U.S. Metals, Inc. v. Liberty Mut. Group, Inc.
U.S. Metals, Inc. sold ExxonMobil Corp. approximately 350 flanges for use in constructing diesel refinery processing units. In post-installation testing, several flanges leaked, and ExxonMobil decided it was necessary to replace them to avoid the risk of fire and explosion. ExxonMobil sued U.S. Metals for the cost of replacing the flanges and damages for the lost use of the diesel units during the process. U.S. Metal settled with ExxonMobil and then claimed indemnification from its commercial general liability (CGL) insurer, Liberty Mutual Group, Inc., for the amount paid. Liberty Mutual denied coverage. U.S. Metals sued in federal district court to determine its right to a defense and indemnity under the policy. Four questions were certified to the Supreme Court by the United States Court of Appeals for the Fifth Circuit. The Court concluded that the CGL does not cover most of the damages claimed and answered the circuit court’s questions accordingly. View "U.S. Metals, Inc. v. Liberty Mut. Group, Inc." on Justia Law