ABDUL K. KALLON, District Judge.
The court has before it Defendant/Counterclaim Plaintiff B.L. Harbert International, LLC's ("BLH") Motion for Summary Judgment, (doc. 48),
In short, GAIC underwrote a Builder's Risk Policy ("the Policy") for the JCC's renovation of the Five Mile Creek Wastewater Treatment Plant, which included the construction of the New Headworks Facility. The JCC hired BLH as the general contractor for the renovation and Hendon Engineering for the engineering work. On December 16, 2007, the New Headworks Facility flooded, causing extensive damage. GAIC denied claim coverage and now seeks a declaratory judgment that the Policy for that structure terminated prior to the flood and that GAIC has no obligation or liability to any insured for the occurrence. BLH cross-moves, seeking summary judgment on its breach of contract claim and an award of damages.
For the reasons stated below, the court DENIES GAIC's motion for summary judgment and GRANTS, in part, BLH's motion for summary judgment. As previously contemplated by the court, the parties are entitled to further discovery on damages and the court therefore DENIES BLH's motion to the extent it seeks a computation of damages.
On June 7, 2005, the JCC awarded a contract to BLH, naming it the general contractor on the Five Mile Creek Wastewater Treatment Modifications Project (the "Five Mile Project"), which was projected to take three years. Doc. 93-1 at 7-9 (Dep. pp. 18, 25-26). The JCC undertook the Five Mile Project to expand and upgrade existing facilities at the sewage treatment plant to, inter alia, increase the average daily flow capacity, increase the peak flow storage capacity, provide effluent filtration of the flows, and provide ultraviolet disinfection of the flows. Doc. 93-1 at 5 (Dep. p. 16). The upgrade and expansion was prompted, at least in part, by a modification in the JCC's National Pollution Discharge Elimination System ("NPDES") permit,
The Five Mile Project contained several components, including the construction of the New Headworks Facility. In addition to housing the influent pumps, the New Headworks Facility was designed to "include[] screening, grit removal, . . . aeration blowers, auxiliary generators and a control system to control that system." Id. at 7 (Dep. p. 18). Additionally, one objective of the Five Mile Project was to automate the treatment plant, including the New Headworks Facility. Id. For the automation, BLH hired subcontractor United Controls Corporation ("UCC") to develop and install a SCADA
The contract between BLH and the JCC required BLH to participate in Jefferson County's Owner Controlled Insurance Program ("the OCIP"). Doc. 50 at 95. Under the OCIP, Jefferson County procured the Policy from GAIC. Doc. 60. GAIC issued Policy No. IMP601-41-13-01 with effective dates of coverage from November 15, 2007, to November 15, 2008, to the JCC as a Named Insured. Id. at 2. Endorsement Form IL 71 25 (Ed. 10/92) later added "All Contractors & Sub-Contractors" as Named Insureds. Id. at 4.
With respect to termination, the Policy provides:
Id. at 12.
The New Headworks Facility, which was scheduled for completion prior to completion of the entire Five Mile Project,
Beginning at approximately 11:30 p.m. on December 15, 2007, and continuing through the early morning hours of December 16, 2007, a flood occurred in the New Headworks Facility. Doc. 93-6 at 3. Robert Holbrook ("Holbrook"), the Project Engineer for the Five Mile Project, later concluded that the control system installed by UCC improperly took the pumps out of service, which caused the flood. Doc. 93-1 at 34 (Dep. p. 199).
BLH identified the following items at the New Headworks Facility that were uncompleted at the time of the flood:
Doc. 49 at 5; Doc. 21 at 9-11.
Additionally, Holbrook testified that BLH was still working at the New Headwork Facility on the date of the flood
BLH performed the cleanup and repairs necessitated by the flood. Doc. 93-7 at 5. BLH subsequently made a claim to GAIC
BLH argues that the New Headworks Facility was still in the testing phase on December 15, 2007, when the flooding began. In support of its position, BLH notes that Holbrook testified that, at the time of the flood, the New Headworks Facility was being tested prior to the demolition of the pumps and the blowers in the Old Headworks Facility. Doc. 61 at 48-49 (Dep. pp. 47-48). Daniel White, a JCC employee involved with the Project, also testified that the New Headworks Facility was still in the testing phase at the time of the flood. Doc. 63 at 16 (Dep. p. 15).
UCC installed the changes to the control systems on December 13, 2007, but it had not yet conducted the contractually-mandated tests of the system to "be made in the presence of the engineer that the entire system shall be shown to work" and had it scheduled for the week after the flood. Doc. 87 at 71-72 (Dep. pp. 310-11). Holbrook testified that pumping operations at the New Headworks Facility would continue during the controls testing as well as during the electrical system testing. Id. at 72 (Dep. p. 311).
GAIC contends that the New Headworks Facility was operational and was not in the testing phase at the time of the flood. In support, GAIC points to Holbrook's testimony that the contract specifications provided for testing of the pumps in four stages: factory testing, on-site testing, intermittent testing, and continuous operation testing. Id. at 65 (Dep. p. 304). The final stage—continuous operation testing —is mandated by Section 9.11(r) of the contract, which provides: "In the presence of the Engineer, such tests as necessary to indicate that the pumps and motors generally conform to the efficiencies and operating conditions specified shall be performed. A thirty-day operating period of the pumps will be required before acceptance." Doc. 53 at 14. Holbrook testified that the contract specifications did not require further testing on the pumps themselves after the thirty-day acceptance testing. Doc. 87 at 66 (Dep. p. 305). GAIC avers that the thirty-day period began on November 7, and was therefore complete prior to the flood on December 15 and 16. See Doc. 93-4 at 6-7 (Dep. pp. 53-54).
Before delving into the summary judgment analysis, the court will address two motions filed after the parties fully briefed the summary judgment motions.
On February 22, 2010, GAIC filed a Motion to Compel Production of Holbrook Memo, (doc. 102), seeking the production of a timeline of events authored by Holbrook that allegedly contradicts his sworn testimony. Doc. 102 at 3. The JCC responds that (1) the memorandum is privileged because Holbrook is an agent of the JCC, (2) Holbrook clarified any contradictions during the second day of his deposition, and (3) the motion is untimely because it was filed after the deadlines for discovery and dispositive motions. Doc. 104; see also Doc. 105. GAIC first learned of the memorandum during the deposition of Daniel White on July 30, 2009. Doc. 104 at 4. That same day, GAIC obtained a copy of the memorandum from Holbrook without the JCC's knowledge or permission. Doc. 104-1 at 12. On August 4, 2009, the court held a teleconference with the parties, ordering (1) the parties to
Plaintiff had ample opportunity— four months—to conduct additional discovery and then move to compel the document if that discovery failed to provide the allegedly vital information in the memorandum. Nevertheless, Plaintiff waited until after the discovery deadline and the parties had fully briefed their motions for summary judgment before seeking an order compelling disclosure. This motion is clearly untimely. See, e.g., Payne v. Ryder Sys., Inc. Long Term Disability Plan, 173 F.R.D. 537, 540 (M.D.Fla.1997) ("The Eleventh Circuit has consistently held that motions filed after a deadline imposed by a court should be denied as untimely."); AB Diversified Enters., Inc. v. Global Transp. Logistics, Inc., 2007 WL 1362632, at *1 (S.D.Fla. May 7, 2007) (denying a motion to compel filed two months after the discovery deadline and after summary judgment motions were fully briefed). Plaintiff's motion is therefore DENIED.
BLH moves to strike portions of an affidavit of James Robert Galuzzi ("Galuzzi"), GAIC's Division Vice-President of the Property and Inland Marine Division. Doc. 103. Specifically, BLH moves to strike the following statements:
"A motion to strike will usually be denied unless the allegations have no possible relation to the controversy and may cause prejudice to one of the parties." Story v. Sunshine Foliage World, Inc., 120 F.Supp.2d 1027, 1030 (M.D.Fla.2000) (citations and internal quotation marks omitted). "An affidavit submitted in connection with a summary judgment motion is subject to a motion to strike if it does not measure up to the standards of Rule 56(e) of the Federal Rules of Civil Procedure." Id. (citation omitted). Rule 56(e) provides: "A supporting or opposing affidavit must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant is competent to testify on the matters stated." Furthermore, "[t]he requirements of Rule 56 make it plain that affidavits which set forth conclusory arguments rather than statements
With respect to ¶ 4, BLH argues that the Policy speaks for itself and that only the court's interpretation of the Policy, not Galuzzi's, is relevant. Doc. 103 at 3. GAIC counters that Galuzzi's testimony is helpful to the court and, moreover, it is undisputed that contractors and subcontractors are not identified by name in the policy. Doc. 106 at 1-2.
"The issue whether a contract is ambiguous or unambiguous is a question of law for a court to decide. . . . If the terms within a contract are plain and unambiguous, the construction of the contract and its legal effect become questions of law for the court." Nationwide Ins. Co. v. Rhodes, 870 So.2d 695, 696-97 (Ala.2003) (citations and internal quotation marks omitted). The court does not read ¶ 4 as a legal interpretation of the Policy, but rather as stating that BLH is not actually identified by name in the Policy. This fact is self-evident from the Policy, and the court need not rely on Galuzzi's affidavit for that point, nor is it necessary to strike the paragraph. The motion to strike is DENIED with respect to ¶ 4.
BLH seeks to strike portions of ¶¶ 5, 6, and 8 as improper because: (1) Galuzzi's affidavit fails to establish that he is qualified to testify on industry standards or what other insurance companies do; (2) the statements are conclusory arguments rather than statements of fact; and (3) BLH identifies authorities that contradict Galuzzi's statements. Doc. 103 at 5-7. Plaintiff counters that Galuzzi's twenty-five years of experience make him competent to testify on the matters stated within those paragraphs, that the paragraphs contain statements of fact rather than conclusory arguments, and that BLH's citations to other sources do not provide a ground for striking his testimony. Doc. 106 at 3-4.
The challenged affidavit appears to be based on Galuzzi's personal knowledge and further shows that he is competent to testify to the matters included in the affidavit. Specifically, his twenty-five years of insurance experience provide an adequate basis for discussing standard industry practices. Moreover, the court finds that the statements present facts rather than conclusory arguments. Finally, BLH's third argument—that the court should strike the statements because BLH cites to sources that purportedly contradict them—is without merit. Therefore, BLH's motion is DENIED with respect to ¶¶ 5, 6, and 8.
Finally, with respect to ¶¶ 7 and 8, BLH argues that Galuzzi's testimony regarding the insurance broker's responsibilities amounts to expert testimony. The court disagrees—as it reads ¶¶ 7 and 8, Galuzzi merely testifies to the business arrangement between GAIC and Hill, Rogal & Hobbes ("HRH"), the insurance broker. Galuzzi does not purport to define GAIC's or HRH's legal obligations. The motion to strike is therefore DENIED with respect to ¶¶ 7 and 8.
Although the court denies the motion to strike in its entirety, the court emphasizes that it will consider Galuzzi's statements only to the extent that it finds them relevant and probative. See Hawthorne v. Baptist Hosp., Inc., 2010 WL 716539, at *3 n. 7 (N.D.Fla. Feb. 25, 2010) (denying motion to strike but "reserv[ing] the right to disregard any of [the] statements in the summary judgment discussion on grounds of relevance or a lack of probative value").
Under Rule 56(c)(2) of the Federal Rules of Civil Procedure, summary judgment is proper "if the pleadings, the discovery
Additionally, "[t]he standard of review is unaffected by the filing of cross-motions for summary judgment." Hope for Families & Cmty. Serv., Inc. v. Warren, 721 F.Supp.2d 1079, 1089 (M.D.Ala.2010) (citations omitted). "When considering motions from both parties for summary judgment, the court applies the same standard of review and so may not resolve genuine issues of material fact. . . . Instead, we consider and rule upon each party's motion separately and determine whether summary judgment is appropriate as to each under the Rule 56 standard." Monumental Paving & Excavating, Inc. v. Pa. Mfrs. Ass'n Ins. Co., 176 F.3d 794, 797 (4th Cir.1999) (citations omitted); see also Christian Heritage Acad. v. Okla. Secondary Sch. Activities Ass'n, 483 F.3d 1025, 1030 (10th Cir.2007) ("Cross motions for summary judgment are to be treated separately; the denial of one does not require the grant of another." (quoting Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th Cir.1979))).
BLH argues that GAIC waived reliance on Condition 6(d) by failing to deliver a copy of the Policy to BLH. Doc. 49 at 28. GAIC contends that it provided the JCC with a copy of the Policy and that it had no obligation to provide BLH with a separate copy because BLH is not a named insured. Doc. 97 at 14-15.
Alabama law requires an insurer to deliver a copy of a policy to certain parties. Specifically, § 27-14-19, Ala.Code 1975, provides:
Interpreting this provision, the Supreme Court of Alabama first concluded that, at a
This raises two questions: (1) is BLH a named insured
In a recent case, Judge William H. Steele of the Southern District of Alabama considered whether a named insured who did not receive a copy of the policy was prejudiced by that failure when the insurer later refused to pay a claim for a crane accident resulting in bodily injury. W.G. Yates & Sons Constr. Co. v. Zurich Am. Ins. Co., 2008 WL 161921, at *9 (S.D.Ala. Jan. 8, 2008). The insurer claimed that the policy excluded coverage for the action. Id. Judge Steele concluded that the contractor was not prejudiced, finding that even if the contractor had received a copy of the policy, it likely would have read the exclusion to include coverage for the accident, just as it did at the time of the litigation. Id. at *9, n. 20 ("[T]he cornerstone of [the plaintiffs] position in this lawsuit is that Price's activities were covered under the Policy and were outside the scope of the Exclusion. Given how emphatically [the plaintiff] has taken that position, it would be disingenuous for [the plaintiff] to argue that if it had only known about the Exclusion beforehand it would have procured additional insurance so there would be coverage for Price's crane activities.").
Here, BLH claims that it "was prejudiced by not being provided with a copy of the Policy because [BLH] was never put on notice as to any coverage provision, or condition prior to performing work on the Five Mile Creek Modifications." Doc. 49 at 28. BLH does not explicitly argue that, had it known about the condition, it would have taken different actions. Rather, as in W.G. Yates & Sons, BLH takes the position that construction of the New Headworks Facility remained covered by the Policy at the time of the flood. Even assuming arguendo that GAIC was required to deliver a copy of the Policy to BLH, BLH's conclusory statements of prejudice are insufficient proof to estop GAIC from applying the condition.
BLH next argues that "put to its intended use" is ambiguous, and that GAIC's interpretation of that provision defeats the reasonable expectations of the insured. Doc. 49 at 19-28. "It is well settled in Alabama that ambiguities in an insurance contract are to be construed in favor of the insured and that `exceptions to coverage must be interpreted as narrowly as possible in order to provide maximum coverage to the insured.'" Brown Mach. Works, 659 So.2d at 59 (quoting Amerisure Ins. Co. v. Allstate Ins. Co., 582 So.2d 1100, 1102 (Ala.1991)). "It is equally well settled in Alabama, however, that unambiguous policies are to be enforced as written." Id. (citations omitted). "If the terms within a contract are plain and unambiguous, the construction of the contract and its legal effect become questions of law for the court and, when appropriate, may be decided by a summary judgment." Mc-Donald v. U.S. Die Casting & Dev. Co., 585 So.2d 853, 855 (Ala.1991) (citation omitted). "However, if the terms within the contract are ambiguous in any respect, the determination of the true meaning of the contract is a question of fact to be resolved by a jury." Id. (citation omitted).
"The question whether a contract is ambiguous is a question of law for the courts." Id. (citation omitted). "The test to be applied by a court in determining whether there is ambiguity is not what the insurer intended its words to mean, but what a reasonably prudent person applying for insurance would have understood them to mean." Miller v. Allstate Ins. Cos., 896 So.2d 499, 503 (Ala.Civ.App.2004) (citations and internal quotations marks omitted). "In determining whether an ambiguity exists, a court should apply the common interpretation of the language alleged to be ambiguous. . . . [T]he terms of an insurance policy should be given a rational and practical construction." Id. (citations omitted) (finding no ambiguity when "your work" was defined but "work" was not); see also Caribbean I Owners' Ass'n, Inc. v. Great Am. Ins. Co. of N.Y., 600 F.Supp.2d 1228, 1245 (S.D.Ala.2009) ("[A]mbiguities cannot be constructed from thin air by strained or twisted reasoning in interpreting the language. . . . Furthermore, the mere fact that a word or a phrase used in a provision in an insurance policy is not defined in the policy does not mean that the word or phrase is inherently ambiguous." (citations and internal quotation marks omitted)). Furthermore, "the court must examine more than an isolated sentence or term; it must read each phrase in the context of all other provisions." Royal Ins. Co. of Am. v. Thomas, 879 So.2d 1144, 1154 (Ala.2003) (citations and internal quotations marks omitted).
Critically, the fact that parties disagree on a policy's interpretation does not render the policy ambiguous. 2 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 21:14 (3d ed. 2010). Nor are policy provisions ambiguous "merely because it is
BLH argues that Condition 6(d) is ambiguous because the Policy does not define "intended use" or "put to intended use" and the Policy does not address whether a structure can be tested without being deemed put to its intended use. Doc. 49 at 19-24. GAIC contends that the Policy is not ambiguous, disputes that testing was ongoing at the time of the flood, and argues that the court's determination will turn on the court's "interpretation of the policy language against the material facts." Doc. 97 at 12-13.
The portion of the Policy containing the disputed provision provides:
Doc. 60 at 12. A "builder's risk" policy like the one at issue here is designed to insure a structure during the "course of construction." 7 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 102:29 (3d ed. 2010). Several of the termination provisions in Condition 6, including 6(d), are designed to clarify when construction is deemed to have terminated. Read in this context, although not specifically defined, Condition 6(d) is capable of a "rational and practical" construction that a "reasonably prudent person applying for insurance" would understand. See Miller, 896 So.2d at 503. The dictionary definitions of "put," "intend," and "use" further illustrate that the phrase in the Policy has a rational and practical construction:
Webster's Third New International Dictionary, 1175, 1849, 2523 (3d ed. 1976). The phrase "put to its intended use" therefore means to bring into the particular service or end for which the structure was designed.
Here, the parties offer differing interpretations of how this provision applies to the facts: GAIC posits that the New Headworks facility was put to its intended use the day that the pumps began running on a continuous basis; BLH contends that the New Headworks facility was not yet put to its intended use because certain features were not installed and other features were still being tested. However, the fact that the parties do not agree on a policy's interpretation does not render the policy ambiguous. 2 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 21:14 (3d ed. 2010); see also Martco Ltd. P'ship v. Wellons, Inc., 588 F.3d 864, 881 (5th Cir.2009) (applying common meaning of "put to its intended use," which did not have a technical meaning or policy-specific definition).
Furthermore, the provision is not ambiguous simply because it is difficult to apply. 2 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 21:14 (3d ed.
Having determined that the Policy is not ambiguous and that BLH is not entitled to any presumption in its favor, the court turns to the crux of this dispute: whether either party has presented undisputed facts sufficient to entitle that party to summary judgment on the coverage issue.
A number of courts have considered the application of "put to its intended use" provisions in insurance policies. The court, however, finds only limited assistance in Alabama state law, which governs this dispute. In Southern Guaranty Insurance Company v. Scott, 289 Ala. 159, 266 So.2d 602 (1972), the Supreme Court of Alabama considered whether an insurance policy issued to a seller of anhydrous ammonia covered injuries sustained by a buyer when a hose transferring the ammonia from the seller's tank to the buyer's applicator ruptured. The insurance policy deemed operations completed, inter alia, "when the portion of the work out of which the injury . . . arises has been put to its intended use by any person. . . ." Id. at 607. The court concluded that if this alternative even applied to the situation at issue, the operation "had not reached the stage where the work had been put to its intended use. The intended use was as a fertilizer. Therefore, the work of the [buyer] would have had to reach the stage where the liquid nitrogen was actually fertilizing the growth of crops on the land." Id. The court further explained: "It is rather obvious that the intention of this alternative is to apply to factual settings similar to where a building contractor has completed his work on a residence house. Under such circumstances his work would be completed on a residence building when it becomes occupied (put to its intended use)." Id.
Other courts have considered cases more analogous to this one in which a structure has arguably been put to its intended use or some limited use before construction is entirely complete. In general, courts have declined to find a building "put to its intended use" when significant work remains, even if the building has been used or occupied on some limited basis. In Cuthrell v. Milwaukee Mechanics Insurance Co. of Milwaukee, Wisconsin, 234 N.C. 137, 66 S.E.2d 649 (1951), the Supreme Court of North Carolina considered whether a building designed for restaurant and recreation purposes was
Id. The court further concluded that the dance held on April 29, 1950 was nothing "more than a mere transient or trivial use." Id. at 652.
The Tenth Circuit reached the same conclusion in a case involving the interpretation of a builder's risk policy for a steel grain storage building. Reliance Ins. Co. v. Jones, 296 F.2d 71 (10th Cir.1961). In that case, the building owner temporarily stored approximately 7,000 to 10,000 bushels in the building (which had a capacity of approximately 200,000 bushels) during the building's construction. Id. at 72-73. The court found that "the building was never put to anything more than a mere transcient [sic] or trivial use" as the grain storage was limited and temporary and that "it was impossible to use the machinery which was installed in the building since the work was not complete nor had the new machinery been tested." Id. at 73-74; see also Commercial Standard Co. v. Rhode Island, 193 F.2d 375 (5th Cir.1952) (finding builder's risk policy in effect on construction of church when (1) approximately six hours of construction work remained, and (2) the church was not occupied or used as a church as the pews and furniture were not installed).
By the same logic, courts have also found projects "put to their intended use" when only de minimus work remains or when the building's or the machine's owner takes control from a contractor. For example, the Fifth Circuit recently examined a "put to its intended use" provision in an insurance policy. Wellons, Inc., 588 F.3d 864. In that case, a manufacturer hired Wellons, a manufacturer of energy systems to design and install certain improvements to its existing Wellons-brand thermal heating system located in one of its plants. Id. at 870. The plant commenced a planned thirty-day shutdown in December 2002 to service the unit and resumed production on January 28, 2003, after which numerous problems arose with the Wellons unit. Id. The insurance policy definition for a "products—completed operations hazard" stated that work would be deemed completed "[w]hen that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractors working on the same project. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed." Id. at 880 n. 13.
Similarly, in Hanover Insurance Company v. Hawkins, which GAIC urges the court to follow, the Seventh Circuit addressed an insurance policy with a "completed operations hazard" exclusion, which defined completion of operations as "when the portion of the work out of which the injury or damage arose had been put to its intended use by any person." 493 F.2d 377, 379 (7th Cir.1974). In Hanover, a company installed a heater in a camping trailer for a customer, who retook possession of the trailer and new heater despite the fact that the paneling and bracing had not been fully installed and would be completed when the customer returned with the camper at a later date. Id. at 379. As advised, the customer left the heater operating overnight to facilitate re-lighting it, and the following morning the trailer exploded from escaped gas. Id. The Seventh Circuit declined to find that the customer was operating the heater solely to "break it in" rather than for human habitation: "It is patently undeniable that the heater's pilot light had been lit and left operating in the camper in a manner envisioned by both the contractor and the consumer. . . . [I]t is clear that both Custom Camper and Stewart intended to operate the heater and thus put it to its intended use when the pilot light was lit." Id. at 379-80.
GAIC contends: "[T]he New Headworks Facility had been put to its intended use prior to the flood. The New Headworks Facility was designed to receive influent, perform basic filtering, and divert the influent for treatment, which is what it began doing on continual basis beginning on November 7, 2007. Therefore, it is irrelevant whether any testing was still occurring at the time of the flood or whether some components had yet to be installed." Doc. 92 at 14. Under the cases cited above, the court could potentially agree with GAIC if the "components . . . yet to be installed" were entirely minor or primarily cosmetic, such as the kitchen cabinets in Hendrix, the ten-percent scale adjustment in Fireman's Fund Insurance, or the paneling and bracing in Hanover. Hendrix, 390 F.2d at 304; Fireman's Fund Ins., 451 F.2d at 1142; Hanover, 493
In this case, however, although the influent pumps were installed and functioning, there was a long list of components that were not installed, fully operational, tested, or accepted. See Doc. 49 at 5; Doc. 21 at 9-11. In particular, the parties agree this list includes the aeration blowers, the generators, and perhaps most critically, the control system. Indeed, the JCC operators were not even housed in the New Headworks Facility control room because electrical control systems were not in place and the building did not have a certificate of occupancy. Doc. 63 at 20 (Dep. p. 19); Doc. 64 at 14 (Dep. p. 13).
Even assuming, as GAIC asserts, that the pumps were fully tested and had completed their final thirty-day continuous operation test period, this fact alone does not establish that the New Headworks Facility had been put to its intended use. First, unlike Wellons or Fireman's Fund Insurance, in which the courts found that the intended use provision applied, BLH had active construction crews onsite working on a number of remaining items. Wellons, 588 F.3d at 881 (plant re-started under owner's control); Fireman's Fund Ins., 451 F.2d at 1142 (construction company had removed its workers from the site). Second, GAIC's case rests on an oversimplication of the New Headworks Facility's function and purpose, which was to replace and upgrade the still-functional Old Headworks Facility. The upgrades included full automation, which remained incomplete on the date of the flood. To suggest that the New Headworks Facility was put to its intended use when it began pumping sewage, fundamentally mischaracterizes the nature of the project that GAIC agreed to insure and is no different than the argument in Cuthrell that a restaurant was put to its intended use when the owner permitted a social gathering to be held there despite the fact that construction on the restaurant was far from complete. 66 S.E.2d at 651.
GAIC half-heartedly argues that the Policy does not cover BLH's losses because
Doc. 93-2 at 22. The warranty in the subcontract between UCC and BLH provides:
Doc. 93-11 at 8 (emphasis added). GAIC argues that, since UCC warranted that the computer system controlling the pumps would work properly and its failure caused the flood, this warranty covers BLH's damages. Doc. 92 at 23.
"Under Alabama law, the insurer bears the burden of proving the applicability of any policy exclusion." Universal Underwriters Ins. Co. v. Stokes Chevrolet, Inc., 990 F.2d 598, 604 (11th Cir.1993) (citations omitted). GAIC fails to meet this burden because it does not establish that a warranty was in place at the time of the flood. GAIC first argues that the "control system" that failed was different from the SCADA control system, which the parties agree was not fully operational. Doc. 100 at 8-9. The evidence to which GAIC cites, however, does not indicate that a control system separate and different from the SCADA control system operated the pumps. Rather, as BLH points out, Holbrook clarified on the second day of his deposition that "control systems" in the New Headworks Facility referred to the SCADA control system. Doc. 87 at 83-84 (Dep. p. 322-23); see also Doc. 61 at 33-35 (Dep. pp. 32-34). Given that GAIC admitted numerous times
GAIC further argues that "[t]he one year provision in the subcontract merely defines the limit of the warranty. It does not define when the warranty begins as any subcontractor warrants its own work during the installation of any structures or systems." Doc. 100 at 9. Unfortunately, GAIC does not cite to any legal authority standing for that proposition, and the court finds that GAIC's assumption is not sound. Rather, the language of the warranty establishes that it runs for a year, beginning on the date of acceptance. Doc. 93-11 at 8; cf. City of Birmingham v. Cochrane Roofing & Metal Co., 547 So.2d 1159, 1163 (Ala.1989) ("In a claim based on breach of warranty to construct a building in a workmanlike manner, the cause of action accrues, and the statute of limitations begins to run, on the date that the defendant completes performance, because by `[b]y its very nature it is the failure to construct the house in a workmanlike manner that constitutes the breach.'" (quoting Stephens v. Creel, 429 So.2d 278, 280 (Ala. 1983))). Because neither the SCADA control
For the reasons set forth above, GAIC's motion for summary judgment is DNIED. BLH's motion for summary judgment is GRANTED, in part. The court finds that the Policy covered the flood occurrence and BLH is entitled to recover the costs incurred for cleanup and repair.
Doc. 60 at 4.
