Lauger Companies, Inc. v. Mid-Continent Casualty Company

Filing 38

OPINION on Summary Judgment. Lauger Companies will recover from Mid-Continent Casualty Company. (Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS District Court
United States
Southern District of Texas

ENTERED
§
§
§
§
§

Lauger Companies, Inc.,
Plaintiff,

'Versus

August 02, 2017
David J. Bradley, Clerk

Civil Action V-I6-II

§
§
§
§

Mid-Continent Casualty Company,
Defendant.

Opinion on Summary Judgment
1.

Introduction.
A company sold defective concrete to a builder. The builder seeks to

recover damages caused by the concrete's failure in the building from the seller's
insurer. The builder will recover.

2.

Background.
M.W. Rentals (9- Services, Inc., hired Lauger Companies to build a

warehouse in Victoria, Texas, to store heavy construction equipment.
In October 20 12, Lauger bought concrete for the foundation from Cross
Roads Industries, Inc. Lauger specified that the concrete would have a strength
of 3 ,000 pounds per square inch. Lauger poured the concrete for the foundation
and a sample. While Lauger waited twenty-eight days for the concrete to cure,
it continued erecting the steel frame of the warehouse.
Lauger tested the sample three times; each time it supported less than
3,000

psi. The foundation flaked as it cured. Lauger hired engineers from T.S.I.

Laboratories to take core samples from the foundation. Of the

22

core samples,

half were less than 3,000 psi. Lauger commissioned a petrographic analysis that
determined that the concrete had
3,000

12%

air content; concrete with a strength of

psi requires 4% air content.
The warehouse owner asked Lauger to remove and replace the defective

concrete. Lauger complied. Lauger sued Cross Roads for the costs from the

defective concrete and was awarded $162,009.14. Cross Roads has since closed
without having paid the judgment.
Mid-Continent Casualty Company insured Cross Roads. Lauger asserts
that it gets Cross Roads' benefits under the Mid-Continent insurance policy.

3.

Co'Verage.
Cross Roads purchased a commercial general-liability policy from Mid-

Continent. The policy covered Cross Roads' liability for property damage from
October of 2011, through October of 2013. Property damage is defined by the
policy as physical injury to or loss of the use of property.
The concrete was defective when it was poured. Pouring defective
concrete is not a covered physical injury. The concrete was not destroyed, but
it was removed because it was weak. The policy does not cover damages from
demolishing the foundation and pouring the new foundation. I
Pouring the defective concrete damaged the non-concrete elements of the
foundation. The foundation included wooden forms, reinforcing bar, Visqueen,
sub-slab fill, and angle iron that would have secured the structure to the
foundation. As a consequence of their having been encased in bad concrete, their
utility was destroyed. These elements were repurchased and reinstalled for the
new foundation. The Mid-Continent policy covers these parts because they
could not be repaired; they were consumed by the faulty concrete.

1

U.S. Metals Inc., v. Liberty Mutual Group, Inc., 490 S.W.3d 20,27 (Tex. 2015).

4-

Damages.
Mid-Continent is obliged to pay for these damages caused by pouring the

defective concrete.

1. Labor to take down steel frame

$ 6,53 6 .87

2. Redo sub-slab fill

$II,800.00

3. Replace galvani:z:ed angle at catch basin

$ 1,224.3 1

4. Replace anchor bolts

$ 1,612.63

5. Labor for non-concrete work

$37,012.5 0

6. Replace rebar

$II,774·53

7. Concrete-cutting saw blade

$

29 6 .5 1

8. Visqueen

$

59 0 .59

9. Fiber expansion board

$

218.02

10. Re:z:all Cure

$

II3· 66

11. Electrical

$ 4,II 1.59

12. Dumpster

$

50 9. 81

13. Sanitary Toilet

$

50 3.3 8

14- Fuel

$

24 8.12

15. Plumbing

$ 2,100.00
Total

$7 8 ,65 2.5 2

5.

Conclusion.
Lauger Companies, Inc., will take $78,652.52 from Mid-Continent

Casualty Company.
Signed on August

a , 2.017, at Houston, Texas.

- ~ -~,~~-----....
tF
Lynn N. Hughes

United States DistrictJudge