                                                                                  FILED
                                                                      United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                          Tenth Circuit

                             FOR THE TENTH CIRCUIT                            July 13, 2020
                         _________________________________
                                                                          Christopher M. Wolpert
                                                                              Clerk of Court
 CANYON SPRINGS AT SOARING
 EAGLES TOWNHOME OWNERS
 ASSOCIATION, INC., a Colorado
 corporation,

       Plaintiff - Appellant,
                                                             No. 19-1386
 v.                                             (D.C. No. 1:18-CV-01811-WJM-KMT)
                                                              (D. Colo.)
 COUNTRY MUTUAL INSURANCE
 COMPANY,

       Defendant - Appellee.
                      _________________________________

                             ORDER AND JUDGMENT *
                         _________________________________

Before TYMKOVICH, Chief Judge, BRISCOE and BACHARACH, Circuit Judges.
                 _________________________________

      This is an insurance dispute premised on diversity jurisdiction. The insured,

Canyon Springs at Soaring Eagles Townhome Owners Association, Inc. (“Canyon

Springs”), appeals from a district court order that entered summary judgment in favor of




      *
        After examining the briefs and appellate record, this panel has determined
unanimously to honor the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
submitted without oral argument. This order and judgment is not binding precedent,
except under the doctrines of law of the case, res judicata, and collateral estoppel. It
may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1
and 10th Cir. R. 32.1.
the insurer, Country Mutual Insurance Company (“Country Mutual”). Exercising

appellate jurisdiction under 28 U.S.C. § 1291, we affirm.

                                       BACKGROUND

       In June 2016, a hailstorm damaged thirty-one townhomes managed by Canyon

Springs. Country Mutual estimated that total replacement costs for damage to the roofs,

siding, doors, and windows would be $1,031,295.13 (“Comprehensive Estimate”). Of

that figure, the estimated cost for repairing the roofs was $758,634.45. Canyon Springs

repaired only the roofs, spending $761,911.74. Both the estimated and the actual costs of

the roof repairs came in under the insurance policy’s deductible of $789,297.12.

       Country Mutual “issued payment for the actual cash value of the damaged

property.” Aplt. App., Vol. I at 36. But when Country Mutual refused Canyon Springs’

demand to “release recoverable depreciation on the roofing portion of the claim,” id. at

16, Canyon Springs sued Country Mutual in federal district court for breach of contract,

bad faith, and unreasonable delay/denial of insurance benefits. According to Canyon

Springs, its “requested payment for the holdback depreciation applicable to the roofs . . .

total[e]d $128,907.25.” Id. at 27. 1


       1
          The term “holdback depreciation” generally refers to the cost of repairs that
exceed the property’s actual cash value at the time of the loss. See, e.g., Lytle v. Country
Mut. Ins. Co., 41 N.E.3d 657, 662 (Ill. App. 2015). Canyon Springs calculates holdback
depreciation by first subtracting the deductible from the Comprehensive Estimate,
arriving at a figure of $241,998.01. See Aplt. Opening Br. at 15. Canyon Springs then
identifies Country Mutual’s total “actual cash value” payment as $61,675.08, which,
according to Canyon Springs, “leav[es] the balance as solely holdback depreciation.” Id.
But subtracting that “actual cash value” payment from $241,998.01 does not result in
“the depreciation amount for the roofs ($128,907.25)” that Canyon Springs claims. Id.
Nevertheless, it is unnecessary for us to determine precisely how Canyon Springs
                                             2
       Canyon Springs filed a motion for partial summary judgment on its breach of

contract claim, arguing that “because [it] actually repaired the damaged roofs, Country

Mutual [could] no longer maintain its deduction of depreciation for those repairs.” Id. at

37. Country Mutual filed a cross-motion for summary judgment on all of Canyon

Springs’ claims, arguing that “[b]ecause [Canyon Springs] did not complete repairs for

non-roof items, and because the actual cost of repairs for the roofs w[as] less than the

deductibles, no additional amounts [were] owed.” Id. at 272. The district court agreed

with Country Mutual and entered summary judgment in its favor.

                                         DISCUSSION

       We review de novo the district court’s grant of summary judgment. Knopf v.

Williams, 884 F.3d 939, 946 (10th Cir. 2018). Summary judgment is required “if the

movant shows that there is no genuine dispute as to any material fact and the movant is

entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).

       This case turns on the interpretation of the insurance policy’s Replacement Cost

endorsement. In relevant part, that endorsement provides that Country Mutual

       will determine the value of Covered Property . . . [a]t replacement cost
       without deduction for depreciation, subject to the following:
       (a)    [Country Mutual] will pay the cost to repair or replace, after
              application of the deductible(s) and without deduction for
              depreciation, but no more than the least of . . . .
              (i)   The Limit of Insurance . . . ;
              (ii)  The cost to replace . . . with other [similar] property . . . ; or
              (iii) The amount that [the insured] actually spend[s] that is
                    necessary to repair or replace the . . . property.
              ...

calculates its $128,907.25 figure, given our conclusion that no holdback depreciation is
available.
                                               3
       ...
       (c)    [Country Mutual] will not pay on a replacement cost basis for any
              loss or damage:
              (i)     Until the lost or damaged property is actually repaired or
                      replaced; and
              (ii)    Unless the repairs or replacements are made as soon as reasonably
                      possible after the loss or damage.

Aplt. App., Vol. I at 135-36 (emphasis added; internal quotation marks omitted).

       Like the district court, we conclude that the Replacement Cost endorsement is

clear in how it calculates Country Mutual’s liability for loss or damage. See Lincoln Gen.

Ins. Co. v. Bailey, 224 P.3d 336, 339 (Colo. App. 2009) (“[I]f insurance policies are clear

and unambiguous, they require no construction or interpretation and are to be enforced as

written.”), aff’d, 255 P.3d 1039 (Colo. 2011). Specifically, the endorsement starts with

the “cost to repair or replace” and then applies the deductible but not depreciation. Here,

the $761,911.74 repair/replacement cost minus the $789,297.12 deductible results in a

negative number. 2 In other words, the repair/replacement cost did not exceed the

deductible. Thus, the calculation ends, as there is no compensable repair/replacement

cost. See Aplt. App., Vol. I at 133 (Wind or Hail endorsement providing that Country

Mutual “will not pay for loss or damage until the amount of loss or damage exceeds the

Deductibles”).

       Canyon Springs argues, however, that the cost of repairing the roofs is not

relevant. It maintains that it should prevail because subtracting the deductible from the

Comprehensive Estimate ($1,031,295.13) results in a positive number from which to


       2
        Even if the estimated cost to repair just the roofs is used ($758,634.45), the
result upon applying the deductible is negative.
                                             4
derive holdback depreciation for the roofs. But Canyon Springs does not identify

language in the policy that supports its position. Indeed, the Replacement Cost

endorsement uses “actual[ ]” repairs/replacement to both trigger its obligation to pay on a

replacement-cost basis and to limit how much it pays. Id. at 135-36. Clearly, the

Comprehensive Estimate includes roof and non-roof items, and it is not based on any

actual repairs or replacements.

       We conclude, based on the unambiguous terms of the insurance policy, that

Country Mutual is not liable for holdback depreciation. Cf. Lytle v. Country Mut. Ins.

Co., 41 N.E.3d 657, 662 (Ill. App. 2015) (holding that the insured was “not entitled to

reimbursement for the depreciation holdback because” there was no “actual[ ] . . .

pecuniary loss”). Summary judgment is therefore appropriate on all of Canyon Springs’

claims for relief.

                                      CONCLUSION

       We affirm the district court’s judgment.
                                             Entered for the Court


                                             Timothy M. Tymkovich
                                             Chief Judge




                                             5
