and MARIE HACKBARTH Defendant-Judgment Debtors: PETERSON CONSTRUCTION, INC., a Colorado Corporation, and ROBIN C. PETERSON, individually Garnishees: ASSURANCE COMPANY OF AMERICA, a New York Corporation, ARAPAHOE DRAIN SYSTEMS, INC., a Colorado Corporation, C & S BACKHOE, INC., a Colorado Corporation, COMPLETE ENGINEERING SERVICES, INC., a Colorado Corporation, 4 x 4, INC., a Colorado Corporation, KC ENTERPRISES, INC., a Colorado Corporation, SERGIS CONCRETE INC., a dissolved Colorado Corporation, and CAMPBELL, LATIOLAIS, & RUEBEL, P.C., a Colorado Corporation
	Case Number: 99 CV 695 Div.: 6
Attorney: Scott F. Sullan, No. 9985 Ronald M. Sandgrund, No. 12505 Marci M. Achenbach, No. 31036 Joseph F. Smith, No. 30960 VANATTA, SULLAN, SANDGRUND & SULLAN, P.C. 5290 DTC Parkway, Suite 120 Greenwood Village, CO 80111-2721 Telephone: 303-779-0077 Fax No: 303-779-4924 Email: rsandgrund@vsss.com
PLAINTIFFS' VERIFIED TRAVERSE OF INSURER'S ANSWER TO ALL WRITS OF GARNISHMENT

TABLE OF CONTENTS

SECTION ...................................................................PAGE (Omitted, sample only)

I. PROCEDURAL BACKGROUND AND PARTIES

II. LEGAL ARGUMENT

A. AVAILABILITY AND PROPRIETY OF GARNISHMENT ACTION TO RESOLVE COVERAGE ISSUES

1. Propriety of Garnishment Proceeding to Resolve Coverage Issues

2. Propriety of Limiting or Precluding Discovery in Garnishment Proceeding

B. INSURER'S INDEMNITY COVERAGE, SUPPLEMENTARY PAYMENT COVERAGE AND DUTY TO DEFEND

1. Rules of Construction

2. Trigger of Coverage Under Coverage Grant

C. PROPERTY DAMAGE COVERAGE

1. Trigger of Coverage Under All Policy Periods

2. Coverage for the Haberers' and McCoys' Claims

D. APPORTIONMENT OF COVERAGE OVER POLICY PERIODS

1. The Policy Affords $1,000,000 in Property Damage Coverage Per Home, Per Year

2. Alternatively, The Policy Affords $1,000,000 in Property Damage Coverage Per Year

E. ANALYSIS OF THE POLICY'S COVERAGE PROVISIONS AND INSURER'S PAYMENT OBLIGATIONS HERE

1. Indemnity

2. Supplemental Payments

a. Insurer's Obligation to Pay All Taxed Costs, Including Attorney Fees

b. Insurer's Obligation to Pay All Prejudgment Interest

3. Insurer's Obligation to Pay All Taxed Costs and Prejudgment Interest May Not Severe to Reduce Its Limits of Liability

F. INAPPLICABILITY OF EXCLUSIONS

1. Ambiguity

a. PCOH Coverage

b. Subcontractor Activity Coverage

2. Inapplicability of the So-Called "Earth Movement" Exclusion

a. Insurer's Failure to Secure Signed Exclusionary Endorsement and Append it to Policy Voids the Endorsement

b. The Earth Movement Exclusion Does Not Preclude Coverage for Damage Caused by Groundwater Pressure

3. Waiver and Estoppel

G. THERE IS COVERAGE FOR THE PORTION OF THE JUDGMENTS CONSISTING OF TREBLE DAMAGES

1. A Negligent Misrepresentation or Omission Under the CCPA Constitutes an "Occurrence"

III. CONCLUSION AND SUMMARY OF REQUESTED RELIEF

TABLE OF AUTHORITIES

COLORADO CASE AUTHORITY ...........................................PAGE(S) (Omitted, sample only)

American Employer's Ins. Co. v. Pinkard Constr. Co., 806 P.2d 954 (Colo. App. 1990)

American States Ins. Co. v. Faganal Brown Builders, No. 98CA1591 (Colo. App., Nov. 12, 1999)

Board of County Comm'rs v. Slovek, 723 P.2d 1309 (Colo. 1986)

Bohrer v. Church Mut. Ins. Co., 965 P.2d 1258 (Colo. 1998)

Browder v. U.S. Fidelity & Guar. Co., 893 P.2d 132 (Colo. 1995)

Butler v. Behaeghe, 548 P.2d 934 (Colo. App. 1976)

Chartier v. Weinland Homes, Inc., 25 P.3d 1279 (Colo. App. 2001)

Clementi v. Nationwide Mut. Fire Ins. Co., 16 P.3d 223 (Colo. 2001)

Colard v. American Fam. Mut. Ins. Co., 709 P.2d 11 (Colo. App. 1985)

Compass Ins. Co. v. City of Littleton, 984 P.2d 606 (Colo. 1999)

Constitution Assocs. v. New Hampshire Ins. Co., 930 P.2d 556 (Colo. 1996)

Continental Western Ins. Co. v. Jim's Hardwood Floor Co., Inc., 12 P.3d 824 (Colo. App. 2000)

Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo. 1983)

Cyprus Amax Minerals Co. v. Lexington Ins. Co., 2002 WL 287532 (Colo. App., Feb. 28, 2002)

Federal Life Ins. Co. v. Wells, 56 P.2d 936 (Colo. 1936)

Flatiron Paving Co. of Boulder v. Great Southwest Fire Ins. Co., 812 P.2d 668 (Colo. App. 1990)

General Acc. Fire & Life Assur. Corp. v. Mitchell, 211 P.2d 551 (Colo. 1949)

Hecla Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083 (Colo. 1991)

Hoang et al. v. Monterra Homes (Powderhorn), LLC, 99 CV 2425 (Jefferson County District Court, Colorado)

Keybank, Nat'l Ass'n v. Mascarenas, 17 P.3d 209 (Colo. App. 2000)

Lamar Truck Plaza, Inc. v. Sentry Ins., 757 P.2d 1143 (Colo. App. 1988)

Lexton-Ancira Real Estate Fund, 1972 v. Heller, 826 P.2d 819 (Colo. 1992)

Lira v. Shelter Ins. Co., 913 P.2d 514 (Colo. 1996)

Maddalone v. C.D.C., Inc., 765 P.2d 1047 (Colo. App. 1988)

M.L. Foss, Inc. v. Liberty Mut. Ins. Co., 885 P.2d 284 (Colo. App. 1994)

Ortiz v. Valdez, 971 P.2d 1076 (Colo. App. 1998)

Public Serv. Co. of Colo. v. Wallis and Cos., 986 P.2d 924 (Colo. 1999)

Robinson v. Poudre Valley Federal Credit Union, 654 P.2d 861 (Colo. App. 1982)

Rosenthal v. Dean Witter Reynolds, Inc., 908 P.2d 1095 (Colo. 1995)

Security Ins. Co. of Hartford v. Houser, 552 P.2d 308 (Colo. 1976)

Shean v. Farmers Ins. Exchange, 934 P.2d 835 (Colo. App. 1996)

Showpiece Homes Corp., et al. v. Assurance Co. of America, Case No. 99-N-1417, United States Dist. Ct., Dist. Of Colo.

Showpiece Homes Corp., et al. v. Assurance Co. of America, 38 P.3d 47 (Colo. 2001).

Simon v. Shelter Gen. Ins. Co., 842 P.2d 236 (Colo. 1992)

Travelers Indem. Co. v. Howard Elec. Co., 879 P.2d 431 (Colo. App. 1994)

Tynan's Nissan, Inc. v. American Hardware Mut. Ins. Co., 917 P.2d 321 (Colo. App. 1995)

Union Ins. Co. v. Kjeldgaard, 820 P.2d 1183 (Colo. App. 1991)

Webster v. Boone, 992 P.2d 1183 (Colo. App. 1999)

Worsham Constr. Co., Inc. v. Reliance Ins. Co., 687 P.2d 988 (Colo. App. 1984)

TABLE OF AUTHORITIES

OTHER CASE AUTHORITY ................................................PAGE(S) (Omitted, sample only)

Avis Rent-a-Car System, Inc. v. Liberty Mutual Ins. Co., 526 A.2d 522 (Conn. 1987)

Bailey v. Hartford Fire Ins. Co., 565 F.2d 826 (2d Cir. 1977)

Barash v. Insurance Co. of North America, 451 N.Y.S.2d 603 (N.Y.Sup. 1982)

Burt Rigid Box Inc. v. Travelers Property Cas., 126 F.Supp.2d 596 (W.D.N.Y. 2001), aff'd in relevant part, rev'd in part on other grounds, 302 F.3d 83 (2nd Cir. 2002)

Cieslewicz v. Mutual Service Cas. Ins. Co., 267 N.W.2d 595 (Wis. 1978)

City of Johnstown v. Bankers Standard Ins. Co., 877 F.2d 1146 (2d Cir. 1989)

Clyce v. St. Paul Fire & Marine Ins. Co., 850 F.2d 1398 (11th Cir. 1987)

Ethicon, Inc. v. Aetna Cas. & Sur. Co., 737 Supp. 1320 (S.D.N.Y. 1990)

Federated Mutual Ins. Co. v. Grapevine Excavation Inc., 197 F.3d 720 (5th Cir. 1999)

Fidelity & Deposit Co. of Maryland v. Hartford Cas. Ins. Co., 189 F.Supp.2d 1212 (D. Kan. 2002)

First Alabama Bank of Montgomery, N.A. v. First State Ins. Co., 899 F.2d 1045 (11th Cir. 1990)

First Newton Nat'l Bank v. General Cas. Co. of" Wisc., 426 N.W.2d 618 (Iowa 1988)

Garriott Crop Dusting Co. v. Superior Court, 270 Cal.Rptr. 678 (Cal. App. 1990)

Gaylord Chem. Corp. v. ProPump, Inc., 753 So.2d 349 (La. App. 2000)

Great Lakes Dredge & Dock Co. v. Commercial Union Assur. Co., 57 F.Supp.2d 525 (N.D. Ill. 1999)

High Country Assoc. v. New Hampshire Ins. Co., 648 A.2d 474 (N.H. 1994)

Home Ins. Co. v. St. Paul Fire & Marine Ins. Co., 229 F.3d 56 (1st Cir. 2000)

Howell v. State Farm Fire & Cas. Co., 267 Cal.Rptr. 708 (Cal. App. 1990)

In re K F Dairies, Inc. & Affiliates, 224 F.3d 922 (9th Cir. 2000)

Insurance Co. of N. Am., Inc. v. U.S. Gypsum Co., Inc., 870 F.2d 148 (4th Cir. 1989)

Kalchthaler v. Keller Constr. Co., 591 N.W.2d 169 (Wis. App. 1999)

L-J, Inc. v. Bituminous Fire and Marine Ins. Co., 567 S.E.2d 489 (S.C. App. 2002)

Lenard v. Argento, 1986 WL 4182 (N.D. Ill. March 26, 1986)

Little v. First Cal. Co., 532 F.2d 1302 (9th Cir. 1976)

Marine Midland Services Corp. v. Samuel Kosoff & Sons, Inc., 400 N.Y.S.2d 959 (N.Y.A.D. 1977)

Morton Int'l, Inc. v. General Accident Ins. Co. of America, 629 A.2d 831 (N.J. 1993)

Murray v. State Farm Fire & Cas. Co., 509 S.E.2d 1 (W.Va. 1998)

Ohio Cas. Ins. Co. v. Terrace Enters., Inc., 260 N.W.2d 450 (Minn. 1977)

O'Shaughnessy v. Smuckler Corp., 543 N.W.2d 99 (Minn. App. 1996)

Pasco v. State Auto. Mut. Ins., 1999 WL 1221633 (Ohio App. Dec. 21, 1999)

Perry v. Economy Fire and Cas. Co., 724 N.E.2d 151 (Ill. App. 1999)

Sheets v. Brethren Mut. Ins. Co., 679 A.2d 540 (Md. 1996)

State Farm Fire & Cas. Co. v. Helminiak, 659 N.E.2d 385 (Ohio Com. Pl. 1995)

Trustees of Tufts Univ. v. Commercial Union Ins. Co., 616 N.E.2d 68 (Mass. 1993)

Waste Management of Carolinas, Inc. v. Peerless Ins. Co., 340 S.E.2d 374 (N.C. 1986)

Weyerhauser Co. v. Commercial Union Ins. Co., 15 P.3d 115 (Wash. 2000)

Wilton v. Seven Falls Co., 515 U.S. 277 (1995)

Wojciak v. Northern Package Corp., 310 N.W.2d 675 (Minn. 1981)

Wood v. Safeco Ins. Co. of America, 980 S.W.2d 43 (Mo. App. 1998)

COLORADO STATUTES AND RULES

Colo. Jury Instr. 4th 9:3A (2002)

Colo. Jury Instr. 4th 9:3B (2002)

Colorado Code of Regulations § 6-1-1(Unfair Trade Practices)

C.R.C.P. 103 § 1-4

C.R.C.P. 103 § 8 (b)

C.R.S. § 5-12-102(4)(b))

C.R.S. § 6-1-115(g)

C.R.S. § 10-4-110.5

C.R.S. § 13-80-104

C.R.S. § 38-41-101

OTHER AUTHORITY

Turner, Insurance Coverage of Construction Disputes (West 2d ed., Aug. 2001)

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