United States Court of Appeals

for the Fifth Circuit

No. 20-11076

Siplast, Incorporated, 

Plaintiff—Appellant,

versus

Employers Mutual Casualty Company, 

Defendant—Appellee.

Appeal from the United States District Court

for the Northern District of Texas

USDC No. 3:19-CV-1320

Before King, Higginson, and Wilson, Circuit Judges.

Per Curiam:

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 

United States Court of Appeals

Fifth Circuit

FILED

January 11, 2022

Lyle W. Cayce

Clerk

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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 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 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 

1 Archdiocese of New York, et al. v. Vema Enters. and Siplast, Inc., No. 32077/2018E 

(N.Y. Sup. Ct.).

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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.” 

Based on these alleged facts, the Underlying Plaintiffsfiled suit against 

Siplast and the installing contractor. In their causes of action, the Underlying 

Plaintiffs stated that they “repeat[,] reaffirm[,] and reallege each of the 

previous allegations as if fully set forth herein.” Specifically as to Siplast, the 

Underlying Plaintiffs asserted a cause of action for “Breach of the 

Guarantee,” alleging that:

Siplast materially breached its obligations under the Siplast 

Guarantee by, among other things, (i) failing to correct defects 

in the roof membrane, system and flashing when called upon 

by the [Underlying] Plaintiffs to do so, and (ii) failing to abide 

by the terms of the Siplast Guarantee. . . . As a result of 

Siplast’s material breaches of the Siplast Guarantee, the 

[Underlying] Plaintiffs will be forced to replace the roof well in 

advance of the 20-year-plus expected useful term at a cost of 

approximately $5,000,000. By reason of such material 

breaches of the Siplast Guarantee, the Plaintiffs are entitled to 

judgment against Siplast in an amount to be determined at trial, 

but in excess of $5,000,000, together with appropriate interest 

thereon. 

B. The Insurance Policy 

After receiving the Underlying Plaintiffs’ formal notice of their intent 

to hold Siplast liable, Siplast submitted a claim to Employers Mutual 

Casualty Company (“EMCC”) asserting coverage under commercial 

general liability policies Siplast had purchased. Those policies required that 

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EMCC “pay those sums that the insured becomes legally obligated to pay as 

damages because of . . . ‘property damage’ to which this insurance applies” 

and that EMCC “will have the right and duty to defend the insured against 

any ‘suit’ seeking those damages.” For the insurance to apply, the property 

damage must have been caused by an “occurrence,” defined as “an accident, 

including continuous or repeated exposure to substantially the same general 

harmful conditions.”

The policies were also subject to several exclusions. The two 

exclusions relevant to the instant dispute are the “Your Product/Your Work 

Exclusion” and the “Contractual Liability Exclusion.” 

The “Your Product/Your Work Exclusion” excluded coverage of

“‘[p]roperty damage’ to ‘your product’ arising out of it or any part of it” or 

“‘property damage’ to ‘your work’ arising out of it or any part of it and 

included in the ‘products-completed operations hazard.’” It defined “Your 

[P]roduct” as “[a]ny goods or products, other than real property, 

manufactured, sold, handled, distributed or disposed of by [you]” and 

“materials, parts or equipment furnished in connection with such goods and 

products.” “Your [W]ork” was defined as “[w]ork or operations performed 

by you or on your behalf” and “[m]aterials, parts or equipment furnished in 

connection with such work or operations.”

The “Contractual Liability Exclusion” excluded coverage for 

“property damage” for which Siplast “is obligated to pay damages by reason 

of the assumption of liability in a contract or agreement.” However, the 

exclusion does not apply to liability for damages “[t]hat the insured would 

have in the absence of the contract or agreement.” 

C. Procedural History

After EMCC denied coverage, including its duty to defend Siplast in 

the Underlying Lawsuit, Siplast filed suit against EMCC in May 2019. It 

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asserted claims for: (1) declaratory relief, “seek[ing] a judicial declaration 

that EMCC is obligated to provide a defense to Siplast in the Underlying 

Action,” (2) breach of contract, (3) violations of Texas Insurance Code 

§ 542.051 et seq. (prompt payment of claims) and § 541.061 

(misrepresentation of insurance policy), and (4) attorneys’ fees. EMCC 

brought a counterclaim for declaratory relief, seeking a judicial declaration 

that it had no duty to defend Siplast in the Underlying Lawsuit and that it had 

“no duty to indemnify Siplast for any non-covered damages, including the 

$5,000,000 cost of replacing Siplast’s work and/or product.” 

Both Siplast and EMCC moved for summary judgment—Siplast on 

its declaratory relief and breach-of-contract claims, and EMCC on its 

counterclaim for declaratory judgment as well as on all of Siplast’s asserted 

claims. The district court granted EMCC’s motion for summary judgment 

and denied Siplast’s motion for partial summary judgment, finding that while 

the complaint in the Underlying Lawsuit did allege property damage that was 

caused by an “occurrence,” the alleged damage fit within the Your 

Product/Your Work Exclusion. The district court did not consider the 

applicability of the Contractual Liability Exclusion. Siplast timely appeals.

II. Standard of Review

“We review a district court’s judgment on cross motions for summary 

judgment de novo, addressing each party’s motion independently, viewing 

the evidence and inferences in the light most favorable to the nonmoving 

party.” Morgan v. Plano Indep. Sch. Dist., 589 F.3d 740, 745 (5th Cir. 2009). 

A grant of summary judgment can stand “only if there is no genuine issue of 

material fact and the party is entitled to prevail as a matter of law.” Id. 

Whether an insurer has a duty to defend the insured is a question of law which 

this court reviews de novo as well. Ooida Risk Retention Grp. v. Williams, 579 

F.3d 469, 471-72 (5th Cir. 2009). 

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III. Discussion

A. Governing Law

The law of the forum state, Texas, applies in this diversity case. See 

Indian Harbor Ins. Co. v. Valley Forge Ins. Grp., 535 F.3d 359, 363 (5th Cir. 

2008). “Under Texas law, an insurer may have two responsibilities relating 

to coverage—the duty to defend and the duty to indemnify.” ACE Am. Ins. 

Co. v. Freeport Welding & Fabricating, Inc., 699 F.3d 832, 839 (5th Cir. 2012) 

(quoting Gilbane Bldg. Co. v. Admiral Ins. Co., 664 F.3d 589, 594 (5th Cir. 

2011)). These duties are separate, with the duty to defend the broader of the 

two; “[t]hus, an insurer may have a duty to defend but, eventually, no 

obligation to indemnify.” Zurich Am. Ins. Co. v. Nokia, Inc., 268 S.W.3d 487, 

490-91 (Tex. 2008). Therefore, even though an insurer may not ultimately 

indemnify its insured, it “must defend its insured if a plaintiff’s factual 

allegations potentially support a covered claim.” Id. at 490. 

The determination of whether an insurer has a duty to defend is made 

under the “eight-corners rule.” Richards v. State Farm Lloyds, 597 S.W.3d 

492, 494 (Tex. 2020). “The eight-corners rule provides that when an insured 

is sued by a third party, the liability insurer is to determine its duty to defend 

solely from the terms of the policy and the pleadings of the third-party 

claimant.” GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 

305, 307 (Tex. 2006). “The ‘four corners’ of the petition and the ‘four 

corners’ of the policy together comprise the ‘eight corners’ that give the rule 

its name.” Richards, 597 S.W.3d at 494-95. “Resort to evidence outside the 

four corners of these two documents is generally prohibited.” GuideOne, 197 

S.W.3d at 307. 

When considering whether a third-party complaint triggers a duty to 

defend, the focus is “on the factual allegations that show the origin of the 

damages rather than on the legal theories alleged.” Nat’l Union Fire Ins. Co. 

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v. Merchs. Fast Motor Lines, 939 S.W.2d 139, 141 (Tex. 1997) (per curiam) 

(quoting and reversing the lower court). “If the underlying pleadings allege 

facts that may fall within the scope of coverage, the insurer has a duty to 

defend; if the pleading only alleges facts excluded by the policy, there is no 

duty to defend.” Freeport Welding & Fabricating, 699 F.3d at 840. In addition, 

a third-party complaint must both “allege[] and seek[] damages for an event 

potentially covered by the policy.” Colony Ins. Co. v. Peachtree Constr., Ltd., 

647 F.3d 248, 252-53 (5th Cir. 2011) (quoting D.R.-Horton-Tex., Ltd. v. 

Markel Int’l Ins. Co., 300 S.W.3d 740, 743 (Tex. 2009)). 

A comparison between two cases, Wilshire Insurance Co. v. RJT 

Construction, LLC, 581 F.3d 222 (5th Cir. 2009), and Building Specialties, Inc. 

v. Liberty Mutual Fire Insurance Co., 712 F. Supp. 2d 628 (S.D. Tex. 2010), is 

instructive when considering the type of factual allegations required to 

trigger the duty to defend. Wilshire Insurance considered whether there was 

a duty to defend the insured, a construction company that performed work 

on the foundation of a home, when the homeowner “allege[d] that cracks in 

the walls and ceilings suddenly appeared in his home, damage which he 

attribute[d] to the foundation being out of level.” 581 F.3d at 224. We held 

that there was:

The complaint allege[d] that the faulty foundation caused damage to other parts of the house that [the insured construction 

company] did not work on including the walls and ceilings. The 

“your work” exclusion does not preclude coverage for damage 

to the parts of the house resulting from the allegedly faulty 

foundation. Because these damages present a covered claim, 

[the insurer] must defend the entire suit.

Id. at 227.

Building Specialties, in turn, concerned an insured company hired to 

“install heating and air conditioning insulation for a residential construction 

project in Houston, Texas.” Building Specialties, 712 F. Supp. 2d at 631. The 

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third-party complaint in that case alleged that “shortly after the system began 

operating, defects in the installation of the duct work were discovered” and 

that the insured “refused to tender payment” for both completed and future 

“repairs to fix the defective heating and air conditioning duct work.”2 The 

district court found that there was no duty to defend. It reasoned that “the 

underlying petition only alleged defective installation of the duct work” and 

that “the only damages alleged and sought were ‘for payment for the 

additional work to remedy the problem and fix the damage.’ ” Building 

Specialties, 712 F. Supp. 2d at 640. In contrast to Wilshire Insurance, the 

“amended petition in the underlying suit did not allege that the allegedly 

defective heating and air conditioning duct work damaged any other part of 

the home or resulted in any loss of use.” Id. Therefore, the district court 

ruled that “as a matter of law, there [was] no duty to defend because the 

underlying lawsuit did not claim covered property damage.” Id. at 645. 

The district court in Building Specialties specifically compared its case 

to Wilshire Insurance when considering the applicability of a “your work” 

exclusion. It found that “unlike the allegations in the underlying litigation in 

Wilshire Insurance Co., [the third-party plaintiff] alleged damages only for 

repairing and replacing [the insured’s] allegedly defective ductwork.” Id. at 

648. Since “there [was] no allegation or competent summary judgment 

evidence of damage to any other property resulting from the defective duct

work,” the “your work exclusion” negated any duty to defend the insurer 

might have had. Id. 

2 These factual allegations are drawn from the third-party complaint in Building 

Specialties, which Siplast attached to its reply brief. The court may take judicial notice of 

this pleading. See Lake Eugenie Land & Dev., Inc. v. Halliburton Energy Servs. (In re 

Deepwater Horizon), 934 F.3d 434, 440 (5th Cir. 2019) (“We may take judicial notice of 

prior court proceedings as matters of public record.”). 

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Reading these two cases together demonstrates the type of factual 

allegations necessary to trigger a duty to defend. If the complaint alleges 

damage to and seeks damages for any property that is not the insured’s 

product or directly subject to the insured’s work, as occurred in Wilshire 

Insurance, then the claim falls outside of a “your product/your work” 

exclusion and the insurer has a duty to defend. However, as in Building 

Specialties, if the complaint solely alleges facts and damage to the insured’s 

own products, or solely seeks to recover the costs to repair the insured’s 

work, then it is covered by a “your product/your work” exclusion and the 

duty to defend remains dormant. 

The initial burden of proof is on the insured to show that a given claim 

is covered by the insurance policy; however, “when ‘the insurer relies on the 

policy’s exclusions, it bears the burden of proving that one or more of those 

exclusions apply.’ ” Trinity Universal Ins. Co. v. Emps. Mut. Cas. Co., 592 

F.3d 687, 692 (5th Cir. 2010) (quoting Federated Mut. Ins. Co. v. Grapevine 

Excavation, Inc., 197 F.3d 720, 723 (5th Cir. 1999)). For both the third-party

complaint and the insurance policy, if there are any ambiguities, the tie goes 

to the insured. “When the language of an insurance policy ‘is susceptible to 

more than one construction, it should be construed strictly against the insurer 

and liberally in favor of the insured.’ ” Gonzalez v. Mid-Continent Cas. Co., 

969 F.3d 554, 557 (5th Cir. 2020) (quoting Mid-Continent Cas. Co. v. JHP 

Dev., Inc., 557 F.3d 207, 212 (5th Cir. 2009)). Moreover, when judging 

whether a third-party complaint alleges a claim covered by the duty to 

defend, “we construe the pleadings liberally.” Zurich Am. Ins. Co. v. Nokia, 

Inc., 268 S.W.3d 487, 491 (Tex. 2008) (citations omitted). Ultimately, “[w]e 

resolve all doubts regarding the duty to defend in favor of the duty.” Id. 

(citations omitted). 

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B. Your Product/Your Work Exclusion

Each of Siplast’s and EMCC’s claims that are at issue in this case can 

largely be reduced to a single question: does the Underlying Complaint 

contain allegations of damage to property other than Siplast’s roof membrane 

as part of the cause of action against Siplast? Liberally construed, it does.

As the district court noted, “the [U]nderlying [C]omplaint mentions 

damage to school property other than the Siplast roofing products.” The 

district court, however, found that while the complaint mentioned said 

damage, the Archdiocese did not actually make “a claim to recover from 

Siplast for any damage to the building caused by the leaky roof that is separate 

from the damage to Siplast’s product.” That reading of the Underlying 

Plaintiffs’ complaint is overly narrow. The factual allegations raised by the 

complaint repeatedly point to damage to property other than Siplast’s roof 

membrane system. The Underlying Complaint alleges that there was “water 

damage in the ceiling tiles throughout the [school] after a rain storm” and 

that Siplast recommended the Archdiocese “contact a designated Siplast 

roofing contractor to address the damage and leak.” The complaint further 

alleges that “[d]espite the work performed by Siplast’s designated 

contractor, the School continued to suffer from additional leaks and water 

damage.” It then alleges that the installing contractor told the Archdiocese 

that “the leaks and any damage created thereby were the sole responsibility of 

Siplast under the Siplast Guarantee.” 

A court must consider “any reasonable inferences that flow from the 

facts alleged.” Liberty Mut. Ins. Co. v. Graham, 473 F.3d 596, 601 (5th Cir. 

2006). Each of these factual allegations contained within the Underlying 

Complaint creates an inference that the Underlying Plaintiffs asserted their 

cause of action based not only on damage to the roof membrane, but also on 

property damage to other parts of the school. It can also be inferred from the 

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factual allegations that the water damage to non-roof-membrane property 

was caused by the failure of Siplast’s faulty roof membrane system. Further, 

the allegations that additional water damage occurred even after Siplast’s 

designated contractor attempted repairs suggests that the additional water 

damage was caused by Siplast’s failure to honor the Siplast Guarantee by 

timely and effectively repairing the roof membrane system—the cause of 

action the Underlying Plaintiffs asserted. Accordingly, these factual 

allegations make clear that the Underlying Complaint alleged damage to 

property other than Siplast’s roof membrane as part of the Underlying 

Plaintiffs’ cause of action (i.e., breach of the Siplast Guarantee).

Returning to the comparison between Wilshire Insurance and Building 

Specialties, this case is like the former—the complaint alleges damage to 

property beyond the product and work of the insured. Therefore, there is a 

duty to defend based on those allegations. And since the Underlying 

Complaint includes allegations of damage to both non-covered and covered 

property, that duty to defend extends to the entire suit. Zurich Am. Ins., 268 

S.W.3d at 491 (“If a complaint potentially includes a covered claim, the 

insurer must defend the entire suit.”). 

Moreover, the Underlying Complaint goes beyond merely 

“mentioning” property damage that would be covered by the insurance 

policies; it additionally links that damage to the cause of action. In their cause 

of action against Siplast, the Underlying Plaintiffs stated that they “repeat[,] 

reaffirm[,] and reallege each of the previous allegations as if fully set forth 

herein.” The previous allegations that are incorporated into the cause of 

action by this language include the allegations of covered property damage to 

the school, which triggers EMCC’s duty to defend. True, this type of 

reallegation language is common to the point of being boilerplate. However, 

that fact does not render the language invalid. Instead, this clause does 

exactly what it says it does—reincorporates all previous factual allegations, 

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including those related to property damage to the school building that is 

covered by the policies at issue, into the cause of action. 

That fact is what separates this boilerplate language from a “catchall” provision, or Mother Hubbard Clause, seeking “other and further 

relief,” which courts have found do not trigger a duty to defend. See Clemons 

v. State Farm Fire & Cas. Co., 879 S.W.2d 385, 393 (Tex. App.—Houston 

[14th Dist.] 1994, no writ); Feed Store Inc. v. Reliance Ins. Co., 774 S.W.2d 73, 

75 (Tex. App.—Houston [14th Dist.] 1989, writ denied). In each of those 

cases, the insured attempted to use these “catch-all provisions” to create 

facts and allegations which were not present in the complaint. Texas courts 

have rejected this attempt to use boilerplate language as a way to find 

“invisible allegations” which were not actually located in the complaint, 

reasoning that to do so would mean that “[a]ll lawsuits seeking ‘other and 

further relief’ would precipitate a duty to defend.” Id. 

The instant case is materially different. Unlike the Mother Hubbard 

examples, there is no attempt here to use boilerplate language to locate 

invisible allegations lurking in the complaint’s penumbras, or to create those 

allegations from whole cloth. Instead, the factual allegations of covered 

damage are explicitly included in the complaint. The boilerplate language 

used by the Underlying Plaintiffs simply ties those factual allegations to the 

cause of action. That is a sufficient method for a complaint to include 

allegations that can trigger a duty to defend. 

Read liberally, the Underlying Complaint also satisfies the 

requirement that the Underlying Plaintiffs seek damages that could be 

covered by the insurance policies. The section of the Underlying Complaint 

asserting the cause of action against Siplast does not specifically mention 

damage to non-roof property. However, the consultant hired by the 

Archdiocese estimated that replacing the roof membrane would cost 

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approximately $5,000,000. Yet in their cause of action against Siplast, the 

Underlying Plaintiffs allege damages against Siplast “in excess of 

$5,000,000,” rather than limiting the alleged damages to the estimated cost 

of replacing the roof. This damage request can therefore be read to include 

compensation for the water damage to the school proper. 

EMCC presents several theories explaining how the “in excess” 

language could relate solely to the replacement of the roof—that it could 

include interest on the replacement costs due to Siplast’s failure to perform,

that it includes attorneys’ fees, or that it reflects the fact that the $5,000,000 

figure was an estimate. But it is equally plausible that the damage figure 

includes both the known (or estimated) cost to repair the roof membrane and 

the unknown additional cost to repair any water damage done to the school 

itself, which is covered by the policies. Especially when “resolv[ing] all 

doubts regarding the duty to defend in favor of the duty,” Zurich Am. Ins., 

268 S.W.3d at 491, as we must, the Underlying Complaint’s request for 

damages in excess of $5,000,000 should be read to go beyond the repair costs 

for the roof membrane and to include a prayer for damages covered by the 

insurance policies. That cause of action triggers EMCC’s duty to defend. 

C. Occurrence

For largely the same reasons discussed above, the district court did 

not err in determining that the Underlying Complaint presented an 

“occurrence.” The policies state that an “occurrence” is “an accident,

including continuous or repeated exposure to substantially the same general 

harmful conditions.” The Texas Supreme Court has stated that “[a]n 

accident is generally understood to be a fortuitous, unexpected, and 

unintended event.” Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 

S.W.3d 1, 8-9 (Tex. 2007). An event is not accidental if “the resulting 

damage was the natural and expected result of the insured’s actions” and 

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“was highly probable whether the insured was negligent or not.” Id. at 9. 

Therefore, “ ‘claims for damage caused by an insured’s defective 

performance or faulty workmanship’ may constitute an ‘occurrence’ when 

‘property damage’ results from the ‘unexpected, unforeseen or undesigned 

happening or consequence’ of the insured’s negligent behavior.” Id. at 16 

(quoting Federated Mut. Ins. Co., 197 F.3d at 725). 

The district court determined that there was an “occurrence” as 

defined by the insurance policies:

The origin of the property damage the underlying plaintiffs 

allege is defects with the workmanship and materials that 

comprised the roof membrane and system. As in Lamar Homes, 

there is nothing in the underlying pleading that alleges Siplast 

intended or expected its roofing system to fail. . . . The 

[U]nderlying [C]omplaint alleges property damage caused by 

an accident or occurrence.

This determination was correct. As stated above in the discussion on the 

applicability of the Your Product/Your Work Exclusion, the complaint 

contains factual allegations that Siplast’s negligence led to the failure of the 

roof membrane, which caused damage to both the roof itself and to the school 

as a whole. There are no allegations that the failure of the roof and the 

attendant damage were intended by Siplast or the “natural and expected 

result of the insured’s actions” (namely, the installation of the roof); it is not 

“highly probable” that the roof would leak “whether the insured was 

negligent or not.” Lamar Homes, 242 S.W.3d at 8-9. Instead, the allegations 

that “Siplast admitted that there were problems with the roof,” attempted 

to repair them through its designated contractor, and failed (leading to 

further leaks and damage) can be inferred to be allegations of negligence. The 

failure of the roof was an occurrence.

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EMCC argues that there was no occurrence because the cause of 

action in the Underlying Complaint was for Siplast’s breach of the Siplast 

Guarantee—an intentional and deliberate act that does not constitute an 

accident. However, this argument fails for two reasons. First, the finding of 

an occurrence necessarily follows from our holding that the Underlying 

Complaint includes allegations related to the school as a whole, and not just 

the replacement of the roof. As stated above, the complaint should be 

liberally read to seek damages to compensate for the water damage to the 

school—damage that was the result of an accidental occurrence covered by 

the insurance policies.

Second, EMCC’s argument is contrary to the holding of Lamar 

Homes. The dissent in Lamar Homes made the exact same argument as 

EMCC—that the defendant “was sued for breaking promises, not for 

breaking property” and therefore the complained-of damages were not 

occurrences. Lamar Homes, 242 S.W.3d at 24 (Brister, J., dissenting). 

However, that argument did not prevail in Lamar Homes, and so cannot 

prevail here. Instead, a majority of the Texas Supreme Court reasoned that:

The duty to defend must be determined under the eightcorners rule rather than by the labels attached to the underlying 

claims. 

The proper inquiry is whether an “occurrence” has 

caused “property damage,” not whether the ultimate remedy 

for that claim lies in contract or in tort.

Id. at 15–16 (internal citations omitted); see also Landry’s, Inc. v. Ins. Co. of 

Pa., 4 F.4th 366, 371 (5th Cir. 2021) (quorum decision) (commenting on the 

language from Lamar Homes and stating “[t]hat’s a different way of saying 

that we must focus on ‘the facts alleged’ in the complaint, ‘not on the actual 

legal theories’ invoked” (quoting St. Paul Fire & Marine Ins. Co. v. Green Tree 

Fin. Corp.-Tex., 249 F.3d 389, 392 (5th Cir. 2001))). While the legal theories 

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underpinning the Underlying Plaintiffs’ cause of action might sound in 

contract (through Siplast’s alleged breach of the Siplast Guarantee), the facts 

alleged concern property damage to the school and the roof due to Siplast’s 

negligence. That constitutes an occurrence under the policies. 

D. Contractual Liability Exclusion

Lastly, we must consider whether the Contractual Liability Exclusion 

contained within the insurance policies applies to Siplast’s claim and negates 

EMCC’s duty to defend. While the district court did not consider the 

applicability of this exclusion, it could provide an independent ground for 

affirming the district court’s summary judgment in favor of EMCC should 

this exclusion apply. See Thibodeaux v. Sanofi U.S. Servs., Inc. (In re Taxotere 

(Docetaxel) Prods. Liab. Litig.), 995 F.3d 384, 388 (5th Cir. 2021) (“Because 

of de novo review, we may affirm summary judgment on any basis supported 

by the record even if not reached by the district court.”). However, the 

Contractual Liability Exclusion is similarly inapplicable here and does not 

vitiate EMCC’s duty to defend.

The Contractual Liability Exclusion provides that the insurance 

policies at issue do not apply to “property damage” for which Siplast “is 

obligated to pay damages by reason of an assumption of liability in a contract 

or agreement.” However, this exclusion does not apply to liability for 

damages “[t]hat the insured would have in the absence of the contract or 

agreement.” In determining the scope of such a clause, the question “is not 

whether the relevant duty is contractual; it is whether the contractual duty 

represents an expansion of liability.” Crownover v. Mid-Continent Cas. Co., 772 

F.3d 197, 208 (5th Cir. 2014). The Texas Supreme Court has made clear that 

“ ‘assumption of liability’ means that the insured has assumed a liability for 

damages that exceeds the liability it would have under general law” because 

“[o]therwise, the words ‘assumption of liability’ are meaningless and are 

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surplusage.” Ewing Constr. Co. v. Amerisure Ins. Co., 420 S.W.3d 30, 37 (Tex. 

2014).

The operative question, therefore, is whether the Siplast Guarantee 

opened Siplast up to additional liability beyond that found at law. It did not. 

We have already determined that the Underlying Plaintiffs alleged that 

Siplast negligently provided a defective roof membrane, causing damage 

including water damage to the school. Even absent the Siplast Guarantee, 

these allegations, if true, would render Siplast liable to repair the roof. 

Crownover, 772 F.3d at 207-08 (holding that an express duty to repair did not 

expand an insured’s obligations beyond those found at general law). There 

was no expansion of liability relevant to this case. 

The only other argument EMCC raises—for the first time on 

appeal—is that the Siplast Guarantee expanded Siplast’s liability by 

promising that the roof would remain watertight for 20 years. As an initial 

matter, this argument is forfeited as EMCC did not raise it to the court below. 

Doe v. MySpace, 528 F.3d 413, 422 (5th Cir. 2008) (“Because the Does failed 

to present this argument to the district court, they are barred from making 

this argument on appeal.”). However, even considering this argument, it 

does not change our analysis. First, EMCC bears the burden of 

demonstrating that the Contractual Liability Exclusion applies to Siplast’s 

claims, Trinity Universal Ins. Co. v. Emps. Mut. Cas. Co., 592 F.3d 687, 692 

(5th Cir. 2010), yet provides no support for its assertion that the provision 

guaranteeing the roof’s watertightness for 20 years expanded Siplast’s 

liability beyond general law. Second, the 20-year guarantee is irrelevant to the 

claims raised in the Underlying Complaint. None of those claims relate to 

whether the roof remained watertight for 20 years; nor could they have, as 

the Underlying Complaint states that the roof was installed in 2012 and 

allegedly failed four years later in 2016. Instead, the Underlying Complaint 

raises claims that the roof failed because it was defective, claims that clearly 

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would attach to Siplast under general law absent the Siplast Guarantee. The 

Contractual Liability Exclusion does not eliminate EMCC’s duty to defend. 

E. Summary of Holdings

Siplast brought several causes of action against EMCC based on its 

assertion that EMCC breached its duty to defend. We take each in turn.

Siplast first sought “a judicial declaration that EMCC is obligated to 

provide a defense to Siplast in the Underlying Action.” EMCC, in turn, 

sought “a judgment declaring that plaintiff’s claims against Siplast in the 

Underlying Lawsuit are not covered under the Policies, and that as a result, 

no defense owed for same thereunder.”3 This declaratory-judgment question 

is a legal one, Ooida Risk Retention Grp., Inc. v. Williams, 579 F.3d 469, 471-

72 (5th Cir. 2009), determined solely based on facts before us—the 

allegations of the Underlying Complaint and the text of the insurance 

policies. Richards v. State Farm Lloyds, 597 S.W.3d 492, 494 (Tex. 2020). 

This question is therefore of the type where “the record permits only one 

resolution of the factual issue” and thus “reversing and rendering is the 

proper course.” Veasey v. Abbott, 830 F.3d 216, 229-30 (5th Cir. 2016) (en 

banc) (quoting Pullman-Standard v. Swint, 456 U.S. 273, 292 (1982)). 

Because we hold that EMCC does have a duty to defend, we reverse the 

district court’s contrary ruling and render declaratory judgment in favor of 

Siplast; EMCC has a duty to defend in the Underlying Lawsuit.

3 EMCC also sought judicial declarations related to its duty to indemnify. These 

were considered by the district court only in the context of its finding that there was no 

duty to defend, which we reverse. Because the duty to indemnify is separate from the duty 

to defend, Zurich Am. Ins. Co. v. Nokia, Inc., 268 S.W.3d 487, 490 (Tex. 2008), and the 

duty to indemnify was not considered independently, we decline to consider it here or issue 

any declarations related to EMCC’s ultimate duty to indemnify. Montano v. Texas, 867 F.3d 

540, 546 (“[A] court of appeals sits as a court of review, not of first view.” (quoting United 

States v. Vicencio, 647 F. App’x 170, 177 (4th Cir. 2016))). 

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Siplast next raised a claim for breach of contract, alleging that EMCC 

breached its contracts with Siplast (the insurance policies) by failing to render 

a defense in the Underlying Lawsuit. This claim could implicate unresolved 

factual issues not considered by the district court due to its ruling that there 

was no duty to defend. We therefore reverse the district court’s judgment in 

favor of EMCC on this claim and remand for further proceedings.

Siplast additionally raised claims for various violations of the Texas 

Insurance Code. However, it did not seek summary judgment on those 

claims. EMCC did, and the district court granted summary judgment in its 

favor based solely on its determination that EMCC did not have a duty to 

defend. Because we reverse that judgment, we further reverse the district 

court’s summary judgment in favor of EMCC on Siplast’s Texas Insurance 

Code claims and remand for further proceedings.

Lastly, the district court ruled that Siplast was not entitled to 

attorneys’ fees because it was not a prevailing party. That finding was also 

based on the district court’s ruling that there was no duty to defend, which 

we reverse. We therefore additionally reverse this ruling and remand for 

further proceedings.

IV. CONCLUSION

For the foregoing reasons, we REVERSE and REMAND for further 

proceedings consistent with this opinion.

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