COLORADO COURT OF APPEALS                                     2017COA29


Court of Appeals No. 15CA2039
Jefferson County District Court No. 14CV32279
Honorable Christopher J. Munch, Judge


City of Lakewood, Colorado,

Plaintiff-Appellant and Cross-Appellee,

v.

Safety National Casualty Corporation,

Defendant-Appellee and Cross-Appellant.


                            JUDGMENT AFFIRMED

                                  Division VII
                          Opinion by JUDGE HARRIS
                    Lichtenstein and Richman, JJ., concur

                          Announced March 9, 2017


Sherman & Howard, L.L.C., Christopher R. Mosley, Jennifer Kirk Morris,
Denver, Colorado, for Plaintiff-Appellant and Cross-Appellee

Treece Alfrey Musat P.C., Paul E. Collins, Carol L. Thomson, Denver, Colorado,
for Defendant-Appellee and Cross-Appellant
¶1    The City of Lakewood (City) has an insurance policy that

 covers losses arising from the workers’ compensation or employers’

 liability laws of any state on account of bodily injury to an

 employee.

¶2    After a City police officer was killed by friendly fire, his widow

 filed a lawsuit under 42 U.S.C. § 1983 (2012), alleging that the City

 and various fellow officers had violated the deceased officer’s rights

 under the Federal Constitution. The City sought indemnification

 for its own defense costs and those of the officers named in the

 lawsuit, which the City has an independent statutory duty to cover.

 The insurance company, Safety National Casualty Corporation,

 denied coverage.

¶3    The district court concluded that a § 1983 claim does not arise

 under an employer liability law of any state and granted summary

 judgment for the insurance company. We agree. And while the

 district court did not reach the separate question of whether the

 officers’ defense costs are covered by the policy, we conclude that

 they are not. Accordingly, we affirm the summary judgment in

 favor of the insurance company.




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                            I.   Background

¶4     The insurance company issued a “Specific Excess Workers’

 Compensation and Employers’ Liability Insurance Agreement” to

 the City. The policy indemnified the City, as an employer, for “Loss

 sustained by the EMPLOYER because of liability imposed upon the

 EMPLOYER by the Workers’ Compensation or Employers’ Liability

 Laws of” Colorado or other states, “on account of bodily injury by

 accident” to “Employees of the EMPLOYER” engaged in job-related

 activities.

¶5     “Loss” included two categories of reimbursable costs. First,

 the City could recoup from the insurance company any “actual

 payments, less recoveries, legally made by the EMPLOYER to

 Employees and their dependents in satisfaction of: (a) statutory

 benefits, (b) settlements of suits and claims, and (c) awards and

 judgments.” Second, the City could recoup its “Claim Expenses,”

 which is defined as the City’s own litigation expenses.

¶6     During the term of the policy, one of the City’s police officers

 was accidentally shot and killed by a fellow officer while both were

 on duty. The slain officer’s widow later filed a lawsuit under 42

 U.S.C. § 1983, alleging that the fellow officer, two of his supervising


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 officers, and the City had violated her husband’s federal

 constitutional rights by subjecting him to the unreasonable use of

 deadly force.

¶7    The City sought indemnification under the policy for the costs

 of its own defense and the defense of the individual officers. When

 the insurance company denied the claim, the City filed a

 declaratory judgment action.

¶8    On cross-motions for summary judgment, the district court

 reasoned that § 1983 did not qualify as an “employers’ liability law”

 of the State of Colorado or any other state, and therefore it

 concluded that the policy did not cover the City’s losses incurred in

 connection with its defense of the lawsuit. The court did not

 address the City’s separate claim that it suffered additional losses

 because of liability imposed by sections 24-10-110 and 29-5-111,

 C.R.S. 2016, which require the City to cover defense costs for its

 peace officers.

                            II.   Discussion

¶9    On appeal, the City contends that the district court erred in

 granting summary judgment to the insurance company because the




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  policy unambiguously covers all defense costs incurred by the City

  in connection with the § 1983 lawsuit.

        A.   Standard of Review and Principles of Interpretation

¶ 10   We review a trial court’s decision granting summary judgment

  de novo. Oasis Legal Fin. Grp., LLC v. Coffman, 2015 CO 63, ¶ 30.

  Summary judgment is appropriate only if the pleadings and

  supporting documents demonstrate no genuine issue of material

  fact and the moving party is entitled to judgment as a matter of law.

  C.R.C.P. 56(c); Laughman v. Girtakovskis, 2015 COA 143, ¶ 8. The

  interpretation of an insurance policy presents a question of law

  and, therefore, is appropriate for summary judgment. Mt. Hawley

  Ins. Co. v. Casson Duncan Constr., Inc., 2016 COA 164, ¶ 3.

¶ 11   An insurance policy is “merely a contract that courts should

  interpret in line with well-settled principles of contract

  interpretation.” Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74

  P.3d 294, 299 (Colo. 2003). Accordingly, words should be given

  their plain and ordinary meaning, unless contrary intent is

  evidenced in the policy. Id.; see also Chacon v. Am. Family Mut. Ins.

  Co., 788 P.2d 748, 750 (Colo. 1990). Provisions of the policy should




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  be read as a whole, rather than in isolation. Simon v. Shelter Gen.

  Ins. Co., 842 P.2d 236, 239 (Colo. 1992).

        B.    Reimbursement of the City’s Own Costs of Defense

¶ 12   There is no dispute that the City has suffered a loss as defined

  by the policy. A “Loss” for purposes of coverage includes the City’s

  “Claim Expenses,” defined as its own costs of defense. The question

  is whether the loss is a result of liability imposed on the City by

  “Employers’ Liability Laws” of Colorado or “other State(s).”

¶ 13   The term “Employers’ Liability Laws” is not defined in the

  policy. But courts and commentators generally agree that an

  employer liability policy is designed to cover an employer’s liability

  to employees for work-related injuries that do not fall within the

  exclusive remedy provisions of workers’ compensation statutes.

  See, e.g., TKK USA, Inc. v. Safety Nat’l Cas. Corp., 727 F.3d 782,

  791 (7th Cir. 2013) (Employer liability insurance policies “fill ‘gaps

  in workers’ compensation law that sometimes allow an employee to

  sue his employer in tort, bypassing the limits on workers’

  compensation relief.’” (quoting Hayes Lemmerz Int’l, Inc. v. Ace Am.

  Ins. Co., 619 F.3d 777, 779 (7th Cir. 2010))); Devine v. Great Divide

  Ins. Co., 350 P.3d 782, 786 (Alaska 2015) (stating that employers’


                                     5
  liability insurance provides coverage for claims that do not come

  within workers’ compensation statutes); 7B John Appleman,

  Insurance Law and Practice § 4571, at 2 (Walter F. Berdal ed., 1979)

  (“[W]orkers’ compensation is routinely written in combination with

  an employer’s liability policy to provide protection for those

  situations where [workers’] compensation may not apply and thus

  avoid a gap in protection because employee claims subject to

  workers’ compensation law are generally excluded in other types of

  liability policies.”).

¶ 14    The City argues that the § 1983 municipal liability claim must

  be covered by the employers’ liability portion of the policy because it

  is a claim based on work-related injuries that falls outside the

  ambit of the workers’ compensation laws. But this overstates the

  scope of the coverage under the policy.

¶ 15    An “employers’ liability law” cannot mean any statutory or

  common law claim that might subject the employer to liability

  because of an employee’s bodily injury. If the insurance company

  had intended to provide such broad coverage, it would not have

  restricted coverage to claims arising under workers’ compensation

  or employers’ liability laws; it would simply have agreed to


                                     6
  reimburse the City for any losses it became obligated to pay on

  account of bodily injury by accident to an employee. The City’s

  construction reads any limitation out of the contract, a result we

  cannot endorse. In construing a contract, we must give effect to all

  of its words and provisions so that none are rendered meaningless.

  Copper Mountain, Inc. v. Indus. Sys., Inc., 208 P.3d 692, 697 (Colo.

  2009).

¶ 16   But if not all claims for employees’ injuries fall within the term

  “employers’ liability laws,” which claims does the policy cover?

  Applying the pertinent law, we conclude that employers’ liability

  laws are workers’ compensation-type claims: they include employee

  injury statutes that have displaced common law claims —

  occupational disease laws, for example — as well as employer

  liability-type common law tort claims that might fall outside the

  relevant statutes. See TKK, 727 F.3d at 788 (rejecting insurer’s

  argument that “Employers’ Liability Laws” included only statutes

  that displace the common law, and reading the term to include

  common law claims); Erie Ins. Prop. & Cas. Co. v. Stage Show Pizza,

  JTS, Inc., 553 S.E.2d 257, 262 (W. Va. 2001) (finding employers’

  liability policy covers an “action for common law damages” that is


                                    7
  not barred by workers’ compensation laws). By the policy’s plain

  terms, though, the common law claims must arise under the laws of

  Colorado or “other State(s).”

¶ 17    Thus, the City’s claim for reimbursement of its costs incurred

  in defending the § 1983 lawsuit is covered only if § 1983 qualifies as

  a state “employers’ liability law,” meaning it is either a state statute

  that displaces an employee’s common law claims for workplace

  injuries, or it constitutes a state common law claim related to, but

  falling outside, a workers’ compensation scheme. We conclude that

  it is neither.

¶ 18    Section 1983 is not a workers’ injury statute that displaces

  common law claims with a new cause of action. Indeed, the statute

  is not itself the source of any substantive rights, Espinoza v. O’Dell,

  633 P.2d 455, 460 (Colo. 1981); rather, it serves as a statutory

  vehicle to provide remedies for the deprivation of rights granted by

  the Federal Constitution or by other federal laws. Mosher v. City of

  Lakewood, 807 P.2d 1235, 1238 (Colo. App. 1991).

¶ 19    Nor could § 1983 be construed as a “common law” claim. The

  statute allows a plaintiff to vindicate rights conferred under the

  Federal Constitution and federal statutes, not under the common


                                     8
  law. Assertion of a common law claim “is not only not required, it is

  not sufficient to state a claim under § 1983.” Meier v. McCoy, 119

  P.3d 519, 526 (Colo. App. 2004).

¶ 20   In any event, as the City acknowledges, § 1983 is not a law of

  Colorado or any other state. Still, it insists that fact is not an

  obstacle to coverage because federal laws are included in the

  policy’s definition of “state” laws. We disagree.

¶ 21   Under the policy, “State” means “any state, territory, or

  possession of the United States of America and the District of

  Columbia.” The City says that because the United States territories

  and the District of Columbia fall under the exclusive jurisdiction of

  the federal government, see U.S. Const. art. I, § 8, cl. 17 (Congress

  has exclusive jurisdiction over District of Columbia); U.S. Const.

  art. IV, § 3, cl. 2 (Congress has exclusive jurisdiction over United

  States territories), these entities are governed exclusively by federal

  law and, therefore, their inclusion in the definition of “State”

  demonstrates that “state” law encompasses federal law. The

  argument stumbles at the second step.

¶ 22   True, Congress has jurisdiction over the District of Columbia

  and all United States territories, but the United States Code is not


                                     9
  the exclusive law that applies. Puerto Rico, for example, has its

  own constitution and its own civil and criminal code. See Calero-

  Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 671 (1974).

  Included within its code is a workers’ compensation statute. See

  P.R. Laws Ann. tit. 11, §§ 1-42 (2016) (Compensation System for

  Work-Related Accidents Act); see also D.C. Code §§ 32-1501

  to -1545 (2016) (workers’ compensation). Thus, we interpret the

  inclusion of the District of Columbia and United States territories

  within the definition of “States” as an acknowledgment that, for

  purposes of workers’ compensation and employers’ liability laws,

  those entities function essentially as independent states.

¶ 23   Moreover, had the insurance company intended to cover

  claims arising under federal law, it is unlikely that it would have

  expressed that intent by reference to the District of Columbia or

  United States territories. More likely, the policy would simply say

  that coverage is provided for loss sustained by an employer because

  of liability imposed by workers’ compensation or employers’ liability

  laws of Colorado, any other state, or the United States. See Flores-

  Rosales v. United States, Nos. EP-08-CV-98-KC & EP-06-CR-1717-

  KC, 2009 WL 1783703, at *2 (W.D. Tex. June 3, 2009) (“The term


                                    10
‘laws of the United States’ unambiguously means federal

laws . . . .”); see also Grand Lodge A. O. U. W. of Okla. v. Hopkins, 52

P.2d 4, 12 (Okla. 1935) (“If appellant intended to reduce the term of

extended insurance on account of loans to the insured, it would

have been an easy matter to have so provided in the policy; and the

inference from its failure to do so is that it did not so intend.”).1

     We therefore conclude that the City’s defense costs, which

were sustained because of liability imposed as a result of the

widow’s § 1983 claim, did not arise from a state workers’

compensation or employers’ liability law and were not covered by

the policy.




1 The City’s argument that it had a reasonable expectation of
coverage is based on the same argument that the policy purported
to cover federal claims. For the reasons explained above, we
disagree that an ordinary insured would have construed the term
“Laws of [Colorado], or other State(s)” to mean federal law.
Accordingly, the doctrine of reasonable expectations does not apply
to extend coverage under the policy to the City’s litigation costs.
See Bailey v. Lincoln Gen. Ins. Co., 255 P.3d 1039, 1054 (Colo.
2011) (stating that under doctrine of reasonable expectations, even
if policy language is not technically ambiguous, it may be construed
in favor of coverage where the insured would reasonably believe
that claim is covered, but doctrine does not expand coverage on a
“general equitable basis” (quoting Johnson v. Farm Bureau Mut. Ins.
Co., 533 N.W.2d 203, 206 (Iowa 1995))).

                                    11
           C.   Reimbursement of the Officers’ Defense Costs

¶ 24   Next, the City contends it is entitled to reimbursement for

  amounts it paid to cover the fellow officers’ defense costs. The

  district court did not address this claim, but we may decide the

  issue without a remand because the scope of coverage presents a

  question of law subject to de novo review in any case. See Bd. of

  Cty. Comm’rs v. Colo. Oil & Gas Conservation Comm’n, 81 P.3d

  1119, 1124 (Colo. App. 2003).

¶ 25   Again, coverage turns on whether the City has suffered a

  defined loss that resulted from liability arising under a state

  employers’ liability law.

¶ 26   Under the Colorado Governmental Immunity Act, section

  24-10-110, a municipality is liable for the costs of defense of any of

  its employees where the claim against the employee arises out of

  injuries sustained from an act of that employee conducted during

  the course and scope of his employment. In addition, section

  29-5-111 requires a municipality to provide a defense for its peace

  officers to any civil action alleging a tort committed within the scope

  of their employment.




                                    12
¶ 27   Even if sections 24-10-110 and 29-5-111 qualify as employers’

  liability laws — an issue we do not decide — the City must have

  suffered a “loss” under the policy because of liability imposed by

  those statutes. The City says the indemnification payments to the

  fellow officers named in the widow’s § 1983 lawsuit qualify as a

  “loss” because those amounts constitute “actual payments . . . to

  Employees . . . in satisfaction of . . . statutory benefits.” We are not

  persuaded.

¶ 28   As an initial matter, if the policy was intended to cover

  third-party indemnification claims, it would likely have included

  express language to that effect. See, e.g., Clackamas Cty. v.

  Midwest Emp’rs Cas. Co., No. 07-CV-780-PK, 2009 WL 4916364, at

  *2 (D. Or. Dec. 14, 2009) (holding policy provided coverage to

  employer for defense costs paid to employees in connection with

  § 1983 lawsuit where policy expressly covered “[d]amages for which

  [the county is] liable to a third party by reason of a claim or suit

  against [the county] by that third party to recover the damages

  claimed against such third party as a result of injury to [the

  county’s] employee”); see also Cyprus, 74 P.3d at 299 (in construing




                                     13
  an insurance policy, courts may not add provisions to extend

  coverage beyond those contracted for).

¶ 29   In the absence of an actual third-party indemnification

  provision, the City attempts to shoehorn its indemnification

  payments into the definition of “loss,” but the resulting construction

  is counterintuitive and at odds with the plain language and obvious

  intent of the loss provision. Under the policy, “Loss” is defined as

  follows:

             (1) “Loss” – shall mean actual payments, less
             recoveries, legally made by the EMPLOYER to
             Employees and their dependents in
             satisfaction of: (a) statutory benefits, (b)
             settlements of suits and claims, and (c) awards
             and judgments. Loss shall also include Claim
             Expenses, paid by the Employer, as defined in
             Paragraph (2) of this Section. The term Loss
             shall not include the items specifically
             excluded by Paragraph (3) of this Section.

             (2) “Claim Expenses” – shall mean court
             costs . . . and the reasonable allocated costs of
             investigation, adjustment, defense, and
             appeal . . . of claims, suits or proceedings
             brought against the EMPLOYER under the
             Workers’ Compensation or Employers’ Liability
             Laws of [Colorado] or other State(s) . . . .

  Under the City’s reading of paragraph (1), “Loss” includes any

  payments made by the employer to any of its employees in



                                    14
  connection with an employers’ liability law, so long as the payment

  relates to some employee’s accidental injury. We reject that broad

  construction.

¶ 30   The policy provides the following definition of “Employee”:

             [A]s respects liability imposed upon the
             EMPLOYER by the Workers’ Compensation
             Law of any State, the word Employee shall
             mean any person performing work which
             renders the EMPLOYER liable under the
             Workers’ Compensation Law of [Colorado],
             which is the State of the injuries or
             occupational disease sustained by such
             person.

¶ 31   Under a narrow reading, this definition indicates that an

  “Employee” includes only persons performing work for which the

  employer is liable under the workers’ compensation law of Colorado,

  and not other employers’ liability laws, as those laws are not

  referenced in the definition. Thus, the City’s liability to the fellow

  officers, which does not arise under workers’ compensation laws of

  Colorado, is not covered.

¶ 32   But even under a broader reading, the definition makes clear

  that the term “Employee” refers to the injured employee, not to an

  employee potentially responsible for the injury. The policy defines

  “Employee” with respect to claims arising under workers’


                                     15
  compensation laws, and does not mention employers’ liability laws.

  If we apply the same definition of “Employee” to liability imposed

  under closely related employers’ liability laws, cf. Sullivan v. Indus.

  Claim Appeals Office, 22 P.3d 535, 538 (Colo. App. 2000)

  (“[D]efinitions of words used elsewhere in the same statute furnish

  authoritative evidence of legislative intent.”), the fellow officers still

  do not qualify as “Employees.” An “Employee” is the “person” who

  has “sustained” the “injuries or occupational disease.”

¶ 33   Moreover, only this definition of “Employee” gives effect to the

  phrase “less recoveries.” The policy limits reimbursable loss to

  “actual payments, less recoveries,” made by the employer to the

  employee in satisfaction of statutory benefits. We read the

  “recovery” contemplated by this provision as a reference to the

  requirement that a workers’ compensation claimant who recovers

  from a third-party tortfeasor must reimburse the employer or its

  insurer for any benefits paid. See Jorgensen v. Colo. Comp. Ins.

  Auth., 967 P.2d 172, 173 (Colo. App. 1998), aff’d, 992 P.2d 1156

  (Colo. 2000). If loss includes payments to non-injured employees,

  we are left to wonder about the meaning of the term “recoveries.”




                                      16
¶ 34   Finally, an interpretation that calls for the insurance company

  to reimburse the City for payments made to any of its employees

  under various indemnification statutes would transform a workers’

  compensation-employers’ liability policy into a third-party

  indemnification policy. We must avoid a construction that

  contradicts the clear intent of the policy to cover only workers’

  injury claims. See Atmel Corp. v. Vitesse Semiconductor Corp., 30

  P.3d 789, 792 (Colo. App. 2001) (“A contract must always be

  interpreted in light of the intentions of the contracting parties.”),

  abrogated on other grounds by Ingold v. AIMCO/Bluffs, L.L.C.

  Apartments, 159 P.3d 116 (Colo. 2007).

¶ 35   Thus, we conclude that “loss” means payments made by the

  City to the injured employee and his or her dependents. Under this

  definition, the City’s indemnification payments to the officers

  named in the lawsuit do not qualify as “losses” under the policy,

  and the City is not entitled to reimbursement from the insurance

  company.




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                           III.   Conclusion

¶ 36   The judgment is affirmed.2

       JUDGE LICHTENSTEIN and JUDGE RICHMAN concur.




  2In light of our disposition, we need not address the insurance
  company’s claim asserted on cross-appeal.

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