Free Motion for Miscellaneous Relief - District Court of Colorado - Colorado

Case 1:01-cv-01807-MSK-MJW

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Filed 10/24/2007

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Case No.: 01-cv-01807-MSK-MJW BANK ONE, NA, (Successor to Bank One, Colorado, N.A.) and BANK ONE TRUST COMPANY, N.A., as Trustee of the Frank G. Jamison Marital Trust and the Frank G. Jamison Family Trust, Plaintiffs, v. C.V.Y. CORPORATION, d/b/a Your Valet Cleaners and JOHNNY ON THE SPOT, INC. Defendants. _____________________________________________________________________ BOULDER CLEANERS, INC. and JOHN'S CLEANERS, INC. Cross-Plaintiffs, v. C.V.Y. CORPORATION, d/b/a Your Valet Cleaners, Cross-Defendant.

MOTION TO SET BRIEFING SCHEDULE FOR DISPOSITIVE MOTIONS _____________________________________________________________________ Cross-Plaintiffs Boulder Cleaners, Inc. and John's Cleaners, Inc., by and through their undersigned counsel, respectfully seek from the Court an Order adopting the schedule for briefing dispositive motions requested herein, because: I. 1. REQUEST FOR BRIEFING SCHEDULE

Boulder Cleaners and John's Cleaners (collectively "BCI/JCI") have a cross-

claim pending in this case against CVY Corporation ("CVY") for breach of a September 27,

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1991 (effective September 30, 1991) Agreement to defend and indemnify Boulder Cleaners with respect to Plaintiffs' claims in this case.1 2. After BCI/JCI settled with Plaintiffs in 2002, litigation of the cross-claim was

stayed following a Law and Motion Hearing on April 14, 2005, pending the outcome of Plaintiffs' claims against CVY and Johnny on the Spot, Inc. ("JOS"). Plaintiffs and CVY and JOS have now settled and motions concerning the approval of their Settlement Agreement with contribution protection are pending. 3. When proceedings were stayed on BCI/JCI's cross-claim, Bank One and

CVY/JOS were given 60 days to submit additional dispositive motions in an effort to resolve remaining issues of law prior to their trial. See, Courtroom Minutes, April 14, 2005 (Doc. # 418). 4. In order to similarly limit the issues which are actually in dispute prior to trial

of BCI/JCI's cross-claim for defense and indemnification under the above referenced Agreement, Cross-Claimants request permission to submit appropriate dispositive motions to the Court within 30 days, allowing CVY 20 days thereafter within which to submit their response. II. 5. LEGAL ISSUES TO BE RESOLVED

The Plaintiffs brought claims against BCI/JCI under which they sought to hold

BCI/JCI jointly and severally liable for millions of dollars stemming from environmental contamination at the property from 1967 through 1991. CVY had a clear contractual duty

As explained in BCI/JCI's Supplement to Response and Objection to Proposed Order Approving Settlement Agreement (Doc. # 508), the cross-claim against CVY is for contractual defense and indemnity, rather than for statutory contribution, and is not affected by the contribution bar.
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to defend BCI/JCI with respect to these claims, which it breached. BCI/JCI have expended substantial legal fees and costs in defending against and ultimately settling those claims. BCI/JCI are now entitled to recover those fees and costs from CVY via their cross-claim, and BCI/JCI are ready to have their day in Court on these issues. 6. The issue of whether CVY's duty to defend was triggered by Plaintiffs'

Complaint has not been finally decided by this Court (or the State Court.) Boulder Cleaners takes the position ­ consistent with settled Colorado law -- that CVY's duty to defend is triggered by what is contained within the four corners of Plaintiffs' Complaint. See, e.g., Compass Ins. Co. v. City of Littleton, 984 P.2d 606, 613 (Colo. 1999); Hecla Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083, 1086 (Colo. 1991). 7. Because Plaintiffs alleged in their Complaint that BCI/JCI was jointly and

severally liable with CVY/JOS for contamination at the site from 1967 forward, CVY's duty to defend was unquestionably triggered by Plaintiffs' Complaint. CVY breached the duty to defend by failing to accept BCI/JCI's tender of its defense. Faced with the potential for joint and several liability for millions of dollars, or an Order to clean up the property, and mounting legal fees, BCI/JCI determined its interests were best served by the early settlement it reached with Plaintiffs in 2002. 8. By failing to defend BCI/JCI prior to the settlement, CVY has lost the right to

argue that any or all of the money BCI/JCI paid in settlement pertained to contamination occurring after 1991. See, Burlington Northern R.R. Corp. v. Stone Container Corp., 934 P.2d 902, 906-07 (Colo. App. 1997) (to be entitled to indemnity after failure to defend, party need only show that underlying claim was settled in good faith and reasonably). Thus, CVY is responsible for both BCI/JCI's defense and settlement costs. 3

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9.

Contrary to established Colorado precedent (see, e.g., cases supra), CVY

contends that the duty to defend and indemnify turns on the apportionment of the parties' actual liability under CERCLA. CVY contends there is no duty to defend or indemnify absent a showing that CVY's predecessor, Purus, Inc., contaminated the property prior to September 1991, and that BCI/JCI's defense and settlement costs related solely to the preSeptember 1991 contamination by Purus, Inc. 10. Because of the stays in this case and the State Court case, no Court has yet

ruled on the issue of whether the timing of the contamination, or the allocation of settlement dollars, has any bearing on CVY's duty to defend (and indemnify) BCI/JCI. If this Court rules, consistent with Colorado precedent, that these issues are immaterial to CVY's duty to defend and indemnify, the actual issues remaining for trial will be very limited. 11. A ruling on this dispositive legal issue in advance of trial would significantly

benefit judicial economy, preserve the juror's time, and conserve the Court's resources. In the absence of such a ruling, the extensive presentation of evidence concerning the cause, timing, nature and extent of the perchloroethylene releases at the north Boulder location will likely be required. WHEREFORE, Cross-Plaintiffs Boulder Cleaners, Inc. and John's Cleaners, Inc., respectfully seek from the Court an Order adopting the schedule for briefing dispositive motions requested herein. DATED this 24th day of October, 2007. Respectfully submitted,

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s/ Scott Jurdem Scott Jurdem, No. 7840 BUCHANAN, JURDEM & CEDERBERG, P.C. Eighteenth Street Atrium 1621 18th Street, Suite 260 Denver, Colorado 80202 Telephone: (303) 297-2277 Facsimile: (303) 297-2233 E-Mail: [email protected] [email protected] ATTORNEYS FOR CROSS-PLAINTIFFS BOULDER CLEANERS, INC. & JOHN'S CLEANERS, INC. CERTIFICATE OF SERVICE I hereby certify that on October 24, 2007, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: Max K. Jones , Jr [email protected],[email protected] Scott Jurdem [email protected],[email protected] C. Michael Montgomery [email protected],[email protected],[email protected] Jonathan William Rauchway [email protected],[email protected] Laura J. Riese [email protected],[email protected] s/ Susan M. Avery Susan M. Avery BUCHANAN, JURDEM & CEDERBERG , P.C. 1621 18th Street, Suite 260 Denver, CO 80202 Telephone: (303) 297-2277 Facsimile: (303) 297-2233 E-Mail: [email protected]

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