Follow Up on Continental Western v. Shay Construction

In a post on February 2, 2012, this blog discussed the case of Continental Western Insurance Company v. Shay Construction, Inc., 805 F.Supp.2d 1125 (D. Colo. 2011). Recently the Court ruled on two Motions to Reconsider filed by Defendants Milender White and Shay Construction. 

Procedurally, the Motions to Reconsider were ruled on by the Honorable William J. Martinez, because the day after the motions were filed the action was reassigned to Judge Martinez. In the short analysis of the Motion to Reconsider, the court leaned on Judge Walker D. Miller’s ruling on the summary judgment and his analysis of the (j)(5) and (j)(6) exclusions.

As a quick refresher regarding the grant of summary judgment, Judge Miller agreed with Continental Western’s argument that the asserted claims were excluded under the “damage to property” exclusion. The policy’s exclusions state: “(j) Damage to Property . . . (5) that particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the ‘property damage’ arises out of those operations; or (6) that particular part of any property that must be restored, repaired or replaced because ‘your work’ was incorrectly performed on it.” Judge Miller found that both exclusions (j)(5) and (6) applied to both Shay’s allegedly defective work. Accordingly, Judge Miller found that the policy did not cover claims asserting breach of contract that do not involve property damage and the policy excluded the claims alleging property damage under exclusions (j)(5) and (6).

Based on the prior findings of Judge Miller, the court upheld the prior ruling granting summary judgment and denied the motions for reconsideration. The court found that while the defendants arguments for reconsideration of the (j)(5) and (j)(6) exclusions were viable, Judge Miller’s previous findings were reasonable and were not clearly erroneous. Without rising to the threshold of clearly erroneous, Judge Miller’s order granting summary judgment cannot be overturned. Thus, the court denied the Motions for Reconsideration, upholding Judge Miller’s prior order, but failing to discuss HB 10-1394 or the applicability thereof.

The ongoing determination of the applicability of HB 10-1394 continues and in the coming weeks this Blog will post articles regarding more cases which have dealt with HB 10-1394 and its codified statute C.R.S. §13-20-808.

For additional information regarding Colorado construction litigation, please contact David M. McLain at (303) 987-9813 or by e-mail at


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