Western Alliance Insurance v. Northern Insurance

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 97-11194

WESTERN ALLIANCE INSURANCE COMPANY,

Plaintiff-Appellee,

versus

NORTHERN INSURANCE COMPANY OF NEW YORK,

Defendant-Appellant.

Appeal from the United States District Court for the
Northern District of Texas

May 20, 1999

Before GARWOOD, BARKSDALE and STEWART, Circuit Judges.

GARWOOD, Circuit Judge:

Plaintiff-appellee Western Alliance Insurance Company

(Western) brought this equitable subrogation action against

defendant-appellant Northern Insurance Company (Northern) seeking

reimbursement of proceeds Western paid to its insured on a

liability policy it asserts was excess to Northern’s policy

obligations. The district court granted Western’s motion for

summary judgment, and Northern appeals. We vacate and remand for

the limited purpose of clarifying an evidentiary defect, and for
further proceedings consistent herewith.

Facts and Proceedings Below

On October 7, 1991, a fire in a Dallas, Texas, house killed

five people. At the time of the accident, the building was owned

by the Federal Deposit Insurance Corporation (FDIC) and rented to

tenants who lived there. The FDIC had contracted with C.W. Sparks

(Sparks) to manage the building. Sparks had two solely-owned

proprietorships/DBAs: Sparks Management Company and Southern

Building Restoration. Only the former was mentioned in the

contract between Sparks and the FDIC. After the fire, the

survivors sued Sparks in state court, alleging that he was

negligent in not installing smoke alarms in the building and in

installing a water heater.

At the time the state suit was commenced, three insurance

policies were potentially implicated by the suit. Northern

provided the FDIC with two policies providing liability coverage

applicable to the property, each of which included as additional

insured “any person or organization while acting on your behalf as

a real estate manager.” The primary Northern policy had a policy

limit of $1,000,000, while its umbrella policy had a $10,000,000

limit. Western provided liability insurance to Sparks and both of

his sole proprietorships in a single policy. The Western policy

had a limit of $500,000, and also contained a clause making the

policy excess to any other insurance policy for liability arising

2
out of Sparks’ management of property as a real estate manager.

Northern concedes that for liability stemming from Sparks’ real

estate management activities on behalf of the FDIC, it was the

primary insurer.

Western defended Sparks in the underlying lawsuit, but it

formally demanded that Northern conduct the defense, arguing that

Northern owed Sparks a duty to defend and that Western’s policy was

excess to Northern’s obligation. In response, Northern did not

unequivocally decline coverage to Sparks. Instead, it asked for

more time to study the matter. In March 1992 Sparks informed

Western that the plaintiffs in the underlying lawsuit had expressed

a willingness to settle their claims for $525,000. After

negotiations between Western and Northern, Western tendered its

policy limits of $500,000 to settle the underlying suit, and

Northern added an additional $25,000. Northern and Western agreed

that they would mediate their dispute over coverage of the Sparks

settlement after the conclusion of litigation against the FDIC,

which the plaintiffs had indicated they would pursue following

settlement.

On March 24, 1992, the plaintiffs in the underlying lawsuit

released Sparks and his sole proprietorships from any liability

stemming from the fire. Immediately following the settlement, the

plaintiffs amended their complaint to name the FDIC, rather than

Sparks, as the defendant. Northern defended the FDIC in the

continued litigation, and had the case removed to federal court. On

3
December 30, 1993, the FDIC settled with the plaintiffs. Pursuant

to this settlement, Northern paid out an amount in excess of its

$1,000,000 primary policy limit.

Mediation between Northern and Western to determine liability

for the $525,000 Sparks settlement was unsuccessful, and Western

brought the current action against Northern in state court on

February 23, 1996. Northern had the action removed to the Northern

District of Texas on diversity grounds. Northern moved for summary

judgment, and Western moved for partial summary judgment on the

question of breach of the duty to indemnify. The district court

granted summary judgment to Western and awarded it the $500,000

Western expended in the Sparks settlement, plus pre- and post-

judgment interest thereon. See Western Alliance Insurance Co. v.

Northern Insurance Co. of New York, 968 F.Supp. 1162 (N.D. Tex.

1997). Thereafter, Western dropped its duty to defend claim,

making the partial summary judgment final. This appeal followed.

Discussion

We review a district court’s grant of summary judgment

employing the same standard as that the district court is required

to apply. Dutcher v. Ingalls Shipbuilding, 53 F.3d 723, 725 (5th

Cir. 1995). Summary judgment is appropriate when the movant

identifies undisputed material facts that would entitle it to

judgment as a matter of law, and the non moving party is unable to

point to evidence that creates a genuine issue of material fact.

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In reviewing the record, we must view all facts in the light most

favorable to the non-movant, and review issues of law de novo. See

id.

I. Statute of Limitations and Exhaustion of the Policy

Northern argues that the statute of limitations bars Western’s

action. Since Western has dropped its breach of contract action

based on the duty to defend, the relevant limitations inquiry is

whether the current action was filed within four years of

Northern’s breach of the duty to indemnify. The duty to indemnify

may be justiciable in a declaratory judgment action before a

determination of the insured’s underlying liability if the

complaint does not trigger the duty to defend and no facts can be

developed in the underlying suit that could trigger the duty to

indemnify. See Farmers Texas County Mutual Insurance Co. v.

Griffin, 955 S.W.2d 81, 84 (Tex. 1997). It does not follow,

however, that every breach of the duty to defend automatically

breaches the duty to indemnify and begins the running of the

statute of limitations on the latter. A clear breach of the duty

to defend might perhaps constitute an anticipatory breach of the

duty to indemnify, but here Northern never definitively stated that

it would not defend Sparks. Instead, it continually asked for more

time to examine the situation and strung both its insured and

Western along. There is no indication that either Sparks or

Western regarded or treated these delaying tactics as a breach of

5
the duty to indemnify. That duty was breached, if it was breached

at all, when Northern declined to tender the full settlement amount

to its insured Sparks on March 24, 1992. We find, as did the

district court, that since the current action was filed on February

23, 1996, within four years of the breach of the duty to indemnify,

the action was not barred by the statute of limitations.

Northern also claims that it is entitled to summary judgment

on the grounds that, having exhausted the limits of its primary

policy in its December 30, 1993, settlement on behalf of the FDIC,

it has no further duty to indemnify Sparks. Northern’s policies

clearly indicated that it had no further obligations under their

terms once the relevant policy limits were exhausted. The FDIC

settlement exceeded the $1,000,000 limit on the primary policy, and

Northern argues that its umbrella policy was excess to Western’s

policy. Western in substance concedes that Northern’s umbrella

policy is excess to Western’s policy. Thus, we disregard the

umbrella policy. We have recently held that under Texas law an

insurer may favor one of its insureds (who had been sued) over

another insured party (who had not been sued), and thus may exhaust

policy limits on behalf of one insured despite the fact that such

a settlement leaves its remaining insureds without protection under

the policy. See Travelers Indemnity Company v. Citgo Petroleum

Corp., 166 F.3d 761, 768 (5th Cir. 1999). See also American States

Insurance Co. of Texas v. Arnold, 930 S.W.2d 196 (Tex. App.--Dallas

6
1996, writ denied).

However, in Citgo we faced a situation in which an insurer

settled on behalf of one of its insureds, who had been sued, before

the other insured party had been named in the action. Here, in

contrast, we face the reverse problem. Northern, having struck an

agreement deferring resolution of its duty to indemnify Sparks

before the FDIC was named in the suit, now claims that its

subsequent decision to exhaust settlement limits in settling on

behalf of the FDIC mooted any liability it might have incurred by

not immediately fulfilling its duty to indemnify Sparks. This

argument fails. Under Citgo, Northern was entitled to settle on

behalf of Sparks and exhaust policy limits on his behalf. It

perhaps might have been entitled to settle on behalf of the FDIC

and exhaust policy limits had the FDIC been a party to the action

at the time of the Sparks settlement. However, at that time

Sparks was the only insured party named in the action, and the

primary policy limits were not exhausted. If the facts were

sufficient to trigger the duty to indemnify, that duty included the

immediate payment of a settlement of up to $1,000,000. Northern’s

decision to subsequently expend the policy limits on behalf of the

FDIC cannot alter the fact that it may be liable to Sparks for the

full value of a settlement within policy limits. Under the facts

of this case, we hold that the exhaustion of Northern’s primary

policy liability in a subsequent proceeding could not serve to

7
excuse Northern’s asserted earlier breach of its duty to indemnify.

II. Breach of the Duty to Indemnify

Northern’s policy included, as an additional insured, any

person or organization acting as a real estate manager for the

FDIC. Northern concedes that its $1,000,000 policy provided

primary coverage for Sparks to the extent his liability arose from

real estate management activity on behalf of the FDIC. However, it

contends that neither the live state court petition (the third

amended petition) at the time of the March 1992 settlement of the

suit against Sparks nor the facts were sufficient to demonstrate

that Sparks’ liability arose from covered management activity.

First, Northern contends that the version of the complaint in the

record before us contained insufficient factual allegations to

trigger its duty to defend Sparks, and that no duty to indemnify

can attach when there was no duty to defend at the time of

settlement. Second, Northern argues that there was insufficient

factual evidence in the record of Sparks acting as a real estate

manager at the time of the accident to justify summary judgment.

Even if an insurer breaches the broad duty to defend, it is not in

all respects estopped from challenging the duty to indemnify, and

the duty to indemnify may turn on the facts in the underlying

lawsuit, not the allegations of the complaint. See Enserch Corp.

v. Shand Morahan & Co., Inc., 952 F.2d 1485, 1493 (5th Cir. 1992).

After a review of the record, we conclude that summary judgment on

8
the question of the duty to indemnify was inappropriate, but only

because of the apparent accidental omission in the record before us

of several pages from the plaintiff’s third amended petition in the

Sparks suit—the live pleading in that suit when the Sparks

settlement was made in March 1992. If, on remand, it is determined

that this third amended petition does not deviate materially in

respect to Sparks from the complete versions of the second amended

and fourth amended petitions in that suit that are in the record

before us, Western will be entitled to summary judgment.

A. The allegations in the petition

Northern’s brief can be read to argue that the third amended

complaint, the live pleading at the time of settlement, did not

trigger the duty to defend, and thus Northern could not owe a duty

to indemnify. Under Texas law, the eight corners rule generally

triggers a duty to defend whenever liability sought to be imposed

by a petition is even potentially covered by the policy. See

Enserch Corp., 952 F.2d at 1492; Heyden Newport Chem. Corp. v.

Southern General Ins. Co., 387 S.W.2d 22, 24-26 (Tex. 1965). In

Texas, the duties to defend and indemnify are separate duties

creating separate causes of action. See, e.g., American Alliance

Insurance Co. v. Frito-Lay, Inc., 788 S.W.2d 152, 153 (Tex. App.--

Dallas 1990, writ dism’d) (reversing injunction on insurer’s

declaratory judgment action for a determination of duty to

indemnify in New York court granted on the grounds that Texas suit

9
for breach of duty to defend involved the same cause of action).

The duty to defend, which rests on allegations, is broader than the

duty to indemnify, which can only be created by actual facts.

Language in some cases can be read to indicate that if the live

pleading at the time a determination of the duty to indemnify is

sought did not trigger the duty to defend, no duty to indemnify can

be found. See, e.g., Farmers Texas County Mutual Ins. Co. v.

Griffin, 955 S.W.2d 81, 82-83 (Tex. 1997). Thus, even though

Western has dropped its duty to defend claim on appeal, a finding

that no duty to defend existed at the time of settlement might

foreclose a finding of a breach of the duty to indemnify. See

Reser v. State Farm Fire & Casualty Co., 981 S.W.2d 260, 264 (Tex.

App.--San Antonio 1998, no writ) (finding deletion of only covered

claim from counterclaim complaint prior to settlement terminated

duty to defend and also foreclosed insurer’s duty to indemnify).

Northern’s argument in this respect seems to rest on an

unexplained and apparently avoidable and accidental defect in the

record before this Court. The plaintiffs’ theory throughout the

Sparks litigation, as evidenced by the fact section of the second

amended and fourth amended petitions in the Sparks case that are

complete in the record before us, was that the FDIC placed

financial restrictions on Sparks in handling the water heater

problem, and that Sparks breached his duty of care by hiring an

uncertified handyman and not supervising the handyman, who

10
installed a used water heater and attempted to deal with a poor

connection to the building’s gas lines with duct tape. However,

the copy of the plaintiffs’ third amended petition in the Sparks

case as contained in the record before us is missing three pages

(it goes from its numbered page 3 to its numbered page 7, and its

wording also makes obvious that page 7 does not immediately follow

page 3). Assuming that the third amended petition followed the

format of the other petitions, these pages were the ones that

contained the plaintiffs’ factual allegations. The incomplete

third amended petition in our possession alleges only that Sparks

was negligent in installing a water heater. Nowhere does it

indicate that Sparks worked for the FDIC as a building manager, or

set forth the factual background to Sparks’ alleged negligence.

We note, however, that Northern failed to argue that the

allegations in a complete copy of the third amended petition

diverged in any material way from those in the other petitions, or

to complain that the district court made its judgment on the basis

of an incomplete copy like the one before us. Indeed, at oral

argument counsel for Northern indicated that any defect in the

record was not relevant to our inquiry. Accordingly, we believe it

is highly probable that a complete copy of the third amended

petition exists that contains factual allegations similar to those

in the other versions of the petition. We believe the prudent

course of action is to remand for a clarification on this point,

rather than proceed to determine Northern’s duty to defend based on

11
the fragmentary evidence before us.

In the interest of judicial economy, we note that the second

amended petition (and the fourth) alleged that Sparks was acting as

a building manager for the FDIC and in this capacity hired an

uncertified handyman rather than a professional to install a water

heater in the building. It also alleges that Sparks never set foot

in the building, and thus asserts that he did not oversee the

handyman’s negligent installation or inspect the building’s

dysfunctional smoke detectors. These allegations were sufficient

to trigger the duty to defend under Northern’s policy, and a

complete copy of the third complaint containing similar factual

allegations would foreclose Northern’s argument that the duty to

defend was absent and thus indemnification is inappropriate.

B. Facts triggering the duty to indemnify

Assuming Northern breached its duty to defend, it may still

challenge indemnification. If an insurer breaches the duty to

defend, it may not contest a determination that its insured was

liable in the underlying settlement or verdict (or the amount of

either). It remains free, however, to argue that the assumed

liability was not in actuality covered under its policy, and thus

no duty to indemnify arises. See Employers Casualty Company v.

Block, 744 S.W.2d 940, 943 (Tex. 1988), overruled on other grounds

by State Farm Fire and Casualty Co. v. Gandy, 925 S.W.2d 696, 714

(Tex. 1996); Hartford Casualty Co. v. Cruse, 938 F.2d 601, 605 (5th

12
Cir. 1991); Enserch Corp., 952 F.2d at 1493. The insured bears the

burden of proving coverage, and to demonstrate a duty to indemnify

it must present facts sufficient to demonstrate coverage. See Data

Specialties, Inc. v. Transcontinental Insurance Co., 125 F.3d 909,

911 (5th Cir. 1997); Block, 744 S.W.2d at 944.

Here, Northern argues that Western has failed to meet its

burden of introducing facts demonstrating that Sparks was covered

by Northern’s policy. Unable to contest Sparks’ liability, they

argue that no facts in the record indicate the manner in which

Sparks’ liability arose. Specifically, they argue that nothing

indicated that Sparks’ liability arose from his real estate

management activity, which is a necessary precondition to

coverage.1 Western first responds by claiming that the factual

scenario outlined in the plaintiff’s petition clearly indicates

that at the time in question Sparks was engaged in real estate

management activity for the FDIC respecting the building. This is

correct but not of itself sufficient. The duty to indemnify

requires facts, and factual allegations in a petition do not

necessarily all become facts merely because of a settlement of the

suit. In Block, the court refused to find facts indicating

coverage that were recited in a settlement agreement dispositive on

1
Western maintains that this argument has been waived. While
Northern’s misguided focus on meritless claims that Sparks and his
sole proprietorships are distinct legal entities obfuscated the
issue, we are satisfied that Northern raised the issue below.

13
the duty to indemnify. See Block, 744 S.W.2d at 943. The court

affirmed on the grounds that uncontroverted testimony demonstrated

that the plaintiff had carried its burden of proving coverage. Id.

at 944. Here, we do not even have an attempt to embed the relevant

facts in the settlement agreement—we have only the allegations made

in the underlying petitions. These allegations do not constitute

facts for the purpose of establishing coverage under Northern’s

policy.

Nevertheless, the limited facts in the record support the

district court’s grant of summary judgment for Western. The fact

that Sparks was managing the house on behalf of the FDIC at the

time of the requisition and installation of the water heater and

the fire is uncontested on appeal, and Northern has conceded that

Sparks is covered under the policy for his real estate management

activities. In its answer to Western’s complaint, Northern did not

contest Western’s position that the fire—and thus Sparks’

settlement liability—was traceable to the recent acquisition and

installation of a defective water heater. Because of the posture

of the case, we can also assume that Sparks’ negligence caused the

fire—if Northern breached its duty to defend, it cannot challenge

Sparks’ liability. The question then becomes whether we can assume

from these facts that Sparks’ liability arose from his “acting as

a real estate manager,” which would bring him within Northern’s

policy.

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 Curiously, the parties do not explore cases construing “real

estate manager” language in insurance policies. We were unable to

discover any relevant published Texas cases. However, other

jurisdictions have construed similar policy language. These cases

have generally looked to see whether the entity claiming additional

insured status by virtue of a similar clause undertook its claimed

real estate management activity primarily in order to benefit the

named insured—thus entitling it to coverage—or in pursuit of its

own interests. Thus a hotel cannot claim coverage under a policy

issued to an organization it was hosting, since its provision of

oversight and security on the premises was driven by its financial

interest in satisfying customers and its statutory duties to

protect its guests. See Insurance Co. of North America v. Hilton

Hotel U.S.A., Inc., 908 F.Supp. 809, 817 (D. Nevada 1995). See

also California Union Insurance Co. v. City of Walnut Grove, 857

F.Supp. 515, 522 (S.D. Miss. 1994) (City, as lessor of property,

was not real estate manager for tenant despite performing some

maintenance work—any work was done to further its own interests as

owner). Similarly, a tenant in possession cannot seek shelter

under such an additional insured clause in his landlord’s policy

merely because the tenant undertook some maintenance work on the

property. See Jackson v. East Baton Rouge Parish School Board, 348

So.2d 739, 741 (La. App. 1st Cir. 1977) (while state entity using

space in a Parish school building may have undertaken management

15
tasks, “it did so to serve its own purposes and not acting as a

real estate manager for the name[d] insured”); Savoy v. Action

Products Co., Inc., 324 So.2d 921, 923 (La. App. 3d Cir. 1975)

(stressing that ordinary meaning of manager implies action on

behalf of another and not oneself, and any action tenant took that

might be construed as managing property was merely fulfilling the

tenant’s own legal obligations). However, when an entity

undertakes management activity solely or primarily on behalf of

others, and it owes duties to the property which derive from the

duties owed to or by those it serves, it may claim coverage under

such a policy. See Fireman’s Fund Insurance Co. v. Vordemeier, 415

So.2d 1347, 1349-50 (Fla. 4th DCA 1982) (in negligence action

arising from child’s fall from window, receiver appointed to manage

property was covered under policy since he was managing property on

behalf of named insured as well as creditors). See also First

National Bank of Palmerton v. Motor Club of America Insurance Co.,

798 A.2d 69, 72-73 (N.J. App. Div. 1997) (mortgagee in possession

benefitted mortgagor through continued operation and maintenance

and thus could claim coverage as a manager).

Here, as Northern has conceded, Sparks was a real estate

manager for the FDIC, the named insured and owner of the house.

Under the logic of the above cases, he may claim coverage under the

policy for any action he took in pursuit of the FDIC’s legal or

economic interests. Under Texas law, the FDIC has a duty to make

16
diligent efforts to repair or remedy conditions that materially

affect the health or safety of tenants after a request has been

received. See Tex. Prop. Code Ann. § 92.052 (Vernon 1995). In any

event, it is clear beyond question that as a landlord the FDIC had

an economic interest in satisfying tenants and insuring the

building was attractive to potential tenants. Obviously, the

provision, or continued provision, of hot water to tenants was in

the FDIC’s economic interest. Northern does not dispute that the

fire stemmed from the installation of a water heater, presumably in

pursuit of the FDIC’s economic and/or legal interests.

To the extent that Sparks had any connection to the building’s

water heater at all—and we must assume he did since we must assume

his causative negligence—it may properly be inferred to have arisen

from his action or inaction in performance of the FDIC’s duties or

interests respecting the water heater. As the FDIC’s agent, Sparks

was charged with the execution of its duties and the furtherance of

its interests respecting its tenants. And in carrying out this

charge, Sparks undertook to offer services that he should have

recognized had to be carefully performed for the protection of

third persons—the tenants. Accordingly, he may be held liable for

physical harm to the tenants that arises out of his failure to

exercise reasonable care in performing the landlord’s role. Cf.

Restatement (Second) of Torts §324A (1977); Seay v. Travelers

Indem. Co., 730 S.W.2d 774, 777 (Tex. App.--Dallas 1987, no writ)

17
(section 324A is the law in Texas); Rao v. Rodriguez, 923 S.W.2d

176, 180 (Tex. App.--Beaumont 1996, no writ) (property manager

could be held liable for failure to install smoke detectors despite

fact statute insulated landlord from liability in absence of tenant

complaint). We do not have facts that precisely indicate how

Sparks was negligent. He might have negligently hired and

supervised another party who actually selected or installed the

water heater, which apparently was the plaintiffs’ theory in the

underlying lawsuit. Or he might have picked out and installed the

unit himself. For our purposes, it does not matter. The point is

that any action Sparks took can be properly inferred to have been

taken in his agency capacity to benefit the named

insured—fulfilling its statutory duties and/or pleasing its tenants

or otherwise furthering its interests.

Northern argues, however, that Sparks’ liability could also

have arisen from another source, one that would not trigger

coverage under its policy. Most of Northern’s argument rests on

its reliance on legally irrelevant distinctions between Sparks and

his sole proprietorships.2 To the extent that it does not, we find

2
In its briefs, as it did below, Northern maintained that the
key to the question was not the language of the policy regarding
the character of the activity, but whether Sparks himself, or one
of Sparks’ sole-proprietorships—and if so, which one—could be
considered as having done the water heater work. We agree with the
court below that the legal status of sole proprietorships in Texas
makes this question irrelevant. Sparks could be held liable in his
personal capacity for conduct nominally pursued under the flag of
his sole proprietorship, and thus insurance coverage of Sparks, or
of one of his d/b/a’s, necessarily covered any suit against any of

18
that a genuine issue of fact has not been created. Western was not

required to introduce facts disproving every theoretically possible

scenario under which Sparks could become liable—it was not required

to show affirmatively that Sparks did not undertake water heater

maintenance in a recreational capacity. On a motion for summary

judgment, the movant bears the burden of introducing evidence

which, if uncontroverted, would entitle the movant to judgment as

a matter of law. By introducing uncontroverted evidence that, at

all relevant times, the FDIC owned the building, Sparks was its

real estate manager for the building, and the fire, a cause of

which must be assumed to be Sparks’ negligence, arose from a water

heater that was defective and defectively installed there, Western

met its burden in this connection. At this point, the burden

shifted to Northern to point to specific evidence demonstrating a

genuine issue of fact. See Anderson v. Liberty Lobby, Inc., 106

S.Ct. 2505, 2511 (1986).

While Northern argues that Sparks’ liability might be traced

to an action outside the scope of real estate management, it does

not direct our attention to any specific facts that call into

question whether Sparks performed his actions in fulfillment of the

his sole proprietorships if the character of the conduct brought it
within the policy. See Warehouse Partners v. Gardner, 910 S.W.2d
19, 24 (Tex. App.--Dallas 1995, writ denied). Which d/b/a hat
Sparks purportedly was wearing at a given time simply does not
control the coverage analysis. It is thus unnecessary to consider
apportionment of the settlement amount between assertedly different
Sparks “entities.”

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FDIC’s duties or interests and not his own separate interests. It

does not even assert that, for example, Sparks was not granted the

authority to install water heaters by the FDIC and thus was acting

wholly outside the scope of his agency. And it fails even to

suggest any alternative theory of Sparks’ assumed liability that

would place it outside the ambit of duties performed on behalf of

the FDIC, let alone provide factual support for such a theory. The

best it can do in this regard is to argue that Sparks—who judging

by the names of his sole proprietorships had a restoration business

that was separate from his management business—may have been

engaging in installation activity beyond the scope of a typical

building manager’s duty. While it is possible that a manager might

hire a contractor to move and hook up a water heater, the fact that

Sparks may have chosen not to do so does not alter the fact that

the task was undertaken on behalf of the FDIC and that it was

within the building manager’s authority. It was thus presumptively

at least in part a building management activity. There is no

factual allegation suggesting otherwise. We conclude that the

district court did not err in holding that the record properly

supported summary judgment for Western (subject only to

clarification regarding the third amended petition’s missing

pages).

Conclusion

On this record, we cannot be absolutely sure that the third

20
amended petition triggered Northern’s duty to defend and thus that

Northern owed a duty to indemnify. Since we expect that this

matter can easily be cleared up below, we remand for a

determination of the contents of the third amended petition’s

missing pages. If the contents of these pages do not deviate

materially from the above-referenced factual allegations contained

in the second amended petition, Western is entitled to summary

judgment on all issues.

VACATED and REMANDED with instructions

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