F I L E D
                                                                 United States Court of Appeals
                                                                         Tenth Circuit
                   UNITED STATES COURT OF APPEALS
                                                                         SEP 27 2004
                          FOR THE TENTH CIRCUIT
                                                                    PATRICK FISHER
                                                                             Clerk

    WEST AMERICAN INSURANCE
    COMPANY,

              Plaintiff-Appellee-
              Cross-Appellant,

    v.                                           Nos. 03-1488 & 03-1505
                                              (D.C. No. 01-MK-1188 (MJW))
    GIUSEPPE’S DEPOT RESTAURANT                         (D. Colo.)
    CORPORATION, doing business as
    Giuseppe’s Old Depot Restaurant;
    NATIONWIDE AGRIBUSINESS
    INSURANCE COMPANY, doing
    business as Farmland Insurance;
    ACORN PETROLEUM, INC., doing
    business as Ochs Brothers,

              Defendants-Appellants-
              Cross-Appellees.


                          ORDER AND JUDGMENT            *




*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Before ANDERSON and BALDOCK , Circuit Judges, and            MARTEN , ** District
Judge. ***


      In this diversity suit, Defendants Giuseppe’s Depot Restaurant

Corporation, Nationwide Agribusiness Insurance Company, and Acorn

Petroleum, Inc. (hereinafter Giuseppe’s) appeal from a declaratory judgment,

entered following a bench trial, in favor of Plaintiff West American Insurance

Company. The district court ruled that, although a West American insurance

policy covering Giuseppe’s tenant liability on its leased premises was ambiguous,

the fire insurance policy limit was $250,000 based on the parties’ intent at the

time of execution. On appeal, Giuseppe’s argues the court applied the wrong

legal standard in construing the policy. According to Giuseppe, once the court

concluded the policy was ambiguous as to the amount of coverage, Colorado law

required the court to construe the policy against West American to require fire

coverage for the highest general liability limit in the policy. On cross-appeal,

West American argues the court erred in finding the policy was ambiguous as

to the $250,000 policy limit.


**
      The Honorable J. Thomas Marten, District Judge, United States District
Court for the District of Kansas, sitting by designation.
***
    After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.

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      Our jurisdiction arises under 28 U.S.C. § 1291. When, as here, the relevant

facts are undisputed, we review the district court’s interpretation of an insurance

contract de novo.   Fed. Ins. Co. v. Tri-State Ins. Co.     , 

, 802 (10th

Cir. 1998). In exercising its diversity jurisdiction, the district court appropriately

applied the substantive law of Colorado.      See Blackhawk-Central City Sanitation

Dist. v. Am. Guar. & Liab. Ins. Co.    , 

, 1188 (10th Cir. 2000). We

do the same. Applying the appropriate standard, we conclude the district court

properly construed the insurance policy under Colorado law and also properly

received the undisputed extrinsic evidence of the parties’ intent.

      Under Colorado law,

      [a]n insurance policy is merely a contract that courts should interpret
      in line with well-settled principles of contract interpretation. In
      undertaking the interpretation of an insurance contract, courts should
      be wary of rewriting provisions, and should give the words contained
      in the contract their plain and ordinary meaning, unless contrary
      intent is evidenced in the policy. Courts should read the provisions
      of the policy as a whole, rather than reading them in isolation.
      Courts may neither add provisions to extend coverage beyond that
      contracted for, nor delete them to limit coverage. However, because
      of the unique nature of insurance contracts and the relationship
      between the insurer and insured, courts do construe ambiguous
      provisions against the insurer and in favor of providing coverage to
      the insured.

Cyprus Amax Minerals Co. v. Lexington Ins. Co.            , 

, 299 (Colo. 2003)

(internal citations omitted). Insurance contracts “must be construed to carry

out the intent of the parties. Whenever possible, the parties’ intent must be


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ascertained from the policy language alone.”          Bengtson v. USAA Prop. & Cas.

Ins. , 

, 1235 (Colo. Ct. App. 2000);        Allstate Ins. Co. v. Starke,   

, 17-18 (Colo. 1990) (accord). But if the policy is ambiguous, “[e]xtrinsic

evidence may assist the trial court in determining whether and to what extent

actual liability . . . is covered by an existing policy.”     Cyprus Amax Minerals

Co. , 74 P.3d at 301-02.

       Giuseppe’s implicitly argues that, when a policy is ambiguous, the

parties’ actual intent is irrelevant. And it asserts, without citing adequate

authority, a court must always construe an ambiguous insurance contract

“to provide the most amount of coverage available” without receiving evidence

of actual intent. We disagree.     1
                                       Although Colorado courts construe an ambiguous

insurance policy in favor of coverage, they “do so only to protect the reasonable

expectations of the insured at the time the insured purchased the policy.”

Bengtson , 3 P.3d at 1237 (citing       Public Serv. Co. v. Wallis & Cos.     , 

(Colo. 1999)). Based upon its uncontested findings, the district court

properly construed the policy and held Giuseppe’s reasonable expectation

at the time it purchased the policy was to receive tenant liability coverage



1
      We agree with the district court, of course, that when an insurance company
seeks to totally avoid coverage through a standard exclusion and uses ambiguous
language to attempt to do so, the ambiguity is construed in favor of coverage. See
Black-Hawk Central City Sanitation Dist.      , 214 F.3d at 1191.

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of $250,000 for fire damage in exchange for payment of an $89 yearly premium.

In so holding, the district court properly found the policy’s terms ambiguous

despite West American’s assertion to the contrary.

      We have carefully reviewed the parties’ briefs, the record on appeal, and

the terms of the subject policy. We affirm the judgment of the district court for

substantially the reasons set forth in its thorough findings and conclusions, set

forth in open court on October 17, 2003.

      AFFIRMED.

                                       Entered for the Court



                                       Bobby R. Baldock
                                       Circuit Judge




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