Free Reply to Response to Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-M-2018 (MJW) APARTMENT INVESTMENT AND MANAGEMENT COMPANY, a Maryland corporation, Plaintiff v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, a Pennsylvania corporation, et al. Defendants. - and ­ RELATED CASES.

THIRD-PARTY DEFENDANT LOCKTON'S REPLY TO DEFENDANT/THIRD-PARTY PLAINTIFF ROGER METZGER ASSOCIATES' RESPONSE TO LOCKTON'S MOTION FOR SUMMARY JUDGMENT Roger Metzger Associates ("Metzger") does not dispute any of the facts included by Lockton in its Motion for Summary Judgment. Metzger does, however, add fifteen of its own "facts" that apparently it believes are relevant to the issues raised by Lockton in its Motion. Although Lockton disputes many of the facts contained in Metzger's Response, only two of those facts require attention here. Metzger's Additional Facts 7. It is true that ten to fourteen days before Vito Gruppuso ("Gruppuso") switched

insurance carriers he notified Lockton of his intent to do so. McDaniel Depo. at p. 62, lns. 1-20, attached hereto as Exhibit A-12. At that time Lockton told Gruppuso that he had no authority to switch carriers. Exhibit A-12, McDaniel Depo. at p. 60, ln. 20 to p. 61, ln .17; p. 62, ln. 12 to p. 63 , ln. 14. Thereafter without Lockton's knowledge or consent, Gruppuso unilaterally switched insurance carriers from Security Insurance Company of Hartford ("SOH") to National Union

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Fire Insurance Company of Pittsburg, PA ("National Union"). Exhibit A-12, McDaniel Depo. at p. 62, ln. 1 to p. 64, ln. 11; p. 67, lns. 13-20. Moreover, there is no evidence that Lockton had knowledge of the AFCO and AI credit premium finance agreements apparently entered into by AIMCO. The deposition testimony cited by Metzger in support of this alleged fact does not support such an allegation. 10. litigation. Lockton and AIMCO did settle their dispute without resorting to formal

This does not mean that claims were not made by AIMCO against Lockton.

Significant claims were made by AIMCO. See, letter dated November 18, 2002, from Miles Cortez to Charles McDaniel attached hereto as Exhibit A-13. The claims made by AIMCO all arose out of Lockton's placement of AIMCO's 2000-2001 property insurance ­ the very subject matter of this litigation. Argument Metzger admits that its third-party clams against Lockton are for contribution/indemnity. Metzger therefore focuses its attention on trying to avoid the application of Colo. Rev. Stat. § 1350.5-105(1)(b); a statute that clearly bars Metzger's claims here. In its attempt to avoid Colo. Rev. Stat. § 13-50.5-105(1)(b), Metzger makes two arguments: (1) Metzger contends that New York law rather than Colorado law applies to its claims against Lockton; and (2) Metzger contends that a question of fact remains as to whether Lockton's settlement with AIMCO was in "good faith" as required by Colo. Rev. Stat. § 13-50.5-105(1)(b). Neither of these arguments get very far. First, statutes in both New York and Colorado bar Metzger's claims against Lockton and therefore which of these two states' law applies is irrelevant to Lockton's Motion. Second, there is absolutely no evidence to support Metzger's assertion (which Lockton is just now hearing about for the first time - after years of discovery) that Lockton's settlement with AIMCO

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was not in good faith. For these reasons, and for the reasons set forth by Lockton in its original Motion, Lockton's Motion for Summary Judgment should be granted. Both Colorado and New York law bar Metzger's claims against Lockton Metzger now admits (if in fact it did not before) that all of its claims against Lockton are for contribution/indemnity. As set forth by Lockton in its original Motion, Colo. Rev. Stat. § 1350.5-105(1)(b) bars third-party claims for contribution/indemnity like those asserted here when a third-party defendant has settled with and been released by a plaintiff. Specifically, Colo. Rev. Stat. § 13-50.5-105 provides: "(1) When a release or a covenant not to sue or not to enforce judgment is given in good faith to one of two or more persons liable in tort for the same injury or the same wrongful death: (a) It does not discharge any of the other tortfeasors from liability for their several pro rata shares of liability for the injury, death, damage, or loss unless its terms so provide; but it reduces the aggregate claim against the others to the extent of any degree or percentage of fault or negligence attributable by the finder of fact, pursuant to section 13-21-111(2) or (3) or section 13-21-111.5, to the tortfeasor to whom the release or covenant is given; and (b) It discharges the tortfeasor to whom it is given from all liability for contribution to any other tortfeasor." Emphasis added. As explained at length in Lockton's original Motion, one of the purposes of Colo. Rev. Stat. § 13-50.5-105(1)(b) is to encourage settlement. This statute allows one of two or more joint tortfeasors to settle with a plaintiff without the fear of being brought back into an action as a third-party defendant. In other words, this statute allows a tortfeasor to "buy its peace" ­ ridding itself of the litigation in its entirety. Most states, including New York have similar statutes. New York General Obligations Law § 15-108 provides: "(a) Effect of release of or covenant not to sue tortfeasors. When a release or a covenant not to sue or not to enforce a judgment is given to one of two or more persons liable or claimed to be liable in tort for the same injury, or the same wrongful death, it does not discharge any of the other tortfeasors from liability for the injury

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or wrongful death unless its terms expressly so provides, but it reduces the claim of the releasor against the other tortfeasors to the extent of any amount stipulated by the release or the covenant, or in the amount of the consideration paid for it, or in the amount of the released tortfeasor's equitable share of the damages under article fourteen of the civil practice law and rules, whichever is greatest. (b) Release of tortfeasor. A release given in good faith by the injured person to one tortfeasor as provided in subdivision(a) relieves him from liability to any other person for contribution as provided in article fourteen of the civil practice law and rules. (c) Waiver of contribution. A tortfeasor who has obtained his own release from liability shall not be entitled to contribution from any other person." Thus, the application of New York law leads to the exact same result that Colorado law does ­ Metzger's third-party claims against Lockton are barred as a result of Lockton's settlement with AIMCO. Lockton's Motion for Summary Judgment should therefore be granted. There is no evidence that Lockton's settlement with AIMCO was anything other than in good faith Knowing that Colorado law likely applies to its claims against Lockton, Metzger, in a desperate attempt to create an issue of fact, latches onto the only part of Colo. Rev. Stat. § 1350.5-105(1)(b) that provides the Court with any discretion at all ­ the "good faith" requirement of the settlement.1 In support of its argument, Metzger cites Copper Mountain, Inc. v. Poma of America, Inc., 890 P.2d 100 (Colo. 1995). Copper Mountain stands for the proposition that the burden is in the challenging party to prove that a settlement was not in good faith. Id. at 108. Moreover, the challenging party must prove more than just a "mere confederacy" between the plaintiff and settling defendant. Id. The challenging party must prove that the settlement was "aimed" to injure the interests of the absent tortfeasor. Id. In this case, there is not a shred of
Metzger does not and cannot dispute the fact that Lockton has been released by AIMCO for all action/inaction related to Lockton's role in the placement of AIMCO's 2000-2001 property insurance.
1

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evidence to cast even the slightest doubt on the legitimacy of Lockton's settlement with AIMCO. Lockton paid $3 million of its own funds to AIMCO in exchange for a release (this $3 million is in addition to the $7 million Lumbermens paid to AIMCO which was funded by a nearly $9 million payment to Lumbermens by Lockton's insurer, Fireman's Fund). If anything, Lockton overpaid for its portion of liability to AIMCO. It is interesting that while Metzger attempts to cast doubt on the settlement between Lockton and AIMCO, nowhere in its Response does Metzger allege that it has been or may be injured by the Lockton/AIMCO settlement. Nowhere in Metzger's Response does it contend that Lockton paid less than market value to settle AIMCO's claims. This is because Metzger's attack on the Lockton/AIMCO settlement is a temporary attack. An attack manufactured by Metzger for the sole purpose of avoiding summary judgment. In the end, Metzger has no intention of attacking the settlement between Lockton and AIMCO. Metzger wants a $3 million credit for the settlement proceeds Lockton paid to AIMCO. Metzger wants this credit, however, without having to let Lockton out of the case. Metzger cannot have it both ways. Neither the Colorado nor New York statutes work that way.2 In its attempt to cast doubt on the settlement between Lockton and AIMCO (while at the same time not alleging that it has been injured by such settlement), Metzger cites to the fact that no formal litigation was ever initiated against Lockton by AIMCO. Metzger intimates that because no formal litigation was ever initiated by AIMCO against Lockton, there was a nefarious purpose to the settlement and thus the settlement was somehow not made in good faith.
It is important here to note the real reason Metzger wants New York law to apply to this case. As set forth above, statutes in both states bar Metzger's third-party claims against Lockton. However, under Colorado law, in the event of a settlement like Lockton has made here, the remaining defendants are only allowed an offset for the percentage of fault ultimately attributed by the jury to Lockton, regardless of how much Lockton paid AIMCO in settlement of its claims. See, Colo. Rev. Stat. § 13-50.5-105(1)(a). The New York statute allows the remaining defendants an offset for the amount of the settlement paid by Lockton to AIMCO or the percentage of fault ultimately attributable to Lockton whichever is greater. New York General Obligations § 15-108(a). Metzger knows that Lockton overpaid for its share of liability to AIMCO and is therefore attempting to trigger the application of New York law. Thus, Metzger's attempt to cast doubt on Lockton's settlement with AIMCO simply to avoid the entry of summary judgment in Lockton's favor at his time is completely disingenuous.
2

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Obviously, the fact that litigation was never commenced by the parties cannot form the basis for finding that a settlement was not made in good faith. Such a finding would require parties to initiate litigation against each other just to ensure the applicability of Colo. Rev. Stat. § 13-50.5105(1(b). Such a result is ludicrous. Disputes between sophisticated commercial parties happen every day. Most of these disputes are resolved prior to the initiation of formal litigation. Demands were made on Lockton by AIMCO. Statement of Fact No. 10 above. Those demands related directly to the issues presented in this litigation ­ Lockton's role in placing AIMCO's 2000-2001 property insurance. Lockton settled AIMCO's claims for more than $3 million. Metzger's third-party claims against Lockton are precisely the type of claims Colo. Rev. Stat. § 13-50.5-105(1)(b) and New York General Obligations Law § 15-108(b) are designed to prevent. Lockton has bought its peace from AIMCO and its Motion for Summary Judgment should therefore be granted. Respectfully submitted, LATHROP & GAGE L.C. By: /s/ Stephen J. Horace ­ CO#32961 4845 Pearl East Circle, Suite 300 Boulder, CO 80301 Telephone: 720-931-3000 Fax: 720-931-3001 and Leonard Rose Jed D. Reeg 2345 Grand Blvd., Suite 2800 Kansas City, MO 64108 Telephone: 816-292-2000 Fax: 816-292-2001

ATTORNEYS FOR THIRD-PARTY DEFENDANTS LOCKTON COMPANIES, INC. AND LOCKTON COMPANIES OF COLORADO, INC.

CERTIFICATE OF SERVICE

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This is to certify that on this 24th day of June, 2005, a true and correct copy of the foregoing was sent via electronic mail filing, addressed to the following: Karma Giulianelli Bartlit Beck Herman Palenchar & Scott 1899 Wynkoop St., 8th Floor Denver, CO 80202 Thomas L. Roberts, Esq. Roberts Levin & Patterson, P.C.. 1660 Wynkoop Street, Suite 800 Denver, Colorado 80202 Jeffrey A. Hall Elizabeth A. Thompson Bartlit Beck Herman Palenchar & Scott 54 West Hubbard St.,. Ste. 300 Chicago, IL 60610 Jeffrey A. Chase Barry A. Schwartz Jacobs Chase Frick Kleinkopf & Kelley 1050 ­ 17th St., Ste. 1500 Denver, CO 80265 John Wolak Gibbons Del Deo Dolan Griffinger & Vecchione One Riverfront Plaza Newark, NJ 07102 James Miletich McConnell Siderius Fleischner Houghtaling & Craigmile 4700 South Syracuse St., Ste. 200 Englewood, CO 80237 William Jeffress, Jr. Baker Botts LLP 1299 Pennsylvania Ave., N.W. Washington, DC 20004 Paul E. Collins, Esq. Robert Zavaglia Treece, Alfrey, Musat & Bosworth, P.C. 999 18th Street, Suite 1600 Denver, Colorado 80202

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John Martin Oster & Martin LLC 717 17th St., Ste. 1475 Denver, CO 80202 Jack Trigg Melissa Collins Julie Walker Wheeler Trigg & Kennedy, P.C. 1801 California St., Ste. 3600 Denver, CO 80202 Charles Tuffley Rozana Widlicka Grotefeld & Denenberg, LLC 30800 Telegraph Rd., Ste. 3858 Bingham Farms, MI 48025 John P. Mitzner Allman & Mitzner LLC 535 16th Street, Suite 727 Denver, CO 80202 Jeffrey Lorell Marc Singer Saiber Schlesinger Satz & Goldstein One Gateway Center 13th Floor Newark, NJ 07102 /s/