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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

MID-CONTINENT CASUALTY 

COMPANY,

§

§

§

 Plaintiff, §

§

v. § CIVIL ACTION NO. 3:22-CV-2184-B

§

VIBRANT BUILDERS, LLC, and 

MOSER UP AT HENDERSON, INC., 

§

§

§

 Defendants. §

MEMORANDUM OPINION AND ORDER

Before the Court is Plaintiff Mid-Continent Casualty Company (“Mid-Continent”)’s 

Motion for Summary Judgment (Doc. 37), Defendant Vibrant Builders, LLC (“Vibrant”)’s Cross 

Motion for Summary Judgment on the Duty to Defend (Doc. 44), and Defendant Moser Up at 

Henderson, Inc. (“Moser Up”)’s Cross Motion for Summary Judgment on the Duty to Defend 

(Doc. 43). For the reasons set forth below, the Court DENIES Mid-Continent’s Motion, and 

GRANTS Vibrant’s and Moser Up’s (collectively, “Defendants”) Motions. The Court further 

DISMISSES WITHOUT PREJUDICE Mid-Continent’s declaratory judgment claim on the duty 

to indemnify as unripe. 

I.

BACKGROUND

This is an insurance dispute. Vibrant is a construction company. See Doc. 37-2, App’x, 

140. Mid-Continent is an insurer. Id. at 5, 69. Mid-Continent issued an insurance policy to Vibrant 

that required Mid-Continent to defend Vibrant in “any suit seeking . . . damages” covered by that

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policy. Id. at 16, 82. Vibrant’s co-defendant, Moser Up, has since sued Vibrant in a separate lawsuit 

for damages allegedly caused by Vibrant. Id. at 130–46. Mid-Continent believes that it does not 

have a duty to defend or indemnify Vibrant for the claims asserted by Moser Up. Doc. 8, Am. 

Compl., 12–22. Defendants argue that Mid-Continent does have such a duty. Doc. 43, Moser Up 

Mot., 1; Doc. 44, Vibrant Mot., 6. This lawsuit was initiated to resolve this dispute. See generally, 

Doc. 8, Am. Compl.

Vibrant obtained two insurance policies from Mid-Continent. See Doc. 37-2, Pl.’s App’x, 

5–128. The first policy provided coverage from December 25, 2017, to December 25, 2018; the 

second policy provided coverage from December 25, 2018, to December 25, 2019. Id. at 5, 69. 

Aside from the period of coverage, the two policies (collectively, the “Policy”) were identical. 

Compare id. at 5–67, with id. at 69–128. 

Under the Policy, Mid-Continent agreed to insure certain “property damage.” Id. at 16, 82.

Specifically, the Policy provides coverage for property damage if:

(1) The . . . “property damage” is caused by an “occurrence” that takes place in the 

“coverage territory”; 

(2) The . . . “property damage” occurs during the policy period; and

(3) Prior to the policy period, no insured . . . knew that the . . . “property damage” 

had occurred, in whole or in part . . . .

Id. The Policy defines “occurrence” as “an accident, including continuous or repeated exposure to 

substantially the same general harmful conditions.” Id. at 30, 96. The Policy also requires MidContinent to defend Vibrant Builders against any suit for “property damage” that is covered by the 

Policy. Id. at 16, 82. However, Mid-Continent has “no duty to defend [Vibrant] against any suit 

seeking damages for . . . property damage to which [the Policy] does not apply.” Id. 

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Vibrant was later hired to assist in the construction of the Moser Up Condominiums in 

Dallas, Texas. Id. at 132–33. In that role, Vibrant “supervised, directed, managed, constructed, 

designed, provided materials, installed materials, facilitated repairs, maintained, inspected, and/or 

played other significant roles in the development, construction, sales, marketing, and repair of [the 

condominiums].” Id. at 133. After construction was completed, however, Defendant Moser Up, 

the condominium’s homeowner’s association, sued Vibrant in state court (the “Underlying Suit”), 

alleging that Vibrant was negligent in the construction, design, and installation of the 

condominiums. See generally id. at 130–146. Moser Up further alleged that there was extensive 

damage to the condominiums as a result of Vibrant’s negligence. See id. at 135. 

Mid-Continent initiated the present suit against Vibrant and Moser Up to obtain a 

declaratory judgment that it has no duty to defend or indemnify Vibrant in the Underlying Suit. 

See Doc. 8, Am. Compl., 16–20. Mid-Continent now moves for summary judgment on both of 

those claims. See Doc. 37, Pl.’s Mot. Moser Up and Vibrant have cross-moved for partial summary 

judgment solely on the duty to defend. See Doc. 43, Moser Up Mot.; Doc. 44, Vibrant Mot. The 

Court considers the Motions below. 

II.

LEGAL STANDARD

Federal Rule of Civil Procedure 56(a) provides that summary judgment is appropriate “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.” FED. R. CIV. P. 56(a). The substantive law governing a matter 

determines which facts are material to a case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 

(1986). The summary-judgment movant bears the burden of proving that no genuine issue of 

material fact exists. Latimer v. Smithkline & French Lab’ys, 919 F.2d 301, 303 (5th Cir. 1990). 

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Usually, this requires the movant to identify “those portions of the pleadings, depositions, answers 

to interrogatories, and admissions on file, together with affidavits, if any, which it believes 

demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 

323 (1986) (citations omitted).

Once the summary-judgment movant has met this burden, the burden shifts to the nonmovant to “go beyond the pleadings and designate specific facts” showing that a genuine issue 

exists. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (per curiam) (citing Celotex, 

477 U.S. at 325). “This burden is not satisfied with ‘some metaphysical doubt as to the material 

facts,’ by ‘conclusory allegations,’ by ‘unsubstantiated assertions,’ or by only a ‘scintilla’ of 

evidence.” Id. (citations omitted). Instead, the non-moving party must “come forward with specific 

facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 

475 U.S. 574, 587 (1986) (emphasis in original) (citations omitted).

“[C]ourts are required to view the facts and draw reasonable inferences in the light most 

favorable to the party opposing the summary judgment motion.” Scott v. Harris, 550 U.S. 372, 378 

(2007) (citations omitted). But the Court need not “sift through the record in search of evidence 

to support a party’s opposition to summary judgment.” Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 

455, 458 (5th Cir. 1998) (citations omitted). If the non-movant is unable to make the required 

showing, the Court must grant summary judgment. Little, 37 F.3d at 1076.

III.

ANALYSIS

Mid-Continent seeks a declaratory judgment that it has (1) no duty to defend Vibrant in 

the Underlying Suit and (2) no duty to indemnify Vibrant for any damages awarded in the 

Underlying Suit. See Doc. 8, Am. Compl., 16–20. “Under Texas law, an insurer may have two 

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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) (citing Gilbane Bldg. 

Co. v. Admiral Ins. Co., 664 F.3d 589, 594 (5th Cir. 2011)). “The Texas Supreme Court has 

explained that the two duties are distinct, and they are to be decided separately.” Gilbane Bldg. Co., 

664 F.3d at 594 (citing D.R. Horton–Tex., Ltd. v. Markel Int’l Ins. Co., 300 S.W.3d 740, 743 (Tex.

2009)). Here, the Court considers the duty to defend first. 

A. Duty to Defend

The Policy requires Mid-Continent to defend Vibrant Builders against any suit for “property 

damage” that is covered by the Policy. Doc. 37-2, App’x, 16, 82. However, Mid-Continent has “no 

duty to defend [Vibrant] against any suit seeking damages for . . . property damage to which [the 

Policy] does not apply.” Id. Thus, the question in this case is whether the property damage Moser 

Up alleges that Vibrant caused is covered by the Policy. The Court concludes that it is. 

“The duty to defend is a creature of contract arising from a liability insurer’s agreement to 

defend its insured against claims or suits seeking damages covered by the policy.” Loya Ins. Co. v. 

Avalos, 610 S.W.3d 878, 880–81 (Tex. 2020). To determine whether a duty to defend exists, Texas 

courts generally apply the so-called “eight-corners rule.” Pharr-San Juan-Alamo Indep. Sch. Dist. v. 

Texas Pol. Subdivisions Prop./Cas. Joint Self Ins. Fund, 642 S.W.3d 466, 472 (Tex. 2022). Under this 

eight-corners rule, “the insurer’s duty to defend is determined by comparing the allegations in the 

plaintiff’s [complaint] to the policy provisions, without regard to the truth or falsity of those 

allegations and without reference to facts otherwise known or ultimately proven.” Windermere Oaks 

Water Supply Corp. v. Allied World Specialty Ins. Co., 67 F.4th 672, 675 (5th Cir. 2023) (alterations 

in original) (quoting Monroe Guar. Ins. Co. v. BITCO Gen. Ins. Corp., 640 S.W.3d 195, 199 (Tex. 

2022)). “The rule’s name derives from the fact that only two documents are ordinarily relevant to 

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the determination of the duty to defend: the policy and the plaintiff’s pleading.” Monroe, 640 

S.W.3d at 199; see also Richards v. State Farm Lloyds, 597 S.W.3d 492, 494 (Tex. 2020); Amerisure 

Ins. Co. v. Navigators Ins. Co., 611 F.3d 299, 309 (5th Cir. 2010). “Resort to evidence outside the 

four corners of these two documents is generally prohibited.” Siplast, Inc. v. Emps. Mut. Cas. Co., 

23 F.4th 486, 492 (5th Cir. 2022) (citation omitted).

“The party seeking coverage has the initial burden of establishing that the underlying claims 

potentially state a cause of action covered by the policy.” BITCO Gen. Ins. Corp. v. Monroe Guar. 

Ins. Co., 31 F.4th 325, 329 (5th Cir. 2022). “If the petition or complaint alleges at least one cause 

of action potentially within the policy’s coverage, then the insurer is obligated to defend the 

insured.” Penn-Am. Ins. Co. v. Tarango Trucking, L.L.C., 30 F.4th 440, 444 (5th Cir. 2022). “After 

the insured meets his burden to show that the alleged facts in the petition state a potential claim 

against him, to defeat the duty to defend, the insurer bears the burden of showing that the plain 

language of a policy exclusion or limitation allows the insurer to avoid coverage of all claims . . . .” 

Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523, 528 (5th Cir. 2004). “If an exclusion is 

subject to more than one reasonable construction, [courts] adopt the interpretation urged by the 

insured as long as it is not unreasonable and even if the insurer’s interpretation ‘appears to be more 

reasonable or a more accurate reflection of the parties’ intent.’” Tarango Trucking, 30 F.4th at 444 

(citation omitted). 

Applying these principles here, the Court concludes that Mid-Continent has a duty to 

defend Vibrant. 

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1. Coverage

Defendants have the initial burden to show that the facts alleged in the Underlying Suit 

fall within the Policy’s coverage. See BITCO Gen. Ins., 31 F.4th at 329. Here, the Policy provides

coverage if the following conditions are met:

(1) The . . . “property damage” is caused by an “occurrence” that takes place in the 

“coverage territory”; 

(2) The . . . “property damage” occurs during the policy period; and

(3) Prior to the policy period, no insured. . . knew that the . . . “property damage” 

had occurred, in whole or in part . . . .

Doc. 44-2, Def.’s App’x, 16, 82. As relevant to the present dispute, the Policy defines “coverage 

territory,” “occurrence,” and “property damage” as follows:

“Coverage territory” means . . . [t]he United States of America (including its 

territories and possessions), . . . ;

. . .

“Occurrence” means an accident, including continuous or repeated exposure to 

substantially the same general harmful conditions.

. . .

“Property damage” means . . . [p]hysical injury to tangible property, including all 

resulting loss of use of that property. All such loss of use shall be deemed to occur 

at the time of the physical injury that caused it[.]

Id. at 28, 30, 94, 96. Finally, the “policy period” ran from December 25, 2017, to December 25, 

2019. Doc. 37-2, Pl,’s App’x, 5, 69.

Thus, to discharge their initial burden of showing “that the underlying claims potentially 

state a cause of action covered by the policy,” Tarango Trucking, 30 F.4th at 444, Defendants must 

establish that the Underlying Suit alleges: (1) physical injury to tangible property that (2) is caused 

by an accident, (3) takes place in the United States, (4) occurred sometime between December 

25, 2017, and December 25, 2019, and (5) that Vibrant was unaware of the property damage prior 

to December 25, 2017. See Doc. 44-2, Def.’s App’x, 16, 28, 30, 82, 94, 96; Doc. 37-2, Pl,’s App’x, 

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5, 69. There is no dispute as to the fifth requirement. See generally Doc. 37, Pl.’s Mot. Thus, the 

Court only considers whether Defendants have satisfied their burden with respect to the first four 

requirements. 

Here, the operative pleading in the Underlying Suit, the first amended petition, asserts a 

cause of action that potentially falls within the Policy’s coverage. The first amended petition alleges 

that Vibrant was engaged as a contractor to assist in the construction and repair of the Moser Up 

condominiums, which are located in Dallas, Texas. Doc. 37-2, Pl.’s App’x, 132–33, 140. In that 

role, Vibrant “supervised, directed, managed, constructed, designed, provided materials, installed 

materials, facilitated repairs, maintained, inspected, and/or played other significant roles in the 

development, construction, sales, marketing, and repair of [the condominiums].” Id. at 136. 

However, the first amended petition continues, Vibrant “negligently, carelessly, [tortiously], and 

wrongfully fail[ed] to use reasonable care in the development, design, construction, maintenance, 

supervision, inspection, and repair of [the condominiums].” Id. And as a result of these mistakes, 

the condominiums suffered “damages that began when the building was improperly constructed, 

and upon the first rain event that followed the construction of each element.” Id. at 134. 

Specifically, the first amended petition alleges that Vibrant improperly constructed, designed, and 

installed: 

• The “TPO roofing resulting in water intrusion and damage to framing materials, other 

building components, insulation, and interior finishes such as drywall, base boards, and 

flooring, among other things”;

• “[S]kylights, gutters, and scuppers resulting in water intrusion and damage to framing 

materials, other building components, insulation, and interior finishes such as drywall, base 

boards, and flooring, among other things”;

• “[T]he stucco cladding systems resulting in severe cracks and bulges, efflorescence on soffits 

and staining below, water intrusion and damage to framing materials, other building 

components, insulation, and interior finishes such as drywall, base boards, and flooring, 

among other things”;

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• “[T]he moisture management system such that the drainage of water is inhibited on/or 

around windows and doors resulting in water intrusion and damage to framing materials, 

other building components, insulation, and interior drywall, baseboards, carpet, and 

flooring among other things”;

• “[W]indows and doors resulting in water intrusion and damage to framing materials, other 

building components, insulation, and interior finishes such as drywall, base boards, and 

flooring, among other things”;

• The “adhered wood siding to TPO such that wood planks are falling off resulting in damage 

to the surrounding building components and property, and further, resulting in life safety 

hazard to people below”;

• The “concrete flatwork such that water ponds on sidewalks, shared driveways, and allows 

water intrusion into garages”; and 

• The “balcony railings such that the rails are rusting prematurely, resulting in staining to the 

surfaces below.”

Id. at 134–35. 

These allegations are sufficient to bring the negligence claim against Vibrant in the 

Underlying Suit within the Policy’s coverage. First, the first amended petition is replete with 

allegations of “property damage” within the meaning of the Policy. Doc. 44-2, Def.’s App’x, 30, 96 

(“‘Property damage’ means . . . [p]hysical injury to tangible property . . . .”). The first amended 

petition alleges that “water intrusion” resulted in physical injury to, inter alia, framing materials, 

insulation, interior finishes, carpeting, garages, and railings. Id. at 134–35. And framing materials, 

insulation, interior finishes, carpeting, garages, and railings all constitute “tangible property.”

Adams v. Great Am. Lloyd’s Ins. Co., 891 S.W.2d 769, 772 (Tex. App.—Austin 1995, no pet.)

(“Tangible property is capable of being handled or touched and may be evaluated by the physical 

senses.”); Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1, 10 (Tex. 2007) (“The home 

and its component parts are clearly ‘tangible property.’”). As such, the Underlying Suit sufficiently 

alleges “property damage.”

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Second, the property damage at issue in the Underlying Suit was allegedly caused by an 

“occurrence” within the meaning of the Policy. Doc. 44-2, Def.’s App’x, 30, 96 (“‘Occurrence’

means an accident, including continuous or repeated exposure to substantially the same general 

harmful conditions.”). According to the first amended petition, the damage to the property was 

caused primarily by water intrusion; and that water intrusion was itself caused by Vibrant’s 

negligence in the design, construction, and installation of the Moser Up’s condominiums’ roofing, 

skylights, windows, doors, and balcony railings, among other things. Doc. 37-2, Pl.’s App’x, 133–

35. A pleading that alleges property damage resulting from a defendant’s negligence, such as the 

first amended petition, is akin to alleging that the property damage was the result of an accident. 

See Lamar Homes, 242 S.W.3d at 9–10; cf. Indian Harbor Ins. Co. v. KB Lone Star, Inc., No. H-11-

CV-1846, 2012 WL 3866858, at *25 (S.D. Tex. Sept. 5, 2012) (“Where the petition in the 

underlying suit(s) alleges that the defendant(s) acted intentionally rather than negligently, the 

insurer does not have a duty to defend.”(alterations in original)). Thus, the first amended petition’s

allegations of Vibrant’s negligence are sufficient to demonstrate that the property damage was

caused an “occurrence” covered by the Policy, namely, by an accident. 

Third, the property damage occurred within the “coverage territory.” Doc. 44-2, Def.’s 

App’x, 28, 94 (“‘Coverage territory’ means . . . [t]he United States of America (including its 

territories and possessions).”). The allegedly damaged property were the Moser Up condominiums. 

Id. at 134–35. Those condominiums are located in Texas. Id. at 132. Texas is located in the United 

States. See Joint Resolution for Annexing Texas to the United States, 5 Stat. 797 (1845). 

Therefore, the property damage occurred within the “coverage territory.”

Fourth, the first amended petition is sufficient to show that the property damage potentially 

occurred during the “policy period,” i.e., between December 25, 2017, and December 25, 2019. See

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Don’s Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20, 30 (Tex. 2008). At the outset, the 

Court notes that the first amended petition does not allege when Vibrant began construction on 

the Moser Up condominiums or when the property damage allegedly occurred. See Doc. 37-2, 

App’x, 130–146. However, “Texas courts have held that a carrier is obligated to defend when the 

underlying petitions are silent about the time of the damage.” Indian Harbor Ins., 2012 WL 

3866858, at *14 (S.D. Tex. Sept. 5, 2012) (citing Gehan Homes, Ltd. v. Employers Mut. Cas. Co., 

146 S.W.3d 833, 845–46 (Tex. App.—Dallas 2004, pet. denied). For example, in GEICO Gen. 

Ins. Co. v. Austin Power Inc., the Houston Court of Appeals found that a pleading potentially 

alleged an injury during the policy period where it “alleged that the injury occurred before the 

petition was filed” and “[n]othing in the pleadings negate[d] the possibility that the injury 

occurred” during the policy period. 357 S.W.3d 821, 825 (Tex. App.—Houston [14th Dist.] 2012, 

pet. denied). Here too, the Underlying Suit was initially filed in October 2021, see Doc. 43, Moser 

Up Mot., 11, and the first amended petition alleges injuries that occurred before this date. Doc. 

37-2, 137 (pleading that Vibrant’s negligence “has resulted in damage to real or personal property.”). 

And nothing in the first amended petition negates the possibility that property damage sued upon 

occurred within the requisite period. See GEICO Gen. Ins., 357 S.W.3d at 825; Lyda Swinerton 

Builders, Inc. v. Oklahoma Sur. Co., 903 F.3d 435, 448 (5th Cir. 2018). Because any doubts in the 

first amended petition are to be resolved in favor of coverage, the Court concludes that the 

Underlying Suit potentially alleges that the property damage occurred within the “policy period.”

See Gehan Homes, 146 S.W.3d at 846 (“In construing the allegations of the underlying suit, the 

pleadings are strictly construed against the insurer, and any doubt is resolved in favor of 

coverage.”). 

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Mid-Continent, however, argues that Defendants were required to put forth extrinsic 

evidence establishing that property damage occurred during the policy period. See Doc. 38, Pl.’s 

Mot. Br., 7–10; Doc. 46, Pl.’s Resp., 3–6; Doc. 49, Pl.’s Resp., 3–5. While Mid-Continent 

acknowledges that the eight corners rule generally prohibits consideration of such extrinsic 

evidence, it argues that an exception to this rule is applicable under the Supreme Court of Texas’s 

recent decision in Monroe Guar. Ins. Co. v. BITCO Gen. Ins. Corp., 640 S.W.3d 195 (Tex. 2022). 

See e.g., Doc. 46., Pl.’s Resp., 3–6. Mid-Continent correctly characterizes Monroe as adopting an 

exception to the eight corners rule. As the Monroe Court explained:

[I]f the underlying petition states a claim that could trigger the duty to defend, and 

the application of the eight-corners rule, due to a gap in the plaintiff's pleading, is 

not determinative of whether coverage exists, Texas law permits consideration of 

extrinsic evidence provided the evidence (1) goes solely to an issue of coverage and 

does not overlap with the merits of liability, (2) does not contradict facts alleged in 

the pleading, and (3) conclusively establishes the coverage fact to be proved.

640 S.W.3d at 203. According to Mid-Continent, in this case, evidence of when the alleged 

property damaged occurred would satisfy each prequisite to the application of the Monroe

exception. See Doc. 38, Pl.’s Mot. Br., 7–10; Doc. 46, Pl.’s Resp., 3–6; Doc. 49, Pl.’s Resp., 3–5. 

However, Mid-Continent continues, neither Defendant has presented any extrinsic evidence that 

the alleged property damage occurred in the policy period. See Doc. 38, Pl.’s Mot. Br., 7–10; Doc. 

46, Pl.’s Resp., 3–6; Doc. 49, Pl.’s Resp., 3–5. And because they have failed to do so, Mid-Continent

argues that it “has conclusively established the fact to be proven,” i.e., that the damage occurred 

outside the policy period. Doc. 38, Pl.’s Mot. Br., 9. 

Mid-Continent misunderstands how the Monroe exception works. Mid-Continent

essentially argues that because certain extrinsic evidence could be considered, Defendants were 

required to come forward with such evidence. See Doc. 38, Pl.’s Mot. Br., 7–10. But Monroe does 

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not impose a burden on any party come forward with extrinsic evidence in the first instance; it 

merely permits a court, under certain circumstances, to consider extrinsic evidence that has already 

been proffered. See Pharr-San Juan-Alamo Indep. Sch. Dist., 642 S.W.3d at 477 (“[W]e must apply 

the eight-corners rule to determine whether the [insurer] had a duty to defend . . . , and may not 

consider extrinsic evidence unless [the Monroe exception applies].”). If no extrinsic evidence is 

offered by the insured—which would presumably be most cases in light of the general bar against 

extrinsic evidence—Monroe simply does not come into play; instead, the eight-corners rule governs

the analysis. And as explained, under the eight corners rule, the first amended petition raises facts 

which support the reasonable conclusion that the property damage potentially occurred during the 

policy period. 

In sum, Defendants have shown that the damage alleged in the Underlying Suit falls within 

the Policy’s coverage. There are five requirements to coverage under the Policy. Defendants have 

shown that the claims in the Underlying Suit meet each of these requirements. Thus, Defendants 

have discharged their initial burden. 

2. Exclusions 

As Defendants have discharged their burden to establish that the claims in the Underlying 

Suit fall within the Policy’s coverage, the burden shifts to Mid-Continent to demonstrate that those 

claims fall within a Policy exclusion. See Northfield Ins. Co., 363 F.3d at 528. Mid-Continent argues 

that three Policy exclusions are applicable here. See Doc. 38, Pl.’s Mot. Br., 6–7. The Court 

considers the applicability of each exclusion in turn. 

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i. Property damage exclusions

Mid-Continent first argues that the claims in the Underlying Suit fall within two exclusions 

for certain property damage. See Doc. 38, Pl.’s Mot. Br., 6. Specifically, it argues that they fall 

within the Policy’s exclusion for “property damage” to:

(5) That particular part of real property on which you or any contractors or 

subcontractors working directly or indirectly on your behalf are performing 

operations, if the “property damage” arises out of those operations

(6) That particular part of any property that must be restored, repaired or replaced 

because “your work” was incorrectly performed on it.

Doc. 37-2, Pl.’s App’x, 17–20, 83–86. 

The Fifth Circuit considered the scope of both exclusions in Mid-Continent Cas. Co. v. JHP 

Dev., Inc., 557 F.3d 207 (5th Cir. 2009).

1 With respect to exclusion (5), the Court explained that 

it “applies only to damage caused during active physical construction activities[,] . . . [not] to 

damage caused during a prolonged suspension of active construction work.” Id. at 213. With 

respect to exclusion (6), the Court held that it

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. 

1 The language of the property damage exclusions at issue here mirrors the language of the 

exclusions in Mid-Continent Cas. Co. v. JHP Dev., Inc.. See 557 F.3d at 211 (“Exclusion j(5) excludes 

property damage to ‘that particular part of real property on which you or any contractors or subcontractors 

working directly or indirectly on your behalf are performing operations, if the property damage arises out of 

those operations. Exclusion j(6) excludes property damage to that particular part of any property that must 

be restored, repaired or replaced because ‘your work’ was incorrectly performed on it.” (quotations and 

alterations omitted)). 

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Following the Fifth Circuit’s interpretation of these two exclusions, it is clear that neither

applies. Exclusion (5) does not apply to the claims in the Underlying Suit because the first amended 

petition alleges that the damage to the property “upon the first rain event that followed the 

construction of each element.” Doc. 37-2, Pl.’s App’x, 134. If the damage to the property occurred 

“follow[ing] the construction,” id., then the damage was not “caused during active physical 

construction activities.” JHP Dev., 557 F.3d at 211. Exclusion (6) does not apply because the first 

amended petition alleges that some of the damaged property was not the subject of Vibrant’s work. 

As one example, the first amended petition avers that Vibrant negligently installed the roof, and 

that as a result of this allegedly shoddy roof work, water intruded into the interior of the home, 

causing “damage to . . . interior finishes, such as drywall, base boards, and flooring.” Doc. 37-2, Pl.’s 

App’x, 135. There are no allegations that Vibrant worked on the drywalls, baseboards, or flooring 

at all, let alone that Vibrant negligently preformed any work on such property. See JHP Dev., 557 

F.3d at 215. Accordingly, exclusion (6) is likewise inapplicable. 

ii. Your work exclusion 

Mid-Continent lastly argues that the claims in the Underlying Suit fall within the “Your 

Work Exclusion.” Doc. 38, Pl.’s Mot. Br., 7. This exclusion precludes coverage for “‘[p]roperty 

damage’ to ‘your work’ arising out of it or any part of it and included in the ‘products-completed 

operations hazard.’” Doc. 37-2, Pl.’s App’x, 20, 86. As relevant here, the Policy defines “your work” 

as “(1) Work or operations performed by you or on your behalf; and (2) Materials, parts or 

equipment furnished in connection with such work or operations.” Id. at 31, 97. 

Here, at least some claims in the Underlying Suit fall outside the plain language of this 

exclusion. The first amended petition alleges as damages, “[t]he reasonable and necessary cost for 

the replacement or repair of any damaged goods in the residence including any personal property.” 

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Doc. 37-2, 135. The personal property of the residents is not “your work” under the Policy. Id. at 

31, 97. Another’s personal property is not “[w]ork or operation performed by [Vibrant] or on 

[Vibrant’s] behalf,” nor is it “[m]aterials, parts or equipment furnished in connection with such 

work or operations.” See id. As the first amended petitions alleges damages to property other than 

Vibrant’s work, the “your work” exclusion would not exclude coverage for every claim alleged in 

the Underlying Suit. 

***

In sum, the Policy requires Mid-Continent to defend Vibrant against any suit for damages 

caused by Vibrant that are covered by the Policy. Vibrant has since been sued and has discharged 

its burden of showing that the claims alleged in the Underlying Suit fall within the Policy. MidContinent has not shown that any exclusion in the Policy completely bars coverage on the claims 

asserted in the Underlying Suit. As such, Mid-Continent has a duty to defend Vibrant in the 

Underlying Suit. Therefore, the Court DENIES Mid-Continent’s Motion for Summary Judgment 

on its claim for a declaratory judgment that it has no duty to defend. It GRANTS Vibrant’s and 

Moser Up’s cross-motions for summary judgment on the same claim. 

B. Duty to Indemnify 

Mid-Continent also asks for a declaratory judgment that it has no duty to indemnify 

Vibrant. Doc. 8, Am. Compl., 20. Mid-Continent has moved for summary judgment on that claim. 

Doc. 38, Pl.’s Mot. Br., 10. Defendants request that the Court defer consideration of the duty to 

indemnify issue until the Underlying Suit is resolved. Doc. 43, Moser Up Mot., 19; Doc. 44, Vibrant 

Mot., 11. 

The Court concludes that it lacks subject-matter jurisdiction to resolve the indemnification 

issue because that claim is not ripe. Thus, it may not enter summary judgment on that claim, as 

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Mid-Continent requests, or defer consideration on it, as Defendants request. Instead, the proper 

course is dismissal without prejudice. See Campos v. United States, 888 F.3d 724, 738 (5th Cir. 

2018).

Article III of the United States Constitution provides that federal courts only have the 

power to decide actual cases or controversies. U.S. CONST. art. III, § 2. The doctrine of ripeness 

“originate[s] in Article III’s ‘case’ or ‘controversy’ language,” and is also “drawn from prudential 

reasons for refusing to exercise jurisdiction.” Choice Inc. of Tex. v. Greenstein, 691 F.3d 710, 715 

(5th Cir. 2012) (citing DaimlerChrystler Corp. v. Cuno, 547 U.S. 332, 352 (2006)). In determining 

ripeness, the Court must find that the issues are fit for judicial decision and that the parties will 

suffer hardship if the Court withholds consideration. Id. In general, a case is ripe “if any remaining 

questions are purely legal ones,” but “is not ripe if further factual development is required.” Id. at 

587.

“While the duty to defend depends on the allegations in the pleadings, the duty to 

indemnify is triggered by the actual facts that establish liability in the underlying suit.” State Farm 

Lloyds v. Richards, 966 F.3d 389, 396 (5th Cir. 2020) (quoting Ooida Risk Retention Grp., Inc. v. 

Williams, 579 F.3d 469, 472 (5th Cir. 2009)). “Texas law only considers the duty-to-indemnify 

question justiciable after the underlying suit is concluded, unless ‘the same reasons that negate the 

duty to defend likewise negate any possibility the insurer will ever have a duty to indemnify.’” Id. 

at 396–97 (quoting Northfield, 363 F.3d at 529). Here, Mid-Continent has a duty to defend and 

the underlying lawsuit is ongoing so there is no justiciable controversy with respect to the 

indemnification claim. 

Accordingly, the Court DISMISSES WITHOUT PREJUDICE Mid-Continent’s 

declaratory judgment claim on the indemnity issue. 

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IV.

CONCLUSION

For these reasons, the Court DENIES Mid-Continent’s Motion, and GRANTS Vibrant’s 

and Moser Up’s (collectively, “Defendants”) Motions. The Court further DISMISSES 

WITHOUT PREJUDICE Mid-Continent’s declaratory judgment claim on the duty to indemnify 

as unripe. As this Order fully resolves the parties’ dispute, a final judgment will follow. 

SO ORDERED.

SIGNED: August 21, 2024. 

_________________________________

JANE J. BOYLE

UNITED STATES DISTRICT JUDGE

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