### IN THE UNI TED STATES COURT OFAPPEALS FOR THE FIF TH CIRCUIT

No. 10-20499

AMERICAN HOME ASSURANCE COMPANY; NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PENNSYLVANIA, Plaintiffs–Appellees
v. CAT TECH L.L.C., as Successor-in-Interest to Cat Tech, Inc. Defendant–Appellant

Appeal from the United States District Court for the Southern District of Texas

Before KING, WIENER, and CLEMENT, Circuit Judges. PER CURIAM: In the course of servicing a hydrotreating reactor owned by Ergon R efining, Inc., Defendant-Appellant Cat Tech, L.L.C. damaged several o f th e reactor’s components. Ergon and Cat Tech arbitrated the resulting dispute. The arb it rators 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 , th at the “your work” exclusion found in both
p o li c i e s precluded coverage for damage to the reactor. The insurers filed a declaratory judgment action, and the district court found that the insurers had U n i te d S ta te s C o u rt o f A p p ea l s

F i ft h C i rc u i t 

### F I L E D Octob er 5, 20 11 Lyle W . Cayce Clerk Case: 10-20499 Document: 00511623697 Page: 1 Date Filed: 10/05/2011No. 10-20499

no duty to indemnify Cat Tech. Cat Tech timely appealed. For the reasons stated h e r e i n , we reverse the judgment of the district court and remand for furthe r proceedings.

I. FACTUAL AND PROCEDURAL BACKGROUND Ergon Refining, Inc. (“Ergon”) hired Defendant-Appellant Cat Tech L.L.C. (“Cat Tech”) to servi c e a D-651 hydrotreating reactor at its Vicksburg, Mississippi, refinery. In January 2005, Cat Tech replaced certain catalyst and “reactor internals” of the Ergon reactor. After Cat Tech comp l eted its work, 1 Ergon initiated the reac t or’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, includin g 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. Following the completion of Cat Tech’s work, a second large pressure

2 drop occurred during the reactor’s start-up process. The reactor, however, was not shut down to address this issue until October 2005, at which point Ergon hired a different contractor to perform the repair work. Additional damage to the reactor was discovered during the October 2005 shutdown and servicing. Cat Tech and Ergon entered arbitration to determine liability. The arbitrators found that Cat Tech’s improper placement of “rope packing” around

The arbit ration aw ard des cribes the sc ope of Cat Tech’ s wo rk in January 2005 as 1 fol low s: “Cat Tech’ s sc ope of wo rk

. . . cons ist ed of unloading all cat alyst fr om Beds 1 thr ough 4, rem oval of exis ting reac tor inte rnals , ins tall atio n of new reac tor inte rnals , and the loading of newc atalystinea ch of the Beds .” The arbit ration aw a rd des cribes the sc ope of Cat Tech’ s wo rk in Februa ry 2005 as 2 fol low s: “Cat Tech unload ed cat alyst fr omBed s 1, 2, 3 and part of Bed 4; Cat Tech sc ree ned the rem oved cat alyst ; Cat Tech rem oved the dam aged reac tor inte rnals and rein st alled the rep aire d inte rnals ; and Cat Tech load ed the sc ree ned cat alyst along wi th a lim ite d amo unt of newc atalystt o m ak e u p forat tri tio n [ of] the amo untslo stinthe sc ree ning p roc es s. ” 2 Case: 10-20499 Document: 00511623697 Page: 2 Date Filed: 10/05/2011No. 10-20499

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. Aft er entry of the arbitration award, Cat Tech sought indemnification under its two insurance policies: (1) a c o m m ercial 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 Pittsb u r gh, Pennsylvania (“NUFIC”) (collectively, the “policies” and the “insu r ers”). The umbrella policy provided coverage in excess of the CGL policy’s limits. Although AHA had provided a defens e 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 p ay 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 u mb r e ll a 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 d a m age 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) [m]aterials, parts or equipment furnished in connection

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with such work or operations.” The phrase “products-completed operations hazard” is defined to include: [A]ll “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” exclusi o n p r ecluded coverage, the insurers filed the instant action seeking a declaratory judg m e nt t o that effect. Cat Tech filed counterclaims, essentially seeking a d e c laratory judgment that

one or both policies provided coverage. Fo ll owing 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 judgm e nt

. Th e di s trict court granted the insurers’ motion and denied Cat Tech’s, c o n c luding that the “your work” exclusion precluded coverage for all of Cat Tech’s claims. Cat Tech timely filed a notice of appeal. II. DISCUSSION 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. , 476 F.3d 337, 343 (5th Cir. 2 0 0 7)

. Summary judgment is proper only if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” F E D

. R. C IV

. P. 56(a). When reviewing a summary judgment m otion, we draw all reasonable inferences in favor of the nonmoving party. Turner , 476 F.3d at 343; see also Ford Motor Co.

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v. Tex. Dep’t of Transp. , 264 F.3d 493, 498 (5th Cir. 2001) (“On cross-motions for summary judgment, we review each party’s motion independently, viewing the evidence and inferences in the light most favorable to the nonmoving party.”). B. Summary Judgment 1. Insurance Contract Interpretation The parties agree that Texas law governs this case. A s w e 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. , 620 F.3d 558, 562 (5th Cir. 2010). Where, as here, the disputed provision in the insurance policy is an exclusion, the insurer bears the burden of establishing th at the exclusion applies. Id ; see also Tex. Ins. Code § 554.002 (“[T]he insurer

. . . has the burden of proof as to any avoidance or affirmative defense that the Texas Rules of Civil Procedure require to be affir m atively pleaded. Language of exclusion [sic] in the contract or an exception to coverage claimed by the insurer or health maintenance organization constitutes an avoidance or an affirmative defense.”). It is well settled that: [t]erms in i n s u r a nce policies that are subject to more than one reasonable construction are interpreted in favor of coverage. Where an ambiguity involv e s a n exclusionary provision of an insurance p o li cy, [a court] must adopt the construction

. . . urged by th e 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 , 327 S.W.3d 118, 133 (Tex. 2010) (internal citations and quotation marks omitted). An ambiguity is present if a “policy is susceptible to two or more reasonable interpretations.” Lincoln Gen. Ins. Co. v. Aisha’s Learning Ctr. , 468 F.3d 857, 859 (5th Cir. 2006)

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(citations omitted). An ambiguity does not exist, however, “simply because the parties interpret a policy differently. If a contract as written can be given a clear and definite legal meaning, then it is not ambiguous as a matter of law.” Gilbert , 327 S.W.3d at 133 (citations omitted). When a n e xc l u s ion is clear and unambiguous, w e interpret it according to its plain meaning, and give no deference to the insured’s interpretation. See Travelers Lloyds Ins. Co. v. Pac. Emp’rs Ins. Co. , 602 F.3d 677, 681 (5th Cir. 2010) (citing Puckett v. U.S. Fire Ins. Co. , 678 S.W.2d 936, 938 (Tex. 198 4)). 3 2. Interpretation of the “Your Work” Exclusion We understand that three categories of property damage are potentially

at i s s u e 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 p r o p erty damage to those parts of the reactor upon which Cat Tech performed non-defective work, but were nonetheles s 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” exclusio n p r e c ludes coverage for the first two categories of property d amage, 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 pr e c l u de coverage for any damage to Ergon’s property that Cat Tech did not repair or service.

Ot her courts have fou n d “your wo rk” exclus ions sim ilar to the one bef ore us to be 3
unambiguous , and, as will be se e n inf ra , Cat Tech pr ovide s us wi th no reas on to arrive at a dif fer ent co nclus ion in thiscase . See T. C. Bates on Constr. Co. v. Lumber me ns Mut. Cas. Co. , 7 84 S. W.2 d 692, 696 (Tex. App

. 1989—Ho ust on [14th Di st .] ) (s tat ing that the “yo u r w o r k” exclus ion is “not amb iguous ”) ; Euli ch v. Ho me Indem

. Co. , 503 S. W.2 d 846, 849 (Tex. App .—Da llas 1974) (d ecli ning to find a “your wo rk” exclus ion amb iguous ). As suc h, we do not def er to Cat Tech’ s int erp ret atio n o f the exclus ion, andin st eadm ustinterpr et the exclus ion acc ording t o i tsp lain and ordinary me aning. 6 Case: 10-20499 Document: 00511623697 Page: 6 Date Filed: 10/05/2011No. 10-20499

In Wilshire Insurance Co. v. RJT Construction, L.L.C. , 581 F.3d 222 (5th Cir. 2009), we interpreted a “your work” exclusion identical to the one before us in this case. There, the insured ha d b e e n hired by a homeowner to perform repairs on the foundation of a house. The repair work was defective and caused cracks in the house’s walls and ceilings. After the homeowner brought suit, the insured sought a defense from its insurer. Th e i n s u r er sought a declaratory judgment as to the applicability of certain policy exclusions, including the “your work” exclusion. On appeal, we concluded that the “your w o rk” exclusion “precludes coverage for th e c ost of repairing [the insured’s] own work, the foundation.” Id. at 226. We made clear, however, that the exclusion “ do e s n o t exclude c o v erage for damage to other property resulting from the defective work.” Id. (emphasis added). Thus, although damage to the foundation itself was excluded, the exclusion did not “preclude coverage for damage to the parts of the house resulting from the allegedly faulty foundation.” Id. at 227. Our decision in Wilshire was based in large part upon Travelers Insurance Co. v. Volentine , 5 7 8 S.W.2d 501 (Tex. Civ. App.—Texarkana 1979, no writ). There, the insurance policy at issue included a “your work” exclu s i o n that precluded coverage for “[p]roperty damage to work performed by or on behalf of the Named insured ari s i n g o u t of the work or any portion thereof, or out of materials, parts or e quipment furnished in connection therewith.” Id. at 503. The insured had performed faulty repair work on the valves of an engine, which caused damage to the valves as well as the “destruction of the entire engine.” Id. at 502-03. The court concluded that the “your work” exclusion “does not insure the policyholder against liability to repair or replace his own defective work or product, but it does provide coverage for the insured’s liabilit y f o r d a mages to other property resulting from the defective condition of the work, even though injury to the work product itself is excluded.” Id. at 503-04 (emphasis added). As such, the exclusion precluded coverage for damage to the valves that the insured

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had attempted to repair, but did not preclude coverage for damage to other parts of the engine. Id. at 504-05. 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. , 784 S.W.2d 692 (Tex. App. 1989—Houston [14th Dist.]), is instructive. In Bateson , the insured contracted with the University of Texas to construct a library on campus. The lib r ary’s exterior was to be sheathed in marble, and the construction documents specified a formula for the mortar used in anchoring the marble to the building. Shortly before completion, an d co ntinuin g th ere af ter , cr ack s ap peared in the marble. The damage was limited to the marble it self, the anchoring system, and some associated water damage, but no other University pr o p e rty was damaged. An investigation discovered that the damage to the marble was caused partially by mortar that did not conf o r m to contract specifications. Id. at 693-94. Bateson refused the University’s request to make repairs, and the University filed suit. Bateson sought a defense from Lumbermens, but the insurer denied coverage in part based upon the insurance policy’s “your work” exclusion, which precluded coverage for “property damage to work performed by or on behalf of the named insured arising out of the work or any portion thereof, or out of materials, parts

or equipment furnished in connection therewith.” Id. at 694. On appeal, Bateson argued, inter alia , that the “your work” exclusio n was ambiguous with respect to whether coverage was precluded for damage to the non-defective portions of the insured’s work. The court firmly rejected this argument, concluding that the exclusion was “not ambiguous and

. . . clearly denies coverage for damage to work of the insured that is not defective .” Id. at 696 (emphasis added). Thus, the “your work” exclusion precluded coverage for damage to other parts of the library that

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the insured constructed, even though only a portion of the building was actually defective. Id. at 697-98. Similarly, in Eulich v. Home Indemnity Co. , 503 S.W.2d 846 (T e x . C iv . App.—Dallas 1974), the court interpreted a “your work” exclusion applicable to “property damage to work performed by or on b e h alf of the named insured arising out of the work, or out of any materials, parts, or equipment furnished in connection therewith.” Id. at 848. In that case, the insured had constructed

a building that later collapsed due to the insured’s use of a defec tiv e s t eel support beam. Id. at 847. The court concluded that the “your work” e xc lusion “clearly e xc l u des liability for damage to the building resulting from the contractor’s failure to perform according to specifications. It does not insure the contractor against his own failure to perform his contract, but does insure him against liability for damages other than to the building itself as to result of his performance, whether defective or otherwise.” Id. at 849 (emphasis added). The court also noted that “[l]iability for damage to the building resulting from use of

an i n adequate steel member that did not comply with specifications is exactly the type of liability which the [exclusion] was evidently intended to exclude.” Id. 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 S.W.2d 380, 382 (Tex. App.–Dallas 1987), abrogated on other grounds by Don’s Bldg. Supply, Inc. v. One Beacon Ins. Co. , 267 S.W.3d 20 (Tex. 2008); Mid-United Contractors, Inc. v. Providence Lloyds Ins. Co. , 754 S.W.2d 824 (Tex. App.–Fort Worth 1988). In both Dorchester and Mid-United Contractors , the court found that insurance coverage w a s p reclu ded only for damage to the insured’s defective work, not for damage to non-defective work. Dorchester , 737 S.W.2d at 382 (“[If] defective work is p e rf

o r m e d by or on behalf of the insured, and such defective

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work causes damage to other work of the insured which was not defective, then there would be coverage for repair, replacement or restoration of the work which

was not defective.”); M i d

- United Contractors , 754 S.W.2d at 827 (holding that exclusion precluded coverage only to “th e particular part of the property with

wh i c h the insured or its subcontractor had contact in causing the loss”). B o th decisions are readily distinguishable from the present case, ho w e v e r , because they did not interpret or apply a “your work” exclusion. Rather, the ins u rance exclusion at issue in Dorchester and Mid-United Contractors provided that the policy did not apply “to property damage

. . . to

. . . t h a t p a r t i c u la r part of any property not on premises owned by or rented to the insured,

. . . the restoration, repair or re p l a c e m ent of which has been made or is necessary by reasons of faulty workmanship thereon by or on behalf of the insured.” 737 S.W.2d at 382 (emphasis added); see also 754 S.W.2d at 827. Unlike the exclusion in Dorchester and Mid-United Contractors , the “your work” exclusion does not confine itself to

a “particular part” of certain property, or contain any other narro wing phrase that might limit its application only to defective workmanship. In Mid-Contin e nt Casualty Co. v. JHP Development, Inc. , 557 F.3d 207 (5th Cir. 2009), we acknowledged the importance of the distinction between the “your work” exclusion and the “particular part” exclusion. There, we interpreted

an exclusion that (like those in Dorchester and Mid-Uni te d C o n t rac to rs) exclu de d property damage to “[t]hat particular part of any property that must be restored, repaired or replaced because ‘your work’ was incorrectly performed on it.” Id. at 211. We held that the exclusion “bars coverage only for property damage to parts of a property that were themselves the subject of defective work by the insured; the exclusion does not bar coverage for damage to parts of a property that were the subject of only nondefective work by the insured and were damaged as a result of defective work by the insured on other parts of the property.” Id. at 215. In doing so, we recognized that certain cases, notably Bateson , “barred coverage
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for the cost o f r epairing or replacing non-defective as well as defective components of the insured’s work.” Id. at 215. We explained, however, that: the exclusion at issue in T.C. Bateson–and in the other Texas cases that reach a similar result–was much b roader in scope than the exclus i o n at issue in this case. The exclusion at issue in T.C. Bateson did not include any restrictive “that parti c u lar part” language, and i n s t ead 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-Co n t i n e n t , their holdings do not conflict with our interpretation of the “your work” exclusion in this case. Finally, we address Cat Tech’s argument before the district court and on appeal that the “your work” exclusion precludes coverage only for damage to its

ow n i nt a n gible repairs (which constitutes its “work”) and does not exclude damage to third-party property (such as Ergon’s react o r) upon which it performed those services. This interp r e t ation is entirely inconsistent with Wilshire , where we found that the “your work” exclusion applied to an insured’s defective repair work on a house’s foundation, 581 F.3d at 226-27, and Volentine , where the exclusion was applied to an insured’s faulty repairs upon the valves of an engine. 578 S.W.2d at 503-04. Both cases clearly demonstrate that the “your work” exclusion applies when an insured has damaged third-party property by performing defective repairs or other services on that property. The district court did not err in rejecting Cat Tech’s argument. 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

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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” exclus i on. See Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Puget Plastics Corp. , 532 F.3d 398, 404 (5th Cir . 2 0 08) (“Summary judgment was proper only if National Union demonstrat e d that there was no genuine issue of material fact that [the impaired property exclusion applied]–which it f

ail e d to do in this case.”); see also Am. Int’l Specialty Lines Ins. Co. , 620 F.3d at 562 (“Where

. . . the disputed provision is an exclusion, the insurer bears the burden of establishing that the exclusion applies.”). Appellees in this case were required to present sufficient evidence to demonstrate that the damage to Ergon’s reactor was limited to those components that Cat Tech serviced. To support their burden on summary judgment, the insurers presented the following evidence : ( 1) the arbitration award, (2) the CGL policy, (3) the umbrella policy, and (4) Exhibit 13 of Ergon ’ s s ubmissions to the arbitration panel.Upon consideration of the evide nc e p re s e nte d , w e co nclu de th at the district

co u rt e rr e d 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

Cat Tech als o argues that both policie s pr ovide additio nal cove r a g e for “p roduct s- 4
com ple ted ope rations ,” and the dis tri ct court err ed wh en it fou nd that t h e d efi niti on of “p roduct s- com ple ted ope rat i ons ” did not cre ate additio nal cover age. As the dis trict court pr ope rly note d, how ever, this argum ent is for eclo se d by Va lm ont Energy Ste e l, Inc. v. Com me rc i al Uni on Insura nce Co. , 359 F.3d 770 (5th Cir. 2004) , wh ere we held that the “p roduct s- com ple ted ope rations ” lim itat ion did not func tio n to grant cover age, but rather to “s im ply explain the amo unt of dam agesea ch pol icy will cover. . . . ” Id. at775 -76. 12 Case: 10-20499 Document: 00511623697 Page: 12 Date Filed: 10/05/2011No. 10-20499

reactor and how that damage relates to the work C at Tech performed. For example, with respect to the January 2005 incident, the award states, “[d]uring th e s t art-up process, a high pressure drop in the lower section of the reac t o r became manifest, and the reactor subsequently shut down. Upon entry of the reactor in February 2005, among other things , significant damage was di s c o v e r ed to the Bed 3 reactor internals.” (R. 204 (emphasis added)). The arbitration award concludes that “Cat Tech failed to pro p e rly p l a ce the rope packing around the B e d 3 J o hnson screens which, among other things , caused the damage to the Bed 3 reactor internals, migration of catalyst from Bed 3 into Bed 4, and damage to some of the cat aly s t

. ” (R

. 205 (emphasis added)). The award is even more vague with respect to the February 2005 incident, as it fails to particularly describe any of the resulting damage. While the award finds Cat Tech responsible for the damage, this only resolves the issue of liability between Ergon and Cat Tech, not coverage between Cat Tech and its insurers. 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 an d f ail s to adequately demonstrate the parts of the r e a c t o r that were damaged, or how those parts correspond to the components upon which Cat Tech worked. The most glaring 5 d e f i c i e ncy in the arbitration award relates to the reactor’s “support beams.” While the arbitrati o n a w ard makes a passing reference to damage to the “support beams,” there is no evidence that Cat Tech performed any “w o rk 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

Tab 13 cont ains , for exam ple , a l ong l ist of “ca talys t” ord ere d, ref ere nce to “grading 5 mat erial,” and num ero us pages wi th alm os t enti rely num eric al dat a. Muc h of the info rm atio n cont ained in that exhibit is quite com ple x and expe rt tes tim ony wo uld lik ely aid its inte rp ret atio n. 13 Case: 10-20499 Document: 00511623697 Page: 13 Date Filed: 10/05/2011No. 10-20499

worked on the support beams to the reactor internals,” it is impossible to discern f r o m th e arbitration award whether the support beams are in fact part of th e reactor internals or whether the support beams are separate com p o n e nts that

were damaged by Cat Tech’s work on the reactor internals. A disputed material 6 issue of fact exists, in our view, as to whether the damage to the react o r w a s 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 concl u d e th at the district court erred when it relied on the award in granting the Ap p ellees’ summary judgment motion. On remand, the district c o urt should conduct any additional fact-finding necessary to determine whether the damage suffered by Ergon’s reactor was limited only to those compon e nt s upon which Cat Tech worked, or instead included other c omponents unrelated to Cat Tech’s operations. 7 Because we remand for further fact-finding, we do not reach Appellant’s second argument regarding whether the district court erred in considering Dr. Christopher Buehler’s expert report on summary judgment. We anticipate, however, that the district court may need to evaluate expert testimony from both

We do not dis count the pos sib ility that AHA’ s pos itio n may ulti mat ely be p r o v e n 6
correc t aft er further fac tual deve lop me nt. But our duty is to evaluat e wh ethe r the adjudicat ed fac ts of the unde rlying pr oce edi ngs det erm ining liability–he re, the arbit ration aw ard–are suf fic ientt o d ete rm ine the iss uesof c overa ge. In so holding, we rec ognize that “[t] he duty t o i n dem nify is tri ggered by the act ual 7 fac ts es tablish ing liabil ity in the unde rlying suit, ” wh ich in this cas e is the arbit ration betw een E r go n and Cat Tech. Tri nity Uni v. Ins. Co. v. Cow an , 945 S. W.2 d 819, 821 (Tex. 19 9 7)

. Neverthel es s, we have als o rec ognized that “[t] he unde rlying cas e oft en doe s not res olve all the fac tual iss ues nece ss ary to d ete rm ine cover age beca use iss ues rele vant to the ques tio n of cover age can be irr elevant to the ques tio n of the ins ured ’s liabil ity, ” and thus “co urt s are not pr eclu ded fr om making fac tual findings in cover age actions .” Na t’l Uni on F i re In s . Co. of Pittsbur gh, Pa. , 532 F. 3 d at 4 0 4. On rem and, the dis tri ct court may conduct wh ateve r fac tfinding it dee msne ces sary t o a pp ly the “yourw ork” exclus ion. 14 Case: 10-20499 Document: 00511623697 Page: 14 Date Filed: 10/05/2011No. 10-20499

sides to properly determine the applicability of the “your work” exclusion in this

case. III. CONCLUSION For the f ore goin g re a s on s , w e R EVERSE the judgment of the district court, and REMAND for further proceedings consistent with this opinion.

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