Court Opinion

ID: 20321
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:33:08+00
Date Added: 2024-06-11T15:04:38.421052
License: Public Domain

UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT

                        _______________________

                               No. 98-50498
                       Lower Ct. No. SA-98-CV-477
                             Summary Calendar
                         _______________________

         KINDER BROTHERS LUMBER AND SUPPLY COMPANY, INC.,

                                                     Plaintiff-Appellant,

                                  versus

                     ASSURANCE COMPANY OF AMERICA,

                                                      Defendant-Appellee.

_________________________________________________________________

           Appeal from the United States District Court
                 for the Western District of Texas
_________________________________________________________________

                            February 29, 2000

Before JOLLY, JONES, and BENAVIDES, Circuit Judges.

EDITH H. JONES, Circuit Judge:*

           Kinder Brothers sued Assurance for breach of contract,

bad faith, DTPA violations and Insurance Code violations.                The

claims arise from Assurance’s denial of coverage for costs that

Kinder Brothers incurred in replacing defectively-installed wood

flooring and for alleged misrepresentations of coverage made by

Assurance employees.      The district court granted summary judgment

for the defendant. Agreeing that no genuine issue of material facts

exists, we affirm.

     *
            Pursuant to 5th Cir. R. 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Cir. R. 47.5.4.
              Kinder   Brothers   was   the   general     contractor    in    the

construction of a residence for Dr. Jacob and Dolly Dreszer.

Kinder Brothers subcontracted the floor work to Carpet Max, who in

turn subcontracted with IB Wood Floors for the job.

              In January 1997, after the floors had been installed but

before they had been finished, the Dreszers discovered that certain

areas of the floor made a “popping” sound when walked upon.             Kinder

Brothers then made a claim under its commercial general liability

policy issued by Assurance seeking reimbursement for the cost of

replacing the flooring.

              An engineer hired to determine the cause of the problem

determined that the popping noise was caused by loose screeds,

which were the result of an inadequate adhesive that had been

applied to the underside of the screeds. Kinder Brothers attempted

to   repair    isolated   areas   of    the   floor;    however,   additional

“popping” occurred thereafter in other areas of the floor.                    The

engineer   then    advised   Kinder     Brothers   that    the   only   way    to

guarantee that the problem was fixed was to remove and replace all

of the wood floors.       In early February 1997, Kinder Brothers had

the floor torn up and ordered wood and other materials to replace

the floor.

              Besides making a claim on its insurance policy, Kinder

Brothers also hired an attorney to seek reimbursement from Carpet

Max, the subcontractor.       As of March 1997, Carpet Max and Kinder

Brothers were in the midst of negotiations – in fact, Carpet Max

had made an offer of some kind – when Jim Jonas, the claims

adjuster hired to assist in the investigation of the claim, told

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Kinder Brothers to “get his numbers together” because “we have some

coverage here.”    In April 1997, Mr. Jonas told Kinder Brothers to

tell their lawyer to hold off on their claim against Carpet Max.

Kinder Brothers did so.    After Assurance denied Kinder Brothers’s

claim in October 1997, Kinder Brothers restarted its negotiations

with Carpet Max and the other subcontractors.

            Kinder Brothers brought suit against Assurance seeking

damages for breach of contract, bad faith, and violations of the

DTPA and Insurance Code.    Assurance moved for summary judgment,

arguing that the policy excludes coverage and that the alleged

misrepresentations did not prejudice Kinder Brothers.         The trial

court agreed with Assurance and granted summary judgment.

            On appeal, Kinder Brothers argues that the “business

risk” policy exclusion relied on by Assurance does not apply

because: (1) the property damage did not arise out of the work

being performed at the time the damage manifested itself; (2) the

property damage occurred after the floor had been installed; and

(3) the property damage included damage to non-defective work

caused by the defective work.    Kinder Brothers also argued that it

detrimentally relied on Assurance’s representations of coverage in

that it spent unnecessary time and effort preparing documentation

for Assurance and forewent an opportunity to seek reimbursement

from the subcontractors.

            This Court reviews summary judgments de novo.      See Webb

v. Cardiothoracic Surgery Assocs. of North Tx., 139 F.3d 532, 536

(5th Cir.    1998).   Summary   judgment   is   appropriate   where   the

pleadings and summary judgment evidence present no genuine issue of

                                  3
material fact and the moving party is entitled to judgment as a

matter of law.       See Fed. R. Civ. P. 56(c); Celotex Corp. v.

Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265

(1986).    The Court must consider the evidence with all reasonable

inferences drawn in favor of the non-moving party.                 See Coleman v.

Houston Indep. School Dist., 113 F.3d 528, 533 (5th Cir. 1997).

The non-moving party may not, however, rest upon mere allegations

or denials in the pleadings, but must set forth specific facts

showing the existence of a genuine issue for trial.                 See id.

            By   failing    to   raise    arguments     regarding     the   policy

exclusions before the trial court, Kinder Brothers waived its right

to present such arguments on appeal.                   “[A] plaintiff in his

opposition to a motion for summary judgment cannot abandon an issue

and then, after an unpalatable decision by the trial judge, on

appeal, by drawing on the pleadings resurrect the abandoned issue.”

Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1164 (5th Cir. 1983),

quoting Edward B. Marks Music Corp. v. Continental Record Co., 222
F.2d 488, 492 (2d Cir. 1955).        Kinder Brothers focused on the issue

of alleged misrepresentations of coverage in its response and reply

briefs to Assurance’s motion for summary judgment.                  While Kinder

Brothers stated that it did not concede that there was no coverage

for the claim under the terms of the policy, it presented no

arguments or legal authority in support of its assertion that the

policy    covered   the    damage.       It   cannot   now   put    forward   such

arguments before this Court.

            Kinder Brothers also claims that it detrimentally relied

on Assurance’s representations of coverage.             As the district court

                                         4
noted, however, the floors were torn out and new materials ordered

for their replacement prior to any representations of coverage.

Kinder Brothers     argues   that     it   also   suffered   damages   to   its

bargaining position with Carpet Max and in expending time and

effort gathering documentation on the claim. While it is true that

Kinder Brothers dropped negotiations with Carpet Max upon being

told there was coverage, Kinder Brothers nowhere presents evidence

that the delay compromised its claims against Carpet Max,1 that it

was prepared to accept the offer that Carpet Max had made, or that

it was forced to incur more attorney’s fees than it would have

otherwise.    Furthermore, any gathering of documentation would have

been done    regardless.      Given    the   lack   of   prejudice,    summary

judgment in favor of the defendant was appropriate.

            AFFIRMED.

      1
       Kinder Brothers did not lose an opportunity to pursue a cause of action
against the subcontractors. In fact, Kinder Brothers acknowledges that it is
currently in the midst of a lawsuit against them.

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