749 F.3d 395
5th Cir.2014Background
- Woodward, LLC petitions panel rehearing of 5th Cir. decision in Woodward v. Acceptance Indem. Ins. Co. (2014); rehearing denied.
- Core dispute: whether Rimkus Report can create a duty to defend despite lack of complaint allegations stating ongoing-operation damages.
- Rimkus Report attributes water damage to concrete work; timing unspecified, and inspections show damages after substantial completion.
- Project timeline: substantial completion August 6, 2007; Rimkus inspections March 2008 and November 2008; damages discovered November 2008.
- Court concludes the Rimkus Report does not state damages occurred during DCM’s ongoing operations, thus no duty to defend exists under Mississippi law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Rimkus Report create a duty to defend? | Woodward argues Rimkus creates uncertainty that favors duty. | Acceptance argues Rimkus cannot create duty absent covered allegations. | No duty to defend based on Rimkus; does not plausibly show ongoing-operation damages. |
| Do timing details in Rimkus/complaint trigger coverage? | Woodward contends timing unspecified supports defense duty. | No timing in report stating damages during ongoing operations. | Damages did not arise during ongoing operations; report not within policy coverage. |
| Is the duty to defend triggered by the complaint alone under Mississippi law? | Mississippi cases support broad reading to favor insured. | Trigger depends on allegations in the complaint and policy language. | Under Mississippi law, duty to defend triggered by allegations within policy; here not established. |
Key Cases Cited
- Lipscomb v. Auto. Ins. Co. of Hartford, 75 So. 3d 557 (Miss. 2011) (insurer's independent investigation can create duty to defend when true facts could be covered)
- Mavar Shrimp & Oyster Co., Ltd. v. U. S. Fid. & Guar. Co., 187 So. 2d 871 (Miss. 1966) (insurer's investigation may trigger defense if facts potentially within policy)
- Baker Donelson Bearman & Caldwell, P.C. v. Muirhead, 920 So. 2d 440 (Miss. 2006) (duty to defend when allegations reasonably bring claim within policy)
- Southern Healthcare Services, Inc. v. Lloyd’s of London, 110 So. 3d 735 (Miss. 2013) (reiterates trigger test for defense based on plausible allegations)
- Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395 (5th Cir. 2008) (applies Mississippi law to insurer's duty to defend)
- Am. Guarantee and Liab. Ins. Co. v. 1906 Co., 273 F.3d 605 (5th Cir. 2001) (articulates broad concept of coverage-based trigger)
- Barden Miss. Gaming, LLC v. Great N. Ins. Co., 576 F.3d 235 (5th Cir. 2009) (duty to defend inferred when allegations arguably within policy)