Preferred Contrs. Ins. Co. Risk Retention Group, L.L.C. v. Finnels, 2014 U.S. App. LEXIS 17512 (5th Cir. Tex. Sept. 10, 2014)
Calvin Finnels was a truck driver who worked as an independent contractor for Gulf Coast. Mr. Finnels helped deliver a fabricated wall to a work site where Oyoque Masonry, Inc. was installing the wall. Mr. Finnels assisted Oyoque Masonry, Inc. in installing the last piece of the wall and was injured.
Mr. Finnels subsequently filed suit against both Gulf Coast and Oyoque Masonry, Inc. The CGL insurer for Oyoque Masonry, Inc. filed a declaratory judgment action seeking a determination that it owed no duty to defend or indemnify.
Mr. Finnels was ultimately successful in his suit and obtained a judgment for $75,000.00 against Oyoque Masonry, Inc. The declaratory judgment action was a different story. There, the court found that the insurer owed no duty to indemnify Oyoque Masonry, Inc.
The Fifth Circuit's Decision:
The Fifth Circuit began by noting that the CGL policy excluded coverage for employees of Oyoque Masonry, Inc., as well as its independent contractors who provided work or products at Oyoque Masonry, Inc.'s work site. The Court also noted that the district court found that Mr. Finnels was an independent contractor based on his express pleading that he was an independent contractor.
Mr. Finnels attempted to argue, in part, that the policy's exclusion was not applicable because he was an independent contractor for Gulf Coast and not Oyoque Masonry, Inc. The Fifth Circuit found no merit in this argument since the exclusion at issue only required the claim to be made by an independent contractor who provided work or products at Oyoque Masonry, Inc.'s work site.
What to Take Away:
If you see it in a pleading, make sure you know how it impacts the policy at issue. Pleading in the alternative is often used to try to avoid the problem presented in this case, but there must be facts to support alternative pleading.