Plaintiff, the Owner of the building, contracted with the Named Insured to provide a completely new roof structure and roofing over the commercial building. When the work was nearing completion, the Owner claimed they began noticing leaks from the new roof, which allegedly caused damage to ceilings, walls, and flooring. The Owner contended it engaged a structural engineer who allegedly found defects in the rafters for spans and spacing, defective and split structural members due to overstressing, failure to provide Code required hurricane ties, and insufficient bracing, among other specified roof defects. In the lawsuit filed by the Owner against the Named Insured, there were no specific factual allegations of other work by the Named Insured except for roofing. The Owner also named the Insurer as a defendant under Louisiana’s Direct Action Statute. The Named Insured filed a cross-claim against the Insurer, who had disclaimed defense and indemnity.
The Commercial General Liability policy issued to the Named Insured contained endorsements adding Exclusion – Designated Ongoing Operations and Exclusion – Designated Work. The Schedule in both included “Roofing or roof repairs.”
The Designated Ongoing Operations exclusion provided: “This insurance does not apply to ‘bodily injury’ or ‘property damage’ arising out of the ongoing operations described in the Schedule of this endorsement, regardless of whether such operations are conducted by you or on your behalf or whether the operations are conducted for yourself or for others.”
The Designated Work exclusion provided: “This insurance does not apply to ‘bodily injury’ or ‘property damage’ included in the ‘products-completed operations hazard’ and arising out of ‘your work’ shown in the Schedule.”
Doris Bobadilla and Frances McGinnis moved for summary dismissal powered by the argument that the policy clearly and unambiguously excluded coverage pursuant to these exclusions. Under the eight-corners rule, the Insurer did not owe a defense to the Insured. The Named Insured argued that a conclusory allegation in the Owner/Plaintiff’s Petition for Breach of Contract, Negligence, and for Damages—“[b]ecause of the negligence [sic] work that caused leaking into the building …”— created a genuine issue of material fact that the Insured performed work other than roofing that was not excluded. Galloway’s lawyers refuted that argument on the basis that it is well established in Louisiana that courts look to factual, not conclusory, allegations of the petition to determine whether the Insurer must defend the insured.
Further, the opposition argued the work was performed entirely by subcontractors. Without any policy language support, the opposition argued that if the damaged work or work out of which the damage arises was performed by a subcontractor, the policy provides coverage. Presumably, he argued that the Damage To Your Work exclusion did not apply. Of importance, the Designated Ongoing Operations exclusion excluded coverage “regardless of whether such operations are conducted by you or on your behalf.” Similarly, the Designated Work exclusion excluded coverage for “property damage” included in the “products-completed operations hazard” arising out of “your [Named Insured’s] work,” which means “work or operations performed by you or on your behalf.” The Court held that the insurance policy excluded coverage for the claims brought by the Owner/Plaintiff.
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