Greenwich Insurance Co. v. Capsco Industries, Inc., No. 18-60032 (5th Cir. 2019)Annotate this Case
After a subcontractor (Capsco) was held liable, in state court, to a company (Ground Control) with which it had contracted for what the latter had expended for labor and materials on a construction project, the subcontractor's liability insurers (Greenwich) successfully sought a declaration in federal court that it did not owe a duty to indemnify.
Applying Alabama law, the Fifth Circuit affirmed, holding that Capsco's obligation was to pay the party with whom it contracted for its work; because of the failure of either party to get a certificate of responsibility, any right to recovery in the litigation shifted from contract to quantum meruit; and thus Capsco was obligated to pay the reasonable value of the services Ground Control provided, rather than for property damage or loss of its use. Finally, the court denied Ground Control's motion to vacate the district court's judgment and dismiss the case without prejudice.