In the course of servicing a hydrotreating reactor owned by Ergon Refining, Inc., Defendant-Appellant Cat Tech, L.L.C. damaged several of the reactor’s components. Ergon and Cat Tech arbitrated the resulting dispute. The arbitrators found Cat Tech responsible for the damage to the reactor, and entered an award against it. Cat Tech sought indemnification from its insurers, Plaintiffs-Appellees American Home Assurance Company and National Union Fire Insurance Company of Pittsburgh, Pennsylvania. The insurers denied the claim, contending, inter alia, that the “your work” exclusion found in both policies precluded coverage for damage to the reactor. The insurers filed a declaratory judgment action, and the district court found that the insurers had no duty to indemnify Cat Tech. Cat Tech timely appealed. For the reasons stated herein, we reverse the judgment of the district court and remand for further proceedings.
I. FACTUAL AND PROCEDURAL BACKGROUND
Ergon Refining, Inc. (“Ergon”) hired Defendant-Appellant Cat Tech L.L.C. (“Cat Tech”) to service a D-651 hydro-treating reactor at its Vicksburg, Mississippi, refinery. In January 2005, Cat Tech replaced certain catalyst and “reactor internals” of the Ergon reactor.
1
After Cat Tech completed its work, Ergon initiated the reactor’s start-up process. During that process, a high pressure drop in the lower section of the reactor occurred, forcing Ergon to shut down the reactor. When Ergon employees investigated the incident, they found significant damage to certain components, including the reactor internals. Following the shutdown, Cat Tech returned in February 2005. Cat Tech removed, repaired, and replaced the damaged internals, and loaded additional catalyst.
2
Following the completion of Cat Tech’s work, a second large pressure drop occurred during the reactor’s start-up pro
Cat Tech and Ergon entered arbitration to determine liability. The arbitrators found that Cat Tech’s improper placement of “rope packing” around the “Bed 3 Johnson screens” had damaged the reactor internals in the January 2005 incident. The arbitrators also found that Cat Tech was responsible for the second pressure drop during the February 2005 incident, although they did not determine the precise cause of this malfunction. They awarded Ergon $1,973,180, which included direct damages for both events, prejudgment interest, attorneys’ fees, and an offset for the unpaid contract price.
After entry of the arbitration award, Cat Tech sought indemnification under its two insurance policies: (1) a commercial general liability policy (the “CGL policy”) issued by Plaintiff-Appellee American Home Assurance Company (“AHA”) and (2) a commercial umbrella policy (the “umbrella policy”) issued by Plaintiff-Appellee National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“NUFIC”) (collectively, the “policies” and the “insurers”). The umbrella policy provided coverage in excess of the CGL policy’s limits. Although AHA had provided a defense to Cat Tech during the arbitration proceeding pursuant to a reservation of rights and paid its policy’s per-occurrence limit of $1 million, AHA refused to pay any additional amount. NUFIC denied Cat Tech’s claim in its entirety. The insurers’ refusals were based in large part upon identical “your work” exclusions found in the CGL and umbrella policies (the “ ‘your work’ exclusion”).
The “your work” exclusion precludes coverage for:
“Property damage” to “your work” arising out of it or any part of it and included in the “products-completed operations hazard.”
This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor.
The policies define “your work” as “(1) [w]ork or operations performed by you or on your behalf; and (2) [mjaterials, parts or equipment furnished in connection with such work or operations.” The phrase “products-completed operations hazard” is defined to include:
[Ajll “bodily injury” and “property damage” occurring away from premises you own or rent and arising out of “your product” or “your work” except:
(1) Products that are still in your physical possession; or
(2) Work that has not yet been completed or abandoned.
Asserting, inter alia, that the “your work” exclusion precluded coverage, the insurers filed the instant action seeking a declaratory judgment to that effect. Cat Tech filed counterclaims, essentially seeking a declaratory judgment that one or both policies provided coverage. Following discovery, the insurers identified two experts who would testify at trial, including reactors expert Dr. Christopher Buehler, and filed the experts’ written reports pursuant to Federal Rule of Civil Procedure 26(a).
Both Cat Tech and the insurers moved for summary judgment. The district court granted the insurers’ motion and denied Cat Tech’s, concluding that the “your work” exclusion precluded coverage for all of Cat Tech’s claims. Cat Tech timely filed a notice of appeal.
A. Standard of Review
We review a district court’s grant of summary judgment
de novo,
applying the same standard as the district court.
Turner v. Baylor Richardson Med. Ctr.,
B. Summary Judgment
1. Insurance Contract Interpretation
The parties agree that Texas law governs this case. As we have noted previously, “Texas law provides that insurance policies are construed according to common principles governing the construction of contracts, and the interpretation of an insurance policy is a question of law for a court to determine.”
Am. Int’l Specialty Lines Ins. Co. v. Rentech Steel L.L.C.,
It is well settled that:
[t]erms in insurance policies that are subject to more than one reasonable construction are interpreted in favor of coverage. Where an ambiguity involves an exclusionary provision of an insurance policy, [a court] must adopt the construction ... urged by the insured as long as that construction is not unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties’ intent.
Gilbert Texas Constr., L.P. v. Underwriters at Lloyd’s London,
We understand that three categories of property damage are potentially at issue in this case. The first category encompasses property damage to the specific parts of Ergon’s reactor upon which Cat Tech performed defective work. The second category embraces property damage to those parts of the reactor upon which Cat Tech performed non-defective work, but were nonetheless damaged in the January or February 2005 incident. The final category encompasses other Ergon property, upon which Cat Tech did not work, but was nevertheless damaged. We conclude that the “your work” exclusion precludes coverage for the first two categories of property damage, but not the third category. Stated differently, the “your work” exclusion only precludes coverage for damage to that portion of Ergon’s property upon which Cat Tech performed repair services, defective or otherwise. It does not preclude coverage for any damage to Ergon’s property that Cat Tech did not repair or service.
In
Wilshire Insurance Co. v. RJT Construction, L.L.C.,
Our decision in
Wilshire
was based in large part upon
Travelers Insurance Co. v. Volentine,
Texas courts have made clear, however, that the “your work” exclusion not only precludes coverage for property damage to an insured’s defective work, but also excludes coverage for all damage to an insured’s work, whether defective or non-defective. The Texas Court of Appeals decision in
T.C. Bateson Construction Co. v. Lumbermens Mutual Casualty Co.,
Similarly, in
Eulich v. Home Indemnity Co.,
Bateson
and
Eulich
demonstrate that the “your work” exclusion precludes coverage for all damage to an insured’s work, whether defective or not defective. In so holding, we recognize that certain other decisions may at first appear to be in conflict with this conclusion.
See Dorchester Dev. Corp. v. Safeco Ins. Co.,
737
In
Mid-Continent Casualty Co. v. JHP Development, Inc.,
the exclusion at issue in T.C. Bateson— and in the other Texas cases that reach a similar result — was much broader in scope than the exclusion at issue in this ease. The exclusion at issue in T.C. Bateson did not include any restrictive “that particular part” language, and instead broadly barred coverage for damage to the insured’s work “arising out of the work or any portion thereof,” which could reasonably be interpreted as excluding damage to any property worked on by an insured.
Id. at 215. Because a separate exclusion was at issue in Dorchester, Mid-United Contractors, and Mid-Continent, their holdings do not conflict with our interpretation of the “your work” exclusion in this case.
In light of our understanding of the “your work” exclusion, proper application of the exclusion depends upon the specific parts of the Ergon reactor that were damaged in the January and February 2005 incidents. For example, coverage would be entirely precluded if the damage was limited solely to those parts of the reactor that Cat Tech repaired or serviced (the first two categories outlined above). On the other hand, coverage would not be precluded under the “your work” exclusion for any damage to reactor components upon which Cat Tech did not work (the third category). With this understanding, we now address whether the district court properly applied the exclusion in this case. 4
3. The District Court Erred in Granting Summary Judgment
For summary judgment in favor of the insurers to be appropriate, the insurers must demonstrate the absence of any genuine dispute of material fact as to application of the “your work” exclusion.
See Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Puget Plastics Corp.,
Upon consideration of the evidence presented, we conclude that the district court erred in granting summary judgment in favor of the Appellees. The arbitration award itself is far too vague in its description of the damage to the reactor and how that damage relates to the work Cat Tech performed. For example, with respect to
The “direct damages” section of the arbitration award is also inconclusive. While this section notes that “Ergon’s direct damages are summarized at Tab 13 of Ergon’s exhibits,” this exhibit is highly technical and fails to adequately demonstrate the parts of the reactor that were damaged, or how those parts correspond to the components upon which Cat Tech worked. 5 The most glaring deficiency in the arbitration award relates to the reactor’s “support beams.” While the arbitration award makes a passing reference to damage to the “support beams,” there is no evidence that Cat Tech performed any “work or operations” upon the support beams. Although AHA contends that the support beams are a component of the reactor internals and that Cat Tech “necessarily worked on the support beams to the reactor internals,” it is impossible to discern from the arbitration award whether the support beams are in fact part of the reactor internals or whether the support beams are separate components that were damaged by Cat Tech’s work on the reactor internals. 6 A disputed material issue of fact exists, in our view, as to whether the damage to the reactor was limited to the parts upon which Cat Tech worked, or whether other parts of the reactor were also damaged in the January and February 2005 incidents.
In sum, the information contained in the arbitration award is insufficient to properly apply the “your work” exclusion. As such, we conclude that the district court erred when it relied on the award in granting the Appellees’ summary judgment motion. On remand, the district court should conduct any additional fact-finding necessary to determine whether the damage suffered by Ergon’s reactor was limited only to those components upon which Cat Tech worked, or instead included other components unrelated to Cat Tech’s operations. 7
III. CONCLUSION
For the foregoing reasons, we REVERSE the judgment of the district court, and REMAND for further proceedings consistent with this opinion.
Notes
. The arbitration award describes the scope of Cat Tech’s work in January 2005 as follows: "Cat Tech’s scope of work ... consisted of unloading all catalyst from Beds 1 through 4, removal of existing reactor internals, installation of new reactor internals, and the loading of new catalyst in each of the Beds.”
. The arbitration award describes the scope of Cat Tech’s work in February 2005 as follows: "Cat Tech unloaded catalyst from Beds 1, 2, 3 and part of Bed 4; Cat Tech screened the removed catalyst; Cat Tech removed the damaged reactor internals and reinstalled the repaired internals; and Cat Tech loaded the screened catalyst along with a limited amount of new catalyst to make up for attrition [of] the amounts lost in the screening process.”
. Other courts have found "your work” exclusions similar to the one before us to be unambiguous, and, as will be seen
infra,
Cat Tech provides us with no reason to arrive at a different conclusion in this case.
See T.C. Bateson Constr. Co. v. Lumbermens Mut. Cas.
. Cat Tech also argues that both policies provide additional coverage for “products-completed operations,” and the district court erred when it found that the definition of "products-completed operations” did not create additional coverage. As the district court properly noted, however, this argument is foreclosed by
Valmont Energy Steel, Inc. v. Commercial Union Insurance Co.,
. Tab 13 contains, for example, a long list of "catalyst” ordered, reference to "grading material,” and numerous pages with almost entirely numerical data. Much of the information contained in that exhibit is quite complex and expert testimony would likely aid its interpretation.
. We do not discount the possibility that AHA’s position may ultimately be proven correct after further factual development. But our duty is to evaluate whether the adjudicated facts of the underlying proceedings determining liability — here, the arbitration award — are sufficient to determine the issues of coverage.
.In so holding, we recognize that "[tjhe duty to indemnify is triggered by the actual facts establishing liability in the underlying suit,” which in this case is the arbitration between Ergon and Cat Tech.
Trinity Univ. Ins. Co. v. Cowan,