Ewing Construction Co. v. Amerisure Insurance
814 F. Supp. 2d 739
S.D. Tex.2011Background
- Ewing Construction is insured under a multi-year CGL policy issued by Amerisure (policy CPP2037436-02 through 05).
- Underlying suit Tuloso-Midway ISD v. Liberty Mutual, et al. was filed Feb. 25, 2010 in Nueces County, Texas, alleging defective tennis court construction.
- Ewing tendered the Underlying Lawsuit to Amerisure for defense; Amerisure denied defense repeatedly (Mar. 4, 2010; Jun. 21, 2010; Jul. 26, 2010).
- This declaratory-judgment action was filed July 29, 2010 seeking defense and indemnity, plus breach and Texas Prompt Payment of Claims Statute claims.
- The court denied partial summary judgment for the plaintiff and granted defendant’s cross-motion, finding no duty to defend or indemnify due to the contractual liability exclusion and lack of coverage for the underlying claims.
- The court awarded declaratory judgments that Amerisure owes no defense or indemnity, has not breached the contract, and is not liable under the Prompt Payment of Claims Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to defend exists for the Underlying Lawsuit? | Ewing argues the claims potentially fall within policy coverage; duty to defend should apply. | Amerisure contends contractual liability exclusion bars coverage; no duty to defend. | No duty to defend; contractual liability exclusion applies, and exception does not. |
| Whether contractual liability exclusion precludes coverage? | Exclusion should not bar coverage because claims are torts and contractual; no assumption of liability. | Exclusion precludes coverage for liability assumed in contract unless an exception applies. | Contractual liability exclusion applies; coverage not available. |
| Whether any exception to the exclusion brings the claim within coverage? | Tort claims independent of the contract should trigger exception. | Claims sound primarily in contract; no independent liability absent the contract. | No exception applies; claims do not reach in absence of contract. |
| Duty to indemnify; is there coverage for indemnity if no defense? | If defense is owed, indemnity should follow; dispute unresolved. | If no defense, no indemnity; same reasons negate indemnity. | No duty to indemnify; same reasons as no defense. |
Key Cases Cited
- Gilbert Texas Const., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118 (Tex. 2010) (contractual liability exclusion interpreted to exclude coverage for damages arising from contract unless exception applies or liability would exist absent contract)
- Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1 (Tex. 2007) (occurrence and economic-loss concepts applied to construction defects under CGL policy)
- Hardscape Construction Specialties, Inc. v. Century Surety Co., 578 F.3d 262 (5th Cir. 2009) (assessed insured-contract exception and eight-corners/economic-loss framework for exclusion interpretation)
- Liberty Mut. Ins. Co. v. Graham, 473 F.3d 596 (5th Cir. 2006) (eight-corners rule; permissive construction in favor of coverage when in doubt)
- JHP Development, Inc. v. Mid-Continent Cas. Co., 557 F.3d 212 (5th Cir. 2009) (reaffirmed eight-corners; exclusion analysis when underlying claims potentially covered)