United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit ____________ FILED December 18, 2023 No. 22-51114 Lyle W. Cayce ____________ Clerk

Colony Insurance Company,

Plaintiff—Appellant,

versus

First Mercury Insurance Company,

Defendant—Appellee. ______________________________

Appeal from the United States District Court for the Western District of Texas USDC No. 1:20-CV-474 ______________________________

Before Higginbotham, Higginson, and Duncan, Circuit Judges. Per Curiam: First Mercury Insurance Co. and Colony Insurance Co. contributed to a settlement agreement related to an underlying negligence case against DL Phillips Construction, Inc. d/b/a Ja-Mar Roofing (“DL Phillips”), which both companies insured consecutively under commercial general liability in- surance policies. After the settlement, Colony sued First Mercury, arguing First Mercury needed to reimburse Colony, under either a contribution or subrogation theory, for the full amount of its settlement contribution because First Mercury’s policies covered all damages at issue. After the parties sub- mitted cross-motions for summary judgment, the district court adopted the Case: 22-51114 Document: 00517005663 Page: 2 Date Filed: 12/18/2023

No. 22-51114

magistrate judge’s Report and Recommendation, granted summary judg- ment in favor of First Mercury, and denied summary judgment for Colony. Colony appealed, arguing the district court erred by: (1) holding that First Mercury was responsible only for those property damages that occurred during the policy period, and in doing so, rejecting the “all-sums” approach to damages allocation; and, alternatively, by (2) finding no genuine dispute of material fact regarding the allocation of covered and non-covered damages. We AFFIRM. I. A. This case began when Palmer Cravens, LLC hired DL Phillips to replace the roof of an outpatient clinic in McAllen, Texas in November 2012. DL Phillips completed the work on February 1, 2013, but the roof began leaking by March 2013. The leaks continued through March, April, May, June, and September 2013, and Palmer reported them to DL Phillips and eventually retained an inspector, Rick Guerra-Prats, to assess the property. Guerra-Prats retained a consultant who inspected the roof and, on February 17, 2014, issued a report noting that there were serious roof defects causing the leaks. Shortly thereafter, Guerra-Prats obtained several estimates for re-roofing and additional repairs. On June 16, 2014, Palmer sued DL Phillips, asserting claims of fraud, negligent misrepresentation, violations of the Texas Insurance Code, breach of fiduciary duty, breach of contract, breach of express warranty, breach of implied warranty, and negligence. While the lawsuit was pending, a strong rainstorm occurred in September 2014 and caused substantial water intrusion damage to the interior of the property. Additional water damage occurred in June 2018.

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