Sherman Act Conspiracy Allegations Do Not Plead an “Occurrence” Under Colorado CGL Policies (No Duty to Defend)

Case: Chaussee v. Auto-Owners Insurance Company, No. 25-1120 (10th Cir. May 21, 2026) (Order and Judgment; nonprecedential but citable for persuasive value).

Governing law: Colorado insurance law (diversity).

1. Introduction

This appeal asked whether Auto-Owners Insurance Company (“AOI”) owed a duty to defend Calvin Chaussee II, Annette Chaussee, and Video Productions, Inc. (“VPI”) (collectively, “the Chaussees”) under a commercial general liability (“CGL”) policy when they were sued in federal court by Van Sant & Co. for antitrust violations under the Sherman Act.

The underlying lawsuit alleged that the Chaussees and related actors used municipal processes in Calhan, Colorado—specifically a 2016 code amendment and a 2018 ordinance—to exclude Van Sant from the long-term RV parking market and entrench Cadillac Jack’s (an RV park owned/operated by the Chaussee network) as the monopolist. The coverage dispute turned on whether the complaint alleged “property damage” caused by an “occurrence,” defined as an “accident,” and whether the allegations necessarily described intentional, non-accidental conduct.

The district court held AOI had no duty to defend; the Tenth Circuit affirmed on the ground that the complaint alleged only intentional conspiratorial conduct, which cannot be an “accident” and therefore cannot be an “occurrence.”

2. Summary of the Opinion

  • Holding: AOI had no duty to defend because the Van Sant complaint alleged only intentional conspiratorial conduct under the Sherman Act; therefore, there was no “occurrence” (no “accident”) as required by the policy for coverage.
  • Key coverage rationale: Under Colorado law, an “accident” is “unexpected and unintended” from the insured’s standpoint; Sherman Act conspiracy allegations, as pleaded here, inherently describe deliberate conduct designed to cause the alleged competitive harm.
  • Procedural ruling: The court declined to consider whether facts outside the complaint could be used to assess the duty to defend because the argument was inadequately briefed and not passed upon below.

3. Analysis

3.1 Precedents Cited

A. Duty-to-defend framework under Colorado law

  • Apartment Inv. & Mgmt. Co. (AIMCO) v. Nutmeg Ins. Co.: The court relied on AIMCO for the proposition that the duty to defend is determined by comparing the underlying complaint’s allegations to the policy’s terms, and that Colorado follows the “complaint rule.” This anchored the analysis to the four corners of the Van Sant pleading (absent a preserved/decided exception).
  • Hecla Min. Co. v. N.H. Ins. Co.: Hecla supplied multiple controlling principles: plain-meaning interpretation; ambiguity construed against the insurer; the duty to defend being broader than indemnity; and—most importantly—the definition of “accident” in liability coverage as “unexpected and unintended,” and the “expected or intended” concept focusing on the insured’s knowledge/intent. Hecla also provided the insurer’s burden: no duty to defend if the allegations are “solely and entirely” within exclusions / no legal or factual basis for indemnity.
  • Compass Ins. Co. v. City of Littleton and Chacon v. Am. Fam. Mut. Ins. Co.: These cases reinforced Colorado’s plain-and-ordinary-meaning approach to policy terms and the breadth of the defense obligation relative to indemnity—yet the court used them to emphasize that breadth does not extend to claims that never plausibly allege a covered “occurrence.”
  • KF 103-CV, LLC v. Am. Fam. Mut. Ins. Co.: KF 103-CV was used for two points: (1) the “expected or intended” standard (damages are expected/intended if the insured intended them or “knew [they] would flow directly and immediately” from the intentional act), and (2) that duty-to-defend analysis turns on factual allegations, not labels of legal claims.
  • Gerrity Co. v. CIGNA Prop. & Cas. Ins. Co.: Cited (via KF 103-CV) for the rule that factual allegations, not causes of action, govern the defense duty inquiry—an important concession the court accepted, but found unhelpful given the intentional nature of the pleaded facts.
  • City of Johnstown v. Bankers Stand. Ins. Co.: Quoted through Hecla to support the intent/knowledge focus—i.e., whether harm is the natural result of voluntary acts and whether the insured knew damages would flow directly and immediately.
  • Plitt et al., 9 Couch on Insurance § 126:27: Secondary authority reinforcing the same idea: “accident” is assessed from the insured’s standpoint, and harm that is the natural result of intentional conduct is not accidental.

B. Sherman Act conspiracy authorities shaping how the allegations are understood

  • Lenox MacLaren Surgical Corp. v. Medtronic, Inc. and Salco Corp. v. Gen. Motors Corp., Buick Motor Div.: Used to describe the elements of Sherman Act conspiracy claims—especially the requirement of concerted action, and (for Section 2 conspiracy to monopolize) the centrality of specific intent. This matters because, in the court’s view, those elements are incompatible with “accidental” conduct when the complaint pleads purposeful exclusion and monopoly-seeking.
  • Monument Builders of Greater Kan. City, Inc. v. Am. Cemetery Ass'n of Kan., City of Tuscaloosa v. Harcos Chems., Inc., and W. Penn Allegheny Health Sys., Inc. v. UPMC: Cited for the threshold requirement of an agreement to restrain trade and the “agreement/concerted action” nature of antitrust conspiracy, reinforcing that the pleaded wrongdoing is deliberate coordination rather than negligent misadventure.
  • Am. Tobacco Co. v. United States and Torodov v. DCH Healthcare Auth.: Invoked to explain that conspiracies can be proven by circumstantial evidence and that no formal agreement is required; this supported the court’s rejection of the insureds’ argument that the complaint’s failure to plead each Chaussee’s specific acts undermined intentionality. The court treated the conspiracy narrative—shared interests, unity of purpose, and co-conspirators’ acts—as sufficient to plead intentional, coordinated conduct.

C. Appellate procedure and waiver

  • United States v. Clay and United States v. Cooper: Cited for the rule that inadequately briefed arguments in an opening brief are waived—supporting the court’s refusal to entertain an underdeveloped request to consider extra-complaint facts.
  • Fisher v. Okla. Health Care Auth.: Used for the principle that appellate courts generally do not consider issues not passed upon below—another independent reason the court declined to reach the “facts outside the complaint” question.

D. Summary judgment standards (contextual, not outcome-driving)

  • Grissom v. Roberts, Anderson v. Liberty Lobby, Inc., and Sartor v. Ark. Gas Corp.: Provided the de novo review and Rule 56 framework; the dispositive issues were legal (policy interpretation and complaint-to-policy comparison), making summary judgment an appropriate vehicle.

3.2 Legal Reasoning

  1. Start with the policy’s coverage grant: The policy covered “property damage” caused by an “occurrence,” defined as an “accident.” Because “accident” was undefined, Colorado law supplied meaning: unexpected and unintended from the insured’s standpoint (Hecla).
  2. Apply Colorado’s complaint rule: The court compared only the Van Sant complaint’s allegations to the policy, asking whether, if sustained, they could impose covered liability (AIMCO; Hecla).
  3. Characterize the pleaded conduct: The complaint alleged the Chaussee network deliberately orchestrated municipal enactments (the 2016 RV Amendment and the 2018 RV Ordinance) to foreclose competition, exempt themselves via “grandfathering,” and monopolize the market—conduct framed as knowing and intentional.
  4. Conclude “no accident,” therefore “no occurrence”: Because the alleged harm was presented as the intended and natural product of a deliberate anticompetitive plan, it was not accidental. Without an occurrence, the coverage grant was never triggered, so AOI owed no defense.
  5. Reject the “no specific acts by these insureds” defense argument: The insureds argued the complaint did not plead what Calvin, Annette, or VPI specifically did or what they knew. The court answered that Sherman Act conspiracy pleading turns on agreement/concerted action and can rely on circumstantial evidence; the complaint’s allegation that the Chaussees were part of the conspiracy sufficed to plead intentional, non-accidental conduct as to them.
  6. Decline to reach extra-complaint evidence theory: The court refused to decide whether judicially noticeable facts outside the complaint can be considered because the issue was not decided below and was inadequately briefed on appeal (Clay; Cooper; Fisher).

3.3 Impact

  • Coverage for antitrust defense under CGL policies: The opinion is a strong (though nonprecedential) signal that, under Colorado’s “occurrence/accident” framework, complaints pleading intentional market-exclusion conspiracies under the Sherman Act will frequently fail to trigger a CGL duty to defend—especially when the complaint is written in “knowing,” “deliberate,” “designed to exclude” terms.
  • Drafting incentives in underlying complaints: Plaintiffs seeking to preserve defendants’ insurance-funded defense may (where supportable) plead alternative theories sounding in negligence or unintended consequences. Conversely, antitrust complaints often emphasize intent and agreement; this opinion shows that emphasis can foreclose defense coverage arguments premised on “accident.”
  • Insureds’ tender strategy: Insureds facing intentional-tort business claims should anticipate that a pure-intent pleading may defeat defense tenders. If an insured intends to argue for an exception to the complaint rule (e.g., judicial notice / known facts), the argument must be developed early and preserved in the district court with specificity.
  • Procedural lesson on preserving “complaint rule” exceptions: The court’s waiver and “not passed upon below” discussion underscores that any attempt to expand the duty-to-defend record beyond the complaint must be properly presented, supported, and litigated in the trial court to be viable on appeal.

4. Complex Concepts Simplified

  • Duty to defend vs. duty to indemnify: Defending means paying for lawyers to fight the lawsuit; indemnifying means paying a judgment/settlement. The duty to defend is broader, but it still requires at least a plausible fit between the complaint’s allegations and the policy’s coverage.
  • “Occurrence” and “accident” in a CGL policy: An “occurrence” typically means an “accident.” Under Colorado law (as applied here), intentional conduct aimed at producing the alleged harm is not an accident—even if the insured disputes the allegations.
  • “Complaint rule”: Colorado generally decides the defense duty by looking at the complaint and the policy—no mini-trial about what “really happened.” This case stayed within that rule and refused to expand the record on appeal.
  • Antitrust “conspiracy”: A Sherman Act conspiracy claim is not about a single actor’s mistake; it is about an agreement (explicit or inferred) among multiple actors to restrain trade or monopolize. The court treated that as inherently deliberate conduct as pleaded here.
  • Waiver for inadequate briefing: Appellate courts require developed arguments with citations and explanation. Vague references to extra facts, without specifying them or explaining how they change the legal result, can be treated as waived.

5. Conclusion

Chaussee v. Auto-Owners Insurance Company reinforces a practical coverage rule under Colorado law: when the underlying complaint pleads only intentional, coordinated anticompetitive conduct—here, Sherman Act conspiracies aimed at excluding a competitor—there is no “accident,” hence no “occurrence,” and a CGL insurer has no duty to defend. The decision also highlights an appellate preservation point: efforts to invoke facts outside the complaint to create a defense duty must be clearly developed and decided in the district court and fully briefed on appeal.