Opinion ID: 162311
Heading Depth: 3
Heading Rank: 3

Heading: Deitz I

Text: Farmington argues that the defense costs for Deitz I should be apportioned by claim or pro rata between it and UE because most claims brought by Deitz were covered by UE’s policy but not Farmington’s. This argument is contradicted by the language of Farmington’s policy, however, as it offers primary insurance Section 188(3) allows for the exceptions found in sections 189-199 and 1 203. This case does not fall under any of those exceptions. -9- that covers “suits,” rather than individual claims. It states that Farmington has a “duty to defend any suit seeking [covered] damages.” Moreover, Farmington’s insurance policy is primary, providing: “This insurance is primary except when [an inapplicable exception] applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary.” UE’s insurance policy is excess, not primary, stating that “[i]f other valid and collectible insurance with any other insurer . . . is available to the Insureds covering a Loss covered by this Policy, other than insurance which is expressly and specifically in excess of this Policy, the insurance afforded by this Policy shall be in excess of and shall not contribute with such other insurance.” For Deitz I, Farmington’s insurance policy is primary, as it covers Deitz’s claim for defamation, making UE’s insurance excess. We enforce the terms of the policies, and under the terms of the policy Farmington is obligated as the primary insurer to pay defense costs. Colonial Ins. Co. of Cal. v. Am. Hardware Mut. Ins. Co. , 969 P.2d 796, 800 (Colo. App. 1998). Farmington contends that regardless of the policy provisions, UE has an equitable duty to contribute to defense costs. The district court rejected this argument, finding that Colorado law does not support such an equitable theory of contribution and that the cases cited by Farmington from other jurisdictions were factually distinguishable. We generally review a district court’s rulings on - 10 - equitable relief for an abuse of discretion, but we review such rulings de novo when the availability of such equitable relief depends on an interpretation of the law. Downriver Cmty. Fed. Credit Union v. Penn Square Bank , 879 F.2d 754, 758 (10th Cir. 1989). Relying on cases from California and other jurisdictions outside of Colorado, Farmington argues that allocation of defense costs between insurers is not governed by contract because no contract relation exists between insurers. E.g. , Signal Companies v. Harbour Ins. Co. , 612 P.2d 889, 895 (Cal. 1980). Instead, Farmington suggests allocation should be governed by “equitable principles designed to accomplish ultimate justice.” Id. Colorado courts have found, however, that the lack of contractual relations between the parties does not prevent an excess insurer from seeking contribution according to policy provisions. Nat’l Cas. Co. v. Great Southwest Fire Ins. Co. , 833 P.2d 741, 747-48 (Colo. 1992) (en banc). Moreover, the only Colorado case Farmington cites in support of its equity argument is a factually distinguishable case, Millers’ Mutual Insurance Ass’n v. Iowa National Mutual Insurance Co. , 618 F. Supp. 301 (D. Colo. 1985). In Millers’ , the court held that an excess insurer could be required to contribute to defense costs. Unlike the present case, however, the policy limits of the primary insurer were sure to be exhausted by the judgments so that the excess insurance would come into effect. Id. at 306. The - 11 - other cases on which Farmington relies come from different jurisdictions, and are also factually distinguishable from the present case, as the district court correctly noted. We therefore find that the district court did not err in declining to grant Farmington equitable relief.