Background
Calvin and Annette Chaussee, along with their business entity Video Productions, Inc., owned an RV park in Calhan, Colorado. They also held positions in the local government, including mayor and trustee. A competitor, Van Sant and Company, owned a mobile home park and alleged that the Chaussees conspired to enact local ordinances that excluded Van Sant from the RV parking market. Van Sant sued the Chaussees under the Sherman Act for conspiracy in restraint of trade and conspiracy to monopolize. The Chaussees sought a defense from their insurer, Auto-Owners Insurance Company, but the insurer denied coverage, arguing the claims did not involve an accident or property damage caused by an occurrence. The district court granted summary judgment to the insurer, and the Chaussees appealed.
The court’s reasoning
The court applied Colorado law, which requires an insurer to defend if the allegations in the complaint, if sustained, would impose liability covered by the policy. The policy covered property damage caused by an occurrence, defined as an accident. The court found that the underlying antitrust complaint alleged that the Chaussees knowingly and intentionally conspired to exclude their competitor. Because conspiracy requires concerted action and specific intent to monopolize, the alleged harm was not accidental. The court concluded that the actions pled were not accidental and therefore did not constitute an occurrence under the policy. The court also declined to consider arguments regarding facts outside the complaint because they were inadequately briefed.
What it means going forward
Insurers in Colorado may deny the duty to defend in cases involving antitrust conspiracy claims where the complaint alleges intentional exclusion of competition, as such claims do not trigger coverage for accidental occurrences.
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