A federal appeals court reversed a lower court Tuesday and held some insurance company must defend a roofing manufacturer in litigation in which the company's roof membrane system allegedly caused additional damage to a Bronx high school.
The litigation comes from a fundamental lawsuit filed through the Ny Archdiocese along with other plaintiffs against parties including Dallas-based Siplast Inc., which in fact had sold a roof membrane system to a Bronx senior high school this year, based on the ruling by the 5th U.S. Circuit Court of Appeals in New Orleans in Siplast Inc. v. Employers Mutual Casualty Company. Siplast provided a 20-year guarantee for that work, the ruling said.
In November 2022, water damage occurred in ceiling tiles through the high school following a rainstorm. A consultant said remediation and replacement would cost about $5 million. The plaintiffs then filed suit against Siplast.
After Des Moines-based Employers Mutual Casualty refused to protect it within the litigation, Siplast filed suit from the insurer in U.S. District Court in Dallas, charging breach of contract.
The district court granted EMCC's motion for summary judgment, holding that a “Your Product/Your Work Exclusion” in the commercial general liability coverage applied.
A three-judge appeals court panel overturned the ruling. The claims “that are at issue in this case can largely be reduced one question: will the Underlying Complaint contain allegations of damage to property apart from Siplast's roof membrane as part of the cause of action against Siplast? Liberally construed, it does,” said the ruling,
“The factual allegations raised by the complaint repeatedly point to damage to property apart from Siplast's roof membrane system,” the ruling said, in holding the exclusion does not apply, overturning the low court and remanding the situation for further proceedings.
Siplast attorney Steven J. Pudell, a managing shareholder with Anderson Kill P.C. in Newark, Nj, said in a statement, “We are content that the 5th Circuit recognized that under Texas law the job to protect should be construed broadly and plainly extended to this suit seeking damages against Siplast.”
Insurer attorneys did not respond to a request for comment.
In November, a federal appeals court reversed a lower court and ruled in support of a Great American Insurance Group unit in a dispute with Employers Mutual Casualty over excess coverage inside a wrongful death suit.
