Travelers Prop. Cas. Co. v. Stresscon Co.

Travelers Property Casualty Company of America (Travelers) petitioned for review of a court of appeals judgment affirming the district court’s denial of its motion for directed verdict in a lawsuit brought by its insured, Stresscon Corporation. Stresscon, a subcontracting concrete company, filed suit against Travelers, alleging, among other things, that Travelers acted in bad faith, unreasonably delaying or denying its claim for covered insurance benefits; and Stresscon sought awards of two times the covered benefits along with fees and costs, as prescribed by statute. Stresscon’s claims for relief arose from a serious construction accident in July 2007, which was caused by a crane operator employed by a company that was itself a subcontractor of Stresscon. Stresscon’s general contractor, Mortenson, sought damages from Stresscon, asserting Stresson’s contractual liability for the resulting construction delays, and Stresscon in turn sought indemnification from Travelers. Although there was much dispute over the factual and legal import of Travelers’ reservation of rights and other of its communications with both Stresscon and Mortenson concerning Mortenson’s claim, there was no dispute that by December 31, 2008, Travelers had not paid the damages asserted by Mortenson. The appellate court rejected Travelers’ contention that the no-voluntary-payments clause of their insurance contract relieved it of any obligation to indemnify Stresscon for payments Stresscon had made without its consent. Instead, the court of appeals found that the Colorato Supreme Court's opinion in "Friedland v. Travelers Indemnity Co.," (105 P.3d 639 (2005)) had effectively overruled prior “no voluntary payments” jurisprudence to the contrary and given Stresscon a similar opportunity. The Supreme Court found that its adoption of a notice-prejudice rule in "Friedland" did not overrule any existing “no voluntary payments” jurisprudence in Colorado, and because the Court declined to extend notice-prejudice reasoning in Friedland to Stresscon’s voluntary payments, made in the face of the no-voluntary-payments clause of its insurance contract with Travelers, the judgment of the court of appeals was reversed. View "Travelers Prop. Cas. Co. v. Stresscon Co." on Justia Law