Greetings from Evans & Co. Counselors and Litigators, with another Case Notes series. We write this month with updates on insurance, construction defect, and commercial auto law in the states of Colorado, Utah, and Wyoming. 
 
Past Case Notes are archived at evanslawfirm.com and we would be pleased to bring current the decisions on which we've reported previously, at your request.
 
The Colorado Supreme Court ruled that a co-owner of a vehicle with “apparent authority” may reject UM/UIM coverage for the other owner. You will see a “war on UIM” theme in these case notes, which deserves the attention of underwriting, claims, and perhaps, legislative liaisons.  This case is followed by the 10th Circuit Court of Appeals in a second case on the subject which we digest within.
 

 
Readers of this newsletter will recall modest joy we expressed when the Tenth Circuit Court of Appeals carved a narrow exception to the Colorado “eight corners” rule [1] for insurance policy construction, in regard declaratory judgment actions brought during the pendency of the underlying liability case. The exception permitted extrinsic evidence that “plainly” showed there was no coverage. No Colorado state appellate court has since followed this (or overruled it). Now a Federal District Court weighs in saying that the extrinsic evidence presented, was not sufficiently “plain” because it was contested. Rare is evidence that cannot be contested.  So we see the sun setting on the Tenth Circuit rule unless a Colorado state court adopts it soon.
 
Turning to Utah law, their Supreme Court continues the war on UM/UIM insurance, holding, like the Colorado Court of Appeals case noted above, that where a worker’s compensation claim does not fully compensate a claimant (they never do, it is part of the “Grand Bargain” that they do not) that the claimant in a qualifying truck or automobile case, can claim against her own UM/UIM for the part of the value of the claim not paid by workers’ compensation. The Supreme Court specifically noted that ambiguity in the UM/UIM lead to this conclusion; legislative action seems the only course to achieve a different result.
 
A breath of fresh air for construction defect insurers, the Tenth Circuit Court of Appeals affirms Utah law that the result of an insured’s negligence or unworkmanlike conduct in construction, is not itself an occurrence under CGL policy terms. Our digest of this case also addresses important issues regarding the general contractor’s insurers’ exposure for the negligence of subcontractors.
 
We also digest a case dealing with limitation on discovery of the insurer, in a declaratory judgment action alleging bad faith, and a case awarding spoliation remedies where a subrogated insurer did not properly preserve evidence. We wind up Utah with a case that finds that homeowners’ insurance does not respond for allegations of unwanted sexual contact, supplying alcohol to a minor, and verbal and sexual harassment.
 
In Wyoming, we digest a Federal District Court case, applying Wyoming law, which underscores the continuing application of the Wyoming oilfield anti-indemnity act to void defense and indemnity contract obligations where the contract has a sufficient nexus with oilfield work.  We have previously noted that insurance obligations are not voided by the statute, and many contracts choose law other than Wyoming, which choice-of-law provision have been upheld.