United States District Court, W.D. Texas, El Paso Division
FINDINGS OF FACT & CONCLUSIONS OF LAW
T. BERTON UNITED STATES MAGISTRATE JUDGE.
day, the Court commenced a Bench Trial on the Papers in the
above-styled and numbered cause. Having duly considered the
parties' pleadings, Agreed Stipulated Facts, trial
briefs, and responses, the Court now enters its findings of
fact and conclusions of law pursuant to Federal Rule of Civil
December 31, 2014, Bain Enterprises, LLC.
(“Bain”) filed suit against Mountain States
Insurance Group (“Mountain States”) and United
Fire & Casualty Company (“United Fire”) for
declaratory judgment. (ECF. No. 1). On December 7, 2015,
Mountain States filed a crossclaim against United Fire for
contribution and subrogation. (ECF. No. 40). On April 29,
2016, the parties each filed Motions for Summary Judgment.
(ECF. Nos. 51-53). On August 1, 2016, the District Court
granted in part and denied in part the parties' Motions
for Summary Judgment. (ECF. No. 67). Subsequently, on August
12, 2016, Bain and Mountain States filed a joint voluntary
dismissal of all of Bain's claims against Mountain
States, which the District Court granted. (ECF. Nos. 69, 70).
the litigation, the parties filed numerous motions for trial
date continuations. Following the District Court's denial
of a fourth trial continuation, on October 25, 2016, the
parties consented to magistrate judge jurisdiction pursuant
to Local Rule CV-72 and 28 U.S.C § 636(c)(1). (ECF. No.
96). Thereafter, the litigation was reassigned to this Court
for final disposition. (ECF. No. 97).
on May 2, 2017, Mountain States voluntarily dismissed its
cross-claims against United Fire. (ECF. No. 126). As no
claims remained that were asserted by or against Mountain
States, the Court dismissed Mountain States from the
litigation. (ECF. No. 128). As such, following the District
Court's ruling and the parties' voluntary dismissals,
the only remaining claim is for declaratory judgment that
United Fire had a duty to indemnify Bain. (See ECF.
Nos. 67, 69, 70).
Bench Trial was originally scheduled for May 15, 2017. (ECF.
No. 99). However, on May 9, 2017, the parties filed a
“Joint Motion Requesting the Court to Decide the Case
on Submissions by the Parties.” (ECF. No. 129).
Therein, the parties represented that “they [would] be
able to submit an agreed statement of facts to the Court . .
. such that an evidentiary trial [would] not be
necessary” and “[t]he Parties also represent[ed]
to the Court that only legal questions remain[ed].”
(Id.). Accordingly, on May 11, 2017, the Court
directed the parties to submit their joint statement of
facts. (ECF. No. 133). After receiving the parties'
Agreed Stipulated Facts on May 12, 2017, the Court vacated
the trial setting and directed the filing of trial briefs.
(ECF. Nos. 134, 135).
to receiving the parties' trial briefs, the Court
received a near 500 page lodgment in contravention of the
parties' representation that “only legal questions
remain.” (See ECF. Nos. 129, 136).
Nevertheless, although not required to do so, the Court will
consider this additional non-stipulated evidence in the
alternative. (See ECF. Nos. 137-140). Accordingly,
as the issues are fully briefed, the matter is now ripe for
the Court to adjudicate.
Court has jurisdiction under 28 U.S.C § 1332(a), and
following the parties' consent to magistrate judge
jurisdiction, the Court is empowered to enter a final
disposition pursuant to 28 U.S.C § 636(c)(1) and Local
Findings of Fact
respect to the stipulated facts between the parties, the
Court ACCEPTS the parties' Agreed Stipulated Facts
(“ASF”) (ECF. No. 134) and ENTERS the following
findings of fact:
1. Bain is a general contractor that performs installation of
utilities, earth moving, dirt work, paving, and miscellaneous
2. Mountain States issued a Commercial General Liability
Policy to Bain, Policy No. CPP 0116646 05, and a Commercial
Umbrella Policy to Bain, Policy No. UMB 0116646 04, with a
policy period from 12/08/2011 to 12/08/2012.
3. United Fire issued a Commercial General Liability Policy
to Bain, Policy No. 85317910 (“United Policy”),
with a policy period from 12/08/2012 to 12/08/2013. The
United Policy provides, in part, as follows:
SECTION I - COVERAGES
COVERAGE A BODILY INJURY AND PROPERTY DAMAGE
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally
obligated to pay as damages because of “bodily
injury” or “property damage” to which
this insurance applies….
b. This insurance applies to “bodily injury”
and “property damage” only if:
(2) The “bodily injury” or “property
damage” occurs during the policy period; and
(3) Prior to the policy period, no insured listed . . .,
knew that the “bodily injury” or “property
damage” had occurred, in whole or in part. If such a
listed insured or authorized “employee” knew,
prior to the policy period, that the “bodily
injury” or “property damage” occurred, then
any continuation, change or resumption of such “bodily
injury” or “property damage” during or
after the policy period will be deemed to have been known
prior to the policy period.
d. “Bodily injury” or “property
damage” will be deemed to have been known to have
occurred at the earliest time when any insured . . .
(1) Reports all, or any part, of the “bodily
injury” or “property damage” to us or any
(2) Receives a written or verbal demand or claim for
damages because of the “bodily injury” or
“property damage”; or
(3) Becomes aware by any other means that “bodily
injury” or “property damage” has occurred
or has begun to occur.
SECTION V - DEFINITIONS
13. “Occurrence” means an accident, including
continuous or repeated exposure to substantially the same
general harmful conditions.
4. In 2011, Bain entered into a contract with the Lower
Valley Water District (“LVWD”), under which Bain
began construction of “Phase I” of a sanitary
sewer system within the Town of Clint. Phase I required (a)
the installation of a sewer main, (b) the installation of
residential yard lines, and (c) the decommissioning of septic
tanks used by certain residents in specific areas of the Town
5. Bain utilized the services of subcontractors for part of
the work performed in Phase I. Specifically, Bain contracted
with Double R Plumbing for plumbing work, which included
installation of yard lines for residences adjacent to the
streets. To install the yard lines, Double R Plumbing had to
dig trenches, lay pipe and then backfill the trenches. Double
R Plumbing performed the work needed starting from the street
curb, connecting the sewer service lines installed by Bain,
and then ran the yard lines to the houses. LVWD's
representative on Phase I inspected the work that was being
performed by both Bain and Double R Plumbing. Bain
representatives were informed at a bi-weekly project meeting
in June 2012 of deficiencies in Double R Plumbing's
trench backfill soil compaction. Thereafter, Double R
Plumbing changed its compaction methods and ultimately LVWD
approved the overall project, which included the yard lines
and work performed by Double R Plumbing. Under the plans and
specifications, Bain was not required to test the soil
compaction for the yard lines; instead, LVWD performed those
tests, and approved the work being performed by both Bain and
Double R Plumbing.
6. Bain completed Phase I work between July 28, 2011 and
September 2012, at which time it received a certificate of
substantial completion of Phase I from the LVWD.
7. The Town of Clint filed a lawsuit against Bain for
structural damages allegedly caused by the construction of
8. Bain tendered the Original Petition to Mountain States
pursuant to its Mountain States policy. Mountain States
agreed to defend Bain and hired its defense counsel, Michael
McLean, in the underlying lawsuit.
9. When Bain applied for insurance coverage from United Fire,
it submitted to United Fire a copy of the Mountain States
Insurance Group Loss Run Report dated September 5, 2012,
which listed claim number 201200289197 related to the claims
made by ...