The Tenth Circuit finds an exception to Colorado's "eight corner" rule
The eight corner rule says that you compare the allegations of the complaint to the policy to determine the duty to defend. This works for most cases, but where the insurer is aware of other facts, those facts must also be considered in determining coverage.
In Apartment Investment and Management Company (AIMCO) v. Nutmeg Insurance Co., AIMCO had been sued in several actions based on the acts of one of AIMCO’s independent contractors. The trial court looked at each complaint separately and said there was no duty to defend, since the allegations either did not state facts which amounted to wrongful acts, or were otherwise excluded under the policy. The Tenth Circuit reversed, finding that the insurance company should have looked at all the allegations in all the complaints to determine if there was coverage. After examining the complaints taken together, the Tenth Circuit was satisfied they contained sufficient information to provide Nutmeg with reasonable notice that these suits “might fall within coverage of the policy,” Hecla, 811 P.2d at 1089. The Tenth Circuit also ruled that the exclusions did not apply to preclude coverage.
