Opinion ID: 815165
Heading Depth: 4
Heading Rank: 1

Heading: Work or operations

Text: performed by you or on your behalf . . . . Commercial General Liability Coverage Form, at pp. 20-21. In April 2005, Cincinnati Insurance sent Forrest Construction a nine-page letter refusing to defend Forrest Construction against the Laughlin claims, basing its denial on the exclusion in the policy for work done by the insured (the “your work” exclusion) and its position that the underlying complaint did not allege damage caused by a subcontractor, thereby rendering the subcontractor exception to the “your work” exclusion inapplicable. Denial Letter at pp. 6-7. Forrest Construction subsequently defended itself in state court and was ordered to pay damages to the homeowners due to the faulty construction. In October 2009, Forrest Construction brought this suit against Cincinnati Insurance. The complaint contains claims for (1) breach of contract for failure to defend and indemnify; (2) declaratory judgment regarding Cincinnati Insurance’s duty to defend and indemnify; (3) bad-faith denial of Forrest Construction’s claim; and (4) violation of the Tennessee Consumer Protection Act. After both parties filed summary judgment motions, the district court found that Cincinnati Insurance had breached its contract with Forrest Construction when it failed to defend it in the state court action. Dist. Ct. Op. filed Aug. 8, 2010. Cincinnati Insurance timely appealed to this Court. The Laughlins intervened in this case in 2011 and they have since settled with Cincinnati Insurance and are not parties to this appeal.1 1 On appeal, Forrest Construction has made the argument that Cincinnati Insurance’s decision to settle with the Laughlins, who had intervened in the federal action because they claim the right to any funds that Forrest Construction might receive from Cincinnati Insurance, serves as an indemnification that negates or estops Cincinnati Insurance’s argument that it did not have a duty to defend Forrest Construction in the state court action. This argument is a red herring. Any decision by Cincinnati Insurance to settle with the intervenors does not estop Cincinnati Insurance from continuing to argue that it did not have a duty to defend Forrest in the state court action. No. 11-6262 Forrest Constr. v. Cincinnati Ins. Co. Page 5