781 F.Supp.3d 400
M.D.N.C.2025Background
- Dragados USA, Inc. contracted with Liberty Insurance Corp. for a Commercial General Liability policy covering June 2018–June 2019.
- Dragados participated in a North Carolina highway construction project, dumping fill on property owned by Durham Coca-Cola ("Durham Coke"), ultimately exceeding the agreed-upon limits.
- After Durham Coke sold the property, its new owner, Parmer Edge, LLC, sued Dragados for trespass and contract breach, alleging 800,000+ cubic yards of unauthorized fill were dumped.
- Dragados sought coverage and defense from Liberty under the policy when sued, but Liberty denied coverage, citing intentional conduct and policy exclusions.
- Both Dragados and Liberty filed motions for summary judgment regarding the duty to defend and indemnify under the policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to Defend | Parmer suit alleged accidental “occurrence”; duty to defend triggered by possibility of covered claims | Alleged conduct was intentional, not an “occurrence”; no duty to defend intentional acts | Liberty owes no duty to defend since conduct was not an "occurrence" |
| Policy Coverage | Placement of fill may have been intentional but harm (development obstruction) was unforeseen; policy ambiguity favors coverage | Intentional dumping—far exceeding contract—was not accidental or unforeseen; exclusion for expected/intended harm applies | No coverage; intentional and expected result, not accidental |
| Policy Exclusions | No evidence Dragados expected specific harm alleged by Parmer; exclusions don’t apply | Acts and resulting harm were expected/intended from Dragados’s perspective; exclusions bar coverage | Exclusion applies; denying coverage |
| Indemnification for Settlement | If duty to defend breached, insurer must indemnify for reasonable settlement | No duty to defend, therefore no indemnification for settlement | No indemnification required |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard and "material fact" definition)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden of proof)
- Hunt v. Cromartie, 526 U.S. 541 (standards for summary judgment)
- Waste Mgmt. of Carolinas, Inc. v. Peerless Ins. Co., 340 S.E.2d 374 (N.C. 1986) (definition of "occurrence" and "accident" in insurance context)
- Smith v. Nationwide Mut. Fire Ins. Co., 446 S.E.2d 877 (N.C. 1994) (scope of insurer's duty to defend)
- N. Carolina Farm Bureau Mut. Ins. Co. v. Stox, 412 S.E.2d 318 (N.C. 1992) (construction of insurance policy provisions)
- Collins & Aikman Corp. v. Hartford Acc. & Indem. Co., 436 S.E.2d 243 (N.C. 1993) (insurance policy and state law connection)