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United States Court of Appeals for the Fifth Circuit
January 11, 2022, Filed
This case concerns a dispute over whether insurer Employers Mutual Casualty Company has a duty to defend in a lawsuit filed against its insured, Siplast, Inc. Because we find that there is a duty to defend, we reverse the judgment of the district court and remand for further proceedings.
I. Facts and Procedural History
A. The Underlying Lawsuit
This duty-to-defend case arises from an underlying lawsuit (the "Underlying Lawsuit") filed in New York state court by the Archdiocese of New York (the "Archdiocese") and other plaintiffs (together, the "Underlying Plaintiffs") against various parties including roofing manufacturer Siplast, Inc. ("Siplast").1 The Underlying Lawsuit stemmed from the Archdiocese's [*2] 2012 purchase of a roof membrane system from Siplast, to be installed at a high school in the Bronx, New York. In conjunction with that sale, Siplast guaranteed that the roof membrane system would "remain in a watertight condition for a period of 20 years, commencing with the date hereof; or SIPLAST will repair the Roof Membrane/System at its own expense" (the "Siplast Guarantee").
The following facts that occurred after installation of the roof are drawn from the Archdiocese's complaint in the aforementioned New York state lawsuit (the "Underlying Complaint"). In November 2016, school officials allegedly observed "water damage in the ceiling tiles throughout the Premises after a rain storm" and "notified both [the installing contractor] and Siplast of the water damage and potential leaks." A designated Siplast contractor attempted to repair any damage and prevent leaks, but to no avail; "the School continued to suffer from additional leaks and water damage." After continued communication, during which "Siplast admitted that there were problems with the roof that needed to be addressed," Siplast eventually informed the [*3] Archdiocese that "its earlier repair attempts [had been] temporary" and that Siplast "would not honor the Siplast Guarantee with respect to any permanent improvements of the roof."
The Archdiocese then retained a consultant who "performed an exhaustive inspection and survey of the water penetration issues involving the roofing system" and "noted significant issues with both the workmanship and the materials that were compromising the entire roof membrane and system." "Accordingly, the roofing membrane and system has failed of its essential purpose and the only way to remediate the issues caused thereby is to replace in toto the existing, failed membrane and system with a new one." "The estimate provided by the consultant fixed the total cost of the remediation and replacement efforts at approximately $5,000,000."
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2022 U.S. App. LEXIS 795 *
SIPLAST, INCORPORATED, Plaintiff—Appellant, versus EMPLOYERS MUTUAL CASUALTY COMPANY, Defendant—Appellee.
Prior History: [*1] Appeal from the United States District Court for the Northern District of Texas. USDC No. 3:19-CV-1320.
Siplast, Inc. v. Emplrs Mut. Cas. Co., 489 F. Supp. 3d 603, 2020 U.S. Dist. LEXIS 176539, 2020 WL 5747869 (N.D. Tex., Sept. 25, 2020)
roof, duty to defend, insured, allegations, damages, property damage, membrane, cause of action, district court, occurrence, insurance policy, repair, factual allegations, underlying lawsuit, Contractual, water damage, installation, replacement, summary judgment, contractor, policies, leaks, no duty, third-party, coverage, trigger, further proceedings, conditioning, boilerplate, declaratory
Civil Procedure, Appeals, Standards of Review, De Novo Review, Insurance Law, Property Insurance, Obligations, Duty to Defend, Summary Judgment Review, Standards of Review, Liability & Performance Standards, Good Faith & Fair Dealing, Business Insurance, Commercial General Liability Insurance, Indemnification, Obligations of Parties, Insurers, Allegations in Complaints, Exclusions, Work Exclusion Clauses, Burdens of Proof, Claim, Contract & Practice Issues, Policy Interpretation, Exclusions, Evidence, Inferences & Presumptions, Inferences, Occurrences, Coverage, Products & Workmanship, Property Claims, Contractual Liabilities