Court Opinion

ID: 160343
Source: CourtListenerOpinion
Date Created: 2010-08-14 06:42:55+00
Date Added: 2024-06-11T15:04:19.149633
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                           NOV 2 2000
                                   TENTH CIRCUIT
                                                                        PATRICK FISHER
                                                                                 Clerk

 DELTA FIBERGLASS
 STRUCTURES, INC., a Utah
 corporation,

               Plaintiff - Appellant,                   No. 99-4187
          v.                                                (D. Utah)
 UNITED STATES FIDELITY AND                       (D.C. No. 97-CV-211-C)
 GUARANTY COMPANY, a foreign
 corporation; RELIANCE
 INSURANCE COMPANY, a foreign
 corporation; and AGORA
 SYNDICATE, a foreign corporation,

               Defendants - Appellees.

                             ORDER AND JUDGMENT         *

Before MURPHY and ANDERSON , Circuit Judges, and            KANE ** , District
Judge.

      *
       This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.

       Honorable John L. Kane, Jr., United States District Judge for the District
      **

of Colorado, sitting by designation.
      Delta Fiberglass, Inc. (“Delta”) appeals the district court’s grant of

summary judgment in favor of United States Fidelity & Guarantee Co.

(“USF&G”) and Reliance Insurance Co. (“Reliance”).     1
                                                           The district court

exercised diversity jurisdiction over the matter pursuant to 28 U.S.C.

§ 1332(a)(1). We have jurisdiction pursuant to 28 U.S.C. § 1291, and affirm in

part and reverse and remand in part.

      This case involves the collapse of a fiberglass dome manufactured by Delta.

It was conclusively determined that both the dome that collapsed and a companion

dome, which had been delivered to the job site but not installed, were defectively

manufactured by Delta. Delta reimbursed the prime contractor for costs it

incurred in repairing a damaged mast arm and tank anchoring system, removing

the collapsed dome and installing its replacement. In addition, Delta directly

incurred expenses for disposing of both defective domes and designing and

manufacturing replacement domes for the project. Delta attempted to recover the

foregoing costs and expenses from its insurance carriers. Both USF&G and

Reliance denied coverage based on exclusions contained in the relevant insurance

policies, as a result of which Delta commenced this action. The district court

      1
       The district court also granted summary judgment in favor of a third
insurer, Agora Syndicate, Inc. Delta does not appeal that part of the judgment.

                                         -2-
found that the damages claimed were excluded by the plain language of the

policies and granted summary judgment in favor of USF&G and Reliance.

       In its brief and at oral argument, Delta substantially restates the arguments

it raised before the district court. Namely, Delta argues that (1) the costs incurred

by the prime contractor in repairing the mast arm and tank anchoring system were

admitted by Reliance to be “covered costs” under the CGL policy issued by

Reliance and should have been awarded to Delta by the district court; (2) the

costs incurred by the prime contractor in removing the defective dome and

installing its replacement are “covered costs” under the CGL policy issued by

Reliance; (3) the incorporation doctrine should apply so that it can be said that the

entire structure, rather than Delta’s product, collapsed, bringing the replacement

cost of the domes under the coverage of the CGL policy issued by Reliance; (4)

the addition of the impaired property exclusion and the modification to the

product exclusion in the 1986 CGL form permit recovery to Delta from Reliance

for the collapse of the dome; (5) the trial court erred in ruling that the prime

contractor’s purchase order did not incorporate the general provisions of the

prime contract thereby precluding coverage under the property policy issued by

USF&G; and (6) the trial court erred in finding that the non-collapsed dome was

not covered under the CGL policy issued by Reliance or the property policy

issued by USF&G.

                                          -3-
       We review appeals from summary judgment             de novo , applying the same

legal standard used by the district court.    Simms v. Oklahoma ex rel. Dep’t of

Mental Health & Substance Abuse Servs.         , 165 F.3d 1321, 1326 (10th Cir.)

(further citations and quotations omitted),     cert. denied , 120 S. Ct. 53 (1999). The

construction of an insurance policy is a matter of law which we review         de novo .

Grimes v. Swaim , 971 F.2d 622, 624 (10th Cir. 1992).

       After thoroughly reviewing the briefs, examining the record and

considering the arguments made before us at oral argument, we conclude that the

district court did not err, with one exception. Reliance admitted before the

district court and before this court that it was responsible to reimburse Delta for

money Delta spent on repairs to the mast arm and tank anchoring system. The

district court acknowledged Reliance’s admission, but failed to make any award

to Delta. The district court erred in failing to award Delta those covered costs.

Accordingly, we reverse the judgment to the extent that it disallows recovery for

the cost of repairing the mast arm and the tank anchoring system and remand for

entry of an award of those covered costs to Delta.     2
                                                           In all other respects we affirm

       2
        Reliance states that the covered repairs amount to approximately $4000. It
is not clear on appeal whether or not that amount is disputed, but it is clear that
any amount Delta spent on the repair of the covered items, namely the mast arm
and the tank anchoring system, should be awarded to Delta on remand.

                                              -4-
the judgment substantially on the grounds and for the reasons relied upon by the

district court in its Order dated July 29, 1999.

      AFFIRMED IN PART, REVERSED AND REMANDED IN PART.

                                                ENTERED FOR THE COURT

                                                Stephen H. Anderson
                                                Circuit Judge

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