The Fifth Circuit considered whether coverage was barred under the policy's insured versus insured provision. Kinsale Ins. Co. v. Georgia-Pacific, L.L.C., 2015 U.S. App. LEXIS 12976 (5th Cir. July 27, 2015).
Georgia-Pacific hired Advanced Services, Inc. for demolition work at Georgia-Pacific's idled plywood plant. A fire occurred at the plant, damaging equipment Advanced had leased from H&E Equipment for the demolition work.
Several lawsuits followed. One was brought by H&E against Advanced. Advanced filed a third-party demand for indemnification against Georgia-Pacific for any damages Advanced was required to pay H&E.
Advanced was covered by a CGL policy issued by Kinsale. Georgia-Pacific was an additional insured under the policy. Georgia-Pacific filed a claim for coverage under the Kinsale policy for any indemnification it might be found to owe Advanced. Kinsale denied coverage based upon the exclusion that applied to suits brought by one insured against another insured.
Kinsale filed suit for declaratory judgment that it did not owe indemnity to Georgia-Pacific. Georgia-Pacific counterclaimed for a declaration that the insured versus insured exclusion was inapplicable.
The district court granted summary judgment in favor of Kinsale, finding the claim was barred by the exclusion. The exclusion stated: "This insurance does not apply to claims or suits for . . . property damage . . . brought by one insured against any other insured."
On appeal, Georgia-Pacific argued that the exclusion was inapplicable because Advanced's claim or suit was not one for property damage "brought by" one insured against another. The original property damage claim was brought by H&E, who was a stranger to the policy. H&E claimed that Advanced was liable for destruction of H&E's equipment as a result of the fire. Advanced did not, in turn, seek damages from Georgia-Pacific due to a property loss; it sought indemnity based on general tort principles for property damage that occurred to another party.
A claim for indemnity allowed a joint tortfeasor who was only technically or constructively at fault to recover from the joint tortfeasor who was actually at fault. To succeed, Advanced would need to show it was not actually at fault, and its liability resulted from the fault of others.
The Fifth Circuit therefore held that the insured versus insured exclusion did not apply. Advanced "brought" a "claim" against another insured, Georgia-Pacific, but it was not one for "property damage." The plain meaning of the exclusion made it inapplicable to an indemnity claim.
