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Friedland v. Travelers Indemnity Co.1/31/2005
JUDGMENT REVERSED AND CASE REMANDED WITH DIRECTIONS
EN BANC
JUSTICE KOURLIS dissents.
JUSTICE COATS dissents.
JUSTICE BENDER does not participate.
We issued a writ of certiorari pursuant to C.A.R. 50 to review the trial court's grant of summary judgment for defendant, the Travelers Indemnity Company (Travelers), and to determine whether the notice-prejudice rule announced in Clementi v. Nationwide Mutual Fire Ins. Co., 16 P.3d 223 (Colo. 2001) applies to liability policies. Although we adopt the notice-prejudice rule for liability policies, in the case before us the insured gave notice of claim and suit to the insurer after the insured had defended and settled the case. In such a circumstance, the delay is unreasonable as a matter of law and the insurer is presumed to have been prejudiced by the delay.
However, the insured must have an opportunity to rebut the presumption of prejudice; thus, we reverse the trial court's grant of summary judgment in favor of the insurer here and remand the case for further proceedings consistent with this opinion.
I.
In the trial court, Plaintiff Robert M. Friedland, sought compensation from defendant, Travelers, for the defense and indemnification costs he incurred in connection with an environmental lawsuit brought against him by the United States and the State of Colorado under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. sections 9604 and 9606 (CERCLA). That suit arose out of pollution caused by a mining operation in Conejos County, Colorado.
Summitville Consolidated Mining Company, Inc. (SCMCI) operated a gold mine and cyanide heap leach facility in the San Juan Mountains south of Del Norte. In April of 1984, Friedland became an officer and director of SCMCI. He resigned this position in January of 1987.
In December, 1992, SCMCI declared bankruptcy . That same month, the Environmental Protection Agency took over management of the site, seized the corporate documents and records located there, and began response actions pursuant to CERCLA, to protect against further environmental degradation.
In May, 1996, the United States and the State of Colorado filed suit against Friedland and other parties seeking recovery under CERCLA of response, investigation, remediation and other costs incurred at the site. See United States v. Friedland, 173 F. Supp. 2d 1077 (D. Colo. 2001). Friedland defended the lawsuit. After approximately four years of litigation, he settled the claims against him by paying twenty million dollars to the United States and the State of Colorado.
During its viability, SCMCI had obtained comprehensive general liability insurance policies from Travelers. These policies were marked on their face "Comprehensive General Liability Form." They provided coverage for bodily injury, property damage, and medical payments to third parties resulting from accidents or occurrences for which the insured was legally obligated. These were not policies specifically negotiated and designed by the parties to address particular circumstances such as CERCLA liability.
Friedland contends that these policies provide him coverage as an additional insured for defense costs and liability payments in connection with the CERCLA case. He also asserts that he had no specific knowledge of this coverage until after he had defended and settled the CERCLA action against him. The trial court did not actually decide whether the policies provided coverage for the environmental contamination costs and damages caused by the Summitville operation. Instead, in di
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