2026-09-10 · Colorado · Courts

A Colorado condominium owners' association circulated a $15.5 million assessment demand its own directors knew was false, and lost its liability insurance for both defense and indemnity. The Tenth Circuit decided New Hampshire Insurance Co. v. TSG Ski & Golf, LLC, No. 23-1248, on February 24, 2025, in an opinion marked for publication — so it is binding precedent. Judge Hartz wrote for a unanimous panel.¹

This is the case to put in front of a board that is about to send an aggressive collection letter.

What the court held

Under Colorado law, a commercial general liability policy's knowledge-of-falsity exclusion for personal-and-advertising-injury coverage:

defeats the duty to defend even where the claims pleaded against the insureds did not require proof that the false statements were made knowingly — because the underlying complaint itself alleged the insureds knowingly published the falsehoods; and

defeats the duty to indemnify because the evidence at the underlying trial established that they knowingly published them.

The insureds' counterclaims for breach of contract and for common-law and statutory bad faith failed with the coverage, since those claims flow from the denial of coverage and must fail if coverage was properly denied.

The community and the arrangement

The Peaks is a mixed-use ski-in, ski-out condominium building in Mountain Village, Colorado — roughly 177 residential units, 14 commercial units and 26 penthouse units — operated as a hotel through a rental programme. The Peaks Owners Association manages the common elements, which the unit owners hold as tenants in common and fund through annual assessments.

From 2009 to mid-2015 one entity, Telluride Resort & Spa, LLC, owned all residential and commercial units; the penthouses were separately owned. Telluride paid through a “True-Up Process”: each year the board allocated about 80% of budgeted common-area expenses to Telluride, which owned about 80% by square footage, and 20% to the penthouse owners; the penthouse owners' collections were remitted to Telluride; Telluride paid the building's expenses as incurred; and at year end the board credited Telluride's payments against the total assessed.

1. New Hampshire Insurance Co. v. TSG Ski & Golf, LLC, No. 23-1248 (10th Cir. Feb. 24, 2025) — published opinion (source of the holding, facts and figures) ↩
2. Same opinion, govinfo mirror, U.S. Court of Appeals for the Tenth Circuit ↩