Gilbane Bldg. Co. v. EMPIRE STEEL ERECTORS, LP

• Decision Date: 23 February 2010
• Docket Number: Civil Action No. H-08-1707.
• Citation: 691 F. Supp.2d 712
• Parties: GILBANE BUILDING COMPANY, Plaintiff, v. EMPIRE STEEL ERECTORS, L.P. and Admiral Insurance Company, Defendants.
• Court: U.S. District Court — Southern District of Texas

691 F. Supp.2d 712

GILBANE BUILDING COMPANY, Plaintiff, v. EMPIRE STEEL ERECTORS, L.P. and Admiral Insurance Company, Defendants.

Civil Action No. H-08-1707.

United States District Court, S.D. Texas, Houston Division.

February 23, 2010.

Mary Alice Parsons, Powers & Frost LP, Houston, TX, for Plaintiff.

Nathan Montgomery Rymer, Rymer Moore et al., Houston, TX, for Defendants.

MEMORANDUM OPINION & ORDER

GRAY H. MILLER, District Judge.

Pending before the court is defendants Empire Steel Erectors, L.P. and Admiral Insurance Company's motion for summary judgment and plaintiff Gilbane Building Company's counter-motion for summary judgment. Dkts. 14, 23. Upon consideration of the motions, the subsequent responses, the summary judgment record, and the applicable law, the defendants' motion is DENIED and plaintiff's motion is GRANTED IN PART and DENIED IN PART.

BACKGROUND

The Underlying Lawsuit

On January 30, 2007, Michael Parr, an employee of Empire Steel Erectors, L.P. ("Empire Steel") was injured while climbing down a ladder at a construction site. Dkt. 23 at 4. There is some evidence that the ladder was muddy at the time of the accident and this may have contributed to Parr's fall. Id. at 5. Parr sustained serious injuries to the left side of his body, requiring extensive surgeries and rehabilitation. Id. at 5.-6. Parr subsequently filed a lawsuit in Texas state court claiming negligence by Gilbane Building Company ("Gilbane"), the general contractor at the job site, and Baker Concrete, the party responsible for installing and maintaining the ladders at the construction site. Parr asked for damages of more than $1 million. Id.; see also Dkt. 23, Ex. F. Before the case proceeded to trial, Gilbane settled the case with Parr for $165,000.¹

The Gilbane-Empire Steel Contract and the Admiral Insurance Policy

In 2006, Gilbane and Empire Steel entered into a Trade Contractor Agreement ("TCA") that ostensibly required Empire Steel to secure insurance coverage for Gilbane as an additional insured under Empire Steel's CGL policy (the "Admiral policy") with Admiral Insurance Company ("Admiral").² Id. After Parr filed his lawsuit, Gilbane sent both Empire Steel and Admiral a letter requesting defense and indemnification in the underlying lawsuit. Dkt. 23, Ex. I. Admiral, however, refused to defend and indemnify Gilbane, basing its denial of coverage on the plain language of Parr's petition in the underlying lawsuit and its interpretation of the additional insured language of the CGL policy.³ Dkt. 23, Ex. J.

The Declaratory Judgment and Breach of Contract Action

Gilbane subsequently filed this action for declaratory judgment and breach of contract against Empire Steel and Admiral. Dkt. 20. In its complaint, Gilbane asks the court to declare that: (1) Gilbane is an additional insured under the Admiral policy; and (2) the underlying lawsuit triggered the additional insured policy, requiring Admiral to both defend and indemnify Gilbane. Id. In the alternative, Gilbane seeks breach of contract damages from both Empire Steel and Admiral. Dkt. 20 at 5.

Empire Steel and Admiral now move the court for summary judgment on several of the claims brought by Gilbane, namely the duties to defend and indemnify and the breach of contract against Empire Steel. Gilbane has filed a counter-motion for summary judgment on the claims regarding the duties to defend and indemnify. Gilbane additionally asks the court for summary judgment on its claim against Admiral for breach of contract.

ANALYSIS

I. Summary Judgment

A timely motion for summary judgment shall be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c); see also Carrizales v. State Farm Lloyds, 518 F.3d 343, 345 (5th Cir.2008). Upon a defendant's motion for summary judgment, the plaintiff "must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him." FED. R. CIV. P. 56(e). Ultimately, "where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no `genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). An issue is "material" if its resolution could affect the outcome of the action. Burrell v. Dr. Pepper/Seven Up Bottling Group, Inc., 482 F.3d 408, 411 (5th Cir.2007). "And a fact is genuinely in dispute only if a reasonable jury could return a verdict for the non-moving party." Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir.2006).

The moving party bears the initial burden of informing the court of all evidence demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Only when the moving party has discharged this initial burden does the burden shift to the non-moving party to demonstrate that there is a genuine issue of material fact. Id. at 322, 106 S.Ct. 2548. If the moving party fails to meet this burden, then it is not entitled to a summary judgment, and no defense to the motion is required. Id.

"For any matter on which the non-movant would bear the burden of proof at trial . . ., the movant may merely point to the absence of evidence and thereby shift to the non-movant the burden of demonstrating by competent summary judgment proof that there is an issue of material fact warranting trial." Transamerica Ins. Co. v. Avenell, 66 F.3d 715, 718-19 (5th Cir. 1995); see also Celotex, 477 U.S. at 323-25, 106 S.Ct. 2548. To prevent summary judgment, "the non-moving party must come forward with `specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. 1348 (quoting FED. R. CIV. P. 56(e)).

When considering a motion for summary judgment, the court must view the evidence in the light most favorable to the non-movant and draw all justifiable inferences in favor of the nonmovant. Envtl. Conservation Org. v. City of Dallas, 529 F.3d 519, 524 (5th Cir.2008). The court must review all of the evidence in the record, but make no credibility determinations or weigh any evidence; disregard all evidence favorable to the moving party that the jury is not required to believe; and give credence to the evidence favoring the non-moving party as well as to the evidence supporting the moving party that is uncontradicted and unimpeached. Moore v. Willis Ind. Sch. Dist., 233 F.3d 871, 874 (5th Cir.2000). However, the nonmovant cannot avoid summary judgment simply by presenting "conclusory allegations and denials, speculation, improbable inferences, unsubstantiated assertions, and legalistic argumentation." See TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir.2002); see also Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994) (en banc). By the same token, the moving party will not meet its burden of proof based on conclusory "bald assertions of ultimate facts." Gossett v. Du-Ra-Kel Corp., 569 F.2d 869, 872 (5th Cir. 1978); see also Galindo v. Precision Amer. Corp., 754 F.2d 1212, 1221 (5th Cir.1985).

II. Contract Interpretation

"Texas courts interpret insurance policies according to the rules of contract construction." de Laurentis v. U.S. Auto. Ass'n, 162 S.W.3d 714, 721 (Tex. App.-Houston 14th Dist. 2005, pet. denied). The primary objective of the court is to ascertain the parties' intent, as expressed in the written instrument. See Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex.1994). "The parties' intent is governed by what they said, not by what they intended to say but did not." Nautilus Ins. Co. v. Country Oaks Apartments, Ltd., 566 F.3d 452, 455 (5th Cir.2009) (quoting Fiess v. State Farm Lloyds, 202 S.W.3d 744, 746 (Tex.2006)) (internal quotation omitted).

"If the insurance policy is worded so that it can be given a definite meaning or certain legal meaning, then the policy is not ambiguous. If the policy is not ambiguous, then the court construes the policy as a matter of law." Brown & Brown of Tex., Inc. v. Omni Metals, Inc., ___ S.W.3d ___, 2010 WL 1240580 (Tex. App.-Houston 1st Dist. Mar. 25, 2010, no pet. h.) (citing Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex.2003)) (internal citation omitted). An ambiguity exists where a policy is susceptible to more than one meaning. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). Courts interpreting contractual provisions give terms their plain, ordinary, and generally accepted meanings, unless otherwise defined by the parties. "`Both the insured and the insurer are likely to take conflicting views of coverage, but neither conflicting expectations nor disputation is sufficient to create an ambiguity.'" Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. U.S. Liquids, Inc., 271 F.Supp.2d 926, 932 (S.D.Tex.2003) (quoting Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 134 (Tex.1994)). "If, and only if, the court finds an ambiguity in the contract provisions, particularly in exclusionary clauses, the court should construe the policy strictly against the insurer." Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 271 F.Supp.2d at 932; see also Waffle House, Inc. v. Travelers Indem. Co. of Ill., 114 S.W.3d 601, 607 (Tex.App.-Ft. Worth 2003, pet. denied) (cautioning that exclusionary provisions "must be clearly expressed and must not be ambiguously worded"). And, "if the insured's construction of an exclusionary provision is reasonable, it must be adopted, even if the insurer's construction is more reasonable." Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 271 F.Supp.2d at 931.

Two distinct duties are at issue in the motion for summary judgment pending before the...