IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                   Fifth Circuit

                                                                            FILED
                                                                            April 8, 2008

                                       No. 06-11088                   Charles R. Fulbruge III
                                                                              Clerk

B HALL CONTRACTING INC, doing business as Hall Contracting Services

                                                   Plaintiff-Appellant
v.

EVANSTON INSURANCE COMPANY

                                                   Defendant-Appellee



                   Appeal from the United States District Court
                        for the Northern District of Texas
                              USDC No. 4:06-CV-50


Before JOLLY, DAVIS, and WIENER, Circuit Judges.
PER CURIAM:*
       In this insurance coverage dispute, B. Hall Contracting (“Hall”) appeals
the district court’s grant of summary judgment in favor of Evanston Insurance
Company (“Evanston”). We VACATE the grant of summary judgment and
REMAND for further proceedings.
                                              I.
       Evanston issued a comprehensive general liability insurance policy
(“Policy”) to Hall, for a one-year term, in January 2003. The Policy obligates


       *
        Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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Evanston to “pay those sums that the insured becomes legally obligated to pay
as damages because of ‘bodily injury’ or ‘property damage’ to which this
insurance applies,” and provides that Evanston “will have the right and duty to
defend the insured against any ‘suit’ seeking those damages.”
       When Hall purchased the Policy, Hall requested a “Roofing-Commercial”
classification as one of its “Hazards/Insured Classification(s).” The “Roofing
Endorsement” of the Policy, however, states, in pertinent part, that the coverage
under the policy “does not apply to ‘bodily injury,’ ‘property damage,’ ‘personal
injury,’ . . . or any injury, loss or damage arising out of: . . . Any operations
involving any hot tar, wand, open flame, torch or heat applications, or membrane
roofing.” In short, for our purposes today, the Policy provides roofing coverage
but under the Roofing Endorsement excludes that coverage for “membrane
roofing.”
       In October 2003, Hall was performing carpentry, roofing, and painting
work on the campus of the University of Texas at Arlington (“UTA”). Hall was
a subcontractor on a project to demolish a structure housing, among other
things, UTA’s main electrical switchgear.                Hall was not subcontracted to
demolish the structure itself; one of Hall’s tasks, though, was to install a roofing
system above the switchgear room inside the main structure such that it would
be protected from the weather and remain operational while and after the larger
building was demolished.1
       The roofing system to be installed for this purpose was a type of membrane
roofing known as ethylene propylene diene monomer (“EPDM”). Further, the
roofing system was to be installed using a “cold” application EPDM roofing




       1
         The district court’s opinion indicates that Hall hired a sub-subcontractor to install the
roof above the switchgear room. The parties’ briefing to this court has not indicated the same,
nor has it indicated that this distinction is relevant to the issues raised on appeal.

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                                   No. 06-11088

material. No heat source—such as “hot tar, wand, open flame, torch or heat
applications”—was required for this application.
      On October 24, while Hall was installing the membrane roofing above the
switchgear room, other contractors were carrying on with the demolition of the
larger building. The demolition workers’ efforts generated sparks that allegedly
fell onto the membrane roof and ignited a fire.
      As a result of this fire, two Texas state lawsuits were filed naming Hall as
a defendant. Evanston refused to assume the duty to defend Hall in the two
lawsuits. Evanston argued that the claims were not covered by the Policy
because the Roofing Endorsement excludes claims arising from operations
involving membrane roofing.
      Before the district court, Hall sought a declaratory adjudication of its
rights under the Policy. Both parties moved for summary judgment. The
district court granted summary judgment to Evanston, concluding that Evanston
has no duty to defend Hall in the two state lawsuits.
      The district court’s grant of summary judgment rests on several grounds.
We need only refer to the first, as our disagreement with the district court as to
this first issue is dispositive.
      The district court held that the Roofing Endorsement “unambiguously”
excludes any operations involving any membrane roofing. The district court did
not define “membrane roofing,” stating that “[i]n the final analysis, the only
thing relevant to this case . . . is that the roofing operation in which Hall was
engaged at the time of the fire was, indeed, an operation involving membrane
roofing.”
                                       II.
      Hall contends that the district court erred by granting summary judgment
in favor of Evanston. Hall argues, inter alia, that “membrane roofing” is a



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                                       No. 06-11088

specialized, industry-specific term that should be interpreted via reference to
evidence of trade usage and industry meaning.
                                              III.
       We review whether an insurer has a duty to defend its insured in an
underlying suit as a de novo question of law. Northfield Ins. Co. v. Loving Home
Care, Inc., 

, 527 (5th Cir. 2004).
       In this diversity case we apply the substantive insurance law of Texas.
Texas courts interpret insurance policies according to the rules of construction
that apply to contracts generally. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v.
CBI Indus., Inc., 

, 520 (Tex. 1995).
       When interpreting a contract, courts are to ascertain the “true intent of
the parties” as expressed in the contract itself. 

is
accomplished by giving words their “plain, ordinary, and generally accepted
meaning” unless the contract shows that the parties “used them in a technical
or different sense.” Heritage Res., Inc. v. NationsBank, 

, 121
(Tex.1996).
       Our study of the Policy, the record, the arguments of the parties, and our
own attempt to resolve this case have convinced us that “membrane roofing” is
a term that cannot properly be interpreted without reference to evidence of trade
usage and industry meaning. The Policy insures a commercial and industrial
construction and remodeling contractor—not a layman—and the term itself is
a term common within the commercial roofing trade and business. The term
was not defined in the Policy. As such, this term “membrane roofing” cannot be
properly interpreted without some understanding of how it is used in the roofing
industry.2


       2
          The experts provided by Hall indicated that the term is a specialized commercial
roofing term. Precedent suggests that, in this circumstance, we should consider the term in
its specialized industry context. See, e.g., Canutillo School Dist. v. Nat. Union Fire Ins. Co.,

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                                        No. 06-11088

         Although the insured provided expert affidavits concerning membrane
roofing, neither party provided a comprehensive definition of that term as it is
understood in the commercial roofing industry.3 Hall argues that under the
Roofing Endorsement, which excludes “loss or damage arising out of . . . [a]ny
operations involving any hot tar, wand, open flame, torch or heat applications,
or membrane roofing,” the words immediately preceding “membrane roofing”
describing various heat applications modify the term “membrane roofing.” We
disagree. The proximity of the words describing roofing operations involving
heat applications does not indicate that hot application membrane roofing is the
only type of membrane roofing excluded. This is because the phrase “membrane
roofing” is set off from the list of hot applications by a comma and the word “or”
indicating that it is distinct of, separate from, and unrelated to the preceding
list.4
         Hall argues that this interpretation of the term proves it is ambiguous.
Hall argues that exclusion of both cold and hot application membrane roofing
would exclude “virtually all” roofing operations from coverage and the Roofing
Endorsement would thus afford no coverage, which would lead to an absurd
result. Resolution of this issue requires a technical definition of membrane
roofing, i.e., the meaning of that term in the roofing industry.

, 700 (5th Cir. 1996) (citing Security Mut. Cas. Co. v. Johnson, 

, 704
(Tex. 1979)); see also, 

; CBI, 907 SW.2d at 521, 522 n.6; Crisalli,
177 Fed. Appx. at 421.
         3
         Evanston did proffer an affidavit of an underwriter who interpreted the Roofing
Endorsement in such a way that it would afford limited coverage even if all operations
including membrane roofing are excluded. But the underwriter is not an expert in the
construction industry and her assertion of an underwriter’s understanding of the term cannot
be considered in arriving at its meaning within the construction industry.
         4
       Hall’s effort to invoke the interpretive doctrines of ejusdem generis and noscitur a sociis
are unavailing because section 3 of the Roofing Endorsement simply does not meet the
requirements for either term.

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                                      No. 06-11088

       The district court granted Evanston’s motion for summary judgment
without considering trade-usage evidence. Because Evanston relied on the
“plain, ordinary, and generally accepted meaning” of the term, and because the
district court decided the case on this basis, no trade-usage evidence was
admitted by the district court.5 We conclude that this ruling was error.


                                            IV.
       We therefore VACATE the district court’s grant of summary judgment and
REMAND this case for further proceedings not inconsistent with this opinion.
On remand, the district court must allow the parties to proffer expert testimony
to support their respective positions on the meaning of the term “membrane
roofing,” and decide the coverage question in the light of that testimony and
other properly admitted evidence.
VACATED and REMANDED.




       5
         Hall proffered roofing industry experts who testified to the trade-usage meaning of
“membrane roofing.” The district court, however, upon granting summary judgment in favor
of Evanston, dismissed as moot Evanston’s challenges to the designation of Hall’s roofing-
industry experts and the evidence was not admitted.

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                                 No. 06-11088




Wiener, Circuit Judge, Specially Concurring:

      Given the stage of the proceedings in the district court at which summary

judgment was rendered in favor of Evanston, denying coverage of the claims

advanced against Hall in the two underlying state court cases, I cannot get too

exercised about remanding the case for further proceedings. So, I do not dissent.

I do believe, however, that remand will accomplish nothing more than the

expenditure of time, effort, and funds by the parties and the waste of judicial

resources at the district court level. This is because I am convinced that on

remand the district court’s original judgment will be replicated.

      As noted above in our per curiam opinion, the Policy was issued to cover

commercial contracting operations, including roofing, by an experienced and

sophisticated commercial construction company with a long roofing history; and

the nature of the Policy and the coverages for which it was issued make clear

that at least some of the undefined terms used in the policy must be interpreted

as they are understood in the commercial construction and roofing industry.

Our per curiam opinion also recognizes that, despite Hall’s contention, the

wording of section 3 of the Roofing Endorsement is not subject to the doctrines

of ejusdem generis, noscitur a sociis, or any other canon of construction that

would cause the exclusion of coverage of “any operation including...membrane

roofing” to be modified or in any way affected by the finite list of heat-related

applications listed in that exclusion.     And there are no other words of
                                 No. 06-11088

qualification or limitation to be found anywhere in the Policy that would limit

or restrict the meaning of “membrane roofing” to only those operations that

involve application by fire or heat and thereby insure Hall (rather than

excluding coverage) for its membrane roofing operation that was being applied

“cold” when the fire broke out on the UTA project.

      Neither could a total exclusion of coverage of membrane roofing operations

be deemed overbroad or absurd when viewed in light of the very construction

accident that produced the instant claims. Hall’s supervisory employee in

charge of the UTA job testified that Hall’s “cold” application (1) was a membrane

roofing operation —— a fact acknowledged by Hall’s principal owner and operator

and by Hall’s expert witness —— and (2) involved the use of a flammable adhesive

that emitted flammable fumes, which apparently ignited when sparks from

another subcontractor’s operations fell in their vicinity. So Evanston obviously

knew what it was doing when it excluded not just any roofing operation,

membrane or otherwise, that involved fire or heat applications, but also any and

all membrane roofing operations, regardless of the method of application.

      The intent of the parties to exclude insurance coverage of all membrane

roofing becomes pellucid when section 3 is interpreted under the venerable

canon of construction that instructs us to presume that the drafters would not

include unnecessary words or phrases that are merely repetitious or surplusage.

If the Roofing Endorsement had been intended to exclude coverage of only those


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                                  No. 06-11088

membrane roofing operations that were installed with the use of heat or fire or

flame, it would indeed be redundant to expressly exclude membrane roofing in

section 3 immediately after having expressly excluded any roofing operations

involving heat, flame, torch, wand, etc. Obviously, the exclusion of all heat-

related installations automatically excludes membrane roofing operations

involving fire or heat. So, adding the unmodified term “membrane roofing”

following the list of excluded flame and heat installations is meaningful —— and

not unnecessary surplusage or repetition —— only if the exclusion of membrane

roofing is intended to encompass all such operations, “cold” as well as “hot.”

      Finally, the record on appeal confirms that there are other categories of

roofing operations that are not membrane roofing operations —— metal and tile,

to name but two others that were acknowledged by Hall. As membrane roofing

is thus not an all-encompassing term, there can be no serious contention that an

exclusion of all membrane roofing —— whether applied hot or cold —— would

somehow swallow coverage and thus require a judicially imposed limitation that

is nowhere to be found in the policy, i.e., judicially restricting the exclusion of

membrane roofing operations to those employing heat or fire and thereby not

excluding insurance coverage for Hall’s “cold” operation.

      In summary, Hall’s acknowledgment that it was engaged in commercial

membrane roofing operations at the time of the incident in question coupled with

our determination that nothing in the policy either defines membrane roofing or


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                                  No. 06-11088

restricts that term to include some but not all such operations , viz., heat but not

cold, I cannot imagine what can come out on remand by way of expert testimony

that could mystically require or even justify a court’s limiting the exclusion of

coverage of membrane roofing operations to those involving fire or heat in their

installation.1 My admittedly belabored point is that, however well-intentioned,

our overly conscientious caution in remanding this case for further consideration

of the meaning of membrane roofing within the construction and roofing

industry will almost certainly prove to have been a hollow act.




      1
          Hall’s expert testified that he is a member of the Construction
Specifications Institute (CSI) which, among other things, jointly (with Mc-Graw
Hill) promulgates the so-called Sweets Catalog, specifically, the Master Format
Reference Guide. That multi-volume set is universally recognized in the
construction industry as an encyclopedic work, and a quick skimming of its index
makes clear that there are numerous categories of commercial and industrial
roofing operations, such as shingles and shakes, metal roof tile, slate shingles
—— and, yes, “Membrane Roofing” —— to name but a few. Sweets further reflects
that there are additional specialized roofing operations that employ
“membranes” in the dictionary sense but are not deemed “membrane roofing” in
the trade, such as tensioned fabric structures (like the Denver International
Airport), greenhouses, swimming pool enclosures, and solariums.

                                        10