Gilbert Texas Construction, L.p., Petitioner v. Underwriters at Lloyd’s London, Respondent

Summary

The Texas Supreme Court, Justice Johnson writing, denied Gilbert's motion for rehearing, withdrew its June 4, 2010 opinion, and substituted this opinion affirming the court of appeals' judgment that Underwriters at Lloyd's owed no indemnity for Gilbert's $6.175 million settlement of the sole surviving breach-of-contract claim. The Court held the ISO CGL contractual liability exclusion unambiguous and applicable whenever the insured's liability arises from obligations assumed in a contract, not merely indemnity or hold-harmless agreements, and held that neither the insured-contract exception nor the absence-of-contract exception restored coverage because the adjudicated liability rested solely on the DART contract. The Court further held Gilbert suffered no prejudice from Underwriters' defense conduct and therefore could not recover settlement damages under an estoppel theory. Jurisdiction rested on a conflict among the courts of appeals under Government Code Section 22.001(a)(2), and Gilbert's exclusion argument was held preserved.