Opinion ID: 2614519
Heading Depth: 1
Heading Rank: 2

Heading: standard of review and principles of insurance contract interpretation

Text: Summary judgment is a drastic remedy and should only be granted if there is a clear showing that no genuine issue as to any material fact exists and the moving party is entitled to judgment as a matter of law. AviComm, Inc. v. Colorado Pub. Utils. Comm'n, 955 P.2d 1023, 1029 (Colo.1998). The nonmoving party is entitled to all favorable inferences that may be drawn from the undisputed facts, and all doubts as to whether a triable issue of fact exists must be resolved against the moving party. Id. An insurance policy is a contract which should be interpreted consistently with the well settled principles of contractual interpretation. Chacon v. American Family Mut. Ins. Co., 788 P.2d 748, 750 (Colo.1990). The interpretation of an insurance contract is a matter of law which we review de novo. See Union Ins. Co. v. Houtz, 883 P.2d 1057, 1061 (Colo.1994). Words used in an insurance policy should be given their plain and ordinary meaning unless the intent of the parties, as expressed in the contract, indicates that an alternative interpretation is intended. Chacon, 788 P.2d at 750. Courts should not rewrite insurance policy provisions that are clear and unambiguous. See id. However, when a contractual provision is reasonably susceptible to different meanings it must be construed against the drafter and in favor of providing coverage to the insured. Id. Here, the court of appeals decided issues related to both the duty to defend and the duty to indemnify. It is frequently said that the duty to defend is broader than the duty to indemnify and should be viewed separately. See Englewood, 940 P.2d at 953. Thus, in some instances, insurers will be found to have a duty to defend even though ultimately it may be determined that they have no duty to indemnify. This court has set a high standard for an insurance company seeking to avoid its duty to defend that focusses on an examination of the allegations in the underlying complaint against the insured: An insurer seeking to avoid its duty to defend an insured bears a heavy burden. An insurer's duty to defend arises when the underlying complaint against the insurer alleges any facts that might fall within the coverage of the policy. The actual liability of the insured to the claimant is not the criterion which places upon the insurance company the obligation to defend. Rather, the obligation to defend arises from allegations in the complaint, which if sustained, would impose a liability covered by the policy. [W]here the insurer's duty to defend is not apparent from the pleadings in the case against the insured, but the allegations do state a claim which is potentially or arguably within the policy coverage, or there is some doubt as to whether a theory of recovery within the policy coverage has been pleaded, the insurer must accept the defense of the claim. Hecla, 811 P.2d at 1089 (citations omitted). In other words, the insured need only show that the underlying claim may fall within policy coverage; the insurer must prove that it cannot. Standun, Inc. v. Fireman's Fund Ins. Co., 62 Cal.App.4th 882, 73 Cal. Rptr.2d 116, 120 (1998). As we further explained in Hecla, [d]etermining the duty to defend based on the allegations contained within the complaint comports with the insured's legitimate expectation of a defense. Hecla, 811 P.2d at 1090. The heavy burden necessary for an insurer to prevail on a duty-to-defend claim holds true in the specific context of a determination of whether insurance coverage does not exist because one of the policy's exclusions applies: In order to avoid policy coverage, an insurer must establish that the exemption claimed applies in the particular case, and that the exclusions are not subject to any other reasonable interpretation. The insurer has a duty to defend unless the insurer can establish that the allegations in the complaint are solely and entirely within the exclusions in the insurance policy. An insurer is not excused from its duty to defend unless there is no factual or legal basis on which the insurer might eventually be held liable to indemnify the insured. Id. at 1090.