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The Summer of Dissents - Ewing Construction v. Amerisure Eviscerates Completed Operations Coverage PART 2

Last night, mere hours after Part 1 of this topic posted, the Fifth Circuit took the rare step of vacating the 2-1 opinion in Ewing v. Amerisure and in turn certifying two questions to the Supreme Court of Texas on the subject.  Here is the opinion vacating the original decision.

"Both sides argue that their interpretation of Gilbert better advances the goals of Texas insurance law and is more compatible with the structure of the CGL. As their arguments reveal, this case could have a significant impact on an important area of Texas insurance law and both parties have urged us to certify these questions to the Texas Supreme Court. Where state law governs an issue, such policy factors are better gauged by the state high court than by a federal court on an Erie guess."

Oddly, there was no mention of our blog post in the opinion (just kidding).  The two questions certified to the Texas Supreme Court are as follows: 

  1. Does a general contractor that enters into a contract in which it agrees to perform its construction work in a good and workmanlike manner, without more specific provisions enlarging this obligation, “assume liability” for damages arising out of the contractor’s defective work so as to trigger the Contractual Liability Exclusion.
  2. If the answer to question one is “Yes” and the contractual liability exclusion is triggered, do the allegations in the underlying lawsuit alleging that the contractor violated its common law duty to perform the contract in a careful, workmanlike, and non-negligent manner fall within the exception to the contractual liability exclusion for “liability that would exist in the absence of contract.”

It could take some time for the Texas Supreme Court to respond to these certified questions.  Indeed, it seems as if the law was clear to everyone but Amerisure and the three federal judges Amerisure was able to convince of the rightness of its view.

As for the legal effect of Ewing v. Amerisure, it now is vacated and has no legal effect.  Its short reign of terror is over.  Thank goodness!  Whether Amerisure will continue to deny defense and indemnity in similar circumstances is still an open question.  

UPDATE: The Texas Supreme Court heard oral arguments in Ewing v. Amerisure on February 27th.

 

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