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Friedland v. Travelers Indemnity Co.1/31/2005
ting liability and damages were arguably aligned when Friedland was making his defense and settlement decisions. In rebuttal of this presumption, Friedland should have the opportunity to introduce evidence that, in the conduct of his defense and settlement of the CERCLA claims against him, all material information that could have been obtained was obtained, all legitimate defenses were raised, his liability in the case was reasonably clear under the facts and the law, and Travelers, had it received notice, could not have obtained any materially better outcome than what Friedland obtained without Travelers's assistance. See Russ & Segalla, Couch on Insurance, ยง 193:29; Pulse v. Northwest Farm Bureau Ins. Co., 566 P.2d 577, 579 (Wash. Ct. App. 1977)(concluding that insurer was not prejudiced as a matter of law despite receiving notice after judgment because "it is highly questionable whether they could have been more persuasive than the plaintiffs' counsel in keeping the amount of the damages down. At best, it would have chosen different counsel, would have demanded a jury, and may or may not have chosen a different judge to preside over the trial.").
If Friedland successfully rebuts the presumption of prejudice, Travelers must show by a preponderance of the evidence that it suffered actual prejudice from the delayed notices of claim and suit in order to be excused from paying policy benefits. What form the proceedings on remand shall take regarding in the issues of prejudice, Friedland's unilateral settlement, and the policy coverage, we leave to the trial court's further determination.
III.
Accordingly, we set aside the trial court's grant of summary judgment, and we remand this case for further proceedings consistent with this opinion.
JUSTICE KOURLIS dissents.
JUSTICE COATS dissents.
JUSTICE BENDER does not participate.
JUSTICE KOURLIS dissenting
Today, this court extends the notice-prejudice rule to general liability insurance cases, essentially overruling our longstanding precedent in Marez v. Dairyland Insurance Co., 638 P.2d 286 (Colo. 1982). Maj. op. at 16. Since I do not believe that this is a case that necessarily or appropriately demands such an outcome, I respectfully dissent.
I. BACKGROUND
In this case, the relevant and undisputed facts are as follows: (1) the parties to the insurance policies at issue were two companies, Summitville Consolidated Mining Company, Inc. ("SCMCI") and Travelers; (2) Friedland is a sophisticated international businessman who presided as president and director of SCMCI for three years; (3) Friedland's tenure began when the company first started construction of a gold mine and heap leach facility near Del Norte, Colorado; (4) Friedland presided over the company at the time Travelers issued the two Special Business liability policies to SCMCI, which policies covered among others, officers and directors of SCMCI; (5) the policy as then issued, even included a separate written endorsement including Friedland as a named insured covering his personal automobile.
In its order concerning Traveler's motion for summary judgment, the trial court specifically alluded to Friedland's knowledge of the existence of the policy by characterizing as a salient fact, evidence that "in 1984 and 1985 when the policies at issue were procured by SCMCI insuring plaintiff as an additional insured, [Friedland] was an officer and director of SCMCI." Moreover, the court pointed out the undisputed fact that Friedland did not notify Travelers of the CERCLA claims until six years after the claims were filed. Significantly, the court observed that Friedland h
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