Garrett Prevails in Tenth Circuit
HCCW partner Tom Garrett recently prevailed on an appeal before the United States Court of Appeals for the Tenth Circuit. Higby Crane Serv., LLC, et al. v. National Helium, LLC, et al., Case Nos. 16-3271 and 16-3279 (10th Cir. Aug. 14, 2017). Higby Crane involved a subrogation action to recover amounts paid under a commercial inland marine policy for damage to a crane as a result of an overnight flashfire at a helium production plant. The defendants contended that the anti-subrogation rule prohibited the action because they were entitled to additional insured coverage under the CGL policy issued to the crane owner. The district court held that the anti-subrogation rule prohibited the action.
The Tenth Circuit reversed, holding that Colorado’s anti-indemnification statute, Colorado Revised Statute § 13-21-111.5(6) prohibited enforcement of the additional insured provisions set forth in the Master Services Agreement (MSA) between the parties. The anti-indemnification statute prohibits, as against public policy, any provision in a construction contract that requires a downstream party to procure additional insured coverage for the upstream party’s own negligence. The Tenth Circuit concluded that, although the MSA was entered into prior to the effective date of the statute, the work order at issue, which incorporated the terms of the MSA, was agreed to after the effective date of the statute such that the statute applied. In so ruling, the Court declined to address the applicability of the owned property exclusion to bar coverage. The court remanded the action to the district court for entry of judgment in the plaintiffs’ favor. For a copy of the full opinion, click here.