Lamar Homes, Inc. v. Mid-Continent Cas. Co., No. A-03-CA-553-LY.
Court | United States District Courts. 5th Circuit. Western District of Texas |
Writing for the Court | Yeakel |
Citation | 335 F.Supp.2d 754 |
Docket Number | No. A-03-CA-553-LY. |
Decision Date | 02 August 2004 |
Parties | LAMAR HOMES, INC., Plaintiff, v. MID-CONTINENT CASUALTY COMPANY, Defendant. |
v.
MID-CONTINENT CASUALTY COMPANY, Defendant.
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Kevin R. Childs, Cathie Childs, Austin, TX, for Lamar Homes, Inc., plaintiff.
James Hans Barcus, J. Jonathan Hlavinka, Engvall and Hlavinka L.L.P., Richard P. Hogan, Jr., Hogan, Dubose & Townsend, John Jr. Engvall, Engvall and Hlavinka L.L.P., Houston, TX, for Mid-Continent Casualty Company, defendant.
YEAKEL, District Judge.
Before the Court are Plaintiff's Motion for Partial Summary Judgment filed October 24, 2003 (Doc. # 8); Defendant Mid-Continent Casualty Company's Response to Plaintiff's Motion for Partial Summary Judgment filed November 3, 2003 (Doc. # 12); Plaintiff Lamar Homes, Inc.'s Reply to Defendant's Response to Motion for Partial Summary Judgment filed November 13, 2003 (Doc. # 19); Defendant Mid-Continent Casualty Company's Cross-Motion
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for Final Summary Judgment filed February 25, 2004 (Doc. # 25); Plaintiff Lamar Homes, Inc.'s Response to Defendant Mid-Continent Casualty Company's Cross-Motion for Final Summary Judgment filed March 8, 2004 (Doc. # 29); Mid-Continent's Supplemental Brief Regarding Pending Motions for Summary Judgment filed May 21, 2004 (Doc. # 43); and Additional Briefing for Purposes of Plaintiff's Motion for Partial Summary Judgment filed May 21, 2004 (Doc. # 45). A hearing was held on the above-listed motions on June 4, 2004, at which the Court heard the arguments of counsel on both motions. Having reviewed the summary-judgment motions, responses, reply, and additional briefing, as well as all summary-judgment evidence submitted by the parties and the arguments of counsel at the hearing, the Court finds that Plaintiff's Motion for Partial Summary Judgment should be denied and Defendant's Cross-Motion for Final Summary Judgment should be granted for the following reasons.
This declaratory judgment action involves the defense and indemnity obligation of Defendant Mid-Continent Casualty Company ("Mid-Continent") owed to Plaintiff Lamar Homes, Inc. ("Lamar") in connection with the following underlying state-court litigation: Vincent M. and Janice D. DiMare v. Lamar Homes, Inc., et al., Cause No. GN 300137, in the 53rd Judicial District Court of Travis County, Texas (the "DiMare Litigation"). Mid-Continent filed what it termed a "cross-motion" seeking a determination from the Court that it does not have a duty to defend or indemnify Lamar in connection with the underlying litigation.
Mid-Continent issued a commercial general liability policy to Lamar, number 04-GL-0000563 83, effective July 1, 2001, through July 1, 2002 (the "Policy"). In March 2003, Lamar was served with the petition in the DiMare Litigation, which was subsequently amended. On March 13, 2003, Lamar tendered the DiMare Litigation to Mid-Continent and requested a defense and indemnification. On April 30, 2003, Mid-Continent denied coverage to Lamar for the claims asserted in the DiMare Litigation. Lamar filed suit against Mid-Continent in the 201st Judicial District Court of Travis County, Texas on July 8, 2003. Mid-Continent removed the cause to this Court.
Lamar filed a motion for partial summary judgment, and Mid-Continent filed a "cross-motion" for final summary judgment. A hearing was held before this Court on both motions on June 4, 2004, at which the parties agreed to limit the Court's consideration on the motions to the sole issue of whether Mid-Continent owed a duty to defend Lamar in the DiMare Litigation.
A. Legal Standard
Summary judgment is appropriate "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 judgment as a matter of law." Fed. R. Civ. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "If the moving party meets the initial burden of showing there is no genuine issue of material fact, the burden shifts to the nonmoving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial." Allen v. Rapides Parish Sch. Bd., 204 F.3d 619, 621 (5th Cir.2000) (internal quotations and citations omitted). When both parties move for summary judgment, the court reviews each party's
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motion independently, viewing the evidence and inferences in the light most favorable to the nonmoving party. Ford Motor Co. v. Texas Dept. of Transp., 264 F.3d 493, 498 (5th Cir.2001) (citing Taylor v. Gregg, 36 F.3d 453, 455 (5th Cir.1994)). Doubts are to be resolved in favor of the nonmoving party, and any reasonable inferences are to be drawn in favor of that party. See Burch v. City of Nacogdoches, 174 F.3d 615, 619 (5th Cir.1999). However, "[n]either `conclusory allegations' nor `unsubstantiated assertions' will satisfy the non-movant's burden," Wallace v. Texas Tech Univ., 80 F.3d 1042, 1047 (5th Cir.1996), and only disputes over facts that might affect the outcome of the lawsuit under governing law will preclude the entry of summary judgment, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
B. The "Eight-Corners Rule"
In a diversity case such as this one, this Court must apply the substantive law of Texas. See Harken Exploration Co. v. Sphere Drake Ins. P.L.C., 261 F.3d 466, 470 n. 3 (5th Cir.2001). The limited issue before this Court is whether Mid-Continent owed a duty to defend Lamar in the underlying state-court litigation. Texas courts apply the "eight-corners" or "complaint allegation" rule in deciding whether an insurer owes a duty to defend. Potomac Ins. Co. v. Jayhawk Med. Acceptance Corp., 198 F.3d 548, 551 (5th Cir.2000); King v. Dallas Fire Ins. Co., 85 S.W.3d 185, 187 (Tex.2002). Under the rule, courts must determine whether an insurer owes a duty to defend "solely from the allegations in the most recent [underlying] petition and the language of the insurance policy." Harken Exploration Co., 261 F.3d at 471; King, 85 S.W.3d at 187.
The insured bears the burden of showing that the claim against it is potentially within the insurance policy's scope of coverage. Harken Exploration Co., 261 F.3d at 471. There can be shifting burdens involved if the insurer relies on the policy's exclusions to deny coverage. Id. In this dispute, however, Mid-Continent concedes that the exclusions do not apply. Therefore, the burden remains with Lamar to prove that the DiMare Litigation is within the scope of coverage of the Policy.
Under the eight-corners rule, this Court must look to the most recent petition in the DiMare Litigation to determine whether the alleged misconduct on the part of Lamar triggered coverage by Mid-Continent. "The general rule is that the insurer is obligated to defend [its insured] if there is, potentially, a case under the [underlying petition] within the coverage of the policy." Nat'l Union Fire Ins. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex.1997) (quoted in Harken Exploration Co., 261 F.3d at 471). "The focus of this inquiry is on the facts alleged, not on the actual legal theories." St. Paul Fire & Marine Ins. Co. v. Green Tree Fin., 249 F.3d 389, 392 (5th Cir.2001) (citing Maayeh v. Trinity Lloyds Ins. Co., 850 S.W.2d 193, 195 (Tex.App. — Dallas 1992, no writ)). "Those allegations are to be considered `without reference to the truth or falsity of such allegations.'" King, 85 S.W.3d at...
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Lamar Homes, Inc. v. Mid-Continent Cas. Co., No. 05-0832.
...had no duty to defend Lamar for construction errors that harmed only Lamar's own product. Lamar Homes, Inc. v. Mid-Continent Cas. Co., 335 F.Supp.2d 754 (W.D.Tex.2004). The court reasoned that the purpose of a CGL policy is "to protect the insured from liability resulting from property dama......
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Lamar Homes, Inc. v. Mid-Continent Cas. Co., No. 05-0832.
...239 S.W.3d 241 defend Lamar for construction errors that harmed only Lamar's own product. Lamar Homes, Inc. v. Mid-Continent Cas. Co., 335 F.Supp.2d 754 (W.D.Tex.2004). The court reasoned that the purpose of a CGL policy is "to protect the insured from liability resulting from property dama......
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Lennar Corp. v. Great American Ins. Co., No. 14-02-00860-CV.
...its work cannot constitute an "occurrence" because the claim sounds in contract only. See Lamar Homes, Inc. v. Mid-Continent Cas. Co., 335 F.Supp.2d 754, 758-60 (W.D.Tex.2004), question certified by Lamar Homes, Inc. v. Mid-Continent Cas. Co., 428 F.3d 193 (5th Cir.2005) (citing Jim Johnson......
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Lennar Corporation v. Great American Insurance Company, No. 14-02-00860-CV (TX 6/2/2005), No. 14-02-00860-CV.
...builder's work cannot constitute an "occurrence" because it sounds in contract only. See Lamar Homes, Inc. v. Mid-Continent Cas. Co., 335 F. Supp. 2d 754, 758-60 (W.D. Tex. 2004) (citing Jim Johnson Homes, 244 F. Supp. 2d at 714). The court noted that the Texas Supreme Court has held that t......
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Lamar Homes, Inc. v. Mid-Continent Cas. Co., No. 05-0832.
...had no duty to defend Lamar for construction errors that harmed only Lamar's own product. Lamar Homes, Inc. v. Mid-Continent Cas. Co., 335 F.Supp.2d 754 (W.D.Tex.2004). The court reasoned that the purpose of a CGL policy is "to protect the insured from liability resulting from property dama......
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Lamar Homes, Inc. v. Mid-Continent Cas. Co., No. 05-0832.
...239 S.W.3d 241 defend Lamar for construction errors that harmed only Lamar's own product. Lamar Homes, Inc. v. Mid-Continent Cas. Co., 335 F.Supp.2d 754 (W.D.Tex.2004). The court reasoned that the purpose of a CGL policy is "to protect the insured from liability resulting from property dama......
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Lennar Corp. v. Great American Ins. Co., No. 14-02-00860-CV.
...its work cannot constitute an "occurrence" because the claim sounds in contract only. See Lamar Homes, Inc. v. Mid-Continent Cas. Co., 335 F.Supp.2d 754, 758-60 (W.D.Tex.2004), question certified by Lamar Homes, Inc. v. Mid-Continent Cas. Co., 428 F.3d 193 (5th Cir.2005) (citing Jim Johnson......
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Lennar Corporation v. Great American Insurance Company, No. 14-02-00860-CV (TX 6/2/2005), No. 14-02-00860-CV.
...builder's work cannot constitute an "occurrence" because it sounds in contract only. See Lamar Homes, Inc. v. Mid-Continent Cas. Co., 335 F. Supp. 2d 754, 758-60 (W.D. Tex. 2004) (citing Jim Johnson Homes, 244 F. Supp. 2d at 714). The court noted that the Texas Supreme Court has held that t......