Craft v. Philadelphia Indemnity Insurance

FILED
United States Court of Appeals
Tenth Circuit
April 14, 2015
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
TENTH CIRCUIT
DEAN CRAFT,
Plaintiff - Appellant,
v. No. 13-1209
(D.C. No. 1:13-CV-00448-RPM)
PHILADELPHIA INDEMNITY (D. of Colo.)
INSURANCE COMPANY, a foreign
corporation,
Defendant - Appellee.
ORDER AND JUDGMENT *
Before BRISCOE, Chief Judge **, TYMKOVICH, and MATHESON, Circuit
Judges.
This case is again before us following the Colorado Supreme Court’s ruling
on questions certified to it concerning issues of state law. For the reasons stated
by the Supreme Court, we now AFFIRM the judgment of the district court.
*
This order and judgment is not binding precedent except under the
doctrines of law of the case, res judicata and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
**
In accord with our order dated March 2, 2015, Chief Judge Mary Beck
Briscoe was randomly assigned to succeed Judge William J. Holloway, Jr. on this
panel.
The facts underlying this appeal are recounted in detail in our certification
order, so we limit our recitation here to a summary of key facts. See Craft v.
Phila. Indem. Ins. Co., 560 F. App’x 710, 711 (10th Cir. 2014). Dean Craft sued
his insurer, Philadelphia Indemnity Insurance Company, after it denied his claim
for reimbursement of costs stemming from a suit against him in his capacity as an
officer of a company. The policy issued by Philadelphia Indemnity provided
liability coverage to officers and directors, but required the insured to comply
with two notice requirements: a prompt notice requirement—to give notice “as
soon as practicable” after the insured learned of a claim—and a date-certain
notice requirement—to give notice “not later than 60 days” after the policy
expired. Craft, unaware of the policy’s existence, did not notify Philadelphia
Indemnity of the claim until more than a year after the policy period had expired.
The district court granted Philadelphia Indemnity’s motion to dismiss the
suit for failure to provide timely notice. In doing so, the district court rejected
Craft’s argument that he should receive the benefit of Colorado’s notice-prejudice
rule for liability insurance policies, which provides that “late notice does not
result in loss of coverage benefits unless the insurer proves prejudice to its
interests by a preponderance of the evidence.” Friedland v. Travelers Indem. Co.,
105 P.3d 639, 643 (Colo. 2005). The court held as a matter of law that the rule
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extends to occurrence policies but not to claims-made policies such as the one
issued by Philadelphia Indemnity. 1
Recognizing that the Colorado Supreme Court had never had the occasion
to clarify the reach of its notice-prejudice rule, we certified the following
questions to the court: (1) whether Colorado’s notice-prejudice rule applies to
claims-made liability insurance policies, and (2) if so, whether the rule applies to
both types of notice requirements—that is, both the prompt notice and date-
certain requirements—in those policies. See Craft, 560 F. App’x at 715.
Before the Supreme Court, the parties agreed that the policy’s prompt
notice requirement was not at issue. The court thus narrowed its focus to
“whether the notice-prejudice rule applies to the date-certain notice requirement
of a claims-made policy.” Craft v. Phila. Indem. Ins. Co., 343 P.3d 951, 954
(Colo. 2015). The court answered in the negative, holding that the rule does not
apply to a date-certain notice requirement in a claims-made insurance policy.
1
An “occurrence” policy is a “policy that provides liability coverage only
for injury or damage that occurs during the policy term, regardless of when the
claim is actually made.” Craft v. Phila. Indem. Ins. Co., 343 P.3d 951, 957 (Colo.
2015) (quoting 3 Colo. Code Regs. § 702–5:5–1–8 (2014)). A “claims-made”
policy is a “policy that provides coverage only if a claim is made during the
policy period or any applicable extended reporting period.” Id. (quoting 3 Colo.
Code Regs. § 702–5:5–1–8 (2014)).
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Because Craft’s was a claims-made policy and he gave notice of his claim
far past the policy’s sixty-day date-certain notice requirement, the Supreme
Court’s ruling requires that we AFFIRM the district court’s dismissal.
ENTERED FOR THE COURT
Timothy M. Tymkovich
Circuit Judge
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