IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 13-30541

LIBERTY MUTUAL INSURANCE COMPANY,

Plaintiff - Appellee

v.

WESTCHESTER FIRE INSURANCE COMPANY,

Defendant - Appellant

Appeal from the United States District Court

for the Eastern District of Louisiana

USDC No. 2:08-CV-5166

Before STEWART, Chief Judge, and DENNIS and ELROD, Circuit Judges.

JAMES L. DENNIS, Circuit Judge:*

This case involves an insurance-coverage dispute. Fluor Enterprises, 

Inc. (“Fluor”) contracted with the Federal Emergency Management Agency 

(“FEMA”) to manage the delivery and installation of FEMA trailers following 

Hurricanes Katrina and Rita. Fluor subcontracted with MMR Constructors, 

Inc. (“MMR”) to haul and install the trailers. As part of the agreement between 

Fluor and MMR, MMR agreed to indemnify Fluor for any injuries arising, 

directly or indirectly, out of the parties’ contract itself or out of MMR’s acts or 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

November 11, 2014

Lyle W. Cayce

Clerk

 

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omissions. As relevant here, Fluor insured its liabilities through Westchester 

Fire Insurance Co. (“Westchester”) and MMR insured its liabilities through

Liberty Mutual Insurance Co. (“Liberty”). 

A flash fire occurred in one of the trailers that MMR had hauled and 

installed, injuring the trailer’s inhabitant and killing her friend. The fire was 

caused in part by the failure of the trailer’s liquid-propane (“LP”) detector to 

alarm. The injured parties sued Fluor, MMR, and their insurers. Those suits 

settled. Now, in this case, Liberty seeks reimbursement for its settlement 

payments from Westchester, arguing that MMR was not responsible for any of 

the injuries. The issue before us is whether MMR was required, as part of its 

contract with Fluor, to test the LP detector and whether its failure to do so was 

a but-for cause of the injuries. 

Following a bench trial, the district court concluded that MMR was 

under no such obligation. Consequently, the district court determined that 

MMR was under no obligation to indemnify Fluor, defeating coverage, and that 

Fluor was not covered under an additional-insured provision contained in 

MMR’s insurance policies with Liberty. We conclude that MMR was not 

obligated to test any trailer’s LP detector and the record supports the 

conclusion that Fluor did not in fact direct MMR to do so with respect to the 

particular trailer in which the fire occurred. Accordingly, we AFFIRM the 

judgment of the district court. 

I. BACKGROUND

A. Fluor’s Contracts with MMR

In July 2005, Fluor contracted with FEMA to provide emergency housing 

assistance following natural disasters. Pursuant to its contract with FEMA, 

Fluor contracted with various subcontractors, including MMR, following 

Hurricanes Katrina and Rita. The general terms of the agreement between 

Fluor and MMR were contained in a document titled the “Blanket Ordering 

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Agreement” (the “BOA”), which went into effect on September 16, 2006. Under 

the BOA, MMR agreed to haul and install FEMA trailers for Fluor. 

The BOA provided that “[p]erformance of the Work under this Contract 

will be authorized and funded through Individual Task Order Releases 

(hereinafter ‘Releases’).” The BOA described the “scope of work” as supplying 

“all services, things, and items of expense necessary to perform the Work” but 

noted that “[e]ach Release will contain a specific Scope.” Under Part III of the 

BOA, which described the “general terms” of the BOA—but not under Part I, 

which described the scope of work—MMR was obligated to “inspect all 

materials, supplies and equipment which are to be incorporated in the Work.” 

Additionally, Part III permitted Fluor to “require additional inspections and 

tests.”1

The BOA also included an indemnity provision, which is at issue in this 

case, under which MMR agreed to defend and indemnify Fluor for injuries 

“arising directly or indirectly out of [the BOA] or out of any acts or omissions 

of [MMR]”:

28.1 [MMR] agrees to defend, indemnify and hold harmless 

[Fluor] and Owner, the affiliated companies of each, and all 

of their directors, officers, employees, agents and 

representatives, from and against any claim, demand, cause 

of action, liability, loss or expense arising: . . .

28.1.3 From injury to or death of persons (including 

employees of [Fluor], Owner, [MMR] and 

[MMR]’s subcontractors) or from damage to or 

loss of property (including the property of 

1 An attachment following the BOA—titled “Quality Assurance and Control”—

provided that “[MMR] has primary responsibility for quality” and was obligated “to 

implement the measures necessary to build quality into the work in accordance with the 

contract, drawings, and specifications.” However, these obligations appeared under a 

heading describing “inspection and / or testing by [Fluor].” Moreover, the first provision 

stated that “[Fluor]-provided testing and inspection of [MMR]’s work will be identified in each 

Individual Release as applicable.” 

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[Fluor] or Owner) arising directly or indirectly 

out of this Contract or out of any acts or 

omissions of [MMR] or its subcontractors. 

[MMR]’s defense and indemnity obligations 

hereunder include claims and damages arising 

from non-delegable duties of [Fluor] or Owner or 

arising from use by [MMR] of construction 

equipment, tools, scaffolding or facilities 

furnished to [MMR] by [Fluor] or Owner. . . .

The indemnity provisions were to apply “regardless of whether the party to be

indemnified was concurrently negligent.” The BOA also obligated MMR to 

obtain several different types of insurance naming Fluor as an additional 

insured. The BOA’s choice-of-law provision stated that the BOA must be 

interpreted in accordance with California law. 

Although the BOA was the overarching base contract defining the rights 

and obligations of the parties with respect to MMR’s work, MMR was neither 

authorized nor required to perform specific work until Fluor issued an 

Individual Release that contained a specific scope. On January 7, 2006, Fluor 

issued the Release describing MMR’s haul-and-install work:

[MMR] shall supply all supervision, labor, equipment, tools, 

materials, protective equipment and all items of expense necessary 

to perform the Work described below:

1.1 Hauling and Installation services of Manufactured Homes, 

Travel Trailers, and Park Models as directed by [Fluor]’s 

representative throughout the state of Louisiana.

The Release incorporated certain exhibits, which set forth the specific tasks 

that MMR was required to complete. Those tasks included exterior 

installation, such as blocking and leveling the trailer, anchoring and strapping 

it, and installing it to sewer lines and gas lines. Additionally, MMR was 

required to make the trailer ready for occupancy, which included a duty to test 

certain appliances and appurtenances:

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(a) Activate, test and make any necessary minor repairs to the 

refrigerator, range, furnace, air conditioner, and water heater for 

proper operations. Adjust pilots and burners, change orifices, 

water heater elements, etc., as needed;

(b) Test smoke detector and replace if faulty. Defective smoke 

detectors provided by FEMA or manufacturer upon receipt of 

damaged one; and

(c) Test exhaust fans for proper operation, repair as need.

B. MMR’s Insurance Contracts 

MMR insured its liabilities under the BOA by acquiring contractualliability insurance under a commercial general-liability policy and an umbrella 

excess-liability policy with Liberty. The general-liability policy defined as an 

insured any person or organization for whom MMR agreed to provide liability 

insurance, but only to the extent the insurance applies to personal injury or 

property damage arising out of MMR’s work. The excess-liability policy

provided contractual-liability coverage only when “[a]ssumed in a contract or 

agreement that is an insured contract provided the bodily injury, property 

damage, personal injury or advertising injury occurs subsequent to the 

execution of the contract or agreement” and covered the assumption of 

another’s “liability that would be imposed by law in the absence of any contract 

or agreement.”

C. Events Leading Up to and Including the Trailer Fire

When MMR took possession of trailers from Fluor, the LP detectors were

already installed in the trailers and MMR played no part in selecting or 

installing the devices. On July 14, 2006, MMR hauled and installed the trailer 

that would eventually be given to Jean Joseph, a hurricane survivor, and would 

subsequently give rise to this suit (the “Joseph trailer”). Once installation of 

the Joseph trailer was complete, Fluor employee Reginald McCoy and MMR 

employee Steven Stanley conducted a “Quality Control/Quality Assurance”

(“QC/QA”) inspection of the trailer. At trial, Stanley testified that he could not 

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specifically recall the Joseph trailer inspection, but discussed what a routine 

QC/QA inspection entailed. He testified that it was not MMR’s job to test the 

LP detector, but that he would sometimes perform various tasks, including 

testing the LP detector, at the request of the Fluor inspector; for instance, 

because the trailer was so small and Stanley was “right there” or because 

Stanley was in the way, and the Fluor inspector could not get to it. Some 

detector models lacked a test button, so if a Fluor inspector asked Stanley to 

test this type of detector, Stanley would use an ordinary cigarette lighter to 

release a stream of butane gas under the detector’s sensor, which was the test 

Fluor selected based on the manufacturer’s instructions. 

The Joseph trailer had this model of detector. Although Stanley could 

not recall whether he had tested the Joseph trailer’s LP detector, he stated 

that if he had and it had not alarmed, he would not have signed off on the 

trailer. At the end of the inspection, Stanley and McCoy both signed a “Unit 

Installation Work Authorization and Completion” form, listing the specific 

tasks that MMR had performed. The form made no mention of an LP detector. 

The form indicated that MMR had completed the work, and Fluor signed it 

indicating that it agreed that MMR had completed the work. After July 14, 

2006, MMR had no further contact with or duties relating to the Joseph trailer 

and Fluor assumed physical control and responsibility for the trailer.

Five weeks later, on August 22, 2006, Fluor conducted a “lease-in” of the 

Joseph trailer, a necessary step before Jean Joseph could move in. A lease-in 

involved conducting an inspection of the trailer in the presence of the new 

occupant and generally explaining the trailer’s basic functions. Fluor never 

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contracted with MMR to do lease-ins; rather, Fluor retained this obligation.2 

As part of the standard lease-in, a Fluor inspector would perform certain tests 

to determine that the electricity was connected, that the propane-gas system 

was not leaking, and that all alarms—including the LP detector—were 

working properly. Additionally, the Fluor inspector would connect the gas 

tanks and check the gas appliances, igniting the burners on the stove and in 

the oven, lighting the furnace, and lighting the water heater. Documentation 

from the lease-in of the Joseph trailer indicates that Fluor performed a leak 

test on the LP gas system and determined that it did not leak. The 

documentation also indicates that Fluor tested the trailer’s range and LP 

detector, and both appeared to be functioning properly. The Fluor employee 

who conducted the lease-in testified that he lit the gas burners in the trailer,

tested the LP detector with a butane lighter as suggested by the manufacturer,

and performed a gas-pressure test, which involved turning on the gas valve on 

the stove top.

On August 25, 2006, three days after the lease-in, Joseph and her friend, 

Bernard Mabry II, entered the trailer and smelled gas. Joseph testified at her 

deposition that Mabry went to the stove, at which point the fire erupted. 

Joseph heard no alarm when she entered the trailer. The New Orleans Fire 

Department concluded that one of the knobs on the stove had been left in an 

open position since August 22, 2006 (the day of the lease-in) and that Mabry 

had inadvertently ignited the accumulated gas when he turned a knob on the 

stove in an attempt to shut the gas off. The Bureau of Alcohol, Tobacco, and 

Firearms reached substantially the same conclusion. Both Joseph and Mabry 

2 Although the BOA provided that “[MMR] shall be available for move-in inspection,” 

there is no indication in the record or briefing that MMR was required to be available for the 

Joseph trailer lease-in.

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suffered serious burns from the flash fire and Mabry ultimately died from his 

injuries.

D. The Joseph and Mabry Suits

After the fire, Mabry’s estate and Joseph both sued several parties 

in Louisiana state court, including Fluor and MMR. Mabry’s estate and 

Joseph alleged that employees at either Fluor or MMR had failed to turn 

off one of the gas stovetop burners in the trailer before turning it over to 

Joseph, failed to ensure that the stovetop was functioning properly, and 

failed to ensure that the trailer’s LP detector, which did not alarm on the 

day of the fire, was functioning properly. Fluor, Fluor’s insurers 

(including Westchester), MMR, and MMR’s insurer (Liberty) agreed to 

settle Joseph’s claims against Fluor and MMR for $10 million, with the 

insurers reserving various rights to recover from one another the sums 

paid in the settlement. The insurers later agreed to settle Mabry’s 

claims against Fluor and MMR for a total of $2.75 million, again 

reserving certain rights to recover from one another.

E. The Proceeding Below

The insurance-coverage dispute giving rise to this appeal followed. 

Liberty (MMR’s insurer) sued Fluor’s insurers (including Westchester3) in 

federal court to recover $4.375 million in settlement payments, and 

Westchester (Fluor’s insurer) counterclaimed to recover its own settlement 

contributions from Liberty. Liberty argued that MMR was not responsible for 

the fire and owed Fluor no indemnity, and so Fluor’s insurers (including 

Westchester) should reimburse Liberty for the settlement payments it had 

made. Westchester argued the reverse. Following a bench trial, the district 

3 Westchester is the only one of Fluor’s insurers that remains a party to this suit.

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court ruled in Liberty’s favor. It held that MMR was not required to indemnify 

Fluor based on the BOA’s indemnity provision and the facts of the underlying 

tort suit. Interpreting the indemnity provision under California law, the 

district court concluded that, to trigger MMR’s indemnity obligation, Fluor was 

required to show a “but-for causal connection between the ultimate harm and 

[MMR’s] duties under the contract.” Applying this standard, the district court 

determined that nothing in the scope of MMR’s work was a but-for cause of 

Joseph’s and Mabry’s injuries. Specifically, the court found that the fire was 

caused by an accumulation of gas in the trailer due to someone leaving the 

stovetop’s gas knob on. Significantly, the court found that “there was no 

evidence that connected MMR’s contract to the open gas knob on the stove” 

because “MMR had no contact with the trailer for five weeks before the fire, 

and Stanley [MMR’s employee] disconnected the propane source when he 

finished the QC/QA inspection.” The district court also concluded that the 

failure of the trailer’s LP detector to alarm contributed to the injuries. 

The court pointed out, however, “[t]hat the LP detector’s failure was a 

contributing cause of the fire does not mean that the fire arose directly or 

indirectly out of the BOA unless MMR’s work under the contract was a but-for 

cause of the injuries.” Examining the extensive BOA and its accompanying 

documents, the district court noted that the BOA contains no mention of the 

LP detector, much less an obligation on MMR’s part to test it. The district 

court acknowledged that a separate Fluor document, the “QC/QA RFO 

Checklist” listed various requirements for Fluor’s inspectors, including 

ensuring that the “LP detector [is] installed and operates correctly,” but 

pointed out that this document was meant to apply to Fluor—not MMR—

inspectors and was not incorporated into the BOA. Indeed, the district court 

determined that the BOA’s integration clause further foreclosed a finding that 

the QC/QA RFO Checklist was binding on MMR. Thus, the district court held 

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that testing the LP detector was outside the scope of the BOA and therefore 

the fire did not arise directly or indirectly out of the BOA.

In the alternative, the district court stated that, even if testing the LP 

detector had been within the scope of MMR’s work under the BOA, MMR’s 

obligation would have been limited to conducting the butane lighter test, which 

the court found would not have indicated that the LP detector was defective. 

Because the test would not have prevented the fire, the district court refused 

to find a causal connection between an obligation to perform the test and the 

injuries Joseph and Mabry sustained. Accordingly, the district court 

determined that, even in this alternative, the fire could not be said to have 

“arisen” out of the BOA, which forecloses Fluor’s indemnity claim. 

II. STANDARD OF REVIEW

“We review a district court’s bench trial conclusions of law”—including 

issues of contract interpretation—“de novo and its findings of fact for clear 

error.” Am. Int’l Specialty Lines Ins. Co. v. Canal Indem. Co., 352 F.3d 254, 

260 (5th Cir. 2003). 

III. DISCUSSION

Westchester (Fluor’s insurer) argues that it has no obligation to 

reimburse Liberty (MMR’s insurer) for the payments Liberty made to settle 

the Mabry and Joseph lawsuits. Westchester does not argue that it has no 

such obligation because MMR was itself liable for Joseph’s and Mabry’s 

injuries under tort law. Instead, Westchester argues that it has no obligation 

to reimburse Liberty because MMR had a duty to indemnify Fluor against the 

Joseph and Mabry lawsuits. In support of this contention, Westchester argues 

that MMR had a duty to indemnify Fluor both pursuant to the indemnity 

provision of the BOA and pursuant to the additional-insured provisions of 

MMR’s insurance policies with Liberty. Westchester is wrong on both points.

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A. Indemnity under the BOA

Liberty claims that Westchester must reimburse it for the settlement 

payments it made on MMR’s behalf because MMR was not responsible for the 

fire in the Joseph trailer. Westchester responds that MMR agreed to 

indemnify Fluor pursuant to the BOA’s indemnity provision and therefore that 

Liberty must reimburse Westchester for its settlement payments. The BOA’s 

indemnity provision states that “[MMR] agrees to defend, indemnify and hold 

harmless [Fluor] . . . from and against any claim, demand, cause of action, 

liability, loss or expense . . . arising directly or indirectly out of [the BOA] or 

out of any acts or omissions of [MMR].” Westchester contends that the Joseph 

and Mabry lawsuits triggered this indemnity provision because the injuries 

resulting from the trailer fire arose “directly or indirectly out of [the BOA] or 

out of any acts or omissions of [MMR].” Liberty argues that the indemnity 

provision was not triggered because none of MMR’s acts, omissions, or 

obligations under the BOA bore any connection to the trailer fire. We agree.

Under California law—the law governing the BOA—Westchester, as the 

party seeking to enforce the BOA’s indemnity provision, has the burden to 

prove that the indemnity provision was triggered, i.e., that MMR was obligated 

to indemnify Fluor. See Four Star Electric, Inc. v. F & H Constr., 10 Cal. Rptr. 

2d 1, 3 (Cal. Ct. App. 1992) (“An indemnitee seeking to recover on an agreement 

for indemnification must allege the parties’ contractual relationship, the 

indemnitee’s performance of that portion of the contract which gives rise to the 

indemnification claim, the facts showing a loss within the meaning of the 

parties’ indemnification agreement, and the amount of damages sustained.”). 

California courts have interpreted indemnity provisions that use the phrase 

“arising . . . out of” to require at least a but-for connection between the alleged 

harm and the indemnitor’s contractual obligations. See, e.g., Transcon. Ins. 

Co. v. Ins. Co. of the State of Penn., 56 Cal. Rptr. 3d 491, 499 (Cal. Ct. App. 

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2007) (“Although the phrase ‘arising out of’ should be broadly read to require 

only a minimal causal connection, it requires more than ‘but for’ causation.”).4

Similarly, California courts construe language equivalent to “arising directly 

or indirectly” out of a contract to require causation. See Centex Golden Constr. 

Co. v. Dale Tile Co., 93 Cal. Rptr. 2d 259, 262, 264 (Cal. Ct. App. 2000) 

(interpreting an agreement to indemnify “with respect to all work which is 

covered by or incidental to this subcontract” as requiring “some connection 

between the subcontractor’s work and the claim”); Cont’l Heller Corp. v. 

Amtech Mech. Servs., Inc., 61 Cal. Rptr. 2d 668, 670 (Cal. Ct. App. 1997) 

(stating that indemnity obligation for a loss that “arises out of or is in any way 

connected” with the performance of work requires proof of causation).

In this case, the district court determined that the fire was caused by (1) 

someone—but not MMR—having left the gas on in the trailer for 

approximately three days before the fire and (2) the LP detector failing to 

alarm. Westchester does not suggest that MMR could owe Fluor indemnity if 

the sole cause of the fire had been that someone left one of the gas burners on. 

Accordingly, for the fire to have arisen directly or indirectly out of either the 

BOA or MMR’s acts or omissions, there must have been a connection between 

MMR’s acts, omissions or obligations under the BOA and the LP detector’s 

failure to alarm. Westchester argues that MMR’s purported obligations to test 

the LP detector and ensure general trailer quality supply the requisite 

4 Westchester criticizes the district court for focusing on whether MMR’s own 

negligence caused the detector to fail. Under California law, as the district court itself 

pointed out, “courts will enforce indemnity agreements even for losses caused by acts over 

which the indemnitor had no control.” Cont’l Heller Corp. v. Amtech Mech. Servs., Inc., 61

Cal. Rptr. 2d 668, 670 (Cal. Ct. App. 1997). Westchester does not suggest the fire can be 

attributed to MMR’s negligence, but the operative question is whether there exists a 

connection between the fire and MMR’s obligations under the BOA such that the fire can be 

said to have arisen, directly or indirectly, out of the BOA.

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connection. Westchester’s argument, however, is not supported by either the 

evidence or the case law. 

Westchester concedes that the BOA did not specifically require MMR to 

test the LP detector. In support of its claim, Westchester instead points to the 

BOA’s general provisions instructing MMR to install the trailers as directed 

by Fluor and to conduct any additional tests or inspections that Fluor required.

Westchester alleges that MMR had a specific obligation to test the LP detector 

by virtue of a separate document, the QC/QA RFO Checklist, which included 

the item “LP detector installed and operates properly.” At trial, one of Fluor’s 

program managers testified that Fluor had provided MMR the QC/QA RFO 

Checklist before MMR bid on the haul-and-install contract. The district court 

concluded, however, that the checklist had never been incorporated into the 

BOA. Fluor’s failure to incorporate the checklist severely undermines 

Westchester’s position, particularly because the BOA contained a merger 

clause, stating that the BOA, together with its attachments, exhibits and 

drawings, “sets forth the entire Contract and agreement between the Parties 

pertaining to the Scope of Work . . . and supersedes all inquiries, proposals, 

agreements, negotiations and commitments[] . . . prior to the date of execution 

of this Contract, pertaining to said Work or this Contract.” The mere fact that 

Stanley (the MMR employee who conducted a quality control inspection of the 

Joseph trailer) or other MMR inspectors occasionally performed certain tasks 

that happened to be on the checklist did not transform the checklist into a 

contractual obligation. Indeed, the QC/QA RFO checklist was a document used 

by Fluor’s, not MMR’s, employees.

Westchester responds that the BOA permitted Fluor to “require 

additional inspections and tests,” and therefore argues that the QC/QA RFO 

checklist was incorporated into the BOA as such an “additional inspection[] 

[or] test[]” that Fluor could insist upon. The question then becomes whether 

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the checklist—or any other evidence—reflects that Fluor in fact requested 

MMR to test the LP detector in the Joseph trailer. The evidence in the record

indicates that Fluor did not. First, Stanley (MMR’s inspector) testified that 

MMR was not required to test the LP detector. Second, although Stanley 

testified that he would sometimes perform certain tasks that he was not 

required to perform, including testing the LP detector, he explained that he 

would do so at the request of the Fluor inspector because Stanley was “right 

there” or because Stanley was in the way, and the Fluor inspector could not get 

to it. Stanley’s testimony thus indicates that he would sometimes test a 

trailer’s LP detector, but for the sake of convenience, not because he was 

required to do so as part of MMR’s work arising out of the BOA. Furthermore, 

that the BOA permitted Fluor to require additional testing or inspection does 

not mean that individual Fluor inspectors, on an ad-hoc basis, were authorized 

to impose such requirements on MMR or its inspectors. Third, although 

Stanley testified that, based on documentation from the inspection, someone 

tested the LP gas detector, he did not confirm that he had in fact been the one 

who tested it. Given its burden to prove indemnity, see Four Star Electric, 10 

Cal. Rptr. 2d at 3, Westchester’s failure to cite to record evidence indicating 

that it in fact required MMR to test the detector in the Joseph trailer is fatal 

to its argument. Accordingly, the district court did not err when it determined 

that MMR was not required to test the LP gas detector.5 

Westchester also argues that MMR assumed the responsibility to ensure 

that trailers had properly-functioning LP detectors by virtue of its general 

5 In the alternative, the district court concluded that, even if MMR had been obligated 

to test the LP gas detector, testing would not have made a difference in exposing the 

detector’s latent defect and preventing the fire. Because we conclude that MMR was not 

required to test the LP detector, we do not consider Liberty’s argument that we should affirm 

on this further ground.

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obligation to assure quality. The BOA stated that MMR “has primary 

responsibility for quality. [MMR] is to implement the measures necessary to 

build quality into the work in accordance with the contract, drawings, and 

specifications.” The “work” for which MMR had the responsibility to ensure 

quality, as described in the “Travel Trailer Installation” exhibit to the specific 

Individual Release relevant here, consisted primarily of towing the FEMA 

trailers, levelling the ground for installation, transferring them onto concrete 

piers, anchoring them, installing sewer and water lines, connecting electrical 

service, filling propane tanks, constructing wooden steps to the front door, and 

generally making the trailer ready for occupancy. This was the work whose 

quality MMR ensured. Although MMR’s work was mostly limited to 

transporting the trailers, installing them and connecting utilities, MMR’s 

obligation to make the trailers ready for occupancy did include some testing of 

appliances and appurtenances. One of MMR’s few obligations in this respect 

was to “[t]est smoke detector and replace if faulty.” While the work release 

specifically obligated MMR to test smoke detectors, it included no obligation to 

test LP detectors. If Fluor had wished to create such an obligation, it could 

have done so easily. See, e.g., White v. W. Title Ins. Co., 710 P.2d 309, 314 & 

n.4 (Cal. 1985) (applying the familiar principle that the inclusion of one thing 

implies exclusion of others to contract interpretation). We will not add an 

obligation to test LP detectors where Fluor, the party that drafted the BOA,

chose not to. Thus, since MMR’s “work” under the BOA was unrelated to the 

LP detectors, MMR’s general obligation “to build quality into the work” did not 

include an obligation to ensure that the LP detectors functioned properly.

Finally, the two cases on which Westchester seeks principally to rely—

St. Paul Fire & Marine Ins. Co. v. Am. Dynasty Surplus Lines Ins. Co., 124 Cal. 

Rptr. 2d 818 (Cal. Ct. App. 2002), and Continental Heller—instead support 

Liberty’s position. In St. Paul, the court concluded that a subcontractor had 

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no duty to indemnify the general contractor based on the terms of the parties’ 

agreement. See 124 Cal. Rptr. 2d at 830. The contract between the parties 

required the subcontractor to indemnify the general contractor for claims 

“arising out of or resulting from the performance of the Work, either directly 

or indirectly” so long as the claim “arises from or is alleged to have arisen in 

whole or in part by any act or omission of Subcontractor or any subcontractor 

under him.” Id. at 821-22. There, an explosion occurred while the general 

contractor was pressure testing a pipe, which resulted in injuries to an 

employee of the subcontractor. Id. at 822. The general contractor’s insurer

sought indemnity from the subcontractor’s insurer, arguing that the 

subcontract’s indemnity provision covered the injuries. Id. at 822-23. 

The court reasoned that the subcontractor “expressly undertook no duty 

to indemnify [the general contractor] except for a liability that arose from an 

‘act or omission’ by [the subcontractor] during the performance of the work 

called for by the Subcontract.” Id. at 828. “Such language,” the court said, “can 

have no other meaning or purpose than to limit the scope of [the 

subcontractor]’s indemnity to injuries occurring in circumstances over which it 

has at least some control and where it is engaged in activity that is causally 

related in some manner to the injury for which indemnity is claimed.” Id. “On 

the record before us,” the court explained, “not only is there no basis for finding 

[the subcontractor] at fault for [the] injury, but also [the subcontractor] did not

do any act that was in any way connected to such injury.” Id. at 829. 

Consequently, the court concluded that the subcontractor’s duty to indemnify 

“was never triggered.” Id. at 830.

Liberty concedes that the BOA’s indemnity provision is broader than the 

language at issue in St. Paul. The BOA requires that MMR indemnify Fluor 

not only for claims arising out of MMR’s own “acts or omissions,” but also for 

claims arising directly or indirectly out of the BOA itself. Nevertheless, 

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because the connection between MMR’s duties and the fire is weaker—MMR 

completed its work with respect to the trailer five weeks before the fire 

occurred—Liberty reasons that St. Paul supports its position. We agree. Like

in St. Paul, there is no evidence that MMR was “at fault for [the] injury” or did 

“any act that was in any way connected to such injury.” 124 Cal. Rptr. 2d at 

829. Westchester’s argument, then, depends on asserting that MMR, under 

the BOA, was responsible for installing trailers with properly functioning LP 

detectors. However, as previously discussed, the evidence indicates that MMR 

was not required to test the LP detector in the Joseph trailer. Accordingly, St. 

Paul better supports Liberty’s position than Westchester’s. 

In Continental Heller, the general contractor hired the subcontractor to 

install an ammonia refrigeration system in an Oscar Meyer meat-packing 

plant. 61 Cal. Rptr. at 669. Following the installation, “an explosion occurred 

at the plant causing property damage and injuring several Oscar Meyer 

employees.” Id. “The explosion was caused by the failure of a valve . . . 

[selected and] installed by [the subcontractor] in the course of its work on the 

refrigeration system.” Id. at 669, 671. The court considered whether the 

subcontractor was obligated to indemnify the general contractor under an 

agreement that required indemnification for “a loss which ‘arises out of or is in 

any way connected with the performance of work under th[e] Subcontract,’” 

including “any acts or omissions[] . . . on the part of Subcontractor.” Id. at 670. 

“[The subcontractor] d[id] not deny its installation of the valve in the 

refrigeration plant was ‘an act’ carried out in ‘the performance of work under 

[the] Subcontract.’” Id. (third alteration in original). “Nor d[id] it deny the loss 

suffered by [the general contractor] was ‘in any way connected’ with that act.” 

Id. “Therefore,” the court concluded, “under the contract as written, [the 

general contractor] is entitled to indemnity from [the subcontractor] for its 

losses.” Id. The court, however, noted that,

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[c]ontrary to [the subcontractor]’s contention, the causal 

connection defined in the agreement does not impose virtually 

unlimited liability on [it]. [The subcontractor]’s liability must be 

connected to an “act” or “omission” in the performance of its 

subcontract, not merely to the performance itself. Therefore, the 

fact [the subcontractor] installed the refrigeration system in the 

plant would not make it liable for indemnity for the loss incurred 

in paying damages to someone who suffered food poisoning from 

eating an Oscar Meyer hot dog on the theory that but for the 

refrigeration system Oscar Meyer could not have made the hot dog. 

The indemnitee in this hypothetical case would have to establish 

the loss was in some way connected to a specific act or omission of 

[the subcontractor].

Id. at 672.

In this case, by contrast, MMR neither selected nor installed the faulty 

detector. In other words, unlike the subcontractor in Continental Heller, MMR 

performed no work under the BOA that was in any way connected to the 

injuries. Westchester’s argument to the contrary depends on the assertion, 

which is not borne out by the record, that MMR was responsible for inspecting

and assuring the quality of the LP detector. Admittedly, Westchester also 

notes that, under the BOA, MMR was primarily responsible for assuring the 

quality of the trailers it hauled and installed, which, according to Westchester, 

“necessarily encompasses the quality of the trailer’s critical safety devices.” 

Certainly, the fire in the Joseph trailer would not have occurred had MMR not 

hauled and installed the trailer, as required by the BOA. But to conclude that 

MMR owes Fluor indemnity under this reasoning would run afoul of the 

Continental Heller court’s admonition that the subcontractor would not be 

“liable for indemnity for the loss incurred in paying damages to someone who 

suffered food poisoning from eating an Oscar Meyer hot dog on the theory that 

but for the refrigeration system Oscar Meyer could not have made the hot dog.” 

Id. Even under the but-for test, indemnity requires a closer connection than 

that to find that “a loss . . . ‘arises out of or is in any way connected with the 

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performance of work under th[e] Subcontract.’” See id. at 670, 672. 

Westchester acknowledges as much by conceding that it “could not seek 

indemnification on the attenuated theory that but for the fact of the trailer’s 

installation, there would have been no oven knobs to mishandle, and hence no 

fire and no injuries,” but argues indemnification is required here because the 

trailer was installed with a faulty LP detector, which MMR had a duty under 

the BOA to test “for the very purpose of avoiding the harm that later occurred.” 

Since, however, the BOA assigned no such duty to MMR, the connection 

between MMR’s obligation to install the Joseph trailer and the subsequent fire 

is just as attenuated as the subcontractor’s installation of the faulty valve and 

the hypothetical spoiled hot dog in Continental Heller.

Ultimately, the record evidence and case law on which Westchester seeks 

to rely supports the district court’s conclusion that the BOA did not obligate 

MMR to test the trailer’s LP detector and that, therefore, neither the BOA

itself nor any act or omission on the part of MMR was a but-for cause of the

injuries. Westchester’s arguments to the contrary are unavailing.

B. Indemnity under MMR’s Insurance Policies

 Aside from the indemnification provision in the BOA, Westchester also 

argues that MMR had a separate obligation to indemnify Fluor pursuant to 

MMR’s insurance policies with Liberty, which are interpreted under Louisiana 

law. Westchester, as Fluor’s insurer, had the burden of proving that Fluor was 

entitled to coverage as an additional insured under MMR’s insurance policies

with Liberty. See, e.g., Tunstall v. Stierwald, 809 So. 2d 916, 921 (La. 2002). 

Specifically, MMR’s excess-liability policy with Liberty provided that coverage 

for an insured “included in or added to an underlying policy” would not be 

broader “than is available to such insured under the underlying policy.” 

Further, the blanket additional-insured provision in the underlying policy—

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MMR’s commercial general-liability policy with Liberty—limited coverage to 

injury arising out of “[MMR’s] work.” 

Westchester argues that MMR’s work under the BOA specifically 

included the installation of trailers with working LP gas detectors. However, 

as previously discussed, the record does not support this contention. The 

general-liability policy also defined “[MMR’s] work” to include “[w]arranties or 

representations made at any time with respect to the fitness, quality, 

durability, performance or use of ‘[MMR’s] work.’” Westchester reasons that 

because the BOA provided that “[MMR] has primary responsibility for quality” 

and was obligated “to implement the measures necessary to build quality into 

the work in accordance with the contract, drawings, and specifications,” the 

district court erred when it concluded that MMR made no warranties with 

respect to its work that occasioned the injuries. However, as discussed 

previously, see supra, note 1, these obligations related to “inspection and / or 

testing by [Fluor],” which, if required, would be identified in an Individual 

Release. For the same reason, Westchester’s arguments that MMR was 

obligated to test the LP detector based on MMR’s “general responsibility to 

ensure trailer quality,” also fails. Accordingly, we affirm the judgment of the 

district court in this regard.

IV. CONCLUSION

For the foregoing reasons, we AFFIRM the district court’s judgment that 

MMR was under no obligation to indemnify Fluor and that Fluor was not 

covered as an additional-insured pursuant to MMR’s insurance policies with 

Liberty.

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