COLORADO COURT OF APPEALS 2017COA29

Court of Appeals No. 15CA2039 

Jefferson County District Court No. 14CV32279 

Honorable Christopher J. Munch, Judge 

City of Lakewood, Colorado, 

Plaintiff-Appellant and Cross-Appellee, 

v. 

Safety National Casualty Corporation, 

Defendant-Appellee and Cross-Appellant. 

JUDGMENT AFFIRMED 

Division VII 

Opinion by JUDGE HARRIS 

Lichtenstein and Richman, JJ., concur 

Announced March 9, 2017 

Sherman & Howard, L.L.C., Christopher R. Mosley, Jennifer Kirk Morris, 

Denver, Colorado, for Plaintiff-Appellant and Cross-Appellee 

Treece Alfrey Musat P.C., Paul E. Collins, Carol L. Thomson, Denver, Colorado, 

for Defendant-Appellee and Cross-Appellant
1 

¶ 1 The City of Lakewood (City) has an insurance policy that 

covers losses arising from the workers’ compensation or employers’ 

liability laws of any state on account of bodily injury to an 

employee. 

¶ 2 After a City police officer was killed by friendly fire, his widow 

filed a lawsuit under 42 U.S.C. § 1983 (2012), alleging that the City 

and various fellow officers had violated the deceased officer’s rights 

under the Federal Constitution. The City sought indemnification 

for its own defense costs and those of the officers named in the 

lawsuit, which the City has an independent statutory duty to cover. 

The insurance company, Safety National Casualty Corporation, 

denied coverage. 

¶ 3 The district court concluded that a § 1983 claim does not arise 

under an employer liability law of any state and granted summary 

judgment for the insurance company. We agree. And while the 

district court did not reach the separate question of whether the 

officers’ defense costs are covered by the policy, we conclude that 

they are not. Accordingly, we affirm the summary judgment in 

favor of the insurance company. 
2 

I. Background 

¶ 4 The insurance company issued a “Specific Excess Workers’ 

Compensation and Employers’ Liability Insurance Agreement” to 

the City. The policy indemnified the City, as an employer, for “Loss 

sustained by the EMPLOYER because of liability imposed upon the 

EMPLOYER by the Workers’ Compensation or Employers’ Liability 

Laws of” Colorado or other states, “on account of bodily injury by 

accident” to “Employees of the EMPLOYER” engaged in job-related 

activities. 

¶ 5 “Loss” included two categories of reimbursable costs. First, 

the City could recoup from the insurance company any “actual 

payments, less recoveries, legally made by the EMPLOYER to 

Employees and their dependents in satisfaction of: (a) statutory 

benefits, (b) settlements of suits and claims, and (c) awards and 

judgments.” Second, the City could recoup its “Claim Expenses,” 

which is defined as the City’s own litigation expenses. 

¶ 6 During the term of the policy, one of the City’s police officers 

was accidentally shot and killed by a fellow officer while both were 

on duty. The slain officer’s widow later filed a lawsuit under 42 

U.S.C. § 1983, alleging that the fellow officer, two of his supervising 
3 

officers, and the City had violated her husband’s federal 

constitutional rights by subjecting him to the unreasonable use of 

deadly force. 

¶ 7 The City sought indemnification under the policy for the costs 

of its own defense and the defense of the individual officers. When 

the insurance company denied the claim, the City filed a 

declaratory judgment action. 

¶ 8 On cross-motions for summary judgment, the district court 

reasoned that § 1983 did not qualify as an “employers’ liability law” 

of the State of Colorado or any other state, and therefore it 

concluded that the policy did not cover the City’s losses incurred in 

connection with its defense of the lawsuit. The court did not 

address the City’s separate claim that it suffered additional losses 

because of liability imposed by sections 24-10-110 and 29-5-111, 

C.R.S. 2016, which require the City to cover defense costs for its 

peace officers. 

II. Discussion 

¶ 9 On appeal, the City contends that the district court erred in 

granting summary judgment to the insurance company because the 
4 

policy unambiguously covers all defense costs incurred by the City 

in connection with the § 1983 lawsuit. 

A. Standard of Review and Principles of Interpretation 

¶ 10 We review a trial court’s decision granting summary judgment 

de novo. Oasis Legal Fin. Grp., LLC v. Coffman, 2015 CO 63, ¶ 30. 

Summary judgment is appropriate only if the pleadings and 

supporting documents demonstrate no genuine issue of material 

fact and the moving party is entitled to judgment as a matter of law. 

C.R.C.P. 56(c); Laughman v. Girtakovskis, 2015 COA 143, ¶ 8. The 

interpretation of an insurance policy presents a question of law 

and, therefore, is appropriate for summary judgment. Mt. Hawley 

Ins. Co. v. Casson Duncan Constr., Inc., 2016 COA 164, ¶ 3. 

¶ 11 An insurance policy is “merely a contract that courts should 

interpret in line with well-settled principles of contract 

interpretation.” Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 

P.3d 294, 299 (Colo. 2003). Accordingly, words should be given 

their plain and ordinary meaning, unless contrary intent is 

evidenced in the policy. Id.; see also Chacon v. Am. Family Mut. Ins. 

Co., 788 P.2d 748, 750 (Colo. 1990). Provisions of the policy should 
5 

be read as a whole, rather than in isolation. Simon v. Shelter Gen. 

Ins. Co., 842 P.2d 236, 239 (Colo. 1992). 

B. Reimbursement of the City’s Own Costs of Defense 

¶ 12 There is no dispute that the City has suffered a loss as defined 

by the policy. A “Loss” for purposes of coverage includes the City’s 

“Claim Expenses,” defined as its own costs of defense. The question 

is whether the loss is a result of liability imposed on the City by 

“Employers’ Liability Laws” of Colorado or “other State(s).” 

¶ 13 The term “Employers’ Liability Laws” is not defined in the 

policy. But courts and commentators generally agree that an 

employer liability policy is designed to cover an employer’s liability 

to employees for work-related injuries that do not fall within the 

exclusive remedy provisions of workers’ compensation statutes. 

See, e.g., TKK USA, Inc. v. Safety Nat’l Cas. Corp., 727 F.3d 782, 

791 (7th Cir. 2013) (Employer liability insurance policies “fill ‘gaps 

in workers’ compensation law that sometimes allow an employee to 

sue his employer in tort, bypassing the limits on workers’ 

compensation relief.’” (quoting Hayes Lemmerz Int’l, Inc. v. Ace Am. 

Ins. Co., 619 F.3d 777, 779 (7th Cir. 2010))); Devine v. Great Divide 

Ins. Co., 350 P.3d 782, 786 (Alaska 2015) (stating that employers’ 
6 

liability insurance provides coverage for claims that do not come 

within workers’ compensation statutes); 7B John Appleman, 

Insurance Law and Practice § 4571, at 2 (Walter F. Berdal ed., 1979) 

(“[W]orkers’ compensation is routinely written in combination with 

an employer’s liability policy to provide protection for those 

situations where [workers’] compensation may not apply and thus 

avoid a gap in protection because employee claims subject to 

workers’ compensation law are generally excluded in other types of 

liability policies.”). 

¶ 14 The City argues that the § 1983 municipal liability claim must 

be covered by the employers’ liability portion of the policy because it 

is a claim based on work-related injuries that falls outside the 

ambit of the workers’ compensation laws. But this overstates the 

scope of the coverage under the policy. 

¶ 15 An “employers’ liability law” cannot mean any statutory or 

common law claim that might subject the employer to liability 

because of an employee’s bodily injury. If the insurance company 

had intended to provide such broad coverage, it would not have 

restricted coverage to claims arising under workers’ compensation 

or employers’ liability laws; it would simply have agreed to 
7 

reimburse the City for any losses it became obligated to pay on 

account of bodily injury by accident to an employee. The City’s 

construction reads any limitation out of the contract, a result we 

cannot endorse. In construing a contract, we must give effect to all 

of its words and provisions so that none are rendered meaningless. 

Copper Mountain, Inc. v. Indus. Sys., Inc., 208 P.3d 692, 697 (Colo. 

2009). 

¶ 16 But if not all claims for employees’ injuries fall within the term 

“employers’ liability laws,” which claims does the policy cover? 

Applying the pertinent law, we conclude that employers’ liability 

laws are workers’ compensation-type claims: they include employee 

injury statutes that have displaced common law claims — 

occupational disease laws, for example — as well as employer 

liability-type common law tort claims that might fall outside the 

relevant statutes. See TKK, 727 F.3d at 788 (rejecting insurer’s 

argument that “Employers’ Liability Laws” included only statutes 

that displace the common law, and reading the term to include 

common law claims); Erie Ins. Prop. & Cas. Co. v. Stage Show Pizza, 

JTS, Inc., 553 S.E.2d 257, 262 (W. Va. 2001) (finding employers’ 

liability policy covers an “action for common law damages” that is 
8 

not barred by workers’ compensation laws). By the policy’s plain 

terms, though, the common law claims must arise under the laws of 

Colorado or “other State(s).” 

¶ 17 Thus, the City’s claim for reimbursement of its costs incurred 

in defending the § 1983 lawsuit is covered only if § 1983 qualifies as 

a state “employers’ liability law,” meaning it is either a state statute 

that displaces an employee’s common law claims for workplace 

injuries, or it constitutes a state common law claim related to, but 

falling outside, a workers’ compensation scheme. We conclude that 

it is neither. 

¶ 18 Section 1983 is not a workers’ injury statute that displaces 

common law claims with a new cause of action. Indeed, the statute 

is not itself the source of any substantive rights, Espinoza v. O’Dell, 

633 P.2d 455, 460 (Colo. 1981); rather, it serves as a statutory 

vehicle to provide remedies for the deprivation of rights granted by 

the Federal Constitution or by other federal laws. Mosher v. City of 

Lakewood, 807 P.2d 1235, 1238 (Colo. App. 1991). 

¶ 19 Nor could § 1983 be construed as a “common law” claim. The 

statute allows a plaintiff to vindicate rights conferred under the 

Federal Constitution and federal statutes, not under the common 
9 

law. Assertion of a common law claim “is not only not required, it is 

not sufficient to state a claim under § 1983.” Meier v. McCoy, 119 

P.3d 519, 526 (Colo. App. 2004). 

¶ 20 In any event, as the City acknowledges, § 1983 is not a law of 

Colorado or any other state. Still, it insists that fact is not an 

obstacle to coverage because federal laws are included in the 

policy’s definition of “state” laws. We disagree. 

¶ 21 Under the policy, “State” means “any state, territory, or 

possession of the United States of America and the District of 

Columbia.” The City says that because the United States territories 

and the District of Columbia fall under the exclusive jurisdiction of 

the federal government, see U.S. Const. art. I, § 8, cl. 17 (Congress 

has exclusive jurisdiction over District of Columbia); U.S. Const. 

art. IV, § 3, cl. 2 (Congress has exclusive jurisdiction over United 

States territories), these entities are governed exclusively by federal 

law and, therefore, their inclusion in the definition of “State” 

demonstrates that “state” law encompasses federal law. The 

argument stumbles at the second step. 

¶ 22 True, Congress has jurisdiction over the District of Columbia 

and all United States territories, but the United States Code is not 
10 

the exclusive law that applies. Puerto Rico, for example, has its 

own constitution and its own civil and criminal code. See CaleroToledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 671 (1974). 

Included within its code is a workers’ compensation statute. See

P.R. Laws Ann. tit. 11, §§ 1-42 (2016) (Compensation System for 

Work-Related Accidents Act); see also D.C. Code §§ 32-1501 

to -1545 (2016) (workers’ compensation). Thus, we interpret the 

inclusion of the District of Columbia and United States territories 

within the definition of “States” as an acknowledgment that, for 

purposes of workers’ compensation and employers’ liability laws, 

those entities function essentially as independent states. 

¶ 23 Moreover, had the insurance company intended to cover 

claims arising under federal law, it is unlikely that it would have 

expressed that intent by reference to the District of Columbia or 

United States territories. More likely, the policy would simply say 

that coverage is provided for loss sustained by an employer because 

of liability imposed by workers’ compensation or employers’ liability 

laws of Colorado, any other state, or the United States. See FloresRosales v. United States, Nos. EP-08-CV-98-KC & EP-06-CR-1717-

KC, 2009 WL 1783703, at *2 (W.D. Tex. June 3, 2009) (“The term 
11 

‘laws of the United States’ unambiguously means federal 

laws . . . .”); see also Grand Lodge A. O. U. W. of Okla. v. Hopkins, 52 

P.2d 4, 12 (Okla. 1935) (“If appellant intended to reduce the term of 

extended insurance on account of loans to the insured, it would 

have been an easy matter to have so provided in the policy; and the 

inference from its failure to do so is that it did not so intend.”).1

We therefore conclude that the City’s defense costs, which 

were sustained because of liability imposed as a result of the 

widow’s § 1983 claim, did not arise from a state workers’ 

compensation or employers’ liability law and were not covered by 

the policy. 

 

1 The City’s argument that it had a reasonable expectation of 

coverage is based on the same argument that the policy purported 

to cover federal claims. For the reasons explained above, we 

disagree that an ordinary insured would have construed the term 

“Laws of [Colorado], or other State(s)” to mean federal law. 

Accordingly, the doctrine of reasonable expectations does not apply 

to extend coverage under the policy to the City’s litigation costs. 

See Bailey v. Lincoln Gen. Ins. Co., 255 P.3d 1039, 1054 (Colo. 

2011) (stating that under doctrine of reasonable expectations, even 

if policy language is not technically ambiguous, it may be construed 

in favor of coverage where the insured would reasonably believe 

that claim is covered, but doctrine does not expand coverage on a 

“general equitable basis” (quoting Johnson v. Farm Bureau Mut. Ins. 

Co., 533 N.W.2d 203, 206 (Iowa 1995))). 
12 

C. Reimbursement of the Officers’ Defense Costs 

¶ 24 Next, the City contends it is entitled to reimbursement for 

amounts it paid to cover the fellow officers’ defense costs. The 

district court did not address this claim, but we may decide the 

issue without a remand because the scope of coverage presents a 

question of law subject to de novo review in any case. See Bd. of 

Cty. Comm’rs v. Colo. Oil & Gas Conservation Comm’n, 81 P.3d 

1119, 1124 (Colo. App. 2003). 

¶ 25 Again, coverage turns on whether the City has suffered a 

defined loss that resulted from liability arising under a state 

employers’ liability law. 

¶ 26 Under the Colorado Governmental Immunity Act, section 

24-10-110, a municipality is liable for the costs of defense of any of 

its employees where the claim against the employee arises out of 

injuries sustained from an act of that employee conducted during 

the course and scope of his employment. In addition, section 

29-5-111 requires a municipality to provide a defense for its peace 

officers to any civil action alleging a tort committed within the scope 

of their employment. 
13 

¶ 27 Even if sections 24-10-110 and 29-5-111 qualify as employers’ 

liability laws — an issue we do not decide — the City must have 

suffered a “loss” under the policy because of liability imposed by 

those statutes. The City says the indemnification payments to the 

fellow officers named in the widow’s § 1983 lawsuit qualify as a 

“loss” because those amounts constitute “actual payments . . . to 

Employees . . . in satisfaction of . . . statutory benefits.” We are not 

persuaded. 

¶ 28 As an initial matter, if the policy was intended to cover 

third-party indemnification claims, it would likely have included 

express language to that effect. See, e.g., Clackamas Cty. v. 

Midwest Emp’rs Cas. Co., No. 07-CV-780-PK, 2009 WL 4916364, at 

*2 (D. Or. Dec. 14, 2009) (holding policy provided coverage to 

employer for defense costs paid to employees in connection with 

§ 1983 lawsuit where policy expressly covered “[d]amages for which 

[the county is] liable to a third party by reason of a claim or suit 

against [the county] by that third party to recover the damages 

claimed against such third party as a result of injury to [the 

county’s] employee”); see also Cyprus, 74 P.3d at 299 (in construing 
14 

an insurance policy, courts may not add provisions to extend 

coverage beyond those contracted for). 

¶ 29 In the absence of an actual third-party indemnification 

provision, the City attempts to shoehorn its indemnification 

payments into the definition of “loss,” but the resulting construction 

is counterintuitive and at odds with the plain language and obvious 

intent of the loss provision. Under the policy, “Loss” is defined as 

follows: 

(1) “Loss” – shall mean actual payments, less 

recoveries, legally made by the EMPLOYER to 

Employees and their dependents in 

satisfaction of: (a) statutory benefits, (b) 

settlements of suits and claims, and (c) awards 

and judgments. Loss shall also include Claim 

Expenses, paid by the Employer, as defined in 

Paragraph (2) of this Section. The term Loss 

shall not include the items specifically 

excluded by Paragraph (3) of this Section. 

(2) “Claim Expenses” – shall mean court 

costs . . . and the reasonable allocated costs of 

investigation, adjustment, defense, and 

appeal . . . of claims, suits or proceedings 

brought against the EMPLOYER under the 

Workers’ Compensation or Employers’ Liability 

Laws of [Colorado] or other State(s) . . . . 

Under the City’s reading of paragraph (1), “Loss” includes any 

payments made by the employer to any of its employees in 
15 

connection with an employers’ liability law, so long as the payment 

relates to some employee’s accidental injury. We reject that broad 

construction. 

¶ 30 The policy provides the following definition of “Employee”: 

[A]s respects liability imposed upon the 

EMPLOYER by the Workers’ Compensation 

Law of any State, the word Employee shall 

mean any person performing work which 

renders the EMPLOYER liable under the 

Workers’ Compensation Law of [Colorado], 

which is the State of the injuries or 

occupational disease sustained by such 

person. 

¶ 31 Under a narrow reading, this definition indicates that an 

“Employee” includes only persons performing work for which the 

employer is liable under the workers’ compensation law of Colorado, 

and not other employers’ liability laws, as those laws are not 

referenced in the definition. Thus, the City’s liability to the fellow 

officers, which does not arise under workers’ compensation laws of 

Colorado, is not covered. 

¶ 32 But even under a broader reading, the definition makes clear 

that the term “Employee” refers to the injured employee, not to an 

employee potentially responsible for the injury. The policy defines 

“Employee” with respect to claims arising under workers’ 
16 

compensation laws, and does not mention employers’ liability laws. 

If we apply the same definition of “Employee” to liability imposed 

under closely related employers’ liability laws, cf. Sullivan v. Indus. 

Claim Appeals Office, 22 P.3d 535, 538 (Colo. App. 2000) 

(“[D]efinitions of words used elsewhere in the same statute furnish 

authoritative evidence of legislative intent.”), the fellow officers still 

do not qualify as “Employees.” An “Employee” is the “person” who 

has “sustained” the “injuries or occupational disease.” 

¶ 33 Moreover, only this definition of “Employee” gives effect to the 

phrase “less recoveries.” The policy limits reimbursable loss to 

“actual payments, less recoveries,” made by the employer to the 

employee in satisfaction of statutory benefits. We read the 

“recovery” contemplated by this provision as a reference to the 

requirement that a workers’ compensation claimant who recovers 

from a third-party tortfeasor must reimburse the employer or its 

insurer for any benefits paid. See Jorgensen v. Colo. Comp. Ins. 

Auth., 967 P.2d 172, 173 (Colo. App. 1998), aff’d, 992 P.2d 1156 

(Colo. 2000). If loss includes payments to non-injured employees, 

we are left to wonder about the meaning of the term “recoveries.” 
17 

¶ 34 Finally, an interpretation that calls for the insurance company 

to reimburse the City for payments made to any of its employees 

under various indemnification statutes would transform a workers’ 

compensation-employers’ liability policy into a third-party 

indemnification policy. We must avoid a construction that 

contradicts the clear intent of the policy to cover only workers’ 

injury claims. See Atmel Corp. v. Vitesse Semiconductor Corp., 30 

P.3d 789, 792 (Colo. App. 2001) (“A contract must always be 

interpreted in light of the intentions of the contracting parties.”), 

abrogated on other grounds by Ingold v. AIMCO/Bluffs, L.L.C. 

Apartments, 159 P.3d 116 (Colo. 2007). 

¶ 35 Thus, we conclude that “loss” means payments made by the 

City to the injured employee and his or her dependents. Under this 

definition, the City’s indemnification payments to the officers 

named in the lawsuit do not qualify as “losses” under the policy, 

and the City is not entitled to reimbursement from the insurance 

company. 
18 

III. Conclusion 

¶ 36 The judgment is affirmed.2

JUDGE LICHTENSTEIN and JUDGE RICHMAN concur. 

 

2 In light of our disposition, we need not address the insurance 

company’s claim asserted on cross-appeal.