United States District Court, D. Minnesota
MEMORANDUM AND ORDER
A. Magnuson United States District Court Judge
matter is before the Court on the parties' cross-Motions
for Summary Judgment or Partial Summary Judgment. For the
following reasons, Plaintiff's Motion for Summary
Judgment is denied and Defendant's Motion for Partial
Summary Judgment is granted.
Miller Architects and Builders, Inc. (“Miller”),
is a Minnesota-based design/build company. In 2013, a
real-estate trust called IRET-Cardinal Point LLC
(“IRET”) hired Miller to design and build a
two-building luxury apartment complex in Grand Forks, North
Dakota. IRET ultimately terminated Miller's role in the
project, ostensibly because of faulty construction and poor
design. IRET then commenced arbitration against Miller under
the terms of the parties' contract. That arbitration is
ongoing, and is still in its preliminary stages.
March 2015, Miller tendered IRET's allegations to its
insurer, Plaintiff Westfield Insurance Company. Westfield
determined that it had no duty to defend or indemnify Miller
in the arbitration, and Westfield filed this lawsuit seeking
a declaration to that effect. Westfield now seeks summary
judgment on its duty to defend. Miller has cross-moved for
partial summary judgment, contending that Westfield's
breach of its duty to defend means that Miller is entitled to
recover the attorney's fees it has thus far expended in
the arbitration as well as the fees it has incurred in
defending this coverage action.
parties focus their discussions on five broader categories of
claimed damage, rather than each of the more than 65 separate
damages claims IRET has preliminarily raised in the
underlying arbitration. (Medeiros Aff. (Docket No. 31) Ex.
2.) Miller contends that all of these five categories fall
within its insurance policies' coverage, and thus that
the Court need look no further than the five categories to
determine that Westfield has the duty to defend Miller in the
arbitration. Westfield argues that none of these categories
is covered and that Miller's failure to discuss the
remaining items of damages constitutes a waiver of its claims
regarding those remaining items. The waiver argument is
specious and the Court will not address it further. The Court
agrees with Miller that it can resolve the parties'
dispute by examining these five categories of damages:
1. Water intrusion damage caused by Miller's
subcontractor defectively installing the roof of one
building, which caused electrical problems and damaged some
of the finishes in the building.
2. Damage to concrete support beams caused by Miller's
subcontractor drilling holes in those beams.
3. Damage to the parking ramp because the ramps themselves
were constructed at an improperly steep angle with no
4. Foundation problems allegedly caused by an unstable
5. Loss of use because of the delay necessary to correct the
insurer's duty to defend is determined by comparing
“the allegations in the complaint in the underlying
action with the relevant language in the insurance
policy.” Meadowbrook, Inc. v. Tower Ins. Co.,
559 N.W.2d 411, 415 (Minn. 1997) (emphasis omitted). An
insurer has a duty to defend all claims even if only one of
the claims is “arguably” covered by its policy.
Jostens, Inc. v. Mission Ins. Co., 387 N.W.2d 161,
165 (Minn. 1986) (quotation omitted). It is the insurer's
burden to demonstrate that “each claim asserted in the
lawsuit clearly falls outside the policy.” Murray
v. Greenwich Ins. Co., 533 F.3d 644, 648 (8th Cir. 2008)
(quoting Jostens, 387 N.W.2d at 165-66). And all
“[d]oubts as to coverage must be resolved against the
insurer issuing the policy in favor of coverage.”
Id. (citation omitted).
case requires construction of perhaps the most oft-litigated
provisions in standard Commercial General Liability
(“CGL”) insurance policy forms, the
products-completed-operations-hazard provision and its
interaction with the “your work” exclusion. These
provisions appear to be drafted to intentionally obscure
coverage decisions, and after more than 30 years of use, it
is past time ...