DENVER (March. 27, 2023) – The Colorado Court of Appeals has ruled in favor of Seneca Insurance following the appeal of a motion for summary judgment in a bad faith case involving construction defect (Mojo Properties, LLC v. Seneca Insurance).
Michael D. Drews, Northwest and Central Regional Managing Partner and Managing Partner of Tyson & Mendes’ Colorado office, which defended Seneca in the case, said his firm originally won a motion for summary judgment on behalf of Seneca. However, “For reasons unknown, the plaintiff appealed. Subsequently, the Colorado Court of Appeals affirmed the well-reasoned Denver District Court’s original order granting summary judgment, and also agreed the plaintiff’s appeal was frivolous.”
The case dates back to 2005, when plaintiff Mojo Properties, LLC purchased vacant land in Denver with the intention of developing the property into a multi-family condominium building. Mojo then purchased a general liability policy from Seneca Insurance through a commercial lines producer to insure the vacant lot. The policy stated that any improvements on or to the land would render the coverage null and void.
Mojo later extended coverage until June 7, 2007, for vacant land only. In August 2006, Mojo began demolition and concrete work for a condominium development but did not renew the policy. In 2016, the condominium building’s HOA brought construction defect litigation against Mojo, which tendered a claim to Seneca for defense and indemnity.
“The Seneca policy could not be found by Seneca or Mojo,” Drews said. “Despite advising Mojo in three separate reservations of rights letters, including two from separately retained coverage counsel, there was likely no coverage, Seneca still defended Mojo and even contributed to settlement.”
After the underlying construction defect matter was closed, Mojo brought multiple claims against Seneca claiming it acted unreasonably by not providing full indemnification against the claims asserted and as a result, paid out-of-pocket expenses for a portion of the settlement.
“During the subsequent bad faith litigation, Seneca was able to locate the policy and its applicable terms, including that it covered only vacant land and would be null and void when any development began,” Drews said. “Based on this key information, we moved for summary judgment, convincing the trial court no genuine issue of material fact existed about the nature of the insurance coverage.”
After fully briefing the case, with the assistance of summer clerk, Tanner Boyzuick, the Colorado Court of Appeals affirmed the trial court’s ruling, agreeing with Tyson & Mendes attorneys that there were no disputed issues of material fact precluding summary judgment and that Seneca provided an adequate reservation of rights, so coverage by estoppel did not apply. The Colorado Court of Appeals also agreed that Mojo’s appeal was frivolous, warranting an award of appellate attorneys’ fees and double appellate costs.
Serving 18 states nationwide, Tyson & Mendes is one of the fastest growing civil defense firms in the U.S. The firm has established itself as a leader in driving down damages awards and reducing the likelihood of Nuclear Verdicts® – often defined as jury awards in excess of $10 million. Using a unique set of proven defense methods, the firm saved clients more than $1.07 billion in 2022.
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About Tyson & Mendes LLP
Tyson & Mendes LLP is a nationwide, AV-rated litigation and trial firm specializing in insurance defense and protecting its clients from Nuclear Verdicts®. Robert Tyson and Patrick Mendes founded the firm in 2002 to defend corporations, insurance companies, and their clients in civil litigation matters. The firm has experienced tremendous growth in the past two decades, with offices across the U.S. serving clients in Arizona, California, Colorado, Connecticut, Florida, Iowa, Illinois, Massachusetts, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Tennessee, Utah, Washington, and Wisconsin.
The firm is most widely recognized for winning the landmark Howell v. Hamilton Meats California Supreme Court case, which forever changed the state’s litigation landscape by significantly impacting the damages a plaintiff may recover. Robert Tyson is also the author of the Amazon Bestseller Nuclear Verdicts®: Defending Justice for All, the first playbook for the defense on how to avoid runaway jury verdicts.
For more information, visit www.tysonmendes.com.
Ashley Bendas/Jean Walcher, J. Walcher Communications
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