Playa Vista Conroe v. Ins of the W, 989 F.3d 411

Background

Playa Vista Conroe (a Texas condominium association) insured a dock with 22 boat slips under a Policy composed of a Difference in Conditions Form (DICF), a Flood Endorsement (FE), and a Boat-Slip Exclusion (BSE).
Hurricane Harvey and the San Jacinto River Authority’s large release from Lake Conroe destroyed the 22 boat slips.
Playa Vista submitted a claim; ICW denied coverage citing flood-related exclusions.
On cross-motions for summary judgment the district court found for Playa Vista; damages and fees were later stipulated ($190,827.50 damages; $50,000 fees) and entered as final judgment.
ICW sought reconsideration, arguing (1) policy exclusions (flood and a governmental-acts exclusion) barred recovery and (2) the post-judgment stipulation admitted facts triggering the governmental-acts exclusion. The district court denied relief; ICW appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether boat slips are covered property despite Section C’s exclusion for docks	Boat slips are covered because the Declarations show a $220,000 sublimit for boat slips	Section C excludes docks and similar property, so no coverage	Covered: the Declarations’ sublimit for boat slips establishes coverage absent an applicable exclusion
Whether Policy flood exclusions (DICF/FE/BSE) bar recovery for the loss caused by the dam release	Loss was not a “flood” as defined by the FE (inundation of normally dry land); Copes affidavit says damage resulted from a suction/drainage effect, not inundation	Damage resulted from Hurricane Harvey/tropical-storm-related flooding and thus falls within the FE/BSE flood exclusions	Exclusions do not apply: FE and BSE define “flood” as inundation of normally dry land (inapplicable to boat slips on water), and Playa Vista submitted unrebutted evidence that loss was caused by suction/drainage rather than inundation; ICW failed to carry its burden to prove an exclusion
Whether ICW’s contract language shifts burden to insured to disprove exclusions	Standard Texas law applies: insured proves coverage, insurer must prove exclusions	Contract wording attempted to allocate burdens differently	Rejected as a substantive defense; in any event ICW conceded coverage in district court, so it cannot reverse position on appeal
Whether the parties’ stipulation that the River Authority’s release caused the damage triggers a governmental-acts exclusion and defeats coverage	Stipulation concerned causation and agreed damages/fees, not an admission of an applicable exclusion	Stipulation admits loss was caused by a governmental decision, triggering the exclusion	Rejected: ICW waived the defense by failing to raise the governmental-acts exclusion at summary judgment and cannot resurrect it post-judgment

Key Cases Cited

Am. Int’l Specialty Lines Ins. Co. v. Rentech Steel, LLC, 620 F.3d 558 (5th Cir. 2010) (cross-motions for summary judgment treated separately; standard of review)
Am. Nat’l Gen. Ins. Co. v. Ryan, 274 F.3d 319 (5th Cir. 2001) (ambiguities in insurance policies construed against the insurer)
Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s London, 327 S.W.3d 118 (Tex. 2010) (burden-shifting: insured must show coverage; insurer must prove exclusions)
Progressive Cnty. Mut. Ins. Co. v. Sink, 107 S.W.3d 547 (Tex. 2003) (contract must be read as a whole to give effect to parties’ intent)
CKB & Assocs., Inc. v. Moore McCormack Petroleum, Inc., 734 S.W.2d 653 (Tex. 1987) (application of expressio unius in contract interpretation)
Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden-shifting principles)
Martinez v. Pompeo, 977 F.3d 457 (5th Cir. 2020) (party bound by concessions made in district court)
Mid-Continent Cas. Co. v. Bay Rock Operating Co., 614 F.3d 105 (5th Cir. 2010) (defenses must be raised at summary judgment or may be waived)
Goswick v. Emps.’ Cas. Co., 440 S.W.2d 287 (Tex. 1969) (interpretation of insurance policies should favor coverage)