FI L ED U.S. COURT OF APPEAL S EL EVENTH CI RCUI T APRI L 26, 2010 J OHN L EY CL ERK [DO NOT PUBLISH]

IN THE UN ITED STATES COURT OF APPEALS

FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 0 9- 15 55 6 Non -Arg um en t Ca le nd ar

__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock et No. 0 6- 00 04 4- CV-WLS-4

TRANSCONTINENTAL INSURANCE COMPANY, CONTINENTAL CASUALTY COMPANY, TRANSPORTATION INSURANCE COMP ANY,

Plai nt iff s- Co un te r- D efen da nt -Ap pe ll ee,

ve rs us

R. LARRY PHILLIPS C ONSTRUCTION COMPANY, INC.,

Defen da nt -Co un te r- Cl ai m an t-Ap pe ll an t,
KMAR INVESTMENTS, LLLP, RIVERTOWN FORD, INC., et a l.,

Defen da nt -Co un te r-Cl ai m an t.

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co ur t fo r th e Mi dd le Dis tri ct of Ge or gi a

__ __ __ __ __ __ __ __ __ __ __ __ (Apri l 2 6, 2 01 0)Befo re BLACK, PRYOR , and COX, Circ ui t J ud ge s.

PER CURI AM:

Tran sc on ti ne nt al In su ran ce Co m pa ny, Co nt in en ta l Cas ua lt y Co m pa ny, an d

Tr an sp or ta ti on In su ran ce Co m pa ny (th e “ In su rers ”) so ug ht a de cl arat or y jud gm en t

th at th ey ha d no ob li ga ti on t o i n de m ni fy or pr ov id e a de fen se to R. Larry Ph il li ps

Co ns tru ct io n Co m

pa ny, In c. in co nn ect io n wit h two la wsu it s fil e d by Geo rg e C.

Woo dr uf f, Jr

. ag ai ns t Ph il li ps : on e in 20 04 an d on e in 20 05

. The In s u r e r s a n d

Ph il li ps fil ed cro ss -m ot io ns f o r su m m ary jud gm en t. The di st ric t co ur t gr an te d th e

In su rers ’ m ot io n a nd de ni ed Ph il li ps ’ m ot io n. Ph il li ps ap pe al s.

Ph il li ps co nt ract ed wit h W oo dr uf f to act as th e ge n eral co nt ract or in

c o n s tru ct in g th e Lak es III Apa rtments fo r W oo dr uf f, whi ch co ns is te d of fiv e

ap art m en t bu il di ng s. Aft er th e co m pl et io n of on e of th e bu il di ng s, Ph il li ps le arn ed

of a crac k i n t he sl ab

. Bec au se of th e crac k a nd ot he r pr ob le m s as so ci at ed wit h t he

co ns tru ct io n of Lak es III, W oo dr uf f su ed Ph il li ps in 2 0 0 4 i n t he st at e co ur t of

M u s co ge e Co un ty, Geo rg ia , al le gi ng “ th at th e fo ot in gs , wall s, flo or s an d ot h e r

st ru ct ur es at th e Lak es III co m pl ex ha ve fai le d.” (R.1 2- 12 6 at 13 .) In 20 05 ,
W oo dr uf f fil ed a se co nd la wsu it in th e st at e co ur t of Mu sc og ee Co un ty, al le gi ng th at

Ph il li ps “ br each ed it s co nt ract an d ne gl ig en tl y co ns tru ct ed sc reen ed po rch es at Lak es

2III wit ho ut pr op er fla sh in g or ot he r wate r pr ot ect io n, whi ch cau se d wate r to le ak in to

bu il di ng s, re su lt in g i n ro t an d o th er d am ag e.” ( Id

. at 1 6- 17 .)

In th e di st ric t co ur t de cl arat or y act io n br ou gh t by th e In su rers , Ph il li ps as se rte d

th at th e In su rers ha d a du ty to pr ov id e it wit h a de fen se an d/ or to in de m ni fy it in th e

W oo dr uf f la wsu it s. Th e I ns ur ers res po nd ed wit h fo ur reas on s why co ve rag e was

ex cl ud ed by th e in su ran ce co nt ract s. The di st ric t co ur t ag reed wit h th e In su rers fir st

reas on in su pp or t of su m

m ary jud gm en t: th at “ no ‘pro pe rty da m ag e’ ha d be en cau se d
by an ‘occu rren ce.’” (R.12 -1 26 at 2 6.)

In ad di ti on , Ph il li ps arg ue d th at th e In su rers waiv ed th ei r rig ht to se ek th e

de cl arat or y act io n, be cau se th e In su rers ’ Res erv at io n of Ri gh ts le tt ers reg ard in g th e

two la wsu it s were in effe ct iv e. In res po ns e, th e In su rers arg ue d th at th ei r Res erv at io n

of Ri gh ts le tt ers were in de ed ad eq ua te t o p r e s e r v e th ei r rig ht s. The di st ric t co ur t

ag reed wit h th e In su rers

. Reg ard in g t h e 2 0 0 4 la wsu it , th e co ur t fo un d th at “ th e

Nov em be r 7, 20 01 Res erv at io n of Ri gh ts le tt er [was ] ap pl ic ab le to th e 20 04 Lawsu it ,

an d fu rth er fin ds th at th e Pl ai nt iff s are n o t es to pp ed fro m se ek in g a de cl arat or y jud gm en t reg ard in g co ve rag e of th e 20 04 Lawsu it .” (R.1 2- 12 6 at 24 .) W it h res pe ct

to th e 20 05 la wsu i t , th e di st ric t co ur t fo un d th at th e In su rers “ su ffi ci en tl y res erv ed

th ei r rig ht s

. . . [an d] are no t es to pp ed fro m se ek in g a de cl arat or y jud gm en t reg ard in g

co ve rag e o f th e 2 00 5 l aws ui t.” ( R.1 2- 12 6 a t 2 6.)

3On ap pe al , Ph il li p s a r g u es th at th e di st ric t co ur t erre d by ho ld in g th at th e

da m a g e a t i ss ue was no t co ve red by th e po li cy

. Ph il li ps al so co nt en ds th at th e

In su rers ’ Res erv at io n of Ri gh ts le tt ers reg ard in g th e two la wsu it s were in effe ct iv e,

an d th eref

or e es to p th e In su rers fro m de nyin g co ve rag e or se ek in g de cl arat or y jud gm en t.

W e co nc lu de th at th e di st ric t co ur t pr op erl y gr an te d t h e I n s ur ers su m m ary
jud gm en t an d pr op erl y de ni ed Ph il li ps su m m ary jud gm en t fo r th e reas on s st a te d in

th e co ur t’s wel l-r eas on ed op in io n. (R .12 -1 26 .)

AFFIRMED.

4