Ernest Martin in Law360: Texas Justices Rescue Builders From Limbo in Ewing Case

01/21/2014


The Texas Supreme Court's long-awaited decision in Ewing Construction Co.'s insurance fight over crumbling tennis courts drew strict boundaries around an exclusion for liabilities that builders assume through contracts, providing much-needed reassurance to the construction industry 19 months after the Fifth Circuit's liberal — and later withdrawn — take on the exclusion.

Contractors throughout the country had been alarmed by developments in Ewing's case against Amerisure Insurance Co., in which a federal court in Texas and the Fifth Circuit held that the contractual liability exclusion in Amerisure's policy cut off coverage for a lawsuit brought by a school that complained about the tennis courts that Ewing had built.

Builders barraged the Fifth Circuit with requests to rethink its ruling, and even Amerisure asked that the case be sent to the Texas Supreme Court. The Fifth Circuit obliged. Contractors argued that the decision's sweeping interpretation of the contractual liability exclusion created a serious gap in insurance coverage for faulty workmanship suits...

“This is a long-awaited decision,” said Ernest Martin, an administrative partner in Haynes and Boone, LLP's Dallas office. “The entire insurance coverage bar had been waiting for it.”

According to Martin, the resolution of many cases in Texas remained in limbo until Friday's decision came down. The decision should discourage insurance companies from holding up the exclusion in similar cases, he said.

Excerpted from Law360, January 21, 2014. To view full article, click here (subscription required).

Email Disclaimer