* Judge Wiener concurs in the judgment only. 1 United States Court of Appeals Fifth Circuit 

## FILED June 5, 2007 Charles R. Fulbruge III Clerk IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

__________________________ No. 05-10929

__________________________ SCOTTSDALE INSURANCE CO, Pl aint iff- Appellant, versus KNOX PARK CONSTRUCTION INC; ET AL, Defendants, KNOX PARK CONSTRUCTION INC, formerly known as Cit y Ho mebuilders Construction Inc Defendant-Appellant, versus LANDMARK INSURANCE COMPANY, Defendant-Appellee.

___________________________________________________ Appeal from the United States District Court fo r the Northern District of Texas

___________________________________________________ Before GARWOOD, WIENER * , and CLEMENT, Circuit Judges. EDITH BROWN CLEMENT, Circuit Judge: In this declaratory judgment action, the district court granted two motions for summary judgment by Landmark Insurance Co. (“Landmark” ) and denied a cross-motion by Scottsdale Insurance Co. (“Scottsdale”). The court concluded th at Landmark did not owe a duty to defend and1 Shade Tree has mult iple d/b/a aliases that include “Ace Electric & Plumbing” and “Ace

Electric & Plumbing HVAC.” 2 was not obligated to cover breach of warranty claims brought in an unde rlying suit against Shade Tree Electric, Inc. (“Shade Tree”), which was the insured of both Scottsdale and Landmark. Knox Park Construction Co. (“Knox Park”), who had asserted the breach of warranty claims, had joined Scottsdale’s cross-motion concerning the coverage issue. Scottsdale and Kno x Park appeal . We dismiss th e appeal of Kno x Park, and as to the appeal of Scottsdale, we affirm in part and reverse in part. I. FACTS AND PROCEEDINGS In an underlying state court action, Kno x Park sued Shade Tree aft er identifying construction defects in work performed by Shade Tree fo r Kno x Park. Kno x Park asserted, inter alia , negligence, breach of warranty , and breach of contract causes of action. In September 2001, Scottsdale sought

a declaratory judgment in federal court regarding its duties to defend and/or indemnify it s insured, Shade Tree, 1 in th e underlying dispute. Scottsdale was Shade Tree’s primary insurer, and Kno x Park and Shade Tree were the original named defendants in the declaratory judgment action. In December 2002, Scottsdale filed an amended com plaint in the declaratory judgment action, adding Landmark, another of Shade Tree’s insurers, as a defendant. The init ial and amended federal

com plaint s together asserted th at Landmark owed an obligation to defend and indemnify Shade Tree and th at Scottsdale did not. In th e federal action, Kno x Park never filed a cross-claim against it s codefendant Landmark. Landmark mo ved fo r parti al summary judgment, arguing th at Scottsdale, and not Landmark, owed a duty to defend Shade Tree in the underlying state court sui t. The di strict court granted3

Landmark’s motion and later administ ratively clo sed the case pending the resol ution of the case in state court. Scottsdale, Shade Tree, and Kno x Park lat er settled the state court action fo r $535,000. The settlement agreement provided th at Scottsdale would pay $535,000 to Kno x Park. In exchange, Kno x Park released Shade Tree and Scottsd ale from all liabilit y. Landmark was not a party to the agreement and, consequently, received no favors from the parties to it

. Kno x Park reserved the right to recover th e difference between $535,000 and $1.2 millio n from Landmark alone. Scottsdale reserved it s right to recoup part of th e $535,000 in settlement funds from Landmark in the federal action. Following th e settlement, th e district court re-opened the federal action, and Landmark filed

a second mo tion fo r summary judgment, arguing th at (1 ) Scotts dale had not shown an “ultimate defined lo ss” in excess of th e Scottsdale pol icy’s limit that would trigger coverage under the Landmark pol

icy; (2) Scottsdale had not com plied wit h all co ndit io ns precedent to recovery in the Landmark pol

icy; and (3) Scottsdale had not shown th at Shade Tree was the insured in the Landmark pol icy. Scottsdale opposed and filed a cross-motion fo r summary judgment against Landmark; Kno x Park purported to j oin t he cross-motion, though it had never filed a claim against Landmark. Reaching only th e fir st of Landmark’s arguments, the district court fo und th at Scottsdale had failed to demonstrate an “ult imat e net lo ss” in excess of the limit reserved to the Scottsdale pol icy and granted summary judgment in favor of Landmark. II. STANDARD OF REVIEW Questions of stand ing are reviewed de novo. M aiz v. Virani , 311 F.3d 334, 338 (5th Cir. 2002). The district court’s grant of summary judgment is also reviewed de novo. Morris v. Equifax Info. Servs., LLC , 457 F.3d 460, 464 (5th Cir. 2006). Sum mary judgment is proper if “there is no4

genuine issue as to any mat erial fact and

. . . the mo ving party is entitled to judgment as a mat ter of law.” FED R. C IV . P. 56(c). The parties do not dispute th at Texas law applies to this diversity case. See Erie R.R. Co. v. Tompkins , 304 U.S. 64, 78 (1938). III. DISCUSSION Three issues are raised by th e parties: (1) Landmark argues th at Knox Park does not have standing to appeal; (2) Scottsdale and Kno x Park assert th at th e di strict court’s grant of summary judgment on th e coverage issue was erroneous; and (3) Scottsdale alone argues that the district court’s grant of summary judgment on the duty to defend issue was in error. A. Standing Whether a party has standing to appeal invo lves the ques ti on of justiciabilit y, namely, “whether th e plaint iff has made out a ‘case or controversy ’ between himself and the defendant wit hin th e meaning of Article III.” Rohm & Hass Tex., Inc. v. Ortiz Bros. Insulation, Inc. , 32 F.3d 205, 208 (5th Cir. 1994). “Merely because a party appears in the district court proceedings does not mean th at th e party automatically has standing to appeal the judgment rendered by th at court.” Id. There must be “some th

reatened or actual injury resulting from the putatively illegal action,” Warth v. Seldin , 422 U.S. 490, 499 (1975) (int ernal quotation om it ted), and a lit igant may not merely “champion the rights of another,” Ortiz Bros. , 32 F.3d at 208. Regarding the injury required, “[a]n indirect financial stake in another party ’s claims i s insufficient to create standing on appeal.” I d. (alteration in original) (int ernal quotation om

it ted). “[T]he injury or th

reat of injury must be both real and immediat e[,] not conjectural or hypothetical.” Id. (int ernal quotation omitted). We agree wit h Landmark th at Kno x Park has no standing to appeal. Kno x Park has never filed

a cross-cl aim against Landmark. Instead, Knox Park joined Scottsdale’s motion for summary5

judgment on Scottsdale’s claim th at sought to establish th at the Landmark policy covers breach of warranty damages and, consequently, th at Land mark must indemnify Scottsdale for the amount Scottsdale paid to Kno x Park fo r such damages. Kno x Park, however, cannot champion a cl aim brought by Scottsdale. Id. at 208 & n.9. Kno x Park does not gain anyt hing if Scottsdale prevails and wins indemnit y fr om Landmark because Knox Park has released Scottsdale from liability. Wit hout a claim of it s own in the federal lit igation, Kno x Park has only an “indirect financial stake” in th e resol

ution of th e coverage dispute th rough its ability to litigate it s claims in the future. I d. at 208 (int ernal quotation omitted). The district court’s judgment concerned whether the Landmark pol

icy covered breach of warranty damages caused by the insured. Because Kno x Park is neit her th e insured nor an insurer in this dispute, a determination that the Landmark policy covers breach of warranty damages does not automatically result in a recovery by Kno x Park of the damages th at it preserved in th e state court settlement agreement and now seeks on appeal. Wit hout a claim, Kno x Park can only posit th at a favorable coverage rul ing here is likely to lat er result in it s recovery of damages from Landmark after a settlement or further litigation. Kno x Park r aises some argum ents in support of standing, all of which are meritless. Knox Park contends th at a holding th at it has no standing could result in conflicting judgments, speculating th at if it is dismissed and this court holds th at the Landmark pol icy does not cover breach of warranty damages, a subsequent suit between Knox Park and Landmark could end with a contrary result. A potenti al fo r conflicting results, however, does not confer standing wit hout a dire ct, real , and immediat e injury. See id. The test for standing focuses on “whether the plaint iff has ‘alleged such a personal stake in th e outcom e of th e controversy ’ as to warrant h is invo cation of federal-court6

jurisdiction,” Warth , 422 U.S. at 498 (quoting Baker v. Carr , 369 U.S. 186, 2 0 4 (1962)), not on whether the result may possibly conflict with that in a hypothetical future lawsuit. Kno x Park also argues th at it s failure to file a claim against Landmark is not fat al because the Federal Rules render cross-claims permissive and because it d oes not n eed its own claim, since Scottsdale’s com

plaint sought declarations regarding all parties’ rights and duties. Knox Park is correct th at cross-claims are permissive, but their permissiveness speaks not to whether relief can be granted when th ere is no claim filed but to whether t hose claims can be brought in subsequent lit igation. See Dunn v. Sears, Roebuck & Co. , 645 F.2d 511, 512 n.1 (5th Cir. 1981) (“[C]ross claims

are permissive rather th an com pulsory[,] and a party to an action has the option to pursue [them] in an independent action.”). Kno x Park’s argument th at it has standing based on Scottsdale’s request fo r declarations of all parties’ rights and duties is also flawed. Declaratory judgment does not exist to allo w courts to decide rights between two co-def endants when they have not sought to have their rights declared. The Declaratory Judgment Act provides that “any court of the Unit ed States, upon the filing o f an appropri ate pleading, may declare th e rights and other legal relations of any int erested party seeking such declaration , whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a) (emphasis added). Similarly, summary judgment is available only fo r parties who have filed a claim. See FED . R. C IV . P. 56(a) (“A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain

a declaratory judgment may . . . mo ve wit h or wit hout supporting affidavit s fo r a summary judgment

. . . .”). Kno x Park and Landmark did not fo rmally seek to have their rights vis-à-vis one another determ ined by t he district court. Knox Park’s appeal is dismissed. B. Coverage7

The resol ution of this issue depends entirely on language in the policies. The district co urt granted Landmark’s mo tion fo r summary judgment and denied Scottsdale and Kno x Park’s mo tion fo r summary judgment on th e issue of whether the Landmark pol icy covered any of Kno x Park’s claims against Shade Tree. The court fo und th at Sco ttsdal e presented no evidence of a loss that would trigger th e Landmark pol icy, which the district court fo und to exist fo r damages caused by the insured th at exceeded $1,000,000. Scottsdale challenges this rul ing, contending that the breach of warranty damages were covered by th e Landmark pol icy and not the Scottsdale pol icy. Landmark is t herefore required, according to Scottsdale, to indemnify it fo r the portion of the $535,000 paid to K nox Park that represents payments for breach of warranty damages. (1) Landmark’s subrogation arguments L andmark argues that Scottsdale’s right to indemnification is based on Scottsdale’s contractual subrogation to th e rights of it s insured, Shade Tree, and that the settlement agreement released Shade Tree from liability, thus extinguishing any subrogation rights. Landmark’s argument is unavailing, however, because even assuming Scottsdale had no contractual right of subrogation on th e basis of a rele ase of liability in favo r of Shade Tree, it can equitably subrogate to th e rights of Shade Tree to enforce the Landmark pol icy. See Employers Cas. Co. v. Transport Ins. Co. , 444 S.W.2d 606, 610 (Tex. 1969) (noting th at if the pol icy in question did not allow contractual subrogation, equitable subrogation applies). “The doctrine of subrogation is given a liberal application, and is broad enough to include every inst ance in which one person, not acting voluntarily, has paid a debt fo r which another was primarily liable and which in equit y and good conscience should have been discharged by the lat ter.” Liberty Mut. Ins. Co. v. Gen. Ins. Corp. , 517 S.W.2d 791, 797 (Tex. App. 1974) (int ernal quotation om it ted); see also Am. Indem. Lloyds v.2 “Ult imat e net lo ss” is defined as “t he total amo unt of damages fo r which the insured is legally

liable in payment of ‘bodily injury’, ‘property damage’ or ‘advertising injury.’”

3 There is no “[o]ther collectible primary insurance ,” and the “self-insured retention” is not applicable, since it is less than the amount from “underlying insurance.” 8 Travelers Prop. & Cas. Ins. Co. , 335 F.3d 429, 435 (5th Cir. 2003) (noting th at when two primary insurers of th e same insured settle a claim and one insurer pays “mo re th an it s share, ” the other insurer is entitled to recover th e excess paid). If the Landmark pol icy covers the breach of warranty claims, Scottsdale is entitled to recover, since Scottsdale paid the debt on those claims. (2) The Landmark policy Two ty pes of insurance pol

icies are at issue: the Scottsdale primary pol icy and the Landmark pol icy, which is labeled an umbrella pol icy. Umbrella pol

icies can provide horizontal coverage, even th ough th e pol

icy limit s of th e primary pol icy h ave not been exhausted, in sit uations where the primary pol

icy does not cover claims th at are covered by the umbrella pol icy. See, e.g. , Mission Nat’l Ins. Co. v. Duke Transp. Co. , 792 F.2d 550, 552 (5th Cir. 1986) (applying Louisiana law). The relevant portion of the Landmark policy provides: We will pay th ose sums th e insured becomes legally obligated to pay fo r “ult imat e net lo ss” 2 in excess of the “retained limit” because o f “bo dily injury” or “property damage” to which this insurance applies. . . . “Retained limit” means the greater of: a. The sum of amounts applicable to any “claim” or “suit” from: (1) “Underlying insurance”, whether such “underlying insurance” is collectible or not; and (2) Other collectible primary insurance; or b. The “self-insured retention”. . . . 3 “Underlying insurance ”: means t he c overage(s) afforded under [designated] insurance pol icies . . . .9

(emphasis added). The parties do not dispute the district court’s conclusion th at the Scottsdale pol icy is t he only designated policy referred to in the definition of “underlying insurance.” The coverage issue turns on (1) whether “coverage(s) afforded” means insurance coverage provided, and not excluded, by th e Scottsdale pol icy fo r particular categories of liabilit y, or (2) whether, taking int o consideration th e “underlying insurance” definit io n’s reference to “coverage(s) affo rded,” th e Landmark policy is not triggered until the total amo unt of coverage affo rded by the Scottsdale pol

icy fo r claims in all cat egories is exhausted. Scottsdale asserts th at th e district court erred by not specifically considering the definit io n of “underlying insurance,” which is “ coverage(s) afforded” by the Scottsdale po lic y. Because “[r]etained limit ” is defined wit h reference to “underlying insurance” and the Landmark pol icy provides coverage fo r damages in excess of th e retained limit , Scottsdale argues, the Landmark po licy provides horizontal coverage when th e Scottsdale pol icy provides no coverage fo r a given ty pe of claim. Per Scottsdale’s view, “coverage(s) affo rded” means the insurance provided, and not excluded, by the Scottsdale pol

icy. The contrary reading of th e phrase “coverage(s) a f fo rded” in the definit io n of “underlying insurance” is one in which “coverage(s) afforded” means the total monetary coverage, i .e. , pol icy limit , affo rd ed by the “underl ying insurance,” notwithstanding any coverage exclusions. Thus, the Landmark pol

icy, as the district court found, would only provide coverage when the total damages (both covered or not covered by th e Scottsdale pol icy) exceeded the Scottsdale policy limit of $1,000,000. The lat ter reading of th e pol icy is fault y. It confuses the con cepts of liabilit y limit s and coverage l

imit s, which are distinct. W ells v. Gulf Ins. Co. , No. 06-40911,

— F.3d —, 2007 WL4 Under Texas law, when a policy is susceptible to mo re than one reasonable interpretation,

courts must resolve th e uncertainty by adopting the construction th at favors coverage. See, e.g. , Nat’l Union Fire Ins. Co. v. Hudson Energy Co. , 811 S.W.2d 552, 555 (Tex. 1 991). Assuming both int erpretations are plausible, Scottsdale’s int erpretation th at the Landmark pol icy provides horizontal coverage should prevail. 10 1002137, at *3 (5th Cir. Apr. 4, 2007). Insurance pol icies, mo reover, “are strictl y construed against th e insurer in order to avoid exclusion of coverage,” see Puckett v. U.S. Fire Ins. Co. , 678 S.W.2d 936, 938 (Tex. 1984), and Landmark drafted the policy. Interpreting “underlying insurance” to mean the insurance coverage provided and not excluded properly gives meaning to th e words “coverage(s) affo rded” and resolves any uncertainty about th e pol

ic y’s language in favor of coverage. 4 Also , the Landmark pol icy excludes from it s coverage sit uations in which th e primary insurance be comes uncollectible, due to, i nter alia , inso lvency. It def

ines “retained limit” with reference to “‘[u]nderlying insurance,’ whether such ‘underlying insurance’ is collectible or not.” Applicabilit y, collectibilit y, recoverability, and coverage are concepts used to def

ine t he scope of horizontal coverage. S ee Duke Transp. Co. , 792 F.2d at 552–53. Landmark only specified non-collectible underlying insurance. It could have added language like “whether covered or not” but did not do so. We hold th at th e district court erred in granting summary judgment in favor of Landmark on th e issue of whether th e Landmark pol icy provided coverage fo r breach of warranty damages when “retained limit ” was defined as “ coverage(s) afforded” by the “underlying insurance.” That leaves the issue of whether the Scottsdale pol icy covers the breach of warranty claims at issue. If it does not, th e Landmark policy covers horizontally. (3) The Scottsdale policy5 Landmark also argues th at th e insured on the Landmark pol icy was different from the insured on th e Scottsdale pol

icy. This contention is based on the fact th at Shade Tree had mult iple d/b/a aliases, one of which was th e Scottsdale insured and a separate one of which was the Landmark insured. This argument does not require a holding that Shade Tree is not a Landmark insured since a slight variation of an assumed name does not prevent coverage when the true identity behind the 11 Scottsdale contends th at th e Scottsdale pol icy and the Landmark pol

icy differ in one impo rtant respect th at requi

res a holding that the former does not cover breach of warranty damages and the lat ter does. That difference is in th e pol icies’ exclusions on “property damage.” Scottsdale’s argument is th at th e Scottsdale pol icy’s “property damage” exclusion is broader th an the corresponding exclusion in th e Landmark pol icy because of th e pol

icies’ respective definitions of “your work,” a term th at fo rms part of both pol icies’ property damage exclusions. The Scottsdale pol icy’s definit io n of “yo ur work” includes “[w]arranties or representations made at any time wit h respect to the fit ness, quality, durability, performance or use of ‘yo ur work.’” Landmark does not argue this point; thus it concedes that the Scottsdale policy excludes damages arising from such warranties. The Landmark pol

icy’s definit io n of “yo ur work” applicable to the property damage exclusion does not include warranties and representations, and therefore the Landmark pol icy does not exclude damage from such acts. Since the damages at issue are breach of warranty damages, the Landmark pol icy co vers. (4) Landmark’s alternate bases to affirm The Landmark pol

icy requires, as a condition precedent to liabilit y, th at the “ult imat e net lo ss” be finally determ

ined by actual tri al or by “written agreement of the insured, the claimant or the claimant ’s legal representative and us [Landmark]” (hereinaf ter, “Consent Clause”). Landmark argues th at Scottsdale did not sati sfy th e Consent Clause because there was no tri al in the underlying suit and Scottsdale did not obtain any consent to the settlement agreement. 5 Landmark is correct that thereassumed names is th e same. See Scottsdale Ins. Co. v. Sessions , 331 F. Supp. 2d 479, 486 (N.D. Tex.

2003), aff’d , Scottsdale Ins. Co. v. Williams , 108 F. App’x 909 (5th Cir. 2004); see also Dillard v. Smith , 205 S.W.2d 366, 367–68 (Tex. 1947) (holding th at, under Texas law, a person doing business under an assumed name can be sued under the assumed name, his natural name, or both). 12 was no tri al and, th ough Landmark demanded settlement wit hin the Scottsdale pol icy’s limit s, it was not a party to the state court agreem ent and did not consent to the settlement. Nonetheless, Landmark waived it s right to deny coverage on the basis of the Consent Clause pursuant to th e rule in Gulf Insurance Co. v. Parker Products, Inc. , 498 S.W.2d 676, 679 (Tex. 1973). Under Gulf Insurance , an insurer can require an insured to com ply wit h a consent clause “fo r it s own protection, but it may not do so aft er it is given the opportunity to defend the suit or to agree to th e settlement and refuses to do eit her on the erroneous ground th at it has no responsibility under th e pol icy.” Id. The policy behind the waiver of consent clauses is as follows: The rationale behind holding to this particular waiver theory is th at a claimant should not be required to approach his insurer, hat in hand, and request consent to settle wit h another when he has already been told in essence, that the insurer is not concerned, and he is to go his way. It is difficult to see why an insurer should be allo wed, on the one hand, to deny liabilit y and thus, in the eyes of the insured breach his contract and, at th e same time, on th e oth er hand, be allo wed to insist th at the insured honor all his contractual com

mit ment s. . . . [I]n the case of existent, denied liabilit y the denial is a breach of contract on th e part of the insurer and it s breach should[,] by rights, relieve th e insured of th e punitive effects of his failure to com ply wit h consent provisions of th e insurance policy. Ford v. State Farm Mut. Auto. Ins. Co. , 550 S.W.2d 663, 666 (Tex. 1977) (ellipses in original and int ernal quotation om

it ted). Given that Landmark demanded settlement within the Scottsdale policy’s limit and did not provide coverage below that limit, Landmark’s refusal to cover was motivated by it s erroneous view that coverage existed only fo r l iabilit y in excess of $1,000,000. Also, Landmark had an opportunit y t o agree to a settlement since it demanded one. Landmark cannot invoke the13

Consent Clause while simultaneously refusing to cover breach of warranty damages. See Gulf Ins. , 498 S.W.2d at 679; see also Ford , 550 S.W.2d at 666. C. Landmark’s duty to defend The district court granted summary judgment in favor of Landmark on Scottsdale’s claim th at Landmark owed a duty to defend Shade Tree. The district court fo und th at Scottsdale had a duty to defend Shade Tree because at least som e of Kno x Park’s claims were not excluded by the Scottsdale pol icy. The district court fo und th at th e Landmark pol icy did not confer a duty to defend because it s terms limit ed th e duty to sit uations where the “underlying insurance” is exhausted. Sco ttsdale challenges this finding, contending th at Landmark owes Scottsdale a pro rata portion of the attorney s fees Scottsdale expended defending Shade Tree on the breach of warranty claims, since th ose claims were covered by the Landmark policy. The Landmark policy provides: We have a duty to def

end the insured [Shade Tree] against any “suits” to which this insurance applies: (a) But which are not covered by any “underlying insurance” shown in the Declarations or by any ot her applicable primary policies that may apply; or (b) If the applicable limit of “underlying insurance” is exhausted. As noted above, th e definit io n of “underlying insurance” specifically refers to the Scottsdale pol icy, and the parties agree that the definition refers to no other policies. Scottsdale seizes on th e Landmark pol icy’s acknowledgment of a duty to defend under (a)

or (b) and argues th at th e district court’s conclusion based on (b)—no exhaustion of the “underlying insurance” pol

icy’s limit s—ignores th e possibilit y of a duty to defend under (a). Scottsdale contends th at subsection (a) of the Landmark policy provides a duty to defend in sit uations, such as the one6 The cases cited by Scottsdale th at allo cate attorney s fees amo ng insurers are inapposite. In

Coastal Iron Works, Inc. v. Petty Ray Geophysical , 783 F.2d 577, 585–86 (5th Cir. 1986), the court split attorney s fees between two insurers, but, unlike here, the insurance pol icies conferred on both insurers a duty to defend. In Hardw are Dealers Mutual Fire Insurance Co. v. Farmers Insurance Exchange , 444 S.W.2d 583, 590 (Tex. 1969), both insurers’ pol icies entirely covered the insured wit hout th e dist inct io n here that one policy covered certain claims and another covered different claims. 14 here, where th e primary pol icy does not provide coverage fo r particular claims. It does not argue th at subsection (b) confers a duty to defend. Scottsdale’s argument is flawed. At least some of the claims in the state court suit were covered by th e Scottsdale pol icy. As such, Scottsdale had a duty to defend the entire suit. See, e.g. , Enserch Corp. v. Shand Morahan & Co. , 952 F.2d 1485, 1492 (5th Cir. 1992) (“If any allegation in th e com plaint is even potenti ally covered by the pol icy then the insurer has a duty to def end its insured.”). Under th e plain terms of subsection (a) in the Landmark pol icy, Landmark has no duty to defend when a suit is covered by “any ‘underlying insurance.’” Because the Scottsdale pol icy covers th e state court suit, th e Landmark pol icy provides th at Landmark has no duty to defend Shade Tree. This is so even th ough, as discussed supra , the Landmark policy covers breach of warranty claims th at th e Scottsdale pol

icy excludes from coverage, since the duty to defend in the Landmark pol icy is determined on a per suit, rather than a per claim, basis. 6 IV. CONCLUSION We DISMISS Kno x Park’s appeal fo r lack of standin g . We AFFIRM the district court’s judgment th at concluded Landmark had no duty to defend Shade Tree, we REVERSE the judgment th at concluded th e Landmark pol icy did not cover breach of warranty damages, and we REMAND fo r proceedings not inconsistent with this opinion.15

GARWOOD, Circuit Judge, concurring in part and dissenting in part. I j oin in all o f Judge Clement’s well considered opinion except as follows. I disagree that Landmark’s demand th at Scottsdale accept a settlement wit hin Scottsdale’s pol icy limit s constituted a denial of coverage on Landmark’s part or a waiver of it s rights under the actual tri al or approved settlement clause of it s pol icy. And, the fact that Landmark had the opportunity to agree to a settlement but declined to does not, of it self, mean anyt hing mo re th an th at it exercised the rights its policy gave it. However, in my opinio n Landmark had a duty to defend Shade Tree against Kno x Park’s suit in which Kno x Park made breach of warranty claims against Shade Tree. Landmark’s policy provided th e primary, and th e only, liabilit y or indemnit y co verage for such claims. In my view, a reasonable construction of the Landmark pol icy is th at, f

or thi s purpose, the Knox Park suit was not “covered by” t he Scottsdale pol

icy because although that policy covered some of the claims in t he suit it did not cover the breach of warranty claims, which only the Landmark pol icy covered. While a contrary construction of th e Landmark pol icy is also reasonable, we are to adopt th at reasonable construction which favors th e insured and com ports wit h the settled Texas rule th at where primary liabilit y coverage is concerned there is no duty to indemnify absent a duty to def end. Landmark refused to perform and repudiated it s duty to defend Shade Tree and fo r that reason waived it s rights under the actual trial or approved settlement clause of it s pol icy. See, e.g., Gulf Ins. Co. v. Parker Products , 498 S.W.2d 676, 679 (Tex. 1973).