### INTHE UNI TED S TATESCOU RT OFAPPEALS FORTHE FIFTH CIRCU IT

N o. 08- 31247 & N o. 08- 31248

M ARTCO LI M I TED PAR TNE RSH I P , P la in tiff v. W E L L O N S IN C , d o in gb u s in e s s a s W e llo n s U S A , D efen d a n t - C ross C l a i m a n t - A p p ell a n t v. ADM I RAL I NSURANCE COM PA NY, D efen da n t- C ross D efen da n t- A pp el l ee

A p p ea l s f

rom the U n i ted S tates D i stri ct C ou rt f ort he W es t er n D i st r i c tof Loui si ana

B e fo r e B A R K S D A L E , S O U T H W IC K , a n d H AY N E S , C ir c u it J u d g e s . H AY N E S , C i rcui tJu dg e: T h i s m att er com es bef ore us as a si n gl e case consol i da t ed f rom app eal s N o. 08-3124 7 an d N o. 08-3124 8. B ot h ap pea l s ari se f rom t h e sam e un derl yi n g case and c e nt e r o n e s s e nt i al l y t he s am e c o nc e r ns . Acc o r di ngl y, w e ad dr ess t h em t o g e t h e r . I n N o .0 8 -3 1 2 4 7 , W e ll o n s I n c . (“ W e ll o n s ” ) a p p e a ls th e d is t r ic tc o u r t ’s det er m i nat i on t hat W el l ons fai l ed t o c ar r y i t s burde n of es t abl i shi ng A dm i r al I nsur ance C om pany’ s ( “A dm i r al” ) dut y t o de fend W el l ons under i t s c om m er c i al United States Court of App eals

Fifth Circuit 

### F I L E D November

19, 2009 Cha rl es R. F ulb ru g e II I ClerkN o. 08- 31247 & N o. 08- 31248

2 general l i abi l i t y pol i c y ( “ Pol i c y” )

. Th e di st r i c t c our t dec l i ned t o f i nd a dut y t o d e fe n d , cit in gE x c lu s io n (m ) o f th e P o lic y . I n N o . 0 8- 31 24 8, Adm i r ala ppe al s t he di s t r i c tc o u rt ’ s s ubs e que nt det er m i nat i on t hat A dm i r al ow ed W el l ons a dut y t o i ndem ni f y undert he Pol i c y. A dm i ralcontends that t h e di st ri ctcou rterred i n b ot h fi n di n g coverage exi st ed
u n de rt he Po l i c y’ s i ns ur i ng c l aus e a nd fai l i ng t o a ppl y anyo f a num be rof p o s s ib le e x c lu s io n s . W i t h r e s pe c tt o t he dut y t o de fe nd a s a ppe al e d i n N o . 0 8- 312 47, w e f i nd t h at t h e di st ri ctcourter re d w h en i tconcl u ded t h at E xcl u si on ( m ) el i m i n ated A d m ir a l’ s d u ty to d e fe n d

. W e co n c lu d e th a t A d m ir a l h a d a d u ty to d e fe n d in l i ghto f t he l ang uag e o f

t he Po l i c y and t he a l l e gati o ns o f t he und e r l yi ng c om pl ai nt
. W i t h re spe c tt o t he dut y t o i ndem ni f y as s etf

or t h i n N o. 08- 31248,
w e agr e e wi t h t h e d i s t r i c tc o u r t ’ s a n a l y s i s . Ac c o r d i n g l y , we REV ERS E t he j udgm entand R E M A N D i n N o. 08- 31247 a nd A FF I R M t he j udgm enti n N o. 08- 3 1 2 4 8
. I . F A CT UA L A ND P ROC E DUR A L B A CK GRO UND M art co Ltd. ( “ M art co” ) , a bu i l di n g produ ctm an u fact u rer, hi red W el l on s, a m anufac t ur e ro f

w o o d- f i r e d b o i l e ra nd e ne r gy s ys t e m s , t o de s i gn, fab r i c at e a nd i nst al lcer t ai n i m pro vem ent s t o i t s exi st i ng W el l ons - br and w oo d- f i r ed t her m al oi lhea t i n g syst em (t h e “ W el l on s un i t ” ) l ocat ed i n M art co’ s ori en t ed st ran d boa rd ( “ O SB ” ) pl ant i n L e M oye n, Loui si ana. The ex t entof t hi s r el at i ons hi p w as docu m en t ed by a ser i es of f i ve contract s executed bet w een M art co and W el l on s. M art co’ s s t ated goali n hi ri n g W el l on s w as t o i n crease t h e t h erm al oi l ou t pu tof i ts W ell on s u n i t. C on stru cti on of th e im p rov em en ts c o m m en ced i n l a te D ecem ber 200 2 w i t h a pl an n ed thi rt y- da y shu t dow n of t h e O S B pl an t
. Th e w ork
s c he dul e de ve l o pe d by t he pa r t i e s c al l e d f o r t he W e l l o ns uni t t o e nt e rs e r vi c e a nd t he O SB pl ant t o r es um e pr oduc t i on o n January 2 8, 2003.N o. 08- 31247 & N o. 08- 31248

3 N um er ous pr obl em s ar os e w i t h t he W el l ons uni t f ol l ow i ng t he January 28
r e s um pt i o n o f pr o duc t i o n. A ne w e xp ans i o n t ank i ns t al l e d b y W e l l o ns i m pl o de d; a ci r c ul at i on pu m p i so l at i on val ve fai l ed; f i r es devel ope d i n t he dr y bi ns; a v al ve stem l ea k ed ; m ore ash tha n an ti ci p a ted w a s ge n era ted by the n ew W ell on s u n i t; th e co m p u te riz e d co n tro l sy ste m d id n o t fu n ctio n p ro p e rly ; a n d w ire s b u rn t off th e th erm oco u p le s . M a rtco l a ter d em on strate d at tri a ltha t i t w a s u n a b l e to operate t h e W el l on s un i t f or cert ai n peri ods of t i m e af t er t h e Jan u ary 28 rest art becau se of

t h ese fai l u res. Th ese s h u t downs an d p eri ods of defect i ve perf

orm an ce c a u s e d u n p la n n e d d o w n t im e fo rth e e n t ir e O S B p la n t . U lt im a t e ly , M a r t c o ’s i n abil i t y t o use t h e W el l on s un i tres u l t ed i n l ostprodu ct i on , prof i t s, an d bu si n ess o p p o r tu n itie s v a lu e d a t $ 4 ,3 9 5 ,8 5 8 .0 0
. M art co s u bsequ en t l y f i l ed su i tagainstW el l on s. M ar t c o ’ s c o m pl ai nts t ated
s ix s e p a r a te co n tr a c tu a l cla im s a g a in s t W e llo n s . T h e m e r its o f M a r tc o ’ s cla im s
w e r e t r i e d a nd a j ur y r e t ur ne d a ve r di c t f o r M ar t c o . W e af

f i r m e d t hatj udg m e nt
o n M a r c h 9 , 2 0 0 9
. S ee Mart co Ltd. P ’ ship v. W

el l on s, I n c. , 312 F. A pp’ x 716, 717 (5 th C ir. 2 0 0 9 ). B e fo r e t r i a l, W e llo n s s o u g h t b o th d e fe n s e a n d in d e m n ity fr o m A d m ir a l. I n a l e t t e r , A d mi r a lr e f u s e d d e fe n s e a n d i n d e mn i t yo n t h e b a s i s t h a tt h e c l a i ms stated i n M ar t c o’ s c om pl ai nt di d notal l ege “ pro per t y dam age” c ause d by a n

“ occurrence” w i t h i n t h e app l i cabl e pol i cy peri od. A dd i t i on al l y, A dm i ralci t ed
n u m erous excl u si on s as f orecl osi n g i t s du t y t o defen d or i n dem n i f y W el l on s f

or an y cl ai m s t h at m ay h ave been st ated. Th e li abil i t y i ssues a s betw een M art co an d W el l on s and t h e i n suran ce i ssues as b e tw e e n W el l on s and A dm i ralw ere b ifu r c a te d b y co u r t o r d e rb e fo r e tr ia l. A f t er t ri alon the u n derl yi n g l i abil i t y i ssues w as com pl et ed, A dm i ralf i l ed
a m ot i on f

or s u m m ary j u dg m en tw h e re in it assert ed that t h e P ol i cy di d n ot provi de i n dem n i f

i cat i on f

or M art co’ s c l ai m s in th e u n derl yi n g sui t
. W el l on s, j o i ne d b y M ar t c o , f i l e d a c r o s s - m o t i o n arguing t hatt he Po l i c y di d p r o vi deN o. 08- 31247 & N o. 08- 31248

4 in dem n i f

i cat i on f

or M art co’ s c l ai m s. Th e di st ri ctcourtf ou n d that t h e P ol i cy
r equi r ed Adm i r alt o i ndem ni f y W el l ons f

orM ar t c o’ s c l ai m s f

orl os tpr oduc t i vi t y, earn i n gs, an d p rof

i t s. A dm i ralt ook the i n st an tapp ealon the qu est i on of i ndem ni t y underm at t erN o. 08- 31248. S h ort l y t h ereaf

t er, W el l on s and M art co f i l ed a j oi n tm ot i on f

or s u m m ary j udgm enton t he i ss ue o f A dm i r al ’ s dut y t o de fend. Adm i r alresp on d ed by
c l ai m i ng t hatt he r e w as no dut y t o de fe nd u nde r t he po l i c y be c aus e t he r e w as no

“ property dam age ” caused by an “ occurrence” evi den ti n t h e ori gi n alM art co c o m pl ai nta nd b e c aus e num e r o us e xc l us i o ns a ppl i e d. The di s t r i ct cou rtf o und th a tt her e w as “ pro per t y dam age. ” W i t hout ex am i ni ng w het hert her e w as an o c c ur r e nc e , t he c o ur tt ur ne d t o Exc l us i o n (m ) t o de t e r m i ne w he t he rt he

“ property dam age” al l eg e d w as excl u ded

. I tconcl u ded t h at t h i s excl u si on ap pl i e d su c h t hatAdm i r aldi d no tha ve a dut y t o de fe nd W e l l o ns i n t he und er l yi ng s ui t
. The dut y t o def end i ss ue w as t i m el y appeal ed as m at t erN o. 08- 3 1 2 4 7
. I I . S TA NDARD OF RE VI EW W e a p p ly L o u is ia n a s u b s t a n t iv e la w w h e n r e v ie w in ga d is t r ic tc o u r t ’s
r u lin g in a d iv e r s ity a c tio n . F o ra d o ri v

. Ha rr is , 523 F. 3d 477, 486 ( 5t h C i r . 2008) ( c i t i ng Eri e R

. R

. Co. v . Tompk i ns , 304 U

. S. 64, 78- 79 ( 19 38 ) )

. W e r e vi e w a g r ant of su m m a ry j u d gm en t d e no vo , a p p l yin g t h e sam e st a n d a rd as th e d i stri ct cou rt. Bol t o n v . Ci ty of

D al l as , 4 7 2 F .3 d 2 6 1 , 2 6 3 ( 5 th C ir . 2 0 0 6 ). O u rin q u ir y “is l i m i ted to t h e su m m a ry j u d gm en t record be fore th e tri a lcou rt. ” T opal i an v. E h r m an , 9 5 4 F. 2 d 1 1 2 5 , 1 1 3 1

- 3 2 n . 1 0 ( 5 t h Ci r . 1 9 9 2 )

. W e m u s t v i e w t he
e v id e n c e in th e lig h t m o s t fa v o r a b le to th e n o n -m o v in gp a r ty , Mats u shit a E l ec. I ndus

. Co. v . Ze ni t h Radi o Cor p. , 475 U

. S. 574, 587 ( 1986) , and t he m ovanthas th e b u r d e n o f sh o w in gth is co u r t t h a t s u m m a r yju d g m e n t is a p p r o p r ia te , C elot ex C o rp . v . C a tre tt , 47 7 U

. S

. 31 7 , 32 3 ( 1 9 8 6 ). S u m m a ry j u d gm en t i s ap p rop ri a te
w h e r e th e co m p e te n t s u m m a r y ju d g m e n t e v id e n c e d e m o n s tr a te s th a t t h e r e isN o. 08- 31247 & N o. 08- 31248

Someca se law articul ates thi s point slightlydifferentlyin dicta, bypositing th at the 1 dutyt o de fe n d is“ gen er allyb ro a de r”th a nth e dutyt o in de mnif y . Se eEl l i o t, 94 9 S o. 2d at 125 0; C zarnieck i , 23 0 S o. 2 d at25 9. Th e relativebr eadthof the dutyto defend whe n compare d to the dutyto inde mnifyis actu ally irrel ev antto t he i nq ui ry. I n reality , th e questions of defen se and inde mnity are better und erstoo d as inde pende nt matters ev alu ated und er their own interpretive rules. A dutyto inde mnifycan arisewher e th ere is no duty to defend (as th e di strictc ourtf

oun d h er e) an d vic e ver sa , thou ghth e fo rm eri s l es s c om mo nth a nth e latt er . 5 no g e nui ne i s s ue o f m at e r i al fac t and t he m o vi ng pa r t y i s e nt i t l e d t o j udg m e nt
a s a m a tt e ro f la w . B ol t on , 4 7 2 F .3 d a t 2 6 3 ; seeF ED
. R. C IV
. P. 56 ( c )

. A ge nui ne i s s ue o f m at e r i alfac te xi s t s i f a r e as o nab l e j ur y c o ul d e nt e ra v e r di c tf o rt he
non- m ovi ng par t y. A n d ers on v. L i berty L obby, I n c. , 4 7 7 U .S . 2 4 2 , 2 5 2 (1 9 8 6 ). I I I . DI S CU S S I ON A n i n surer’ s du t y t o defen d su i t s on beh al f on an i n sured p resents a se par at e a nd di st i ncti nqui r y f r om t hat of

t he i nsur er ’ s d u ty to in dem ni f y a covered cl ai m af

t er j u dg m en tagainstt h e i n sured i n t h e un de r l yi ng l i ab i l i t y case. E ll i otv. Con t ’lCas. Co. , 9 4 9 So

. 2 d 1 2 4 7 , 1 2 5 0 ( La

. 2 0 0 7 ) ( c i t i ng A m. Ho me A s s uranc e Co. v. Czar ni e c ki , 230 So. 2d 253 , 259 ( La. 1969) )

. W hi l e fac t ual 1 i n q u i ri es b e y o n d t h e com p l a i n t are p roh ib i ted w i th resp ect to the du ty to de fe nd , t h e y a r e i n d i s p e n s a b l e i n a s s e s s i n gt h e d u t yt o i n d e m n i f y . As s e s s i ng e ac h du t y r e qui r e s a nal ys i s o f di f fe r e ntfac t s i n t he l i ghto f a ppl i c ab l e c o nt r o l l i ng pre sum pt i ons . Acc or di ngl y, w e w i l laddr es s eac h dutys epar at el y. A. The D uty t o D ef

e nd W el l on s’ s app ealf

rom t h e di st ri ctcourt ’ s gran t of sum m ary j u dg m en ton t he dut y t o de fe nd r ai s e s t w o i s s ue s f o rr e vi e w : ( 1) w he t he rM ar t c o ’ s c o m pl ai nt al l e ge dap o t e nt i al l y c o ve r e d e ve ntt r i gg e r i ng Adm i r al ’ s dut y t o de fe nd u nde rt he P ol i cy, an d ( 2) w h et h er t h at al l eged t ri ggeri n g even tf el lw i t h i n an excl u si on of t h e P ol i cy. Th e du t y t o defend ana l ysi s begins w i t h an exam i n ati on of w h et h er an y of t h e fact s pl ead ed i n t h e com pl ai n tpossibl y fal lw i t h i n m att ers covered
u n d e rth e in s u r in gcla u s e . T h e in s u r e d b e a r s th e b u r d e n o n th is p o in t. S ee D o e r rv . Mo bi lO i lCor p. , 7 7 4 S o . 2 d 1 1 9 , 1 2 4 ( L a . 2 0 0 0 ), m od if i ed on ot h erN o. 08- 31247 & N o. 08- 31248

6 gr o unds , 7 82 So

. 2 d 5 73 ( La. 2 00 1)

. I f c l ai m s po t e nt i al l y c o ve r e d un de rt he i ns ur i ng c l aus e a r e pl e d, t he i ns ur e rt he n ha s t he b ur de n of pr o vi ng t hatt he
c o m p la in t s ta te s o n lyfa c ts t h a t fa ll w ith in a n e x c lu s io n f r o m c o v e r a g e . D oerr , 7 7 4 S o . 2 d a t 1 2 4 ; La. Mai nt
. Se r v s . , I nc . v . Ce r t ai n Unde r w r i t e r s atLl oy ds , 616 So

. 2d 12 50 , 12 52 ( La. 19 93 )

. To pr e va i l , t he i ns ur e r m us tshow t h at t he al l egati on s i n t h e com pl ai n tun am bi gu ou sl y fal lw i t h i n on e of t h e excl u si on ary c la u s e s . A l ertC entr e, I n c. v. A l arm P rot ect i on S ervs . , I n c. , 967 F. 2d 161, 163 ( 5t h Ci r . 1 99 2)

. W e c o nc l ude t hat W e l l o ns w as e nt i t l e d t o a de fe ns e und e rt he Pol i c y. Read br oadl y, as Loui si ana l aw requi r es , the c om pl ai nt al l ege d fac t s t hat fal lw i th i n th e P oli cy ’ s i n su ri n g cl a u se. E xc l u sion ( m ) d i d n ot d efea t t h e d u ty to def end be c ause M ar t c o’ s c om p l a i ntd i d notal l ege dam age t o “ i m pai r ed pr ope r t y”
as def i ned by t he Pol i c y. 1. Lou i si an a’

s D u ty t o D ef

end I n t erpre t i ve R u l es U n d e rL o u is ia n a ’ s “E ig h t C o r n e r s R u le ,” w e m u s t a s s e s s w h e th e rth e r e is
a dut y t o de fe nd b y ap pl yi ng t he al l e ga t i o ns of t he co m pl ai ntt o t he und e r l yi ng p o lic y w ith o u t r e s o r t t o e x tr in s ic e v id e n c e . A d am s v. Frost , 990 So. 2d 751 , 756 ( La. C t
. A pp. 2008) ( c i t i ng V a ug h n v. Fra n k lin , 7 85 So

. 2 d 7 9 ( La. Ct

. App. 20 01 ) )

. The i ns ur e rha s a dut y t o de fe nd u nl e s s t he a l l e ga t i o ns i n t he c o m pl ai nt
a s a p p lie d to th e p o lic y u n a m b ig u o u s ly p r e c lu d e co v e r a g e . E l l i ot , 949 So. 2d at 1250. M or eo ver , an i nsur er ’ s dut y t o de fend ar i se s w heneve rt he pl eadi ngs a g a in s t t h e in s u r e d d is c lo s e a p o s s ib ility o f lia b ility u n d e rt h e p o lic y . Me l oy v. C on oco, I

n c. , 5 0 4 S o . 2 d 8 3 3 , 8 3 9 (L a . 1 9 8 7 ). The al l e ga t i o ns o f

t he c o m pl ai ntar e l ibe r al l y i nt e r pr e t e d i n de t e r m i ni ng
w he t he rt he y s e t for t h g r o unds t hatb r i ng t he c l ai m w i t hi n t he s c o pe o f t he in s u r e r ’ s d u ty to d e fe n d

. Yountv . Mai s ano , 627 So. 2d 148, 15 3 ( L a . 1993) ( c i t i ng Czar ni e c ki , 230 So. 2d 2 53)

. At t he s am e t i m e, any am bi gui t y i n an in s u r a n c e p o lic y is co n s tr u e d a g a in s t t h e in s u r e r . S mi t h v. Ma t t h e ws , 611 So.N o. 08- 31247 & N o. 08- 31248

7 2 d 1 3 7 7 , 1 3 7 9 (L a . 1 9 9 3 ); Bre l and v . Sc hi l l i ng , 5 5 0 S o . 2 d 6 0 9 , 6 1 0 ( L a . 1 9 8 9 ); K end ri ck v. Mason , 9 9 S o . 2 d 1 0 8 , 1 1 6 (L a . 1 9 5 8 ). 2. W he t he rMar t c o ’

s Al l ega t i o ns D o No tUnam biguo us l y Pr e c l ude C ov e r age Bef o r e c o ns i de r i ng anye xc l us i o ns , w e m us tf i r s taddr e s s w he t he rW e l l o ns sa ti sfi e d it s b u r d en of d em on strating tha t t h e com p l a i n t all eg es a set of facts th a t w ou l d fa l lw i th i n cov era g e. A s m en ti on ed ab ov e, th e test of a l i a b i l i ty in s u r e r ’ s d u ty to d efen di s n ot w h eth e rth e a lle g a tio n s u n a m b ig u o u s ly fa ll w ith in
cov era ge bu t, rath er, w h eth er th e a l l eg a ti on s d o n ot u n a m b i gu ou sly p rev en t a
c o n c lu s io n th a t co v e r a g e c o u ld e x is t. V a ug h n v . Fra n k lin , 785 So. 2d 79, 84 ( La. C t
. A pp. 2001)

. W e c onc l ude t hat M ar t c o a l l ege d “ pro per t y dam age” c ause d by an “ oc c urr enc e” under t he Pol i c y.

a. Pro per t y D am age I n o r de rt o s at i s f

y i t s bur de n, W e l l o ns m us tsho w t hatM ar t c o ’ s c o m pl ai nt al l ege s “ pro per t y dam age” w i t hi n t he m eani ng of the Pol i c y. U ndert he Pol i c y,

“ pr o pe r t y da m ag e ” i s de f i ne d a s “ [ p] hys i c ali nj ur y t o t a n g ibl e pr o pe r t y, i nc l udi ng al lres u l t i n g l oss of

use of tha tp ropert y. ” W h en con st rued liberal l y i n favor of W el l on s, P aragrap h 12 of M art co’ s com pl ai n t , as sup ported by P aragrap h I II of t he c o m pl ai nt , m ad e o uta c l ai m t hatfal l s w i t hi n t he po l i c y de f i ni t i o n. M ar t c o’ s c om pl ai nt r el i ed o n a t ot alof el eve n para gr aphs o f fac t ual al l egati on s t o m ak e out s i x di st i n ctcl ai m s. A s A dm i ra lasser t s, t en of t h ese p a r a gr a p h s w ere directed at M a rtco’ s d i ssa ti sfacti on w i th W ell on s’ s p rod u ct. O n e p a r a g r a p h , h o w e v e r , w a s n o ts o c le a r ly fo c u s e d

. P a r a g r a p h 1 2 o f M a r t c o ’s
com p l a i n t st a ted tha t: W EL LO N S’e f

f o r t s ha ve pr o duc e d ne ga t i ve r e s ul t s s o fara nd t he o pe r at i o n o f

t he W e l l o ns uni tha s c aus e d p hys i c alde gr ad i ng o f t he i n f rast ructure t h rough excess i ve ash carr yover.N o. 08- 31247 & N o. 08- 31248

Ad m ir al al s o s u gge s t s i n it s di s c u s s i o n o f E xc lu s i o n ( a) th at i n j ury ari s i n gfrom 2 Wellon s’s workmanship r esponsibilitie s (what it c al ls the “essence” of the Martco -Wellons contract) cannot be deemed an “acci dent.” Wellon s cont ends that Loui sian a l aw co nclusively estab lish es th at defectiveworkman ship should b e tr eate d as an “acci dent” for commerci al gen er al li ab ilityp olicyp urp os es . See I beria ParishSch. Bd. v. Sand ifer &Son Const r. C o. , 72 1 So. 2 d 10 21, 102 3 (L a. C t. App. 19 98) (“Def e c tive wo rkm a n s hip o r th e i nc o rporationof d e f e c tive m at e ri al s i s a n ‘ ac c i d e nt ’ u n d e r the [Ke nd r i c k v. Mason , 9 9S o. 2 d 1 0 8(L a . 1 9 5 8)] analy sis. With construction defects, the realissu e u suallyis no tw heth er thereh as b eenan ‘occurrence,’ butwhether ther e h as b eenpro pertydama ge. . . .”) (quoting1 Willia m S. 8 M ar t c o C o m pl

. ¶12

. M uc h of t he de ba t e o n t hi s i s s ue ha s c e nt e r e d o n what “ t he i nf r as t r uct ure ” m eans . The m eani ng of t hi s phras e, i n fact, i s det er m i nat i ve wh e n we e x a m i n e t h e e x c l u s i o n s . Ho we v e r , a tt h i s s t e p i n t h e a n a l y s i s , we e x a m in e o n lyw h e th e r“p r o p e r ty d a m a g e ” c a u s e d b ya n “o c c u r r e n c e ” is a r g u a b ly pl ed. W e need onl y ask i f P aragrap h 12 an d the dem an d f or dam ages f

or r epa i rs in P a r a g r a p h II I c a n b e co n s tr u e d a s m a k in ga cla im fo ra n in ju r yto ta n g ib le pro per t y c ause d by t he i nsur ed. W het her t he dam age t hat r equi r ed r epai rw as t o t he W e l l o ns uni tort he l ar ge rO SB pl anti s i m m at e r i alt o t hi s q ue s t i o n. The
c l ai m t hat “ t he i nf

r as t r uct u re”– w hat eve rt hat m ay be –w as “ degr ad[ ed] ” c an
r e as o nab l y be r e ad i n c o nj unc t i o n wi t h t he de m and f o rr e pa i rda m ag e s t o m ak e o uta c l ai m f

o ri nj ur y t o s o m e i t e m o f t ang ibl e pr o pe r t y c aus e d byt he i ns ur e d. A s s u c h , W e llo n s m e t it s b u r d e n w ith re s p e c t t o th is p o r tio n .

b. O ccurrence W ell on s m u st also sh ow tha t t h e c o m p l a i n t all eg es th a t t h e “p rop erty dam age” ati ss ue w as c ause d by a n “ oc c urr enc e.” T he Pol i c y de f i nes an “occu rren c e ” a s “a n accid en t, i n cl u d i n g co n ti n u ou s or rep ea ted ex p osu re to subs t ant i al l y t he s am e g ener alhar m f ulc ondi t i ons . ” W el l on s c ont ends t hat M art co’ s c om pl ai n tsat i sfac to ri l y pl ed an “ occurrence” un der t h e “ repeated expo sur e” por t i on of t he pol i c y def i ni t i on w hen i t al l ege d dam age f r om “ exc es sive ash carr yover. ” I n res pon se, A dm i ralcontends that the even t s al l eged coul d n ot be an “ occurrence” becau se t h e al l ega ti on s w ere t oo am bi gu ou s t o const i t u t e a

“ repeated exp osure. ” A dm i ral ’ s argu m en t , h ow ever, is i n suff i ci en tt o overcom e 2N o. 08- 31247 & N o. 08- 31248

Mc Ke n z ie&H. Als to nJ ohn so nI I I , Insuran ce Law and P ract ice § 1 8 3 , at 3 7 0 , in15L OUI S I A NA C I VI L LA W T REATI SE (199 6)). Ad m ir alh as waive d this argu ment on appeal b y failing to a dva nceit. Jas on D. W. ex rel . Douglas W. v . H oustonIndep. Sch. D is t. , 15 8 F .3d 2 05, 210–11 n.4 (5th Cir. 199 8) (“[F]ailure to provide any legal or factu al analy sis of an is s ue onap p eal waives th at issue.”). E ve n if Admiralh ad not waived this argu ment, W el lo ns’s expl anation of th e applicableLoui sian a l aw appears to b e correct.

Th e po ssibility , of cour se, exists that the “excessive ash carryover” is a t erm of art in 3 thisin du strywithad ef initio nkno wnto thos e withinth e in du stry . As thisqu es tionsp eaks to an exclu sion , th e b urdenof proving such a definitio n fall s on the insurer. Admir al has made no effort to show th at “excessive a sh c arryover” carri es astyliz ed meanin g that exclu des th e pos sib ility of dam age to pr ope rty beyondthe unit itsel f. Acco rdingly, we do notread “e xces sive a shc arryover” toc arryanysorto f me a nin gb eyon d th at evid ence d b yap lainr ea din g . 9 t h e presum pti on i n favor of t h e i n sured. W el l on s h as carr i ed i t s burd en of p rov i n g a n “occu rren ce.” A dm i r alc ont en d s t hat not hi ng i n t he c om pl ai nt c oul d be c ons t r ued as
s ugg e s t i n g da m age a r i s i ng f r o m c o nt i nuo us o rr e pe at e d e xp o s ur e . I ns t e ad , A dm i ralcl ai m s M art co w ou l d h ave n eeded to p l ead h ow oft en the “ excessive ash carryover” occ u rred f or us t o fin d c o verage u n der t h e “ repeated exp osure” def i ni t i on. I n sho r t , A dm i r al c om pl ai ns t hat M ar t c o di d notaf f i r m at i vel y pl ead
s u ffic ie n t fa c ts to a llo w W e llo n s to a s s e r t c o v e r a g e u s in gP a r a g r a p h 1 2
. S u ch a read i n g w ou l d requ i re an i n versi on of L ou i si an a’ s s t an da rd f or as s e s s i ng t he dut y t o def e nd i s s ue . Rat he r , w e m us tas k w he t he rt he a l l e ga t i o ns d o n o t u n a m b ig u o u s lyp r e v e n t a c o n c lu s io n th a t c o v e r a g e co u ld e x is t. Vaughn, 785 So. 2d at84. H er e, P ar agr aph 12 i s am bi guous. I tdoes n otdef i ne “ exc es sive as h c ar r yo ve r . ” I t do e s no t s t at e ho w o f t e n “ e xc e s s i ve as h c ar r yo ve r ” o c c ur r e d. 3 Al li ts t at e s i s t hatW e l l o ns ’ s ef f o r t s at r e pa i r( w hi c h t he pr e c e di ng and f o l l o w i ng pa r ag r ap hs s ugg e s tl as t e d m o nt hs ) c r e at e d a ddi t i o nalha r m a nd t he r e s ul t i ng as h c ar r yo ver le d t o de gr ad at i o n o f s o m e und e f

i ne d i nf

r as t r uc t ur e . Aga i n, l i ber al l y c ons t r ui ng t he al l egat i on s, inj ury by “ exc es sive as h ca r r yov er” c an
r e a son a b l y be u n d ersto od to i n vo l ve rep ea ted ex p osu re ove r th e l on g pe ri od in
w hi c h W el l on s frui t l es sl y at t em pt ed t o m ake r epai r s. W hi l e t hi s m ay notbeN o. 08- 31247 & N o. 08- 31248

E xclu sion s (

j )( 5) a n d j (6): 4 j. Damage To Property “Pro pertydama ge” to : ( 5) Th at p artic ul ar p art o f r e al p r o p e rty o n whic h yo u o r a ny c o ntr ac t ors o r 10 af f i r m at i ve l y c l e aro n t he pl e ad i ngs , i ti s s uf f i c i en t to c o nc l ude t hatt he al l egat i ons do notunam bi guousl y pr ec l ude a f i ndi ng t hat t her e w as an

“ o c c ur r e nc e . ” Con s e que nt l y, w e co nc l ude t hatt he a l l e ga t i o ns o f t he c o m pl ai nt st at e c l ai m s t hat m ay be c ove r ed byt he i nsur i ng c l ause of t he Pol i c y. 3. W h et h er A d m i ralC arri ed It s B u rden of P rovi ng T

h at a Pol i cy Exc l us i o n Appl i e s t o Mar t c o ’ s Al l ega t i o ns W e m u st n e x t c o n si der w h et h er any pol i cy excl u si on app l i es. A s noted abov e, t he i nsur erbe ars the b urde n of pr ovi ng t he appl i c abi l i t y o f an e x c lu s io n a r y cla u s e w ith in th e p o lic y . D o e r rv. Mo bi lO i lCor p. , 774 So. 2d 119, 124 ( La. 2000) , m o dif i e d o n o t he rg r o unds , 78 2 S o. 2 d 57 3 ( L a . 20 0 1 ). Adu ty to de fe nd wi l le xi s tunl e s s t he al l e ga t i o ns ar e s uc h t hat e ve r y c l ai m pl e ad e d i n t he
c o m p la in t (a n d o th e rw i se fall i n g w i th i n the i n su ri n g cla u s e ) u n a m b ig u o u s lyfa lls
w i t hi n an e xc l us i o n. A l ert C entr e, Inc. v. A l arm P rot ect i on S ervs . , I n c. , 967 F. 2d 1 6 1 , 1 6 3 (5 th C ir . 1 9 9 2 )

. F in a lly , a n ya m b ig u ity in a n in s u r a n c e p o lic y is
c o n s tr u e d a g a in s t t h e in s u r e r . S mi t h v . Ma t t h e ws , 611 So. 2d 137 7, 1379 ( La. 1 9 9 3 ). A d m i ra l a l l eg es t h ree sep a ra te ex cl u sion s ap p l y: ( 1 ) th e “W ork P rod u ct” excl u sion ; ( 2) E xcl u si on ( m ) f or “ i m pa i red property” ; an d ( 3) E xcl u si on ( a) f or “in te n d e d or ex p e cte d ” inju ry . T h o u g h th e d istr ict co u rt ap p li e d E x clu sio n (m ),
w e f i n d that no excl u si on contai n ed i n t h e P ol i cy app l i es i n t h i s c ase. a. Th e “ W ork P rodu ct ” E xcl u si on A d m ir a l, w ith o u t s p e c ific ity , a lle g e s th a t a n y“p r o p e r ty d a m a g e ” fo u n d in t he c om p l a i n t f

al l s und erone of

t he “ W or k Produc t ” ex c l usi ons of t he Pol i c y. T h is a rg u m e n t co u ld re fer to a n yof fou r d iff e re n t ex clu sio n s: E x clu sio n (j )(5), 4N o. 08- 31247 & N o. 08- 31248

subco nt r ac t ors workingdir ectlyor indirectly on yo ur beh alf are performing op er ation s, if

th e “p ro pe rtyd a ma ge”ari se s o ut of th es e op er ation s[ .] (6) Thatparticular part of anypro pertyth at must b e re s t ored, repaired, or replaced because “yo ur work” was incorrectly performe d onit

.

.. . Paragraph(6) of this exclusio n does not applyto “property damage” included in th e “p ro duct s- co mp lete d op er ation s h a z ard .”
E xclu sion(k): 5 k. Dama geTo Yo ur Pro duct “Pro pertydama ge” to“your product” arisin g out of it orany part of it.
E xclu sion(l) : 6 l. Damage To Yo ur Work “Pro pertydama ge” to”yo ur work” arising out of it or anypart of it and include d inth e “p ro duct s- co mp lete d op er ation s h a z ard .” Thisexclus ion doe s not app ly if the dam age wo rkor the w orkout of w hich thedama ge arise s was pe rformed on yo ur beh alf bya subco ntractor.
11 E xcl u si on (

j ) ( 6) , E xcl u si on (k) , a n d E xcl u si on (l)

. R egard l ess of w h i ch provis i on 5 6 Adm i r ali nt e nde d t o a s s e r t , t he c r ux of the di s put e o ve rt he s e f o ure xc l us i o ns bo i l s do w n t o a s i m pl e i nqui r y: w h at “ i nf r as t r uc t ur e ” w as de gr ad e d b y t he

“ excessive ash carryover”? A s w e h ave st ated, an y am bi gu i t y i s r esol ved i n favor o f th e d u ty t o d e fe n d

. Yountv . Mai s ano , 6 2 7 S o . 2 d 1 4 8 , 1 5 3 (L a . 1 9 9 3 ); S m ith , 6 1 1 So. 2d at1379. Thu s, W el l ons ’ s pl ausibl e r eadi ng of t he c om pl ai nt as ad dr e s s i ng dam ag e t o t he M ar t c o pl ant“ i nf r as t r uc t ur e ” r at he rt han o nl y t he W e l l o ns uni t“ i nf

r as t r uc t ur e ” sup po r t s t he c o nc l us i o n t hatt he s e e xc l us i o ns do
n o t a p p ly

. 2
. E x c l u s i o n ( m)N o. 08- 31247 & N o. 08- 31248

Exclu sion(m) states in relevant part: 7 m. Dama geTo I mpaire d Property or Property Not Physic ally In jured “Pro pertydama ge” to“ im p ai r edpro perty” orpro pertyth at has not bee n phy sically in j ure d, ari sin go ut of: (1) A d efec t , deficiency, ina dequ acyor dangerou s con ditio n in “yo ur product” o r “yo ur work”; or (2 ) A d el ayo r failureb yyour or anyone actin go nyour b eh alf t o pe rf or m a co ntr acto r a gre em ent inacc or dancewithitst er ms.
Admiraldevotes a si gnificant por t ionof its b rief to criticiz ing th e re asoning

in 8 Gaylord

. S p e c if

ic ally , Ad m ir alcl ai m sthat P CS Nitrogen Ferti lize r, L.P. v. U.S. Filter/Arrowhead, I

nc. , 8 3 4S o. 2 d 4 5 6(L a . C t. App . 2 0 0 2 ), r ej ects Ga ylorda s “ob viously wrong .” PCS does not support this argument. While the court doe s distinguish Gaylord on its facts, it actuallyappears to u se Gaylord’s re a so nin g to app ly th e ex act sa mee xclu sion . Id

. 12 A d m i ra ln ex t a rg u es, a n d th e d i stri ct cou rt f ou n d , tha t A d m i ra l ’ s d u ty to d efen d w a s p reclu d ed by E xc l u sion ( m ) of t h e P oli cy . E xc l u sion ( m ) op era tes to 7
om i tproperty da m age t o “i m pa i red property. ” T h e P ol i cy set s f ort h a t w o- pa rt d efi n i ti on f

or “i m p a i red pr op erty ”: 8. “ I m pa i r e d p r o pe r t y” m e ans t ang ibl e pr o pe r t y, o t he rt han “ yo ur pr o duc t” o r“ yo urw o r k, ” t hatc anno tb e us e d o ri s l e s s us e f ul becau se:

a. I ti nc o r po r at e s “ yo urpr o duc t ” o r“ yo urw o r k” t hati s kno w n o rt ho ugh t to b e d e fe c tiv e , d e fic ie n t, in a d e q u a te o rd a n g e r o u s [.]

... I f s uch pr ope r t y c an be r es t or ed t o us e b y:

a. Th e repai r, repl acem en t , adj u st m en tor rem oval of “ you r produ ct ” or “y o u r w o rk [. ]” W o r k in go ff th is d e fin itio n , W e llo n s a s s e r ts tw o a r g u m e n ts
. F i rst , W el l on s c on t en ds t h at E xcl u si on ( m ) cann otapp l y t o cl ai m s f or ph ysi ca l inj u ry t o “ i m pa i red property. ” For t h i s proposi t i on , W el l on s c i t es G aylor dC h em . Corp. v. P roP u mp, I n c. , 75 3 S o. 2 d 34 9 ( L a . C t. A p p . 2 0 0 0 ). In 8N o. 08- 31247 & N o. 08- 31248

at 459 -60. Wefin d two cases instructive on this point. First, in Federated Mut ual Insuran ce C o. 9 v. GrapevineE

xcavat ion, In c. , 1 9 7 F .3 d 7 2 0 , 7 2 8( 5 thC ir

. 1 9 9 9), modified on oth er groun ds , 241 F .3d 3 96 (5thC ir. 2 001 ), we foun d that an identical provisionpreve nted a findin g that th e complaint all eged da mage to“i mpaire d pro perty .” Inth at case, the insured was sue d for im prop ersub surf

aceb ackfillin gres ultin gindam a ge toap arkin gl ot
. I d

. at 722 . We re ason ed th at re pl acin gth e b ackfillwo uldnot , inits elf, f ixth e da ma ge toth e surf ace . I d

. at 728(citing Actio n Auto Stores In c. v. United Capitol I ns. Co. , 8 4 5F

. Supp . 4 1 7 , 4 1 9(W. D. Mich

. 1 9 9 3))

. 13 G aylor d , t h e L ou i si an a C ou rtof A p p e a ls ad dressed an i den t i cal“ i m pa i red property” excl u si on . Th e G aylor di n sured so u g h tcoverage f or dam ages to a t h i rd- pa rty ’ s p la n t in fra str u ctu re ca u se d b yex ce ss ive ly v ib ra tin gp ip e s in st al l ed b y th e in s u r e d

. I

d. at 351 & n. 2. Th e court , i n add ress i n g t h e “ i m pa i red p r o p e r ty ” e x c lu s io n w ith re s p e c t t o th e d a m a g e d p la n t, c o n c lu d e d th a t: [T ]he “i m p a i red pr op erty ” exclu sion on l y e xc l u d es d a m a ge to pro p erty t h at has n otbeen ph ysi cal l y i nj u red or f or w h i ch the cl ai m ed d am ages are onl y f

or l oss of

use of t h at propert y. Th eref ore, an y da m ages ba sed on act u alph ysi cali nj u ry t o G aylor d’ s pl an t , equ i pm en t , or ot h er pr o pe r t y w o ul d no tb e e xc l ude d un de rt hi s pr o vi s i o n. Id

. a t 3 5 5
. T h is in te r p r e ta tio n o f a n id e n tic a l “im p a ir e d p r o p e r ty ” p r o v is io n is convinci n g an d, argu ab ly, u n der G aylor d , t h e “ i m pa i red property” excl u si on
s ho ul d no t ap pl y be c aus e t he al l e ga t i o ns o f Par ag r ap h 1 2 byw ayo f Par ag r ap h II I a p p e a rto m a k e a cla im fo rre p a ir s ra th e rth a n lo s s o f u s e . W el l on s al so argues t h at t h e res t orat i on provi si on of t h e “ i m pa i red property” def

i n i t i o n p re v e n t s E xcl u si on ( m ) f rom app l yi n g, an d w e agree. S p ecif i ca l l y, f or t h e exclu sion to a p p l y, t h e com p l a i n t m u st u n a m b i gu ou sly state t hat“ i m pai r ed p rop erty ” i s su scep tib l e to fullrestora ti on by rep a i ri n g, rep l a ci ng, adj u st i n g, or rem ovi n g t h e i n sured’ s “ w ork” or t h e i n sur ed’ s “ produ ct
. ” Stat ed anot her w ay, A dm i r al m ust sho w t hat t he degr adat i on al l ege d i n Paragr aph 12
w ou l d be en ti rely rep a i red by si m p l y fi xin g (or rem ov i n g) the W ell on s u n i t. N ot h i n g i n t h e com pl ai n tun am bi gu ou sl y dem on st rat es s u ch a si m pl e sol u t i on
w ou l d repa i r M a rtc o ’ s i n f rast ructure. O n t h e contr ary, t h e const ructi on of 9N o. 08- 31247 & N o. 08- 31248

So too here , nothingsugge sts that re placing th e Wellons unit would r epair th e alle ge d de gra dationt o Martco ’sf acility
. Simil arly , in Ac tion Au to , a district court in theWe stern District of Michi gan foun d th at property polluted bya faulty gas ol in e cont ain ment system coul d not c onstitute“i mpaire d property” und er a similar policy definitio n. 845 F. Supp. at 426
. As with the emitte d ashin the instant case, simply fixing th e co ntainment sy stem woul d not r ectifyth e pollutioncaused b yth e g a so lin e th at se ep edo ut of th e sy st em . Id

. at42 5-26
.

14 P a ra gr a p h III a s d em a n d i n g re p a i r d a m a ge s f or M a rtco’ s O S B plan t su gg ests t he o ppo s i t e c o nc l us i o n. Ac c o r di ngl y, w e f i nd t hat t he pr o pe r t y da m ag e t o “ t he in fr a s tr u c tu r e ” a s a lle g e d in P a r a g r a p h 1 2 d id n o t in v o lv e “im p a ir e d p r o p e r ty ,”
a n d , a s s u c h , E x c lu s io n (m ) d o e s n o t a p p ly

. 3. Excl usi on ( a) Fi nal l y, Adm i r ala r gue s t hatw e s ho ul d a ppl y Exc l us i o n ( a) t o a f f i r m t he di s t r i c t c o u r t ’ s g r a n t o f s u m m a r y j u d g m e n t i f n o o t h e r e x c l u s i o n a p p l i e s . But Adm i r aldi d no tr ai s e Exc l us i o n ( a) w i t h r e s pe c tt o i t s dut y t o de fe nd i n t he di s t r i c tco ur t
. W e m ayonl y af f i r m an or de rgr ant i ng s um m ar y j udg m e nton a b a s is th a t w a s p r e s e n te d to th e d is tr ic t c o u r t. S ee Le Mai r e v . Lo ui s i ana , 480 F

. 3d 383, 3 8 7 ( 5 t h Ci r . 2 0 0 7 )

. Thi s r ul e i s i n ke e p i ng wi t h o ur r e q ui r e m e nt t hat argu m en t s not rai sed bef ore the di st ri ctcou rta re w ai ved a n d can n otb e rai sed fo r t h e fir s t t im e o n a p p e a l. Id

. A d m i ra lon l y a sse rted E xc l u sion ( a ) w i th respectt o i t s du t y t o i n dem n i f y i n t h e courtbel ow . E xcl u si on ( a) i s never once
m e nt i on ed any w he r e i n Adm i r al ’ s a r gum e ntb e l o w r e ga r di ng dut y t o de fe nd. A ddi t i onal l y, t he di st r i c tc our t ’ s r ul i ng i n no w ay s ugges t s t hat A dm i ral oth erw i se su b m i tted th i s ar gu m en t f or co n sider a ti on w i th resp ect to i ts du ty to de fe nd. As s uc h, t hi s a r gum e ntha s b e e n wai ve d. B

. T h e D u ty to In d em n ify W e ne xtt urn t o t he ques t i on of i ndem ni t y advanc ed i n ca se N o. 08- 31248. U nl i ke o ure xa m i nat i o n o f t he dut y t o de fen d, w e a r e no tl i m i t e d b y t he Ei ght Cor ne r s Ru l e i n a s s e s s i n gt h e d u t yt o i n d e m n i f y . I n s t e a d , we mus ta p p l y t he P ol i cy t o t h e act u alevi den ce add u ced at t h e un derl yi n g l i abil i t y t ri alt ogetherN o. 08- 31247 & N o. 08- 31248

Admiralraised one other issue that we can dispen se with quickly . Admiralasked in 10 the conclusion to its brief that we reverse the district co urt in part bystrikingth e affidavit of A drian Scho oner . Admiral m adeno argumen t on this pointin any of it s app ellat e brief ing. Acc or din gly , a nyclaimo f erro r re g ardin gS choo n er’saff id aviti s w aived

. J

ust is s OilCo. v. Kerr-Megee Ref. C

orp. , 7 5F .3 d 1 0 5 7 , 1 0 6 7( 5 thC ir

. 1 9 9 6). 15 w i t h an y evi den ce i n t rodu ced i n t h e coverage case. A dm i ralrai ses f ou r i ssues f or r evi ew in it s ap pea lfr om the di st ri ctcou rt ’ s gran tof sum m ary j u dg m en tf or W el l ons : ( 1) w het herW el l ons car r i ed i t s burde n of es t abl i shi ng t hat t he ac t ual
c la im s fo r w h ic h th e ju d g m e n t in th e u n d e r ly in gca s e a w a r d e d d a m a g e s fe ll
w i t h i n t h e P ol i cy’ s i n suri n g cl au se; ( 2) w h et h er t h e P ol i cy’ s produ ct s- com pl et ed
o pe r at i o ns ha z ar ds ( “ PC O H ” ) c o ve r a g e a ppl i e d; ( 3) w he t he r t he
c o ve r ag e - t r i gg e r i ng e ve ntfe l lw i t hi n Exc l us i o n ( m ) o f t he Po l i c y ba s e d o n t he fac t s es t abl i she d att r i al ; and ( 4) w het her any ot her Pol i c y exc l usi on of fer ed by Adm i r ala ppl i e s . W e c o nc l ude t hat t he di s t r i c t c o ur t c o r r e c t l y de c i de d al lf o ur 10 is s u e s . 1. Lou i si an a’

s D u ty t o I

n d em n if

y I n t erpre t i ve R u l es T h e parti es agree t h at Loui s i anai nsuran ce l aw governs the i n t erpret ati on of t h e P ol i cy. A s su ch , t h e qu est i on of i n dem n i t y bef

ore us shou l d be assessed in lig h t o f th e fo llo w in gL o u is ia n a in te r p r e tiv e ru le s . T h e i n t e r p r e t a t i o n o f a n i n s u r a n c e c o n t r a c tp r e s e n t s a q u e s t i o n o f l a w,
r at hert han of

fac t , an d ther ef

or e i s an appro pri at e m at t erf ordet er m i nat i on by
s u m m a r yju d g m e n t. B on i n v. W est portI n s. Co. , 9 3 0 S o . 2 d 9 0 6 , 9 1 0 (L a . 2 0 0 6 ). A n i n suran ce pol i cy i s a c on t ractbetw een t h e parti es and shou l d be con st rued
us i ng t he g e ne r alr ul e s of i nt e r pr e t at i o n of

co nt r ac t s se tfo r t h i n t he Lo ui s i ana C iv il C o d e . C ad w allad er v. A l lst ateI n s. Co. , 8 4 8 S o . 2 d 5 7 7 , 5 8 0 (L a . 2 0 0 3 ); La. Ins. G u ar. A ss’

n v. I n t ers t ateFi re & Cas. Co. , 6 3 0 S o . 2 d 7 5 9 , 7 6 3 ( L a . 1 9 9 4 ). W o r d s a n d p h r a s e s u s e d in a n in s u r a n c e p o lic y s h o u ld b e c o n s tr u e d u s in gth e ir pl ai n, or di nary and gener al l y pr evai l i ng m eani ng, unl es s t he w or ds haveN o. 08- 31247 & N o. 08- 31248

Admiralcontends for the first time on appeal t ha tWello ns mu st al so show a net 11 pay ment to Martco out of th e procee ds of any coverage und er the Policy

. This argu ment was waiveda s Adm ir al fail edt o rais e it in th e di strictc ourt
. Ho rtonv . BankOne, N .A

. , 38 7 F .3d 4 2 6 , 4 3 5( 5 thC ir

. 2 0 0 4). 16 a c q u ir e d a te c h n ic a l m e a n in g . C a d w a l l ad er , 8 4 8 S o . 2 d a t 5 8 0 ; C arb on v. A l lst ateI

n s. Co. , 7 1 9 S o . 2 d 4 3 7 , 4 3 9 -4 0 (L a . 1 9 9 8 ). A n i n su ra n ce p o licy m u st be “con stru ed acco rd i n g to th e en ti rety of i ts t erm s and con d i t i on s as s etf ort h i n t h e pol i cy, an d as am pl i f i ed, ext en ded , or
m odi f i ed by an y ri der, en d o rs e m en t , or ap pl i cat i on att ach ed to or m ad e a part of t h e p oli cy . ” V

an d erbrook v. Un i t ri n P ref err ed Ins. Co. , 4 9 5 F

. 3 d 19 1 , 20 6 ( 5 th C i r . 2007) ( quoti n g L A
. R EV
. S TAT
. A NN
. § 22: 654 ( 2004) )

. “A m bi gui t y i n an i ns ur anc e c o nt r ac tm us tb e r e s o l ve d a c c o r di ng t o t he g e ne r alr ul e s g o ve r ni ng contracti n t erpret ati on . . . A m b igu o u s pol i cy provi si on s are t o be const rued agai nstt he c onfec tor, t he i nsur er . Am bi gui t y w i l lal so be r es ol ved by
as c e r t ai ni ng ho w a r e as o nab l e i ns ur anc e p ol i c y pur c has e rw o ul d c o ns t r ue t he cl a u se a t t h e ti m e t h e i n su ra n ce con tract w a s en tered

. ” Bre l and v . Sc hi l l i ng , 550 S o . 2 d 6 0 9 , 6 1 0 -1 1 (L a . 1 9 8 9 ) (c ita tio n s o m itt e d ). 2. Coverage Un d er t h e I n suri ng C l au se T o ca rry i ts bu rd en , W ell on s m u st sh ow tha t t h e d a m a ge s th a t itsee k s to
r e c o v e rfr o m A d m ir a l fa ll w ith in th e P o lic y ’ s te r m s . S ee D o e r rv. Mo b il O il Cor p. , 7 7 4 S o . 2 d 1 1 9 , 1 2 4 ( L a . 2 0 0 0 ), m o dif i e d o n o t he rg r o unds , 782 So. 2d 573 ( L a. 200 1)

. Th at i s, W el l on s m u stdem on st rat e t h a t t h e d a m ages f or w h i ch 11 i ndem ni t y i s so ught c ons t i t ut e “ pro per t y dam age” cause d by an “ oc c urr enc e, ” as t h ose ter m s are defi n ed i n t h e P ol i cy . A r e v ie w o f th e e v id e n c e a d d u c e d a t t r ia l, th e re s u ltin gv e r d ic t a n d ju d g m e n t, a n d t h e a p p lic a b le L o u is ia n a la w re v e a ls t hatW e l l o ns c l e ar l y c ar r i e d i t s b ur de n o f e s t ab l i s hi ng c o ve r ag e und e rt he i n suri n g cl au se.N o. 08- 31247 & N o. 08- 31248

Admiralcontends that Stewart’sdis cu ssiono f thisi ssu e wa s dicta
. Ste w a rt’s 12 discussio n of this point was a nece ssaryholdinginord er to re acht he court’s ultimate conclusion. As such , we will not di smiss it as mer e dicta. 17 a. Pro per t y D am age A dm i ralm ak es t w o argu m e n ts w i t h res pect t o t h e “ property dam age” pron g of

coverage a n al ysi s. Fir st , A dm i ralcontends that any att em pt t o show

“ property dam age” as partof M art co’ s c on t ract u alcl ai m s is p re cl u ded as a
m at t e ro f

l aw. Se c o nd, Adm i r al cont e nds t hatW e l l o ns c anno ts ho w a ny

“ p r o p e r t y d a m a g e ” u n d e r t h e P o li c y d e fi n it io n fo rth a tte r m . T h e d is t r ic tc o u r t ’s
r ej e c t i o n o f

b o t h o f

t he s e a r gum e nt s w as s o und a n d ac c ur at e l y r e f l e c t s t he
c urr ents t at e o f

i nsur ance l aw i n L oui si ana. Acc or di ng l y, w e c onc l ude t hat W el l ons has adequat el y pr ove n “ pro per t y dam age” under t he Pol i c y.

i

. C o n t r a c tC l a i ms a s “ P r o p e r t yD a ma g e ” C l a i ms A dm i ralf

i rstcontends that, as a m att er o f law , a cl ai m f or breach of
c ont r ac tcannotcons t i t ut e a cl ai m for“pr ope r t y dam age. ” A dm i r alreas ons t hat
an y recover y deri ved f rom such cl ai m s w ou l d i n vol ve pu rel y econom i c dam ages an d, as such, M art co fai l ed t o prove t h e n ecess ary i nj u ry. A s t h e di st ri ctcourt not ed, how eve r , t hi s ar gum entfai l s bec ause t he L oui si ana C our tof A ppeal s has
a d d r e s s e d th is e x a c t is s u e a n d reje c te d A d m ir a l’ s p o s itio n . I n St e wa r tI

n t e r i o rCo n t r a c t o r s , L. L. C. v . Me t a lPr o I n d u s t r i e s , L

. L. C. , 969 S o. 2d 65 3 ( L a. C t
. A pp . 200 7) , t h e courta dd ress ed w h et h er c l ai m s f or breach of contractan d redh ibi t i on du e t o m i srepresentat i on w ere c l ai m s “ solel y f or e c o n o m ic lo s s e s ” c a u s e d b y b r e a c h o f c o n tr a c t a n d n o t c o v e r e d b yth e p o lic y . I d. at 660. Th e courtconcl u ded t h at such cl ai m s cou l d be covered, an d, m oreover, C G L pol i ci e s w ou l d si m pl y n otm ak e sense i f t h e courthel d otherw i se. Spe c i f i c al l y, v ar i o us CG L pr o vi s i o ns and e xc l us i o ns c ar e f ul l y ad dr e s s s i t uat i o ns a r is in gfr o m co n tr a c tu a l b r e a c h e s p r o d u c in gp r o p e r ty d a m a g e . I d. I n l i gh tof t h i s ana l ysi s, t h e S tew a rt court af f i rm ati vel y f

ou n d t h at gr an t i n g sum m ary

12N o. 08- 31247 & N o. 08- 31248

18 j u dg m en tm erel y becau se on ly c o n tra ctu a l claim s w e re in v o lve d const i t u t es er ror
u n d e rL o u is ia n a la w . I d. A s s u ch, M art co’ s cl ai m s are, as a t h reshol d m att er, e lig ib le fo r“p r o p e r ty d a m a g e ” c o v e r a g e u n d e rth e P o lic y .

i i

. “ L oss of

U se” as “ P ropert y D am age” i n T h i s C ase A dm i rala l t erna t i vel y contend s that M art co and W el l on s hav e not proven

“ property dam age” a s d ef i n ed u n der t h e P ol i cy. A s t h e di st ri ctcourtnoted, t h ree e xhibi t s c l e ar l y s e tf o r t h t he “ do w nt i m e ” a tt he O SB pl an t cause d b y va r i o us fa il u r e s in th e W e ll o n s u n it . M o r e im p o r t a n t ly , t h e ju r ya g r e e d

. T h e ju r y ’s verdi ctf

orm expressl y aw a rd s $ 4, 395 , 858
. 00 for“ L ostP rodu ct i vi t y, E arn i n gs, an d Prof

i t s” du e t o W el l on s’ s breach of contract , n egl i gen ce, an d s al e of a prod u ct
w i t h a redh ibi t ory defect
. T h e d istr i ctcourtcor rect l y concl u ded t h at t h ese f i n di n gs show M art co dem on st rat ed “l oss of use. ” A s s u ch , W el l on s, b y w a y of M a r tc o , a d e q u a te ly d e m o n s tr a te d “p r o p e r ty d a m a g e ” a s th a t te r m is d e fin e d in t he Pol i c y. b. O ccurrence O n app eal , A dm i ralonl y m akes one rel evan targu m en tregardi n g w h et h er M ar t c o a nd W el l ons s at i sfac t or i l y de m ons t r at ed “ pro per t y dam a ge” c ause d by
a n “o c c u r r e n c e .” A d m ir a l s u g g e s ts th a t t h e d is tr ic t c o u r t e r r e d w h e n it
con clu ded t h at Lou i si an a l aw no l on ger cat egori cal l y excl u des constr u ct i on defe c t s a s po s s ibl e “ o c c ur r e nc e s . ” Ye tLo ui s i ana c as e l aw f ul l y s upp o r t s t he di s t r i c tc o ur t ’ s a s s e s s m e nto f t he “ o c c ur r e nc e ” r e qui r e m e nt
. As s uc h, W e l l o ns eas i l y s at i sf

i es i t s burde n of dem ons t r at i ng t he pr ove n “ pro per t y dam age” w as ca u sed by an “occu rren ce.” B e lo w , A d m ir a l v ig o r o u s ly co n te n d e d th a t n o co n s tr u c t i o n d e fe c t c o u ld
e v e rco n s tit u te a n “o c c u r r e n c e ” u n d e ra C G L p o lic y . T h e d is tr ic t c o u r t c o r r e c tly f o und, ho w e ve r , t hatt he L o ui s i ana Cour to f Appe al s di r e c t l y ad dr e s s e d a nd
r eje c te d th a t p r o p o s itio n . Se e Ra n d o v . To p No t c h P r o

p s . , L

. L. C. , 879 So. 2d 821 , 833 (L a . C t. A pp . 200 4) ( “ [ T ] h e cl ear w ei gh tof au t h ori t y i n m ore r ecent c asesN o. 08- 31247 & N o. 08- 31248

19 consi ders defect s i n const ructi on t h at r esul ti n da m ag e s ubs equ en tt o com pl et i on to b e ‘ a c c id e n ts ’a n d ‘ o c c u r r e n c e s ’w h e n th e ym a n ife s t t h e m s e lv e s .”). O n a p p e a l, A dm i ralatt em pts t o argu e, i n st ead , t h at Lou i si an a l aw excl u des t hi s ty pe of
con stru cti on d e fect ca se. A d m i ra lci tes n o a u th ority tha t su p p orts th i s p oin t. Massey v. Parker , 7 3 3 S o . 2 d 7 4 ( La. C t
. Ap p . 1 9 9 9 ) , d o e s n o ts o h o l d

. As di sc uss ed ab ove , t he j ury f ound t hat M ar t c o a l l eg ed a n d pr ove d m or e t han $4
m i l l i on i n “ property dam age” i n t h e f orm of “l oss of use. ” Th at l oss of

use f l ow ed f rom repeated, sud den breakd ow n s. A s s u ch, this case al l eges exact l y t h e sor t
o f c o ns t r uc t i o n de fe c tr e s ul t i ng i n da m ag e t hatt he c o ur ti n Massey ac c ept ed as fa llin gw ith in a n o r d in a r y C G L p o lic y . 3. W he t he ra Pol i cy Exc l us i o n Appl i e s t o Mar t c o ’ s Al l ega t i o ns A dm i ralbears the bu rden of provi n g t h e a pp l i cabi l i t y of a n excl u si on ary c la u s e w ith in th e P o l i c y . D oerr , 7 7 4 S o . 2 d a t 1 2 4 ; La. Mai nt
. Ser vs . , I nc. v. C ert ain Unde r w r i t e r s atLl oy ds , 616 So. 2d 125 0, 1252 ( La. 1993)

. I f A dm i r al
can n otun am bi gu ou sl y show an excl u si on ap pl i es, t h e P ol i cy m u stbe const rued in fa v o ro f c o v e r a g e . D oerr , 774 So. 2d at124 ( c i t i ng Yountv . Mai s ano , 627 So. 2d 148 , 151 ( L a. 199 3) )

. A dm i ralvari ou sl y argu es t h at t h e di st ri ctcourt i n corr ect l y consi dered P C O H coverage, in co rr ect l y ap pl i ed the excepti on to E x c lu s io n (m ), a n d in c o r r e c tly fa ile d to a p p ly th e “W o r k P r o d u c t” e x c lu s io n s . W e co nc l ude t hatt he di s t r i c tco ur tco r r e c t l y de c i de d al lo f t he a bo ve i s s ue s a nd,
as s uch, W el l ons i s ent i t l ed t o i ndem ni f i c at i on undert he Pol i c y. a. App l i c abi l i t y o f

PC O H C ove r age A s t h e di st ri ctcou rtn ot ed bel ow , the ap pl i cabi l i t y of t h e pol i cy def

i n i t i on f o ra “ pr o duc t s - c o m p l e t e do p e r a t i o ns ha z ar d” ( “ PC O H ” ) ha s pr o ve n t o b e pe r hap s t he m o s tc o nt e s t e d i s s ue s ur r o undi ng t he q ue s t i o n o f i nde m ni f

i cat i on. The par t i es ev en di sput e w hy w e m ustc ons i derw het herPC O H appl i es . Adm i r al
s u g g e s ts P C O H a n a ly s is is n e c e s s a r yto fu llyco n s id e rE x c lu s io n (j)(6 ) fo rce r ta in h a r m s re la tin gto “W o r k P r o d u c t.” W e llo n s co n te n d s th a t P C O H a n a ly s is isN o. 08- 31247 & N o. 08- 31248

The policy definitio n for P COH state s inrel ev antpart: 13 16. “Products-Compl eted Operations Hazard”:

a. Inclu des all “bodily inj ury” and “property damage” occurrin g away from pr em is es yo u own or re nt and arisingout of “yo ur product” o r “your work” except:

.. . (2 ) Work th at h a s n ot yet b ee n co mp lete d orab a n do n ed

. Ho wever , “your wo rk”

willb e de em edc om pl et edat th e earlie sto f th e fo llowin gtim es : (a) Whenall the work called for in yo ur contract has bee n complet ed;

.. . (c) Wh en that part of th e work doneata j ob site has bee n put to its intende d

use byany personor organi zationoth er thananother co ntractor or subco ntractors working onth e sa me pro

je ct. Work that mayn eed service, maintenance, corre ction , repair or r eplacement, b ut whichis otherwise co mplete, will be treated a s compl eted.
20 n e c e s s a r y t o a d d r e s s t he a p p l i c a b i l i t yo f t h e e x c e p t i o n t o Ex c l u s i o n ( m )

. As ap pl i ed to ei t h er i ssue, t h e di st ri ctcourt ’ s ap pl i cat i on of t h e pol i cy def i n i t i on f or P C O H w a s corre ct.

13 i

. PC O H and E xc l usi on ( j ) ( 6) A dm i ralargu es that the di st ri ctcou rterred i n it s ap pl i cat i on of the P ol i cy defi n i t i on of

P C O H

. Sp eci f

i cal l y, A dm i ralcontends that t h e di st ri ctcourt in c o r r e c t ly d e t e r m in e d th a tM a r t c o p r o v e d “l o s s o f u s e ” c a u s e d b yW e ll o n s ’s p rod u ct. O n the con trary , the distri ct cou rt’ s i n terp r e ta tio n of P C O H w i th respectt o t h i s excl u si on app ears t o be cor rect
. A s s u ch, M art co’ s c l ai m cann ot fa ll w ith in E x c lu s io n (j)(6 ) o f th e P o lic yd u e to th e P C O H e x c e p tio n . Ad m i r a l ’ s p r i ma r y r e a s o n f o ra p p e a l i n gt h e d i s t r i c tc o u r t ’ s P COH
assessm en tw as t h e di st ri ctcourt ’ s i n t erpret ati on of t h e p o l i cy def

i n i t i on f

or PC O H i n t he c ont extof a n ex c ept i on t o Excl usi on ( j ) ( 6)

. Excl usi on (

j ) ( 6) excl u des:

“ P ropert y da m age” t o:N o. 08- 31247 & N o. 08- 31248

21 ... ( 6) T h at part i cul ar part of an y property t h at m u stbe res t ored, repai red or re p l a ced be ca u se “yo u r w ork ” w a s i n corre ctl y p erform ed on i t.

... P aragrap h ( 6) of

t h i s excl u si on does not app l y t o “ property dam age” in c lu d e d in th e “p r o d u c ts -o p e r a tio n h a z a r d .”

T h e d i s t r i c tc o u r ts q u a r e l ya d d r e s s e d t h e a p p l i c a b i l i t yo f t h e P CO H defi n i t i on to M art co’ s cl ai m ed da m ages. T h e P ol i cy al l ow s f or i n dem n i f

i cat i on
w h ere “pro p erty da m a ge ” t o “oth er p rop erty ” a r o s e f rom W ell on s’ s p rod u ct. Mart co L t d

. P ’

ship v. W

el l on s, I n c. , N o. 04- 673, 2008 U

. S. D i st
. LE X I S 98385, at
* 2 5 -2 9 (W .D . L a . D e c . 1 , 2 0 0 8 ). A d m ir a l c o n t e n d s th a tth e d i s t r ic tc o u r t ’s
rea son i n g circu l a rl y a sse rts “ lo s s o f u se” w a s ca u sed by “l oss of u se.” W e c o nc l ude t hatt he di s t r i c tc o ur tc o r r e c t l y f o und t hatM ar t c o “ l o s t t he us e ” o f t he O SB p la n t be c aus e i t“ l o s tt he us e ” o f t h e We ll o n s u n it t h rough a ser i es of
m e c h a n ic a l fa i l u r e s . F a rfr o m c ir c u la r , t h is ju s t if ic a t io n in th e d is t r ic tc o u r t ’s
o p i n i o n s h o ws t h e s o r to f di r e c tc a u s a ll i n k r e q u i r e d b yt h e PCOH d e f i n i t i o n . As
su ch , the distri ct cou rt’ s ap p l i ca ti on of th e P C O H de fi n i ti on w ith r e s p ect to M art co’ s “ l oss of

use of ot h er property” w as corr ect an d E xcl u si on (j ) ( 6) does not ap pl y due t o t he e xc e pt i o n pr o vi s i o n.

i i

. P C O H a n d E x c l u s i o n ( m) W e l l o n s a s s e r t s t h a tt h e d i s t r i c t c o u r tu n d e r t o o k i t s a n a l y s i s o f P CO H
co v e ra g e a s p a rt o f i ts a ss e ss m e n t of th e a p p li ca b il ityof E x clu sio n (m ). Spe c i f i c al l y, W e l l o ns po i nt s o utt hatt he e xc e pt i o n t o Exc l usi o n ( m ) a nd t he P C O H de fi n i ti on bo th req u i re a sh ow i n g th a t th e i n su red ’ s p rod u ct w a s “pu t t o i t s i nt ended us e. ” “ Pu tto i t s i nt ended use” i s nota def i ned te r m i n t he Pol i c y. T h e di st ri ctcourtconcl u ded t h at t h e j u ry a w a rd ed d am ages to M art co w h i ch
a rose after the W ell on s u n i t w a s “pu t t o it s i n ten d ed u se.”N o. 08- 31247 & N o. 08- 31248

Forth e text of E xclusio n (m), see supranote 7. 14 22 T h e p r i ma r y p o i n to f c o n t e n t i o n r e g a r d i n gP C O H a n d E x c l u s i o n ( m) centers on w h et h er W el l on s’ s w ork w as ev er com pl et ed an d pu tto use by M art co. N ei t h er part y di spu t es that the st art

- u p of the W el l on s un i tocc u rred on Ja n u ary 28, 2003. N ei t herpar t y di sput es t hat t he e nsui ng w or k on t he W el l ons uni tw as o ut s i de t he o r i gi nalc o nt r ac t s a nd, i ns t e ad , r e f l e c t e d r e m e di alef

f o r t s . Al lof

t he
ava i l able evi den ce dem on st rat es t h at M art co’ s “ l oss of use” da m ages did not begi n t o a c c r ue unt i l af t er t he January r e- st ar t w hen M ar t c o w as suppos ed t o b e a b le to fu llyu tiliz e th e u p g r a d e d fu r n a c e . W o r ds a nd p hr as e s us e d i n a n i ns ur anc e po l i c y s ho ul d b e c o ns t r ue d us i ng t hei rpl ai n, ordi nary, an d gener al l y prev ai l i ng m eani ng, unl es s t he w or ds have
a c q u ir e d a te c h n ic a l m e a n in g . C ad w allad er , 8 4 8 S o . 2 d a t 5 8 0 ; C arbon , 719 So. 2d at 439
. H ere, “ pu tto i t s i n t en ded use” does n otha ve a tec h n i calm ean i n g or a po l i c y- s pe c i f

i c de f i ni t i o n. A pp l yi ng t he c o m m o n m e ani ng, t he n, t he W e l l o ns uni tw as put t o use as so on as M ar t c o b egan e m pl oyi ng i tas par tof i t s fac t or y. W e l l o ns w as put at i ve l y do ne w i t h i t s r e s po ns ibi l i t i e s , a nd M art co had be gun tr y in gto m a k e u s e o f i t s n e w fu r n a c e . O n ly a s it b e g a n u s in gth e p r o d u c t d id M ar t c o s t ar ti nc ur r i ng une xp e c t e d d ow n t i m e . The di s t r i c tc o ur t ’ s c o nc l us i o ns ( 1) t h at W el l on s c om pl et ed i t s w ork on Jan u ary 28, 200 3, a n d (2 ) t h at M art co b eg a n p u tti n g t h e f u rn a ce t o use on J a n u a ry 2 8 , 2 0 0 3 , w e r e co rrect. Cons e que nt l y, t he PCO H de f i ni t i o n a ppl i e s t o M ar t c o ’ s da m ag e s i n t he i ns t ant
case. b

. E x c l u s i o n ( m) 14 W h e n we a d d r e s s e d E x c l u s i o n ( m) i n t h e s e c t i o n o n d u t yt o d e fe n d , we not ed t hat t he par t i es f oc use d on w het her t he “ i m pai r ed pro per t y” pr ong o f t hat excl u si on app l i ed. B ecau se t h e pl ead i n g al l eged “ da m ag e t o i nf r astr u ct u re” f

rom

“ exc es sive as h ca r r yov er , ” t he s ec ond pr ong o f E xc l usi on ( m ) – “ pro per t y t hat hasN o. 08- 31247 & N o. 08- 31248

Wellon s didnotapp eal thedis trict co urt’sc onclu sionth at E xclu sion( m) app li es . 15 Inst ead , it argue s thatthe dis tri ct co urtcorr ect ly app lied the except ion to Exclus ion (m). As such , th e app licab ilityo f E xclu sion( m) isnota ddre sse d inthisse ctio n . 23 n o t b e e n p h y s ic a llyinju r e d ” –w a s n o t a t is s u e . H o w e v e r , fo llo w in ga tr ia l in
w h i c h t h e b u l k o f

d a ma g e s a w a r d e d w e r e f o r“ l o s s o f

u s e , ” E x c l u s i o n ( m) argu ably app l i es. Th e di st ri ctcourtf ou n d t h at the excepti on t o t h e excl u si on 15
a p p lie d to n e g a te th e e x c lu s io n . Adm i r alc l ai m s thatt he di s t r i c tc o ur ti m pr o pe r l y ap pl i e d t he e xc e pt i o n. T h e d i stri ct cou rt’ s an a ly s is o f th ese i ssu es is both corre ct an d con sist en t w i th L o u is ia n a a n d F if

t h C ir c u it c a s e la w . A s s u c h , w e a ff ir m th e d is t r ic tc o u r t ’s
a p p lic a tio n o f th e e x c e p tio n to E x c lu s io n (m ). T h e e x c e p tio n to E x c lu s io n (m ) r e a d s in re le v a n t p a r t: Thi s e xc l us i o n do e s no ta ppl y t o t he l o s s o f us e o f o t he rpr o pe r t y ar i s i ng o uto f s udd e n a nd a c c i de nt alphy s i c ali nj ur y t o “ yo urpr o duc t ” o r“ yo ur w o r k ” a fte rit h a s b e e n p u t t o its in te n d e d u s e . A dm i ralcl ai m s t h at t h e di st ri ctcourtl acked an y evi den ce t o concl u de the j u ry aw arded dam ages f

or ( 1) i nj u ry t o “ ot h er propert y” ( t h e O S B pl an t ) ( 2) caused by su dd en an d acci den t alph ysi calinju ry t o t h e W el l on s un i t
. Y ett h e di st ri ct
c our thad am pl e e vid en ce to s upportt hes e c onc l usi ons . The ev i denc e a tt r i al d e m o n s tr a te d th a t a t h e r m a l o il ta n k in s ta lle d b yW e llo n s im p lo d e d ; a ci rcul ati on pu m p i sol ati on val ve fai l ed; a val ve st em l eak ed; t h e com pu t eri zed controlsyst em di d n otf u n ct i on properl y; an d w i res bu rnt of f t h e t h erm ocoup l es. M a rtco offere d ev i d en ce of the do w n ti m e ca u sed by ea ch of th ese i nj u ri es in it s pr e s e nt at i o n t o t he j ur y. The j ur y f o und t hatW e l l o ns ’ s ne gl i ge nc e i n pe r f o r m i ng i t s c o nt r a c t ua l d ut i e s r e s ul t e d i n l o s t p r o d uc t i o n a nd p r o f i t s . I n s ho r t , a huge porti on of

M art co’ s c ase w as ded i cat ed to show i n g t h at i tlostuse of “ ot h er pro per t y, ” nam el y t he O S B p l ant , be c ause of s udden and acc i dent alphysi c al i nj ur y t o t he W e l l o ns uni t
. As s uc h, t he di s t r i c tc o ur tha d m o r e t han s uf f i c i e ntN o. 08- 31247 & N o. 08- 31248

24 ev i d en ce in th e reco rd to fi n d tha t M a rtco’ s cl a i m con form ed to t h e req u i rem en ts
o f E x c lu s io n (m )’s e x c e p tio n p r o v is io n . M o r e o v e r , t h i s r e s u l ti s s u p p o r t e d b yt h e a v a i l a b l e F i f t h C i r c u i tc a s e l a w. The di s t r i c tc o ur t ’ s de c i s i o n pr i m ar i l y r e l i e d up o n R i l ey St o ke rv . Fi d e l i ty and G u aran t ee Insuran ce Un d erw ri t ers , I n c. , 2 6 F. 3d 5 81 ( 5t h Ci r . 1 99 4)

. I n R i l ey , t h e i n sured’ s c oal

- f

i red st eam gen erat ors suff ered severe m echa n i calfai l u res a fte r th e in s u r e d ’ s clie n t b e g a n u s in gth e g e n e r a to r . Id

. at5 84
. As a r e s ul t , t he i n sured’ s c li en tw as f orced t o shu tdow n i n i t i aloperati on s t o al l ow f or r epa i rs. I d. T h e c o ur ti n R i l ey f o und t hatb r e ak do w ns i n i ni t i alo pe r at i o ns w e re
su ff i ci en t t o tri gg er th e ex cep ti o n . I d. a t 5 89
. The i ns t antc as e i nvo l ve s t he
s a m e s o r t o f r e p e a te d m e c h a n ic a l fa ilu r e d u r in gin itia l p e r fo r m a n c e in v o lv e d in R i l ey . M o r e i m p o r t a n t l y , t h e r e s u l t i n gi nj u r ya n d c l a i m f o rd a m a g e s we r e t he
s am e –une xp e c t e d d o w nt i m e l e ad i ng t o l o s t pr o duc t i o n and pr o f i t s . As s uc h, t he di s t r i c tc o ur t ’ s r e l i anc e o n R i l ey w a s a p p r o p r ia te
. A dm i ralci t es P C SNi t rogen F ert i l i zer, L Pv. U

. S

. Fi l t er/A rrow h ead , I n c. , 8 3 4 S o. 2 d 4 5 6 (L a . C t. A p p . 2 0 0 2 ), for th e pro p ositi on tha t R i l ey i s i nc o ns i s t e nt
w i th L ou i sian a l a w . Y et PC Sh a s n o b e a r i n go n t h e i n s t a n tc a s e f o rt wo im p o r ta n t r e a s o n s . F ir s t, PC S n e v e r re a ch e d th e e x ce p tion to E x clu sio n (m ). I ns t e ad , t he c o ur tr ul e d o n t he a ppl i c ab i l i t y o f Excl us i o n ( m ) i t s e l f w i t ho ut
n e e d in gto a d d r e s s t h e e x c e p tio n . Id

. at4 58
. Se c o nd, t he c o ur ti n PC Sw as not
con cern ed w i th the sam e p ortion of E xc lu s ion ( m ). E xc l u sion ( m ) a p p l i es to “pro p e r ty d a m a ge ” f l ow i n g from eit h er d efecti ve w ork pr od u ct or fa i l u re to p e r fo r m a c o n tr a c t a c c o r d in g to its te r m s . PCS i nvol ved a cont r ac t i ng par t y t hat fa ile d to tim e lyp e r fo r m . I d. W e , l i ke t he c o ur ti n R i l ey , ar e fac ed w i t h defec t i ve
w o r k p r o d u c t. A s s u c h , PCS i s di s t i ngu i s hab l e a nd i tdo e s no ta f fe c tt he ap pl i cat i on of

t h e excepti on t o E xcl u si on ( m ) i n t h i s c ase. T h ou gh A dm i rala rgua bl y show ed E xcl u si on ( m ) app l i ed, W el l on s c arri ed i t s b ur de n o f pr o vi ng t he e xc e pt i o n. As s uc h, t he di s t r i c tc o ur tc o r r e c t l y f o undN o. 08- 31247 & N o. 08- 31248

No te s 4- 6 , supra , qu o t e th e f ull t e xt o f E xc lu s i o n s ( j ) ( 5)

- ( 6) , E xc lu s i o n (k), an d 16 Exclus ion (l) , res pec tively. 25 t h e excepti on app l i ed an d, m ore bro ad l y, cor rect l y concl u ded t h at t h e P ol i cy p r o v id e s in d e m n ific a tio n fo rM a r tc o ’ s cla im s . c . “ W o r k Pr o duc t ” Exc l us i o ns Fi nal l y, a s i n t he c o m pa ni o n du t y t o de fe nd c as e , Adm i r al , w i t ho ut speci f i ci t y, al l eges t h at al lpossibl e “ property dam age” f ou n d i n the com pl ai n tor pre se nt ed att r i alfal l s und er one of t he “ W or k Produc t ” ex c l usi ons of t he Pol i c y. A gain , th is argu m en tcoul d refer t o as m an y as f ou r di f ferent excl u si on s: E xcl u si on (

j ) ( 5) , E xcl u si on (

j ) ( 6) , E xcl u si on ( k), an d E xcl u si on (l)

. N on e of t h ese 16
e x c lu s io n s a p p lyto th e in s ta n t c a s e . N e ith e r E x cl u si on (

j ) ( 5) nor E xcl u si on ( j ) ( 6) can ap pl y t o t h i s c ase as a
m at t erof

Loui si ana l aw . The Loui si ana Sup r em e C ou rt h a s expl ai ned “ t hat
e xc l us i o ns [ (j ) ( 5) ] a nd ( 6) a ppl y w hi l e t he i ns ur e d’ s w ork i s i n pr o c e s s , i

. e . , t he
w ork i s n ot ye t com p l eted

. ” S u prem e S ervs . & S

peci alty Co. v. S on ny G ree r, I n c. , 9 5 8 S o . 2 d 6 3 4 , 6 4 1 (L a . 2 0 0 7 ). A s d is c u s s e d a b o v e , th e d is tr ic t c o u r t c o r r e c tly f o und t hatW e l l o ns ’ s w o r k was “ c o m pl e t e ” o n J anua r y 28 , 2 00 3, a tw hi c h po i nt M art co had a reasona bl e exp ect ati on of f u l l u sage of t h e W el l on s un i t
. Th e fact th a t t h e u n it fa ile d a n d re q u ir e d a d d itio n a l r e p a i r s d o e s n o t a ffe c t t h is concl u si on . H ere, a l lof M art co’ s cl ai m s stem fr om dow n t i m e af t er t h e Jan u ary 28 com pl et i on date. A ccor di n gl y, E xcl u si on ( j ) ( 5) a n d E x clu si on ( j ) ( 6) cann ot appl y be c ause W el l ons ’ s w or k w as al r eady c om pl et e i nsofar a s the po l i c y w as c o n c e r n e d w h e n th e cla im e d inju r yo c c u r r e d

. A dm i ral ’ s argu m en t s w i t h respect t o E xcl u si on (k) an d E xcl u si on (l) res t on a faul t y ass um pt i on. Adm i r als ugges t s t hat t he di st r i c tc our tf ound co ver age f or t h e ph ysi cal , t an gi bl e inju ry to t h e W el l on s un i ti t sel f

. W h i l e t h i s i nj u ry occurred – an d i s pa rt of t h e coverage an al ysi s – t h e act u al aw ard of da m ages f or
w hi c h i ndem ni t y w as f ound w as i n t he f

or m of l os s of use . Th at l os s of use w asN o. 08- 31247 & N o. 08- 31248

26 suf fer ed byt he O S B p l ant as a w hol e. These i nj uri es w er e pr es ent ed att r i al t hr o ugh e vi de nc e o f

sp eci f i c i ns t anc e s o f

pl ant

- w i de do w nt i m e c aus e d b y t he vari ou s m echa n i calfai l u res of t h e W el l on s un i t
. Th e j u ry f ou n d f or M art co on t he ne gl i ge nc e c l ai m a nd a w ar de d d am ag e s f o rl o s tpr o duc t i on, pr o f i t s , a nd b u siness opport u n i t i es. I n short , everyt h i n g i n t h e rec ord sup ports a determ i n ati on t h at t h e j u ry aw arded dam ages – an d the di st ri ctcourtaw arded i nde m ni t y – o nl y f

o ri nj ur y t o “ o t he rp ropert y” a nd, a c c o r di ngl y, Exc l us i o n (k)
a n d E x c lu s io n (l) c a n n o t a p p ly

. I V . C ONC L US I ON W i t h res pect t o N o. 08-31247 , M art co’ s c om pl ai n tan d the P ol i cy, t ak en tog eth er, d o n ot u n a m b i gu ou sly p reclu d e a f i n d i n g th a t A d m i ra lretain ed a d u ty t o d e fe n d W e l l o n s i n t h i s c a s e . A p p l y i n gL o u i s i a n a ’ s r u l e s of c o n s t r u c t i o n , we c onc l ude t hat t he M ar t c o c om pl ai nt al l ege s c ove r ed pr ope r t y dam age c ause d by
an oc c urr enc e. A t th e sa m e t i m e, none o f t he pol i c y e xc l usi ons advanc ed by A d m ir a l w o r k to e x tin g u is h its d u ty u n d e rth e P o lic y . S i m i l a rl y, rega rd i n g N o. 0 8 -31 2 4 8 , W ello n s h a s su cces sfull y ca rried it s b u rd en w i t h re spe c tt o i ndem ni f i c at i on. W el l ons has dem ons t r at ed “ pro perty d a m a ge ” ca u sed b y an “occu rren ce” w i th i n th e ap p l i ca b l e poli cy d efi n i ti o n s in l i ght of t he e vi denc e a dduced att r i al

. The di st r i c tc our tc or r ec t l y c onc l uded t hat M ar t c o’ s c l ai m s fal lw i t hi n t he PC O H def i ni t i on o f

the P oli cy . W el l ons has sho w n t hat the exc ept i on to E xc l usi on ( m ) appl i es i n t hi s c as e. Fi nal l y, A dm i r al h a s n ot car r i ed i t s burde n w i t h re spe c tt o a ny of t he pos sibl e “W or k Produc t”
e x c lu s io n s . In l i gh t of

the se co n cl u sion s, w e fi n d tha t A d m i ra l d i d i n fact h a ve a du ty t o defen d W el l on s u n der t h e P ol i cy an d, as t h e di st ri ctcourtf ou n d, A dm i ralal so had a dut y t o i nde m ni f y W e l l o ns . Acc o r di ngl y, i n N o . 08

- 31 24 7, w e RE VE RSE
a n d R EMAND f

o rp r o c e e d i n g s c o n s i s t e n twi t h t h i s o p i n i o n ; i n No

. 0 8

- 3 1 2 4 8 , we A F F I R M.