United States Court of Appeals

For the Eighth Circuit

___________________________

No. 21-3389

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Fluor Corporation

lllllllllllllllllllllPlaintiff - Appellant

v.

Zurich American Insurance Company

lllllllllllllllllllllDefendant - Appellee

Hartford Accident and Indemnity Company; Does 1-100

lllllllllllllllllllllDefendants

 ____________

Appeal from United States District Court 

for the Eastern District of Missouri - St. Louis

 ____________

 Submitted: September 22, 2022

Filed: April 13, 2023

____________

Before COLLOTON, WOLLMAN, and STRAS, Circuit Judges. 

____________

WOLLMAN, Circuit Judge.
Zurich American Insurance Company (Zurich) insured St. Joe Minerals

Corporation (St. Joe) and its sole shareholder Fluor Corporation (Fluor) from 1981

to 1985. St. Joe operated a lead smelting plant in Herculaneum, Missouri. Residents

of the town sued Fluor and St. Joe (then named Doe Run Resources Corporation (Doe

Run)) in the early 2000s, alleging that they had been injured by the plant’s release of

lead and other toxins. Zurich agreed to defend the companies and paid $9.87 million

in four settlements on behalf of both companies. Zurich also contributed more than

$25 million to a settlement between Doe Run and remaining plaintiffs. Fluor went

to trial, suffered an adverse jury verdict, and thereafter settled the claims for $300

million.

Zurich filed a declaratory judgment action against Fluor, which, in turn, filed

a counterclaim alleging bad faith failure to settle.1 The district court granted

summary judgment to Zurich, concluding that the policy limited Zurich’s liability on

a per-occurrence basis and that the $3.5 million per-occurrence limit had been

exhausted by Zurich’s initial settlement payments. The court concluded that Zurich

thus did not act in bad faith when it did not settle the claims against Fluor.

Fluor appeals, arguing that the district court erred in determining that the policy

limited Zurich’s liability on a per-occurrence and not a per-claim basis, which would

have increased Zurich’s liability to $21.5 million for the 1981 and 1982 policies. 

Fluor also contends that, regardless of whether the policy is limited on a peroccurrence or per-claim basis, the limits do not foreclose its claim. Finally, Fluor

argues that it is entitled to partial summary judgment. Reviewing de novo and

applying Missouri law, we reverse the policy-limits determination and remand for

further proceedings. See Am. Fam. Mut. Ins. Co., S.I. v. Mid-Am. Grain Distribs.,

LLC, 958 F.3d 748, 752 (8th Cir. 2020) (standard of review); Cont’l Cas. Co. v. Nat’l

1Fluor also alleged breach of the duty to defend and unreasonable refusal to

pay, but those claims are not relevant to this appeal.

-2-
Union Fire Ins. Co. of Pittsburgh, PA, 812 F.3d 1147, 1149 (8th Cir. 2016) (“No one

disputes Minnesota law governs, so it does.”).

An insurance policy is interpreted according to the plain and ordinary meaning

of its terms, “or the meaning that would be attached by an ordinary purchaser of

insurance.” Seaton v. Shelter Mut. Ins. Co., 574 S.W.3d 245, 247 (Mo. 2019)

(quoting Doe Run Res. Corp. v. Am. Guar. & Liab. Ins., 531 S.W.3d 508, 511 (Mo.

2017)). Courts should evaluate policies as a whole when interpreting policy

provisions. Ritchie v. Allied Prop. & Cas. Ins. Co., 307 S.W.3d 132, 135 (Mo. 2009). 

When an endorsement conflicts with the policy’s terms, the endorsement prevails. 

Merlyn Vandervort Invs., LLC v. Essex Ins. Co., Inc., 309 S.W.3d 333, 338 (Mo. Ct.

App. 2010) (citing Abco Tank & Mfg. Co. v. Fed. Ins. Co., 550 S.W.2d 193, 198

(Mo. 1977)). Moreover, the last antecedent rule provides that a limiting clause

“should ordinarily be read as modifying only the noun or phrase that it immediately

follows.” Paroline v. United States, 572 U.S. 434, 447 (2014) (quoting Barnhart v.

Thomas, 540 U.S. 20, 26 (2003)). The last antecedent rule is not absolute, however,

and can “be overcome by other indicia of meaning.” Id. (quoting Barnhart, 540 U.S.

at 26)). Finally, the scope of subparts canon recognizes that “[m]aterial within an

indented subpart relates only to that subpart.” Antonin Scalia & Bryan A. Garner,

Reading Law: The Interpretation of Legal Texts 156 (2012). 

The Declarations in the policies at issue here set forth the limits for

comprehensive general liability, which included bodily injury liability.2 The

Declarations limited Zurich’s liability on an “each occurrence” basis. Endorsement

7 amended the Declarations, however, stating:

2The parties rely upon the language from the policies issued in 1981 and 1982. 

This opinion cites the 1981 policy, which is identical in all material respects to the

1982 policy. We have omitted certain capitalizations for ease of reading.

-3-
It is agreed that with respect to limits of liability for

comprehensive general liability as designated under Item 3

of the policy declarations is amended to read:

500,000 each claim

500,000 each aggregate as respects incidental professional

 liability endorsement.

Fluor argues that Endorsement 7 amended the Declarations’ limitations in a

manner that limited comprehensive general liability—which, again, includes bodily

injury liability—to a per-claim basis. The plain language of Endorsement 7’s

introductory clause, “limits of liability for comprehensive general liability,” supports

Fluor’s reading. By contrast, Endorsement 7’s limiting language, “as respects

incidental professional liability endorsement,” was placed in an indented subpart. 

Applying the last antecedent rule, Endorsement 7’s limiting clause applied only to the

immediately preceding phrase, “500,000 each aggregate.” The scope of subparts

canon leads to the same conclusion.

Zurich argues that the last antecedent rule should not apply here, because there

were other indicia that the policy intended to apply a per-occurrence limit to Zurich’s

comprehensive general liability. Zurich contends that Endorsement 7 provided the

limits of liability for incidental professional liability coverage, which it asserts were

not set forth elsewhere in the policy. But Endorsement 11, which set forth the terms

for incidental professional liability, provided those precise limits:

The total liability of the company for all damages, including damages

for care and loss of services, because of bodily injury sustained by 

one or more persons as the result of any one occurrence shall not

exceed the limit of bodily injury liability stated in the Declarations 

as applicable to “each occurrence”.

(emphasis added). Accordingly, the Declarations provided the limits of liability for

incidental professional liability coverage. 

-4-
Zurich also argues that reading Endorsement 7 as amending the comprehensive

general liability limits is contrary to a holistic reading of the policy because it

contradicts other important terms. When a contradiction arises, however, we enforce

the policy “as altered by the endorsement.” Merlyn Vandervort Investments, LLC,

309 S.W.3d at 338 (quoting Abco Tank & Mfg. Co., 550 S.W.2d at 198). Because

it as a whole may be given effect with per-claim limits on Zurich’s liability, we will

enforce the policy as so amended by Endorsement 7.

We conclude that Endorsement 7 modified the limits of liability for

comprehensive general liability, including bodily injury liability, to be on a per-claim

basis. The district court thus erred by determining that the policy was limited on a

per-occurrence basis.

Fluor argued before the district court that a determination of the actual limits

was unnecessary because it could establish its claim by showing that Zurich failed to

settle at a time when it did not believe that the policy limits had been exhausted. 

When the district court rejected this argument and proceeded to determine the policy

limits, Fluor stipulated that Zurich’s settlement payments had exhausted those limits. 

Fluor also argued that the court’s policy-limits determination “prevented Fluor from

proving up its bad faith failure to settle claim.” The court agreed that Fluor could not

establish its bad faith claim because the policy limits had been exhausted. D. Ct.

Order of July 27, 2021, at 3. Fluor contends on appeal, however, that it does not

matter whether the policy limits had been exhausted because it can still establish its

bad faith claim because of Zurich’s failure to timely inform Fluor that the policy

limits had been exhausted. Fluor did not present this argument below, however, nor

did it cite any authority regarding an insurance company’s duty to provide such

notice. We conclude that Fluor failed to preserve its argument that Zurich had not

provided timely notice of exhaustion, and we therefore decline to consider it in the

first instance. See Scott C. by and through Melissa C. v. Riverview Gardens Sch.

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Dist., 19 F.4th 1078, 1082 (8th Cir. 2021) (“As a general rule, we do not consider

issues that are raised for the first time on appeal.”).

We also do not rule on the district court’s denial of summary judgment on the

first two elements of Fluor’s claim because it was not a predicate to the final

judgment. See Beadle v. City of Omaha, 983 F.3d 1073, 1076 (8th Cir. 2020)

(explaining that an appeal “bring[s] up for review all of the previous rulings and

orders that led up to and served as a predicate for that final judgment” (quoting Greer

v. St. Louis Reg’l Med. Ctr., 258 F.3d 843, 846 (8th Cir. 2001))). 

The judgment is reversed and the case is remanded for further proceedings

consistent with the views set forth herein.

COLLOTON, Circuit Judge, dissenting.

From 1981 to 1983, Zurich American Insurance Company provided

comprehensive general liability insurance coverage to Fluor Corporation for damages

due to bodily injury or property damage in the amount of $500,000 per occurrence. 

One of many endorsements to the policies provided coverage for damages because

of bodily injury arising from “incidental professional liability” in the amount of

$500,000 for each claim, up to an aggregate of $500,000. Fluor argues, however, that

the endorsement concerning incidental professional liability transformed the entire

policy into an “each claim” policy without limits on liability per occurrence. 

Accepting Fluor’s position would result in a $20 million windfall recovery for which

the company did not pay premiums. The district court properly construed the policy

as providing comprehensive general liability coverage up to $500,000 per occurrence,

and its judgment should be affirmed.3

3The 1981-82 policy was an extension of a 1980-81 policy that Zurich issued

to a company that Fluor acquired in 1981. The parties entered into another policy for

-6-
 The insurance policy begins with a Declarations page, excerpted as follows: 

Item 3 provides that insurance is afforded for “comprehensive general

liability.” The item states limits of liability for (A) bodily injury liability and (B)

property damage liability. The pre-printed form provides a box for a limit as to “each

occurrence” for each type of liability, and a box for an “aggregate” limit for each type

of liability. 

Under bodily injury liability, an amount of “$500,000” is typed for “each

occurrence.” No amount is typed in the “each occurrence” box for property damage

liability. The letters “C S L” are typed in the box for an “aggregate” limit under

bodily injury liability. “C S L” is an abbreviation for “combined single limit,” a term

of art in the insurance industry. This term means that the limit of $500,000 stated for

“each occurrence” is a single limit with respect to each occurrence for bodily injury

liability and property damage liability “combined.” No limit is stated in the “each

occurrence” or “aggregate” box for property damage liability because the single

combined limit applies to both types of liability arising from an occurrence. See H.

Walter Croskey, et al., California Practice Guide: Insurance Litigation §§ 7:348,

7:350 (The Rutter Group 2022). 

1982-83. The polices are identical in material respects, and this discussion refers to

the 1981-82 policy except where noted.

-7-
Item 3 also provides that the policy includes insurance for incidental

professional liability, as indicated by an “X” to the right of the term on the

Declarations page in the excerpt below. No limits of liability for this coverage are

stated in the Declarations. 

Twenty-six endorsements are attached to the policy. Seven are identified by

title and a form number. Fourteen are numbered endorsements beginning with #1

through #13 and concluding with #18. All relevant endorsements, and the policy

itself, originally took effect on the same date of February 4, 1980.

One endorsement is entitled “Comprehensive General Liability.” This

endorsement specifies that Zurich will pay on behalf of the insured all sums that the

insured becomes legally obligated to pay as damages for bodily injury or property

damage caused by an occurrence. Section III of the endorsement sets forth “Limits

of Liability.” This section provides that the total liability for damages because of

bodily injury or property damage sustained as the result of any one occurrence will

not exceed the limit of bodily injury or property damage, respectively, stated in the

Declarations as applicable to “each occurrence.”

Fluor’s theory is that one line in one particular endorsement concerning limits

of liability for “incidental professional liability” revolutionized the entire policy—the

classic elephant hidden in a mousehole. Fluor maintains that Endorsement #7

transformed the contract from an “each occurrence” policy with carefully specified

limits of liability for each occurrence to an “each claim” policy that dispensed with

those limits.

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Endorsement #7 provides as follows:

Fluor contends that the reference to “$500,000 EACH CLAIM” in

Endorsement #7 applies to all claims under the policy, not only to claims respecting

incidental professional liability. Fluor maintains that this line in the endorsement

nullifies other references in contemporaneous provisions to coverage for “each

occurrence” and limits of liability for “each occurrence.”

When interpreting an insurance contract in Missouri, a court seeks to effectuate

the intent of the parties. A court “should not interpret policy provisions in isolation

but rather evaluate policies as a whole.” Ritchie v. Allied Prop. & Cas. Ins. Co., 307

S.W.3d 132, 135 (Mo. 2009); see Restatement (Second) of Contracts § 202(2) (1981). 

“[N]o substantive clause should be allowed to perish by construction unless

unsurmountable obstacles stand in the way of any other course.” Soukup v. Emps.’

Liab. Assurance Corp., 108 S.W.2d 86, 92 (Mo. 1937). “[L]ooking to the instrument

as a whole, courts should give such construction that each clause will have some

effect and perform some office; seeming contradictions must be harmonized, if that

course is possible; a construction which entirely neutralizes one provision should not

be adopted if the contract is susceptible of another construction which gives effect to

all of its provisions and is consistent with general intent.” Id.; see Kyte v. Am. Fam.

Mut. Ins. Co., 92 S.W.3d 295, 299 (Mo. Ct. App. 2002).

-9-
Fluor advances three arguments why Endorsement #7 supposedly transforms

the policy’s coverage from insurance based on “each occurrence” with defined limits

to insurance based on “each claim” with no limits per occurrence. Even viewing

Endorsement #7 in artificial isolation, these contentions are unpersuasive. When the

endorsement is considered properly as part of the policy as a whole, context

demonstrates convincingly that the district court was right to reject Fluor’s

submission.

Fluor first argues that unless Endorsement #7 is understood to revolutionize the

policy, the reference to “comprehensive general liability” in the endorsement would

be superfluous. In referring to Item 3 of the Declarations page, however, the parties

naturally specified which of the coverage parts was amended. The parties might have

left the coverage part unspecified, and required the reader to infer the coverage part

from the fact that incidental professional liability is a subcategory of comprehensive

general liability. But the clarity gained by including the term is hardly the sort of

redundancy that supports an inference that the parties intended sub silentio to make

a dramatic revision of the policy within one line of one endorsement. Contracting

parties, like legislatures, sometimes employ arguable redundancy to ensure that their

intent is communicated and understood, or simply due to inadvertence or

shortcomings of human communication. See Barton v. Barr, 140 S. Ct. 1442, 1453

(2020); Brazil v. Auto-Owners Ins. Co., 3 F.4th 1040, 1043-44 (8th Cir. 2021) (“The

canon against surplusage does not require courts to read a contract in a way that

contains no surplusage.”); In re SRC Holding Corp., 545 F.3d 661, 670 (8th Cir.

2008) (“Nothing prevents the parties from using a ‘belt and suspenders’ approach . . .

in order to be ‘doubly sure.’”); Crescent Plaza Hotel Owner, L.P. v. Zurich Am. Ins.

Co., 20 F.4th 303, 311 (7th Cir. 2021). Fluor’s contention about redundancy is

particularly unpersuasive here, because the parties used similar redundancy

elsewhere. See Garland v. Aleman Gonzalez, 142 S. Ct. 2057, 2073 (2022)

(Sotomayor, J., concurring in the judgment in part and dissenting in part); TMW

Enters., Inc. v. Fed. Ins. Co., 619 F.3d 574, 577 (6th Cir. 2010). In the 1982 policy,

-10-
Endorsements #36, #38, and #39 refer to changing insurance for “comprehensive

general liability.” As with Endorsement #7, each of the three 1982 endorsements

proceeds to specify a distinct subcategory of coverage addressed by the endorsement,

even though each subcategory is part of coverage for “comprehensive general

liability.” R. Doc. 687-3, at 76, 78-79.

Fluor next invokes the formatting of Endorsement #7 and the “scope-ofsubparts canon.” This argument, however, seeks to place dispositive weight on a

canon of construction that does not match the text of the contract. Even when fully

applicable, canons of construction are not absolute rules; they provide “clues” to the

meaning of a text that must be considered with other indicators and balanced

according to the clarity and weight of each signal. Antonin Scalia & Bryan A.

Garner, Reading Law: The Interpretation of Legal Texts 59 (2012). In this case, the

cited canon does not support Fluor’s proposed policy interpretation.

The scope-of-subparts canon applies to a text that is formatted as follows:

Scalia & Garner, supra, at 156. In such a passage, the material in boldface relates to

all three subparts, but the if-clause in subpart (C) relates only to (C). 

-11-
Fluor’s argument regarding Endorsement #7 fails to acknowledge that

punctuation and subpart designations are significant predicates for the full-throated

application of this canon. In the prototype from Scalia & Garner, each subpart is

introduced by a separate parenthetical letter (A) through (C), and each subpart

concludes definitively with a period or semicolon. These features tend to show that

each subpart is complete by itself. The leading court decision on the canon, Jama v.

Immigration and Customs Enforcement, 543 U.S. 335 (2000), follows the same

pattern. In that case, each subpart was introduced with a parenthetical romanette (i)

through (vii), and each subpart ended with a period. See 8 U.S.C. § 1231(b)(2)(E). 

The Court thus observed that “[e]ach clause is distinct and ends with a period,

strongly suggesting that each may be understood completely without reading further.” 

543 U.S. at 344.

The text of Endorsement #7 is markedly different. The two indented lines of

text are not designated with letters or numbers as though they are self-contained

subparts. The first indented line of text does not end with punctuation to indicate that

it is a complete subpart. Rather, the endorsement flows uninterrupted as though it is

a textual sentence with a period appearing only at the end of the entire text. Contrary

to Fluor’s preferred canon, the format of Endorsement #7 suggests a single

continuous utterance in which the closing reference to incidental professional liability

qualifies the series of coverage amounts that come before it. 

This inference is strengthened by the fact that the parties in Endorsement #5

to the same policy employed subpart designations and punctuation when they

intended to create complete, self-contained subparts: 

-12-
Like the model text cited by Scalia & Garner, Endorsement #5 includes three

subparts that begin with parenthetical numerals and conclude with periods at the end

of subparts (2) and (3). This format thus indicates that the qualifying language “as

respect bond issue” in subparts (2) and (3) does not qualify the text in subpart (1). 

The structure displayed in Endorsement #5 is conspicuously missing from

Endorsement #7. The difference in usage within the same document is a signal that

the parties did not mean to employ self-contained subparts in Endorsement #7. See

Akhil Amar, Intratextualism, 112 Harv. L. Rev. 747, 748 (1999).

Fluor’s third argument relies on the “rule of the last antecedent,” under which

“relative and qualitative words are to be applied only to the words and phrases

preceding them.” Spradling v. SSM Health Care St. Louis, 313 S.W.3d 683, 688

(Mo. 2010). The company contends that Endorsement #7 transforms all

comprehensive general liability insurance into “each claim” coverage, because the

endorsement’s reference to incidental professional liability modifies only the amount

for “each aggregate” that appears immediately before the qualifying phrase. The

“last-antecedent canon,” however, competes here with the “series-qualifier canon,”

and the correct interpretation depends on context. See Facebook, Inc. v. Duguid, 141

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S. Ct. 1163, 1169 (2021). Under the series-qualifier canon, when “there is a

straightforward, parallel construction that involves all nouns or verbs in a series, a

prepositive or postpositive modifier normally applies to the entire series.” State v.

Champagne, 561 S.W.3d 869, 873 (Mo. Ct. App. 2018) (quoting Scalia & Garner,

supra, at 147); see Porto Rico Ry., Light & Power Co. v. Mor, 253 U.S. 345, 348

(1920). “Where several words are followed by a clause as much applicable to the first

and other words as to the last, the clause should be read as applicable to all.” 

Spradling, 313 S.W.3d at 688 (quoting Norberg v. Montgomery, 173 S.W.2d 387, 390

(Mo. 1943)); see Scalia & Garner, supra, at 147.

Even viewing Endorsement #7 in isolation, the series-qualifier canon naturally

applies. This insurance policy, like most policies, states individual and aggregate

coverage amounts in tandem. There is an amount of coverage for “each occurrence”

or “each claim” and then an “aggregate” amount of coverage. The Declarations page

is a pre-printed form with boxes designed for the two companion amounts. 

Endorsement #7 thus lends itself to a “straightforward, parallel construction that

involves all nouns or verbs in a series,” Champagne, 561 S.W.3d at 873 (quoting

Scalia & Garner, supra, at 147)—that is, “each claim” and “each aggregate” are part

of a single integrated series in an insurance policy. The qualifier—“as respects

incidental professional liability endorsement”—is “as much applicable to the first and

other words as to the last.” Spradling, 313 S.W.3d at 688 (quoting Norberg, 173

S.W.2d at 390). As the district court remarked, “[i]t strains credulity to think the

phrase ‘$500,000 EACH CLAIM’ would be left blank as to the type [of] coverage it

applied to, while the second phrase immediately below it for the aggregate limit

specifically references an entirely different type of coverage.” Ordinary principles

of interpretation indicate that “incidental professional liability” modifies the coverage

amounts for both “each claim” and “each aggregate.” See Duguid, 141 S. Ct. at 1169;

United States v. Loyd, 886 F.3d 686, 688 (8th Cir. 2018).

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Beyond Fluor’s three arguments that focus on Endorsement #7 standing alone,

a proper examination of the whole text confirms that the endorsement addresses only

coverage for incidental professional liability. The Declarations page and all relevant

endorsements had the same effective date. But rather than harmonize Endorsement

#7 with the rest of the policy as required by Missouri law, Fluor’s interpretation

would nullify several core provisions.

Item 3 of the Declarations sets forth limits of liability with respect to

comprehensive general liability insurance for “each occurrence” and in the

“aggregate.” Yet Fluor’s interpretation of Endorsement #7 would mean that the

parties used a form with limits for “each occurrence” that they never intended to

apply. Not only does Fluor’s interpretation require believing that the parties used the

wrong pre-printed form for the Declarations, but that the parties manually entered a

meaningless figure of $500,000 into the box for limits of liability on “each

occurrence” under Coverage A. Under Fluor’s interpretation of Endorsement #7, the

parties intended from the outset that liability would not be limited based on “each

occurrence,” so there would have been no reason to complete an “each occurrence”

box on the Declarations page. There is, however, a ready means to harmonize the

seeming contradiction: the endorsement states the “each claim” limits of liability for

incidental professional liability only, and the Declarations page states the “each

occurrence” limits for other comprehensive general liability.

Fluor’s interpretation also falters on the simple exercise of attempting to

implement its suggested amendment. Endorsement #7 calls for amending item 3 of

the Declarations to read “$500,000 each claim.” But the endorsement does not

specify which part or parts of item 3 should be amended—coverage A for bodily

injury, coverage B for property damage, or both. Fluor seems to propose an

amendment only to coverage A for bodily injury, but that suggestion produces an

anomaly: bodily injury coverage is then based on “each claim,” while coverage B for

property damage is based on “each occurrence,” and the aggregate limit is an

-15-
incoherent “combined single limit” with respect to individual limits of two different

types. If Fluor instead means that the amendment of “$500,000 each claim” applies

to both types of coverage, then the Declarations page becomes a different jumble: 

bodily injury liability and property damage liability are each limited to $500,000 each

claim, but the “aggregate” box continues to state a “combined single limit” that makes

no sense when each coverage type states its own limit of liability.

Fluor’s argument depends on a mix-and-match construction under which

Endorsement #7 amends the Declarations page to provide a limit of “$500,000 each

claim” for bodily injury under Coverage A, and to provide an “each claim” limit with

no specified dollar amount for property damage under Coverage B. This suggested

rewrite of the Declarations page is not supported by the text of Endorsement #7. The

endorsement does not purport to amend Coverage B for property damage.

But when Endorsement #7 is properly understood to address only incidental

professional liability, these several anomalies disappear. Endorsement #11 explains

that the incidental professional liability endorsement covers only damages because

of “bodily injury,” not property damage. Therefore, it was unnecessary for

Endorsement #7 to specify which coverage was at issue on the Declarations page: the

amendment necessarily applies only to coverage A for bodily injury. Endorsement

#7 sets a new “each claim” limit for bodily injury arising from incidental professional

liability only, and sets a new “each aggregate” limit for incidental professional

liability only. The Declarations page remains intact with its “each occurrence” limit

and aggregate “combined single limit” for both bodily injury and property damage

with respect to all other comprehensive general liability.

Fluor’s interpretation creates other unacceptable contradictions in the policy. 

Fluor maintains that Endorsement #7 amended the Declarations page to eliminate the

reference to “each occurrence” and to substitute a limit of liability of $500,000 for

“each claim.” At the same time, however, other endorsements specifically

-16-
contemplated that the Declarations page includes a limit of liability for “each

occurrence.” The Comprehensive General Liability endorsement, Form No. L9259A,

provides that the insurer’s total liability for damages because of bodily injury

sustained as a result of any one occurrence will “not exceed the limit of bodily injury

liability stated in the declarations as applicable to ‘each occurrence.’” R. Doc. 687-

2, at 16 (emphasis added). Fluor’s interpretation of Endorsement #7 would nullify

this core policy provision even though the two endorsements have the same effective

date. 

Endorsement #11 states that with respect to the insurance afforded by that

endorsement, the total liability of the company for all damages because of bodily

injury sustained as the result of any one occurrence will “not exceed the limit of

bodily injury liability stated in the declarations as applicable to ‘each occurrence.’”

(emphasis added). Accepting Fluor’s contention, however, would mean that the

parties in Endorsement #11 referred to a phantom “each occurrence” limit of liability,

because Endorsement #7 supposedly had amended the Declarations page to read

“each claim” instead of “each occurrence.” Fluor’s interpretation of Endorsement #7

impermissibly attributes to the parties an intent to adopt meaningless provisions,

including in a later-numbered endorsement.

The district court also noted that the 1983 and 1984 insurance contracts

between the same parties confirmed the court’s interpretation of Endorsement #7. 

The court cited endorsements in the later policies that specified “each claim” limits

of liability for incidental professional liability alone, independent of the “each

occurrence” limits for other comprehensive general liability. Fluor criticizes the

district court’s reliance on policies from later years, and posits that the parties could

have reached an “each claim” agreement for 1981 and 1982 and then changed to an

“each occurrence” agreement for 1983 and 1984. To accept Fluor’s hypothesis,

however, the court would have to believe that the parties substantially reduced

insurance coverage in 1983 but increased the premium paid by the insured. Fluor

-17-
suggests that the parties changed from an “each claim” policy with no occurrencebased limits of liability in 1981 and 1982 to an “each occurrence” policy with

carefully circumscribed limits of liability in 1983. But the parties at the same time

increased the insured’s premium payment from $94,982 to $114,000. R. Doc. 687-3,

at 2; R. Doc. 687-4, at 4. Fluor’s hypothesis is commercially unreasonable and is

another reason to reject its contention that Endorsement #7 transformed the 1981

policy.

“Perhaps no interpretive fault is more common than the failure to follow the

whole text canon, which calls on the judicial interpreter to consider the entire text, in

view of its structure and of the physical and logical relation of its many parts.” Scalia

& Garner, supra, at 167. Fluor’s proposed interpretation of the disputed policy

unfortunately suffers from this fault. Fluor focuses on Endorsement #7 in isolation,

invokes canons of construction that are unpersuasive even as to the endorsement

standing alone, and ignores broader context that convincingly demonstrates the

limited scope of Endorsement #7. The district court correctly determined that the

policies at issue establish coverage for bodily injury that is subject to an “each

occurrence” limit of liability as set forth on the Declarations page. Fluor’s argument

for recovery of an additional $20 million based on supposed “each claim” limits of

liability should be rejected.

Given the majority’s contrary conclusion, a lengthy discussion of the remaining

issues on appeal would be largely academic. The district court correctly determined

that the alleged injuries in this case arose from one occurrence, and that the relevant

policy limits were exhausted before 2010. Once the policy limits were exhausted, the

duty to defend or settle ended. Because the policy limits were exhausted before the

disputed settlement negotiations in November and December 2010, Fluor cannot

establish that Zurich acted in bad faith in refusing to settle a claim within the limits

of the policy. I would therefore affirm the judgment of the district court.

______________________________

-18-