Court Opinion

ID: 5648764
Source: CourtListenerOpinion
Date Created: 2022-01-11 19:00:35.197238+00
Date Added: 2024-06-11T08:38:28.507214
License: Public Domain

Case: 20-11076         Document: 00516161838        Page: 1    Date Filed: 01/11/2022

           United States Court of Appeals
                for the Fifth Circuit                                  United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                       January 11, 2022
                                     No. 20-11076
                                                                         Lyle W. Cayce
                                                                              Clerk
   Siplast, Incorporated,

                                                              Plaintiff—Appellant,

                                         versus

   Employers Mutual Casualty Company,

                                                              Defendant—Appellee.

                      Appeal from the United States District Court
                          for the Northern District of Texas
                               USDC No. 3:19-CV-1320

   Before King, Higginson, and Wilson, Circuit Judges.
   Per Curiam:
          This case concerns a dispute over whether insurer Employers Mutual
   Casualty Company has a duty to defend in a lawsuit filed against its insured,
   Siplast, Inc. Because we find that there is a duty to defend, we reverse the
   judgment of the district court and remand for further proceedings.
                 I.     Facts and Procedural History
                             A. The Underlying Lawsuit
          This duty-to-defend case arises from an underlying lawsuit (the
   “Underlying Lawsuit”) filed in New York state court by the Archdiocese of
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                                         No. 20-11076

   New York (the “Archdiocese”) and other plaintiffs (together, the
   “Underlying Plaintiffs”) against various parties including roofing
   manufacturer Siplast, Inc. (“Siplast”). 1 The Underlying Lawsuit stemmed
   from the Archdiocese’s 2012 purchase of a roof membrane system from
   Siplast, to be installed at a high school in the Bronx, New York. In
   conjunction with that sale, Siplast guaranteed that the roof membrane system
   would “remain in a watertight condition for a period of 20 years,
   commencing with the date hereof; or SIPLAST will repair the Roof
   Membrane/System at its own expense” (the “Siplast Guarantee”).
           The following facts that occurred after installation of the roof are
   drawn from the Archdiocese’s complaint in the aforementioned New York
   state lawsuit (the “Underlying Complaint”). In November 2016, school
   officials allegedly observed “water damage in the ceiling tiles throughout the
   Premises after a rain storm” and “notified both [the installing contractor]
   and Siplast of the water damage and potential leaks.” A designated Siplast
   contractor attempted to repair any damage and prevent leaks, but to no avail;
   “the School continued to suffer from additional leaks and water damage.”
   After continued communication, during which “Siplast admitted that there
   were problems with the roof that needed to be addressed,” Siplast eventually
   informed the Archdiocese that “its earlier repair attempts [had been]
   temporary” and that Siplast “would not honor the Siplast Guarantee with
   respect to any permanent improvements of the roof.”
           The Archdiocese then retained a consultant who “performed an
   exhaustive inspection and survey of the water penetration issues involving
   the roofing system” and “noted significant issues with both the

           1
           Archdiocese of New York, et al. v. Vema Enters. and Siplast, Inc., No. 32077/2018E
   (N.Y. Sup. Ct.).

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   workmanship and the materials that were compromising the entire roof
   membrane and system.” “Accordingly, the roofing membrane and system
   has failed of its essential purpose and the only way to remediate the issues
   caused thereby is to replace in toto the existing, failed membrane and system
   with a new one.” “The estimate provided by the consultant fixed the total
   cost of the remediation and replacement efforts at approximately
   $5,000,000.”
          Based on these alleged facts, the Underlying Plaintiffs filed suit against
   Siplast and the installing contractor. In their causes of action, the Underlying
   Plaintiffs stated that they “repeat[,] reaffirm[,] and reallege each of the
   previous allegations as if fully set forth herein.” Specifically as to Siplast, the
   Underlying Plaintiffs asserted a cause of action for “Breach of the
   Guarantee,” alleging that:
          Siplast materially breached its obligations under the Siplast
          Guarantee by, among other things, (i) failing to correct defects
          in the roof membrane, system and flashing when called upon
          by the [Underlying] Plaintiffs to do so, and (ii) failing to abide
          by the terms of the Siplast Guarantee. . . . As a result of
          Siplast’s material breaches of the Siplast Guarantee, the
          [Underlying] Plaintiffs will be forced to replace the roof well in
          advance of the 20-year-plus expected useful term at a cost of
          approximately $5,000,000. By reason of such material
          breaches of the Siplast Guarantee, the Plaintiffs are entitled to
          judgment against Siplast in an amount to be determined at trial,
          but in excess of $5,000,000, together with appropriate interest
          thereon.
                          B. The Insurance Policy
          After receiving the Underlying Plaintiffs’ formal notice of their intent
   to hold Siplast liable, Siplast submitted a claim to Employers Mutual
   Casualty Company (“EMCC”) asserting coverage under commercial
   general liability policies Siplast had purchased. Those policies required that

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   EMCC “pay those sums that the insured becomes legally obligated to pay as
   damages because of . . . ‘property damage’ to which this insurance applies”
   and that EMCC “will have the right and duty to defend the insured against
   any ‘suit’ seeking those damages.” For the insurance to apply, the property
   damage must have been caused by an “occurrence,” defined as “an accident,
   including continuous or repeated exposure to substantially the same general
   harmful conditions.”
          The policies were also subject to several exclusions. The two
   exclusions relevant to the instant dispute are the “Your Product/Your Work
   Exclusion” and the “Contractual Liability Exclusion.”
          The “Your Product/Your Work Exclusion” excluded coverage of
   “‘[p]roperty damage’ to ‘your product’ arising out of it or any part of it” or
   “‘property damage’ to ‘your work’ arising out of it or any part of it and
   included in the ‘products-completed operations hazard.’” It defined “Your
   [P]roduct” as “[a]ny goods or products, other than real property,
   manufactured, sold, handled, distributed or disposed of by [you]” and
   “materials, parts or equipment furnished in connection with such goods and
   products.” “Your [W]ork” was defined as “[w]ork or operations performed
   by you or on your behalf” and “[m]aterials, parts or equipment furnished in
   connection with such work or operations.”
          The “Contractual Liability Exclusion” excluded coverage for
   “property damage” for which Siplast “is obligated to pay damages by reason
   of the assumption of liability in a contract or agreement.” However, the
   exclusion does not apply to liability for damages “[t]hat the insured would
   have in the absence of the contract or agreement.”
                          C. Procedural History
          After EMCC denied coverage, including its duty to defend Siplast in
   the Underlying Lawsuit, Siplast filed suit against EMCC in May 2019. It

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   asserted claims for: (1) declaratory relief, “seek[ing] a judicial declaration
   that EMCC is obligated to provide a defense to Siplast in the Underlying
   Action,” (2) breach of contract, (3) violations of Texas Insurance Code
   § 542.051   et   seq.   (prompt     payment      of   claims)   and   § 541.061
   (misrepresentation of insurance policy), and (4) attorneys’ fees. EMCC
   brought a counterclaim for declaratory relief, seeking a judicial declaration
   that it had no duty to defend Siplast in the Underlying Lawsuit and that it had
   “no duty to indemnify Siplast for any non-covered damages, including the
   $5,000,000 cost of replacing Siplast’s work and/or product.”
          Both Siplast and EMCC moved for summary judgment—Siplast on
   its declaratory relief and breach-of-contract claims, and EMCC on its
   counterclaim for declaratory judgment as well as on all of Siplast’s asserted
   claims. The district court granted EMCC’s motion for summary judgment
   and denied Siplast’s motion for partial summary judgment, finding that while
   the complaint in the Underlying Lawsuit did allege property damage that was
   caused by an “occurrence,” the alleged damage fit within the Your
   Product/Your Work Exclusion. The district court did not consider the
   applicability of the Contractual Liability Exclusion. Siplast timely appeals.
                    II.    Standard of Review
          “We review a district court’s judgment on cross motions for summary
   judgment de novo, addressing each party’s motion independently, viewing
   the evidence and inferences in the light most favorable to the nonmoving
   party.” Morgan v. Plano Indep. Sch. Dist., 589 F.3d 740, 745 (5th Cir. 2009).
   A grant of summary judgment can stand “only if there is no genuine issue of
   material fact and the party is entitled to prevail as a matter of law.” Id.
   Whether an insurer has a duty to defend the insured is a question of law which
   this court reviews de novo as well. Ooida Risk Retention Grp. v. Williams, 579
   F.3d 469, 471-72 (5th Cir. 2009).

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                          III.   Discussion
                             A. Governing Law
          The law of the forum state, Texas, applies in this diversity case. See
   Indian Harbor Ins. Co. v. Valley Forge Ins. Grp., 535 F.3d 359, 363 (5th Cir.
   2008). “Under Texas law, an insurer may have two responsibilities relating
   to coverage—the duty to defend and the duty to indemnify.” ACE Am. Ins.
   Co. v. Freeport Welding & Fabricating, Inc., 699 F.3d 832, 839 (5th Cir. 2012)
   (quoting Gilbane Bldg. Co. v. Admiral Ins. Co., 664 F.3d 589, 594 (5th Cir.
   2011)). These duties are separate, with the duty to defend the broader of the
   two; “[t]hus, an insurer may have a duty to defend but, eventually, no
   obligation to indemnify.” Zurich Am. Ins. Co. v. Nokia, Inc., 268 S.W.3d 487,
   490-91 (Tex. 2008). Therefore, even though an insurer may not ultimately
   indemnify its insured, it “must defend its insured if a plaintiff’s factual
   allegations potentially support a covered claim.” Id. at 490.
          The determination of whether an insurer has a duty to defend is made
   under the “eight-corners rule.” Richards v. State Farm Lloyds, 597 S.W.3d
   492, 494 (Tex. 2020). “The eight-corners rule provides that when an insured
   is sued by a third party, the liability insurer is to determine its duty to defend
   solely from the terms of the policy and the pleadings of the third-party
   claimant.” GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d
   305, 307 (Tex. 2006). “The ‘four corners’ of the petition and the ‘four
   corners’ of the policy together comprise the ‘eight corners’ that give the rule
   its name.” Richards, 597 S.W.3d at 494-95. “Resort to evidence outside the
   four corners of these two documents is generally prohibited.” GuideOne, 197
   S.W.3d at 307.
          When considering whether a third-party complaint triggers a duty to
   defend, the focus is “on the factual allegations that show the origin of the
   damages rather than on the legal theories alleged.” Nat’l Union Fire Ins. Co.

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   v. Merchs. Fast Motor Lines, 939 S.W.2d 139, 141 (Tex. 1997) (per curiam)
   (quoting and reversing the lower court). “If the underlying pleadings allege
   facts that may fall within the scope of coverage, the insurer has a duty to
   defend; if the pleading only alleges facts excluded by the policy, there is no
   duty to defend.” Freeport Welding & Fabricating, 699 F.3d at 840. In addition,
   a third-party complaint must both “allege[] and seek[] damages for an event
   potentially covered by the policy.” Colony Ins. Co. v. Peachtree Constr., Ltd.,
   647 F.3d 248, 252-53 (5th Cir. 2011) (quoting D.R.-Horton-Tex., Ltd. v.
   Markel Int’l Ins. Co., 300 S.W.3d 740, 743 (Tex. 2009)).
          A comparison between two cases, Wilshire Insurance Co. v. RJT
   Construction, LLC, 581 F.3d 222 (5th Cir. 2009), and Building Specialties, Inc.
   v. Liberty Mutual Fire Insurance Co., 712 F. Supp. 2d 628 (S.D. Tex. 2010), is
   instructive when considering the type of factual allegations required to
   trigger the duty to defend. Wilshire Insurance considered whether there was
   a duty to defend the insured, a construction company that performed work
   on the foundation of a home, when the homeowner “allege[d] that cracks in
   the walls and ceilings suddenly appeared in his home, damage which he
   attribute[d] to the foundation being out of level.” 581 F.3d at 224. We held
   that there was:
          The complaint allege[d] that the faulty foundation caused dam-
          age to other parts of the house that [the insured construction
          company] did not work on including the walls and ceilings. The
          “your work” exclusion does not preclude coverage for damage
          to the parts of the house resulting from the allegedly faulty
          foundation. Because these damages present a covered claim,
          [the insurer] must defend the entire suit.
   Id. at 227.
          Building Specialties, in turn, concerned an insured company hired to
   “install heating and air conditioning insulation for a residential construction
   project in Houston, Texas.” Building Specialties, 712 F. Supp. 2d at 631. The

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   third-party complaint in that case alleged that “shortly after the system began
   operating, defects in the installation of the duct work were discovered” and
   that the insured “refused to tender payment” for both completed and future
   “repairs to fix the defective heating and air conditioning duct work.” 2 The
   district court found that there was no duty to defend. It reasoned that “the
   underlying petition only alleged defective installation of the duct work” and
   that “the only damages alleged and sought were ‘for payment for the
   additional work to remedy the problem and fix the damage.’ ” Building
   Specialties, 712 F. Supp. 2d at 640. In contrast to Wilshire Insurance, the
   “amended petition in the underlying suit did not allege that the allegedly
   defective heating and air conditioning duct work damaged any other part of
   the home or resulted in any loss of use.” Id. Therefore, the district court
   ruled that “as a matter of law, there [was] no duty to defend because the
   underlying lawsuit did not claim covered property damage.” Id. at 645.
           The district court in Building Specialties specifically compared its case
   to Wilshire Insurance when considering the applicability of a “your work”
   exclusion. It found that “unlike the allegations in the underlying litigation in
   Wilshire Insurance Co., [the third-party plaintiff] alleged damages only for
   repairing and replacing [the insured’s] allegedly defective ductwork.” Id. at
   648. Since “there [was] no allegation or competent summary judgment
   evidence of damage to any other property resulting from the defective duct
   work,” the “your work exclusion” negated any duty to defend the insurer
   might have had. Id.

           2
              These factual allegations are drawn from the third-party complaint in Building
   Specialties, which Siplast attached to its reply brief. The court may take judicial notice of
   this pleading. See Lake Eugenie Land & Dev., Inc. v. Halliburton Energy Servs. (In re
   Deepwater Horizon), 934 F.3d 434, 440 (5th Cir. 2019) (“We may take judicial notice of
   prior court proceedings as matters of public record.”).

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          Reading these two cases together demonstrates the type of factual
   allegations necessary to trigger a duty to defend. If the complaint alleges
   damage to and seeks damages for any property that is not the insured’s
   product or directly subject to the insured’s work, as occurred in Wilshire
   Insurance, then the claim falls outside of a “your product/your work”
   exclusion and the insurer has a duty to defend. However, as in Building
   Specialties, if the complaint solely alleges facts and damage to the insured’s
   own products, or solely seeks to recover the costs to repair the insured’s
   work, then it is covered by a “your product/your work” exclusion and the
   duty to defend remains dormant.
          The initial burden of proof is on the insured to show that a given claim
   is covered by the insurance policy; however, “when ‘the insurer relies on the
   policy’s exclusions, it bears the burden of proving that one or more of those
   exclusions apply.’ ” Trinity Universal Ins. Co. v. Emps. Mut. Cas. Co., 592
   F.3d 687, 692 (5th Cir. 2010) (quoting Federated Mut. Ins. Co. v. Grapevine
   Excavation, Inc., 197 F.3d 720, 723 (5th Cir. 1999)). For both the third-party
   complaint and the insurance policy, if there are any ambiguities, the tie goes
   to the insured. “When the language of an insurance policy ‘is susceptible to
   more than one construction, it should be construed strictly against the insurer
   and liberally in favor of the insured.’ ” Gonzalez v. Mid-Continent Cas. Co.,
   969 F.3d 554, 557 (5th Cir. 2020) (quoting Mid-Continent Cas. Co. v. JHP
   Dev., Inc., 557 F.3d 207, 212 (5th Cir. 2009)). Moreover, when judging
   whether a third-party complaint alleges a claim covered by the duty to
   defend, “we construe the pleadings liberally.” Zurich Am. Ins. Co. v. Nokia,
   Inc., 268 S.W.3d 487, 491 (Tex. 2008) (citations omitted). Ultimately, “[w]e
   resolve all doubts regarding the duty to defend in favor of the duty.” Id.
   (citations omitted).

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                 B. Your Product/Your Work Exclusion
          Each of Siplast’s and EMCC’s claims that are at issue in this case can
   largely be reduced to a single question: does the Underlying Complaint
   contain allegations of damage to property other than Siplast’s roof membrane
   as part of the cause of action against Siplast? Liberally construed, it does.
          As the district court noted, “the [U]nderlying [C]omplaint mentions
   damage to school property other than the Siplast roofing products.” The
   district court, however, found that while the complaint mentioned said
   damage, the Archdiocese did not actually make “a claim to recover from
   Siplast for any damage to the building caused by the leaky roof that is separate
   from the damage to Siplast’s product.” That reading of the Underlying
   Plaintiffs’ complaint is overly narrow. The factual allegations raised by the
   complaint repeatedly point to damage to property other than Siplast’s roof
   membrane system. The Underlying Complaint alleges that there was “water
   damage in the ceiling tiles throughout the [school] after a rain storm” and
   that Siplast recommended the Archdiocese “contact a designated Siplast
   roofing contractor to address the damage and leak.” The complaint further
   alleges that “[d]espite the work performed by Siplast’s designated
   contractor, the School continued to suffer from additional leaks and water
   damage.” It then alleges that the installing contractor told the Archdiocese
   that “the leaks and any damage created thereby were the sole responsibility of
   Siplast under the Siplast Guarantee.”
          A court must consider “any reasonable inferences that flow from the
   facts alleged.” Liberty Mut. Ins. Co. v. Graham, 473 F.3d 596, 601 (5th Cir.
   2006). Each of these factual allegations contained within the Underlying
   Complaint creates an inference that the Underlying Plaintiffs asserted their
   cause of action based not only on damage to the roof membrane, but also on
   property damage to other parts of the school. It can also be inferred from the

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   factual allegations that the water damage to non-roof-membrane property
   was caused by the failure of Siplast’s faulty roof membrane system. Further,
   the allegations that additional water damage occurred even after Siplast’s
   designated contractor attempted repairs suggests that the additional water
   damage was caused by Siplast’s failure to honor the Siplast Guarantee by
   timely and effectively repairing the roof membrane system—the cause of
   action the Underlying Plaintiffs asserted. Accordingly, these factual
   allegations make clear that the Underlying Complaint alleged damage to
   property other than Siplast’s roof membrane as part of the Underlying
   Plaintiffs’ cause of action (i.e., breach of the Siplast Guarantee).
          Returning to the comparison between Wilshire Insurance and Building
   Specialties, this case is like the former—the complaint alleges damage to
   property beyond the product and work of the insured. Therefore, there is a
   duty to defend based on those allegations. And since the Underlying
   Complaint includes allegations of damage to both non-covered and covered
   property, that duty to defend extends to the entire suit. Zurich Am. Ins., 268
   S.W.3d at 491 (“If a complaint potentially includes a covered claim, the
   insurer must defend the entire suit.”).
          Moreover, the Underlying Complaint goes beyond merely
   “mentioning” property damage that would be covered by the insurance
   policies; it additionally links that damage to the cause of action. In their cause
   of action against Siplast, the Underlying Plaintiffs stated that they “repeat[,]
   reaffirm[,] and reallege each of the previous allegations as if fully set forth
   herein.” The previous allegations that are incorporated into the cause of
   action by this language include the allegations of covered property damage to
   the school, which triggers EMCC’s duty to defend. True, this type of
   reallegation language is common to the point of being boilerplate. However,
   that fact does not render the language invalid. Instead, this clause does
   exactly what it says it does—reincorporates all previous factual allegations,

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   including those related to property damage to the school building that is
   covered by the policies at issue, into the cause of action.
          That fact is what separates this boilerplate language from a “catch-
   all” provision, or Mother Hubbard Clause, seeking “other and further
   relief,” which courts have found do not trigger a duty to defend. See Clemons
   v. State Farm Fire & Cas. Co., 879 S.W.2d 385, 393 (Tex. App.—Houston
   [14th Dist.] 1994, no writ); Feed Store Inc. v. Reliance Ins. Co., 774 S.W.2d 73,
   75 (Tex. App.—Houston [14th Dist.] 1989, writ denied). In each of those
   cases, the insured attempted to use these “catch-all provisions” to create
   facts and allegations which were not present in the complaint. Texas courts
   have rejected this attempt to use boilerplate language as a way to find
   “invisible allegations” which were not actually located in the complaint,
   reasoning that to do so would mean that “[a]ll lawsuits seeking ‘other and
   further relief’ would precipitate a duty to defend.” Id.
          The instant case is materially different. Unlike the Mother Hubbard
   examples, there is no attempt here to use boilerplate language to locate
   invisible allegations lurking in the complaint’s penumbras, or to create those
   allegations from whole cloth. Instead, the factual allegations of covered
   damage are explicitly included in the complaint. The boilerplate language
   used by the Underlying Plaintiffs simply ties those factual allegations to the
   cause of action. That is a sufficient method for a complaint to include
   allegations that can trigger a duty to defend.
          Read liberally, the Underlying Complaint also satisfies the
   requirement that the Underlying Plaintiffs seek damages that could be
   covered by the insurance policies. The section of the Underlying Complaint
   asserting the cause of action against Siplast does not specifically mention
   damage to non-roof property. However, the consultant hired by the
   Archdiocese estimated that replacing the roof membrane would cost

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   approximately $5,000,000. Yet in their cause of action against Siplast, the
   Underlying Plaintiffs allege damages against Siplast “in excess of
   $5,000,000,” rather than limiting the alleged damages to the estimated cost
   of replacing the roof. This damage request can therefore be read to include
   compensation for the water damage to the school proper.
          EMCC presents several theories explaining how the “in excess”
   language could relate solely to the replacement of the roof—that it could
   include interest on the replacement costs due to Siplast’s failure to perform,
   that it includes attorneys’ fees, or that it reflects the fact that the $5,000,000
   figure was an estimate. But it is equally plausible that the damage figure
   includes both the known (or estimated) cost to repair the roof membrane and
   the unknown additional cost to repair any water damage done to the school
   itself, which is covered by the policies. Especially when “resolv[ing] all
   doubts regarding the duty to defend in favor of the duty,” Zurich Am. Ins.,
   268 S.W.3d at 491, as we must, the Underlying Complaint’s request for
   damages in excess of $5,000,000 should be read to go beyond the repair costs
   for the roof membrane and to include a prayer for damages covered by the
   insurance policies. That cause of action triggers EMCC’s duty to defend.
                               C. Occurrence
          For largely the same reasons discussed above, the district court did
   not err in determining that the Underlying Complaint presented an
   “occurrence.” The policies state that an “occurrence” is “an accident,
   including continuous or repeated exposure to substantially the same general
   harmful conditions.” The Texas Supreme Court has stated that “[a]n
   accident is generally understood to be a fortuitous, unexpected, and
   unintended event.” Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242
   S.W.3d 1, 8-9 (Tex. 2007). An event is not accidental if “the resulting
   damage was the natural and expected result of the insured’s actions” and

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   “was highly probable whether the insured was negligent or not.” Id. at 9.
   Therefore, “ ‘claims for damage caused by an insured’s defective
   performance or faulty workmanship’ may constitute an ‘occurrence’ when
   ‘property damage’ results from the ‘unexpected, unforeseen or undesigned
   happening or consequence’ of the insured’s negligent behavior.” Id. at 16
   (quoting Federated Mut. Ins. Co., 197 F.3d at 725).
          The district court determined that there was an “occurrence” as
   defined by the insurance policies:
          The origin of the property damage the underlying plaintiffs
          allege is defects with the workmanship and materials that
          comprised the roof membrane and system. As in Lamar Homes,
          there is nothing in the underlying pleading that alleges Siplast
          intended or expected its roofing system to fail. . . . The
          [U]nderlying [C]omplaint alleges property damage caused by
          an accident or occurrence.
   This determination was correct. As stated above in the discussion on the
   applicability of the Your Product/Your Work Exclusion, the complaint
   contains factual allegations that Siplast’s negligence led to the failure of the
   roof membrane, which caused damage to both the roof itself and to the school
   as a whole. There are no allegations that the failure of the roof and the
   attendant damage were intended by Siplast or the “natural and expected
   result of the insured’s actions” (namely, the installation of the roof); it is not
   “highly probable” that the roof would leak “whether the insured was
   negligent or not.” Lamar Homes, 242 S.W.3d at 8-9. Instead, the allegations
   that “Siplast admitted that there were problems with the roof,” attempted
   to repair them through its designated contractor, and failed (leading to
   further leaks and damage) can be inferred to be allegations of negligence. The
   failure of the roof was an occurrence.

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          EMCC argues that there was no occurrence because the cause of
   action in the Underlying Complaint was for Siplast’s breach of the Siplast
   Guarantee—an intentional and deliberate act that does not constitute an
   accident. However, this argument fails for two reasons. First, the finding of
   an occurrence necessarily follows from our holding that the Underlying
   Complaint includes allegations related to the school as a whole, and not just
   the replacement of the roof. As stated above, the complaint should be
   liberally read to seek damages to compensate for the water damage to the
   school—damage that was the result of an accidental occurrence covered by
   the insurance policies.
          Second, EMCC’s argument is contrary to the holding of Lamar
   Homes. The dissent in Lamar Homes made the exact same argument as
   EMCC—that the defendant “was sued for breaking promises, not for
   breaking property” and therefore the complained-of damages were not
   occurrences. Lamar Homes, 242 S.W.3d at 24 (Brister, J., dissenting).
   However, that argument did not prevail in Lamar Homes, and so cannot
   prevail here. Instead, a majority of the Texas Supreme Court reasoned that:
          The duty to defend must be determined under the eight-
          corners rule rather than by the labels attached to the underlying
          claims.
                 The proper inquiry is whether an “occurrence” has
          caused “property damage,” not whether the ultimate remedy
          for that claim lies in contract or in tort.
   Id. at 15–16 (internal citations omitted); see also Landry’s, Inc. v. Ins. Co. of
   Pa., 4 F.4th 366, 371 (5th Cir. 2021) (quorum decision) (commenting on the
   language from Lamar Homes and stating “[t]hat’s a different way of saying
   that we must focus on ‘the facts alleged’ in the complaint, ‘not on the actual
   legal theories’ invoked” (quoting St. Paul Fire & Marine Ins. Co. v. Green Tree
   Fin. Corp.-Tex., 249 F.3d 389, 392 (5th Cir. 2001))). While the legal theories

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   underpinning the Underlying Plaintiffs’ cause of action might sound in
   contract (through Siplast’s alleged breach of the Siplast Guarantee), the facts
   alleged concern property damage to the school and the roof due to Siplast’s
   negligence. That constitutes an occurrence under the policies.
                   D. Contractual Liability Exclusion
          Lastly, we must consider whether the Contractual Liability Exclusion
   contained within the insurance policies applies to Siplast’s claim and negates
   EMCC’s duty to defend. While the district court did not consider the
   applicability of this exclusion, it could provide an independent ground for
   affirming the district court’s summary judgment in favor of EMCC should
   this exclusion apply. See Thibodeaux v. Sanofi U.S. Servs., Inc. (In re Taxotere
   (Docetaxel) Prods. Liab. Litig.), 995 F.3d 384, 388 (5th Cir. 2021) (“Because
   of de novo review, we may affirm summary judgment on any basis supported
   by the record even if not reached by the district court.”). However, the
   Contractual Liability Exclusion is similarly inapplicable here and does not
   vitiate EMCC’s duty to defend.
          The Contractual Liability Exclusion provides that the insurance
   policies at issue do not apply to “property damage” for which Siplast “is
   obligated to pay damages by reason of an assumption of liability in a contract
   or agreement.” However, this exclusion does not apply to liability for
   damages “[t]hat the insured would have in the absence of the contract or
   agreement.” In determining the scope of such a clause, the question “is not
   whether the relevant duty is contractual; it is whether the contractual duty
   represents an expansion of liability.” Crownover v. Mid-Continent Cas. Co., 772
   F.3d 197, 208 (5th Cir. 2014). The Texas Supreme Court has made clear that
   “ ‘assumption of liability’ means that the insured has assumed a liability for
   damages that exceeds the liability it would have under general law” because
   “[o]therwise, the words ‘assumption of liability’ are meaningless and are

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                                     No. 20-11076

   surplusage.” Ewing Constr. Co. v. Amerisure Ins. Co., 420 S.W.3d 30, 37 (Tex.
   2014).
            The operative question, therefore, is whether the Siplast Guarantee
   opened Siplast up to additional liability beyond that found at law. It did not.
   We have already determined that the Underlying Plaintiffs alleged that
   Siplast negligently provided a defective roof membrane, causing damage
   including water damage to the school. Even absent the Siplast Guarantee,
   these allegations, if true, would render Siplast liable to repair the roof.
   Crownover, 772 F.3d at 207-08 (holding that an express duty to repair did not
   expand an insured’s obligations beyond those found at general law). There
   was no expansion of liability relevant to this case.
            The only other argument EMCC raises—for the first time on
   appeal—is that the Siplast Guarantee expanded Siplast’s liability by
   promising that the roof would remain watertight for 20 years. As an initial
   matter, this argument is forfeited as EMCC did not raise it to the court below.
   Doe v. MySpace, 528 F.3d 413, 422 (5th Cir. 2008) (“Because the Does failed
   to present this argument to the district court, they are barred from making
   this argument on appeal.”). However, even considering this argument, it
   does not change our analysis. First, EMCC bears the burden of
   demonstrating that the Contractual Liability Exclusion applies to Siplast’s
   claims, Trinity Universal Ins. Co. v. Emps. Mut. Cas. Co., 592 F.3d 687, 692
   (5th Cir. 2010), yet provides no support for its assertion that the provision
   guaranteeing the roof’s watertightness for 20 years expanded Siplast’s
   liability beyond general law. Second, the 20-year guarantee is irrelevant to the
   claims raised in the Underlying Complaint. None of those claims relate to
   whether the roof remained watertight for 20 years; nor could they have, as
   the Underlying Complaint states that the roof was installed in 2012 and
   allegedly failed four years later in 2016. Instead, the Underlying Complaint
   raises claims that the roof failed because it was defective, claims that clearly

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   would attach to Siplast under general law absent the Siplast Guarantee. The
   Contractual Liability Exclusion does not eliminate EMCC’s duty to defend.
                             E. Summary of Holdings
           Siplast brought several causes of action against EMCC based on its
   assertion that EMCC breached its duty to defend. We take each in turn.
           Siplast first sought “a judicial declaration that EMCC is obligated to
   provide a defense to Siplast in the Underlying Action.” EMCC, in turn,
   sought “a judgment declaring that plaintiff’s claims against Siplast in the
   Underlying Lawsuit are not covered under the Policies, and that as a result,
   no defense owed for same thereunder.” 3 This declaratory-judgment question
   is a legal one, Ooida Risk Retention Grp., Inc. v. Williams, 579 F.3d 469, 471-
   72 (5th Cir. 2009), determined solely based on facts before us—the
   allegations of the Underlying Complaint and the text of the insurance
   policies. Richards v. State Farm Lloyds, 597 S.W.3d 492, 494 (Tex. 2020).
   This question is therefore of the type where “the record permits only one
   resolution of the factual issue” and thus “reversing and rendering is the
   proper course.” Veasey v. Abbott, 830 F.3d 216, 229-30 (5th Cir. 2016) (en
   banc) (quoting Pullman-Standard v. Swint, 456 U.S. 273, 292 (1982)).
   Because we hold that EMCC does have a duty to defend, we reverse the
   district court’s contrary ruling and render declaratory judgment in favor of
   Siplast; EMCC has a duty to defend in the Underlying Lawsuit.

           3
              EMCC also sought judicial declarations related to its duty to indemnify. These
   were considered by the district court only in the context of its finding that there was no
   duty to defend, which we reverse. Because the duty to indemnify is separate from the duty
   to defend, Zurich Am. Ins. Co. v. Nokia, Inc., 268 S.W.3d 487, 490 (Tex. 2008), and the
   duty to indemnify was not considered independently, we decline to consider it here or issue
   any declarations related to EMCC’s ultimate duty to indemnify. Montano v. Texas, 867 F.3d
   540, 546 (“[A] court of appeals sits as a court of review, not of first view.” (quoting United
   States v. Vicencio, 647 F. App’x 170, 177 (4th Cir. 2016))).

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          Siplast next raised a claim for breach of contract, alleging that EMCC
   breached its contracts with Siplast (the insurance policies) by failing to render
   a defense in the Underlying Lawsuit. This claim could implicate unresolved
   factual issues not considered by the district court due to its ruling that there
   was no duty to defend. We therefore reverse the district court’s judgment in
   favor of EMCC on this claim and remand for further proceedings.
          Siplast additionally raised claims for various violations of the Texas
   Insurance Code. However, it did not seek summary judgment on those
   claims. EMCC did, and the district court granted summary judgment in its
   favor based solely on its determination that EMCC did not have a duty to
   defend. Because we reverse that judgment, we further reverse the district
   court’s summary judgment in favor of EMCC on Siplast’s Texas Insurance
   Code claims and remand for further proceedings.
          Lastly, the district court ruled that Siplast was not entitled to
   attorneys’ fees because it was not a prevailing party. That finding was also
   based on the district court’s ruling that there was no duty to defend, which
   we reverse. We therefore additionally reverse this ruling and remand for
   further proceedings.
                          IV.   CONCLUSION
          For the foregoing reasons, we REVERSE and REMAND for further
   proceedings consistent with this opinion.

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