Article by William J. Brady and Lisa K. Mayers

Reprinted with permission of The Colorado Lawyer, Vol. 29, No. 2, February, 2000

Recently the Colorado Supreme Court decided two important cases arising in the environmental insurance coverage context. The decisions are expected to have a major impact on the availability of insurance coverage for Colorado policyholders. Coverage counsel, in-house corporate attorneys, insurance defense lawyers, environmental attorneys, and practitioners representing businesses will find this article helpful in understanding their clients' insurance policies, especially when multi-year claims are implicated.

Affected businesses range from multi-national conglomerates to small "mom" and "pop," gasoline-dispensing convenience stores. These latest pronouncements from the Supreme Court are relevant to clients facing liability for damages spanning multiple coverage periods, such as groundwater contamination, asbestos exposure, and progressive construction defects and deterioration. Moreover, given the recent proliferation of Y2K insurance coverage suits being filed around the country, the potential application of these precedent-setting cases beyond environmental and construction claims is significant.

According to EPA statistics, the average Superfund cleanup costs $25 million and legal/consulting/transaction costs often more than double the indemnity exposure. By declining to follow prior precedent in the U.S. Court of Appeals for the Tenth Circuit, the City of Littleton and Wallis decisions will be welcome news to businesses across the country, as well as in Colorado, when facing federal- and state-mandated cleanups.


The standard form comprehensive general liability insurance policy ("CGL") has been drafted on an industry-wide basis through organizations such as the Insurance Services Organization ("ISO") and its predecessor, the Insurance Rating Board. The standard form CGL policy contains common insuring agreements, definitions, exclusions, terms, and conditions and, in most respects, varies insignificantly from one policy to another when analyzing for environmental damage claims coverage.

The standard form CGL insurance policy insuring agreement provides:

The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of

A. bodily injury,

B. property damage, or

C. personal injury

to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages. . . . (Emphasis added.)

"Occurrence" is defined in the standard form policy as an accident, including a continuous or repeated exposure to the same or similar conditions, which results, during the policy period, in bodily injury, property damage or personal injury, neither expected nor intended from the standpoint of the insured. Therefore, coverage exists whenever someone imposes or attempts to impose legal liability on a policyholder for an occurrence spanning multiple policy periods, unless a specific exclusion applies.

Duty to Defend: The Hecla Mining Co. Case

The preeminent case in Colorado addressing an insurance company's duty to defend is Hecla Mining Co. v. New Hampshire Ins. Co.1 Subsequent appellate court opinions build on the principles set forth in this case. In Hecla Mining Co., the Colorado Supreme Court ruled that an insurer's duty to defend arises when the underlying complaint against the insured alleges any facts that might arguably fall within coverage of the policy. In the environmental arena, this has proved to be a difficult duty to avoid. The opinion also states that an insurer is not excused from its duty to defend an insured, unless there is no factual or legal basis on which the insurer might eventually be held liable to indemnify the insured.

Once the analysis has established an "occurrence" under the applicable trigger of coverage theory,2 the next inquiry focuses on any policy conditions that might exclude coverage under the applicable facts. In the absence of a clear and explicit exclusion, the CGL policy provides coverage to policyholders arising out of pollution or environmental impairment. It is well settled that insurance companies must establish that the exclusion claimed applies in the particular case, and the exclusion is not subject to any other reasonable interpretation. If there is more than one reasonable interpretation, the provision is ambiguous and must be construed in favor of the policyholder.

The 1973 standard form CGL policy excludes the following from coverage:

Property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalies, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants, or pollutants into or upon land, the atmosphere, or any water course or body of water, but this exclusion does not apply if such discharge, dispersal, release or escape is sudden and accidental. (Emphasis added.)

Hecla Mining Co. established that since the term "sudden" is susceptible to more than one reasonable definition, the term is ambiguous, and the phrase "sudden and accidental" is construed against the insurer to mean "unexpected and unintended."3 Carriers seeking to avoid the duty to defend environmental liability claims will therefore attempt to prove that the policyholder intentionally engaged in conduct that produced the contaminant release.

Requirement of Timely Notice

Timely notification of a claim must be given to an insurance company under most CGL policies. Notice of a claim arguably within the ambit of insurance coverage gives rise to a duty to defend and preserves the policyholder's right to indemnification under the terms of the policy. Generally, the insurance company must receive reasonable notice in accordance with the policy terms. Failure to provide timely notice under a policy of insurance may relieve the insurer of liability under its policy and obviate the duty to defend. Notice should be given to the insurance company and its authorized agent or broker.

In the environmental context, if a potentially responsible party ("PRP") notice letter, a demand from a federal or state agency, a third-party complaint in a contribution action, or a letter merely notifying a policyholder of environmental damage is received, consideration should immediately be given to forwarding every demand, notice, summons, complaint, PRP notice letter or other process to the insurer.4

The Colorado Supreme Court recently held in the case of Compass Ins. Co. v. City of Littleton5 that the term "suit" found in the standard CGL policy would encompass not only traditional lawsuits, but also coercive administrative enforcement proceedings such as Environmental Protection Agency ("EPA") actions initiated by PRP letters under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").6 Liability insurers, therefore, should be notified as soon as a policyholder learns of potential property damage caused by an occurrence within the meaning of the policy, even in the absence of governmental notice or formal notification by third parties of the alleged damage.

Commonly, substantial amounts of time expire between the date when a municipality, private company, or individual policyholder discovers a pollution problem and the date when the financial manager, risk manager, or bookkeeper charged with the responsibility of insurance realizes there may be insurance coverage. Whether notice has been given in a reasonable and timely fashion depends on the facts and circumstances of the case, and, in some states unlike Colorado, the insurance company's ability to demonstrate prejudice from the failure to receive a more timely notification. Some jurisdictions have held that any delay in giving notice bars an otherwise valid claim only if the insurance company is able to demonstrate prejudice.7

In Colorado, on the other hand, prejudice or lack of prejudice is irrelevant.8 Untimely notice is a bar unless the delay is "reasonable under the circumstances" or "justifiably excused." If the policyholder can establish justifiable excuse, prejudice to the insurance company may not bar the claim.9 In other words, failure to notify an insurance company within a reasonable time may constitute a breach of contract, thus relieving the insurance company from liability thereunder, unless the policyholder establishes a justifiable excuse or extenuating circumstances to reasonably explain away the delay.10

Policyholders typically attempt to excuse their conduct by asserting that they were unaware of the policy because old policies were lost, missing, or otherwise not retained. Usually, the policyholder did not think that coverage was applicable, or otherwise available, until being informed at a later date by experienced, knowledgeable coverage counsel. An uninformed broker or agent, financial director, risk manager, bookkeeper, or even legal counsel unfamiliar with coverage issues may not have realized that insurance coverage was available. In some instances, a well-founded belief that the insured is not liable for the damage claimed, perhaps based on the advice of a broker, insurance agent, counsel, or otherwise, has been accepted as an excuse for untimely notice.11

However, in the 1997 case of Haller v. Hawkeye Security Ins. Co., the Colorado Court of Appeals held as a matter of law that a belief in non-liability was not a justifiable excuse for failing to notify an insurer of a suit or claim.12 Judge Metzger specially concurred in the Haller opinion to clarify that justifiable excuse in giving notice is a question of fact to be determined by all the facts and circumstances measured against a reasonable person standard.

The issue of whether Haller applies retroactively to notice cases is a question presently on appeal before the U.S Court of Appeals for the Tenth Circuit.13 In the meantime, practitioners should note that, under pre-Haller case law, whether or not the excuse is justifiable under the circumstances was a jury question. Presumably, this approach would continue to apply to environmental damage claims where late notice was given prior to the Haller case. However, several recent decisions from other jurisdictions indicate that failure to give notice voids insurance coverage for environmental claims.14


Upon tendering notice to the carrier, a question arises as to the appropriate burden of proof in establishing the obligation to defend. In the June 1999 case of Compass Ins. Co. v. City of Littleton, the Colorado Supreme Court ruled that, while the policyholder has the initial burden of proving insurance coverage, to avoid the duty to defend the insurance company bears the burden of establishing any exclusion from coverage and that an exception to an exclusion cannot apply to restore coverage.15

In the environmental context, for example, the carrier must not only show that the policyholder's wastestream was a contaminant within the meaning of the pollution exclusion clause, but also must demonstrate that the policyholder expected or intended its release or escape after being placed in a state of confinement. Where the duty to indemnify is at issue, the insurance company again has the burden of proving the exclusion from coverage, and, if the burden is met, the Colorado Court of Appeals has held that the burden may shift back to the policyholder to prove any exception to the exclusion.16

In City of Littleton, the Colorado Supreme Court held that insurance companies issuing standard form CGL policies had a duty to defend the cities of Littleton and Englewood against the EPA's allegations of environmental liability for wastewater sludge disposal at the Lowry Landfill. To reach its holding, the court declined to follow the U.S. Court of Appeals for the Tenth Circuit's interpretation of the pollution exclusion in Broderick Investment Co. v. Hartford Accident & Indemnity Co.17 In Broderick Investment Co., the Tenth Circuit Court construed the exclusion as addressing the initial placement of the alleged polluting material into or on the land. Instead, in City of Littleton, the Colorado Supreme Court was implicitly guided by Hecla Mining Co.,18 which focused on the mining company's intent to discharge pollutants from the containment area in the mine, as opposed to their initial placement in the first instance.

The City of Littleton opinion followed the Washington State Supreme Court's precedent in Queen City Farms, Inc. v. Central National Ins. Co. of Omaha,19 which adopted the "second discharge analysis." In setting forth the law of Colorado, the Colorado Supreme Court explicitly found that the relevant polluting event for purposes of the pollution exclusion clause is the release or escape of pollutants from a containment area and not the initial placement of waste into the containment area.20 Consequently, the insurance companies must now prove that the policyholder "expected and intended" the release of contaminants from the containment zone into groundwater to avoid their defense obligation. Because the PRP notice letters in City of Littleton contained no such allegation, the carriers could not, and cannot on remand to the trial court, sustain their burden.

Defining Ambiguous Terms

In the City of Littleton opinion, the Colorado court continued to interpret undefined terms in an insurance policy according to their plain and ordinary meanings and according to the understanding of the average purchaser of insurance.21 Relying on Queen City Farms, the court adopted the Washington court's conclusion that "the average purchaser of insurance would have understood that mere placement of wastes into a place which was thought would contain or filter the wastes would not have been an event which would fall within the [pollution] exclusion."22 The Colorado court further refused to impose overly technical, constrained, or arcane meanings to commonly used terms like "damages" and "suit."

In discussing ambiguities, the Colorado court again recognized the fundamental doctrine of contrapreferendum23 in insurance policy contract interpretation. An ambiguous provision must be construed against the drafter and in favor of providing coverage to the insured.24 The Colorado Supreme Court joined many other jurisdictions in finding both terms--"damages" and "suit"--to be ambiguous.25 With respect to the term "suit," the court adopted the analysis of the Supreme Court of Michigan: "The existence of these alternative and more general definitions of 'suit' persuasively suggests that a typical layperson might reasonably expect the term to apply to legal proceedings other than a court action initiated by a complaint."26 An EPA notice letter pursuant to CERCLA is sufficiently coercive to be the "functional equivalent of a suit" within the meaning of the liability policies.27

Applying similar reasoning, the City of Littleton court also concluded that government-mandated response or cleanup costs under CERCLA constitute "damages" as the term is used in CGL insurance policies.28 The court declined the insurers' request that it draw a bright-line distinction between legal remedies and equitable remedies. Instead, the insurance companies were found to have failed to indicate a limited technical meaning of the term "damages," despite having the opportunity to do so when the CGL policies were drafted.


After giving timely notice of claim to all insurance companies potentially providing coverage for the claim, and on receipt of an insurance company's denial of coverage, a policyholder may bring an action against its insurance company to seek a declaration of the policyholder's rights pursuant to the insurance policy and specific performance. A policyholder also may assert damages for breach of contract and recovery of defense costs.

Declaratory Judgments

A claim for declaratory judgment is brought pursuant to the Uniform Declaratory Judgments Law ("Uniform Law") and Colorado Rules of Civil Procedure 57.29 The statute provides:

Any person interested under a . . . written contract, or other writings constituting a contract . . . may have determined any question of construction or validity arising under the . . . contract . . . and obtain a declaration of rights, status, or other legal relations thereunder.

C.R.C.P. 57 contains identical language and should be consulted concurrently. The primary provisions of the Uniform Law and the procedural rule allow an action to be brought by the policyholder or by an insurance company. An action may be brought before or after there has been a breach of the written document,30 and a declaratory judgment has the force and effect of a final judgment or decree.31 Parties are also entitled to trial by jury subject to C.R.C.P. 38 and 39, and may be entitled to an expedited hearing.32

In Constitution Associates v. New Hampshire Ins. Co.,33 the Colorado Supreme Court addressed the propriety of an "anticipatory declaratory judgment." In this case, the insurance company filed an action for declaratory relief to determine its obligations toward its policyholder before any judgment had been entered against the policyholder in the underlying suit. The court held that an anticipatory declaratory judgment action may be proper where (1) there exists an actual controversy, (2) only if the declaratory judgment will fully and finally resolve the uncertainty and controversy as to all parties having a substantial interest in the matter, and (3) only where the action is independent of and separable from the underlying action.34

Of the three prongs set forth in Constitution Associates, the most difficult to satisfy will usually be the third, listed above. Typically in the environmental context, the underlying action will involve allegations that the policyholder engaged in activities resulting in contamination. An insurer filing a declaratory judgment action to avoid defending or indemnifying the policyholder usually seeks to establish that the policyholder expected and intended the discharge, dispersal, release, or escape of pollutants, contaminants, irritants, or other waste materials. The carrier necessarily attempts to introduce evidence of pollution-generating activities that produced the claimed damages, thereby violating the "lack of severability" prong of the Constitution Associates test.

Given the insurer's heavy burden under Hecla Mining Co., the better course of action for an insurance company is to defend under a reservation of rights while an underlying action is pending and to seek reimbursement of defense costs in a subsequent proceeding.35 Consideration of the impact of collateral estoppel against the policyholder mandates this result.36 Otherwise, the insurance company may breach its covenant of good faith and fair dealing by introducing evidence of contamination that can be used against the policyholder in the underlying liability proceeding.

Specific Performance

The policyholder may assert a claim for specific performance of the insurance contract, including compelling the provision of a defense, or appropriate payment for coverage of defense costs, as well as indemnification coverage. The policyholder must be able to set forth adequately the essential terms of the contract between the parties for which the policyholder seeks to compel performance; i.e., the essential terms of the insurance policy that may give rise to a duty to defend under the particular factual circumstances.

Policyholders have traditionally had the burden of initially proving coverage, including the essential terms of the policy, identity of the carrier, periods of coverage, payment of premiums, and an occurrence within the meaning of the policy. Specific performance is an equitable remedy in that the claiming party also must show that there is no other full and adequate remedy at law beyond enforcement of the contract.

Breach of Contract

A policyholder may assert a claim for breach of contract to recover costs and damages when an insurance company refuses to provide a defense for liability claims alleged against a policyholder. The policyholder must show only that an underlying claim may arguably fall within policy coverage,37 whereas the insurance company must prove that it conclusively cannot fall within policy coverage.38

The policyholder must establish the essential terms of the insurance contract, including "occurrence" and "damages," and ensure that all conditions precedent to coverage have been satisfied, which includes timely notice of claim. Colorado follows the majority "trigger of coverage" rule, which holds that an occurrence takes place when actual property damage is suffered during the policy period, regardless of when the wrongful act that caused the damage happened.39

For the insurance company's duty to defend to arise, the policyholder must make the requisite threshold showing that the underlying complaint alleged bodily injury, personal injury, or property damage. Where the policyholder cannot meet this threshold, the duty to defend will not arise, and a court is not required to force an ambiguity in the policy language to resolve the coverage issue against the insurance company.40

To establish a claim for breach of contract, the policyholder must show that the insurance company owed it a duty to defend and that the insurance company breached this duty. Upon such a showing, the insurance company will be responsible for reimbursement of all defense costs reasonably incurred by the policyholder in proceeding without the benefit of a defense.41


In September 1999, the Colorado Supreme Court announced another decision involving insurance coverage for environmental pollution. In Public Service Co. of Colorado v. Wallis and Companies,42 the court addressed three issues involving excess policies issued by Wallis and Companies, which are London market insurers. The court first addressed the meaning of the phrase "sudden, unintended and unexpected" contained in the pollution exclusion clause of certain insurance policies sold by London market insurance companies. Next, the court addressed application of the "sudden, unintended and unexpected" exception to the pollution exclusion clause to determine whether the relevant inquiry for application of the exception would be from the standpoint of the insured or from the standpoint of those in control of the contaminants. Finally, and most important, the court addressed the proper method for allocating liability among the implicated insurers and policies based on time-on-the-risk and the degree of risk assumed.

Wallis and Companies sold excess insurance policies to Public Service Company ("PSC") from 1955 through 1977. After receiving notification from the EPA that it was a potentially responsible party subject to CERCLA, PSC sued Wallis and other London market insurance companies, seeking indemnification for expenses it incurred with respect to environmental liabilities at two sites, including Lowry Landfill.

Unlike the standard pollution exclusion contained in policies issued by insurance companies in the United States, the London market insurance companies' pollution exclusion states:

This Insurance does not cover any liability for:

The cost of removing, nullifying or cleaning-up seeping, polluting or contaminating substances unless the seepage, pollution or contamination is caused by a sudden, unintended and unexpected happening during the period of this Insurance.

In interpreting the "sudden, unintended and unexpected" phrase of the above clause, the trial court relied on Hecla Mining Co.43 in instructing the jury:

The phrase "sudden, unintended and unexpected" is ambiguous because it is susceptible to more than one reasonable interpretation. You are instructed that, in this case, the phrase "sudden, unintended and unexpected" as used in this exclusion means "unexpected or unintended" from the standpoint of Public Service [insured].

The Supreme Court found the above instruction to be erroneous. In so finding, it held that "sudden" was ambiguous and construed the phrase against the insurer, ultimately finding the phrase "sudden, unintended and unexpected" to mean "unprepared for, unintended, and unexpected." By this interpretation, the Supreme Court gave meaning to each of the words in the phrase "sudden, unintended and unexpected."

The appellate court also held that the "London" pollution exclusion was ambiguous for failing to indicate from whose standpoint the phrase "sudden, unintended and unexpected" was to be applied. In finding an ambiguity, the court construed the ambiguous provision in favor of coverage and held that the relevant inquiry was whether the happenings were sudden, unintended, and unexpected from the standpoint of the insured. This is consistent with Hecla Mining Co.'s application of the subjective intent of the policyholder in examining whether the release of contaminants was expected or intended. The Colorado Supreme Court reversed the Court of Appeals' finding that the exclusion was to be interpreted from the standpoint of those in control of the contaminants.

The third issue (and arguably the most significant from a precedential aspect) before the Supreme Court was the proper method for allocating liability among applicable insurance policies where the property damage was gradual, long-term, and indivisible (a "continuous occurrence"). This is the court's most thorough pronouncement to date on the issue of allocation of insurance benefits over successive coverage years. In the proceedings below, the Court of Appeals affirmed the trial court, which permitted the policyholder to "pick and choose" among the applicable policies when seeking indemnification for costs of remediation, based on the policy language stating that the insurer would pay "any and all sums" caused by an occurrence. Under this reasoning, any one policy could be held liable for all of the costs incurred by the policyholder. The Supreme Court found this method to be unreasonable and an incorrect interpretation of case law.

Instead, the Supreme Court adopted a method whereby damages are to be allocated according to time-on-the-risk and according to the relative degree of risk assumed. The court stated:

where property damage is gradual, long-term, and indivisible, the trial court should make a reasonable estimate of the portion of the 'occurrence' that is fairly attributable to each year by dividing the total amount of liability by the number of years at issue. The trial court should then allocate liability accordingly to each policy year, taking into account primary and excess coverage, SIRs [self-insured retention], policy limits, and other insurance on the risk.44

A detailed example of the calculation of the allocation is contained in footnote 17 of the opinion, which can be summarized in the following six steps:

Horizontal Exhaustion Scheme

1. Determine loss, i.e., total damages or ultimate nett [Brit. sp.] loss;

2. Determine years of loss (time-on-the-risk);

3. Divide one by two to arrive at a per-year allocation;

4. Subtract self-insured retention or annual deductible for each policy year;

5. Subtract underlying policy limits; and,

6. Determine degree of risk of each layer, i.e., primary, excess, etc., by dividing limits of each policy by total limits, unless policies specifically provide otherwise; i.e., specific percentages of loss allocated under policy terms.45

The Wallis opinion specifically states that time-on-the-risk allocation applies where there is a continuous trigger implicating the policy. Additionally, the opinion clearly calls for exhaustion of primary insurance or self-insured retention ("SIRs") before moving vertically into the excess layers of coverage for each policy year, up to the limit of the allocated liability. Where the allocated liability exceeds the available insurance (primary and excess) in one policy year, any remaining liability is absorbed by the insured. Additionally, where the allocation accounts for "degree of risk assumed," there should be no set-off for amounts received in settlement with other insurers.46

Finally, in setting forth the time-on-the-risk allocation, the court presents "some general guidelines to follow, emphasizing that these are flexible standards that the trial court has the discretion to modify and adapt according to the circumstances of a particular case."47 (Emphasis added.) The Supreme Court's analysis recognizes that a variety of complex insurance coverage scenarios are likely to come before the trial courts and are fact-specific, requiring adjustment of the general standards set forth in the Wallis opinion.

Left unsettled by the Wallis decision is the issue of allocating attorney fees in the defense of the underlying claim. Typically, carriers issuing standard form CGL policies have the obligation to provide a defense for all claims arguably falling within coverage. As the CGL insuring agreement states, "The company shall have the right and duty to defend any suit against the insured seeking damages. . . ." Each carrier providing coverage for the asserted claims arguably is jointly and severally liable for these defense costs over each year of coverage triggered.48 A question arises as to whether defense costs under standard form CGL policies are included in the "ultimate nett loss" analysis under Wallis or whether indemnity alone is allocated.

Assuming that the policyholder contracted for a complete defense of covered claims by payment of its premiums, the ability to recover the costs of defense from any one or all carriers should not be impacted by the Wallis multi-year allocation scheme.49 Otherwise, the policyholder would conceivably be responsible for defense costs in "orphan share" years for which no coverage is available. Such a result could not have been intended by the allocation scheme set forth in note 17 of the Wallis opinion. However, the "ultimate nett loss" language appears to include attorney fees under the definition in the London market policies at issue. This is in marked contrast to the language of standard form CGL policies that, without limitations on carrier responsibility for attorney fees and defense costs, distinguish the defense obligation from indemnity.


The recent pronouncements of the Colorado Supreme Court in City of Littleton and Wallis provide a basis for policyholders and insurance companies to require a defense and allocate indemnity for continuous trigger liability claims spanning multiple coverage years. Carriers cannot escape their defense obligations in the absence of an exclusion or language in the suit or notifying process alleging intentional conduct. While the guidelines for allocation of indemnity are instructive, their flexibility allows courts wide latitude in their exercise of discretion. Left unsettled is the proper allocation of defense costs under CGL policies where the defense and indemnity obligations are separate and distinct, unlike the London market policies at issue in Wallis.


1. 811 P.2d 1083 (Colo. 1991).

2. Colorado follows the majority rule that an occurrence takes place when actual property damage is suffered during the policy period, regardless of when the wrongful act that caused the damage happened. See American Employer's Ins. Co. v. Pinkard Construction Co., 893 P.2d 954 (Colo.App. 1990); accord, Browder v. U.S. Fidelity & Guar. Co., 893 P.2d 132 (Colo. 1995).

3. Supra, note 1 at 1090-92.

4. Couch on Insurance 2d (rev. ed. 1984), §§ 49.34-49.48.

5. 984 P.2d 606, 622 (Colo. 1999).

6. 42 U.S.C. §§ 9601-75.

7. Northwestern Title Security Co. v. Flack, 85 Cal. Rptr. 693, 696-97 (Cal.App.3d 1970); Washington v. Federal Kemper Ins. Co., 482 A.2d 503, 505-06 (Md.App. 1984); Foundation Reserve Ins. Co. v. Esquibel, 607 P.2d 1150, 1152 (1980).

8. Marez v. Daryland Ins. Co., 638 P.2d 286, 290-91 (Colo. 1981); United Services Auto. Ass'n v. Allstate Ins. Co., 662 P.2d 1102, 1104 (Colo. App. 1983).

9. Marez, supra, note 8 at 289-90; Colard v. American Family Mut. Ins. Co., 709 P.2d 11, 15 (Colo.App. 1985); see generally, 29 Am.Jur. 829, Insurance, § 1105.

10. Graton v. United Security Ins. Co., 740 P.2d 533, 534 (Colo.App. 1987).

11. Colard, supra, note 9 at 15; Barnes v. Waco Scaffolding and Equip., 589 P.2d 505, 507 (Colo.App. 1978). But see, Haller v. Hawkeye Security Ins. Co., 936 P.2d 601 (Colo.App. 1997).

12. Haller, supra, note 11.

13. See Metro Wastewater Reclamation Dist. v. Fireman's Fund Ins. Co., No. 89D895 (D.Colo. 1999), appeal pending (where U.S. District Court Judge Wiley Daniel refused to retroactively apply Haller to a 1988 late notice).

14. Firemans Fund Ins. Co. v. ACC Chemical Co., 538 N.W.2d 259 (Iowa 1995); Industrial Codings Group, Inc. v. American Motorists Ins. Co., 658 N.E.2d 1338 (Ill.App. 1995); American Ins. Co. v. Fairchild Indus., Inc., 852 F.Supp. 1173 (E.D.N.Y. 1994).

15. 984 P.2d 606, 618 (Colo. 1999).

16. Id. at 618, n.12, citing Public Service Co. v. Wallis & Cos., 955 P.2d 564, 568-69 (Colo. App. 1997), reversed and remanded on other grounds, 986 P.2d 924 (Colo. 1999). See discussion infra. (The Colorado Supreme Court did not grant certiorari to address the burden of proof issue in the indemnity context in the Wallis decision.)

17. 954 F.2d 601 (10th Cir. 1992), cert. denied, 506 U.S. 865 (1992). By declining to follow Broderick's application of Colorado law, the Colorado Supreme Court's decision in City of Littleton could have a multi-million dollar impact on the insurance industry, according to some industry observers. Although frequently cited, and followed by several courts outside of Colorado in placing the focal inquiry upon the policyholder's expectations at the time of initial disposal, Broderick's vitality as reliable precedent is highly suspect. As a result, innocent policyholders, who never expected or intended environmental damages to occur, have renewed life under CGL insurance policies applicable in those jurisdictions previously following Broderick's rationale. See Kinark Corp. v. Home Ins. Co., 68 F.3d 467 (5th Cir. 1995)(applying Colorado law); St. Paul Fire & Marine Ins. Co. v. Warwick Dyeing Co., 26 F.3d 1195 (1st Cir. 1994); Employer's Ins. of Wausau v. George, 673 N.E.2d 572 (Mass.App.Ct. 1996).

18. Supra, note 1.

19. 882 P.2d 703 (Wash. 1994).

20. Supra, note 15 at 617.

21. Id.

22. Id. (citing, Queen City Farms, supra, note 19 at 718).

23. 13 Appleman, Insurance Law and Practice § 7401, 7481 (1976)(most jurisdictions follow the time-honored doctrine, which requires ambiguous policy language to be construed against the drafter-insurance company).

24. Id. at 619, citing, Chacon v. American Family Mut. Ins. Co., 788 P.2d 748, 750 (Colo. 1990).

25. Id. at 622-23.

26. Id. at 622, quoting Michigan Millers Mut. Ins. Co. v. Bronson Plating Co., 519 N.W.2d 864 (Mich. 1994).

27. Id.

28. Id. at 622-23.

29. CRS § 13-51-101 et seq.; C.R.C.P. 57.

30. CRS § 13-51-107; C.R.C.P. 57(c).

31. CRS § 13-51-105; C.R.C.P. 57(a).

32. C.R.C.P. 57(m).

33. 930 P.2d 556 (Colo. 1996).

34. Id. at 561.

35. Supra, note 1 at 1089-90, n.10.

36. See Constitution Associates, supra, note 33 at 562. See, e.g., Montrose Chem. Corp. v. Superior Court, 6 Cal.4th 287, 861 P.2d 1153 (1993)(stay of coverage litigation appropriate where issues overlap with underlying action due to potential for prejudice to the insured should fact issues be litigated in a coverage action before being resolved in the underlying action).

37. Hecla Mining Co., supra, note 1 at 1083, 1089.

38. See Compass Ins. Co. v. City of Littleton, 984 P.2d 606, 614 (Colo. 1999).

39. See note 2, supra, for authorities.

40. City of Arvada v. Colorado Intergovernmental Risk Sharing Agency, 988 P.2d 184 (Colo. App. 1999)(policy cannot be read to provide coverage for breach of contract).

41. The potential award of attorney fees is beyond the scope of this article. However, practitioners should be mindful of Colorado case law that permits the award of attorney fees and costs, not only for the defense of the underlying case, but for the maintenance of the action seeking to enforce coverage. Allstate Ins. Co. v. Robins, 597 P.2d 1052, 1053 (Colo.App. 1979); Allstate Ins. Co. v. Orban, 855 P.2d 9 (Colo. App. 1992). (The broad form endorsement found in many CGL policies requires the insurance company to reimburse the insured for all reasonable expenses incurred as a result of litigation pursued at the request of the insurance company). Compare, Bernhard v. Farmer's Ins. Exchange, 915 P.2d 1285, 1287 (Colo. 1996). (As a general rule, in the absence of statute, court rule, or contract provision, attorney fees are not recoverable in a contract or tort action.)

42. 986 P.2d 924 (Colo. 1999).

43. Supra, note 1 at 1083 ("sudden and accidental" is ambiguous and means "unexpected and unintended").

44. Wallis, supra, note 42 at 940.

45. Id. at n.17.

46. Id. at 942.

47. Id. at 941.

48. Domtar, Inc. v. Niagara Fire Ins. Co., 563 N.W.2d 724, 739 (Minn. 1997); TPLC, Inc. v. United Nat'l Ins. Co., 44 F.3d 1484 (10th Cir. 1995); Insurance Coverage of Const. Dispute § 6.20; Annot., Performance by One Insurer of Its Duty to Defend, 90 ALR3d 1199; 14 Couch on Insurance 2d, § 51:36 (1982); 1 Long, The Law of Liability Insurance, § 5.07 (1996). See discussion in Kalis, Policyholder's Guide to the Law of Insurance Coverage § 4-04(A) (New York, N.Y.: Aspen Law and Business, 1999) and cases cited at note 80 therein.

49. Id.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.