              IN THE UNITED STATES COURT OF APPEALS

                         FOR THE FIFTH CIRCUIT

             _______________________________________

                           No. 98-10904
             _______________________________________


FEDERATED MUTUAL INSURANCE COMPANY

                                                        Plaintiff,

                                versus

GRAPEVINE EXCAVATION INC.; ET AL,

                                                       Defendants,

GRAPEVINE EXCAVATION INC.,

                   Defendant - Third Party Plaintiff - Appellant,

                                versus

MARYLAND LLOYDS, a Lloyds Insurance Company,

                                  Third Party Defendant - Appellee.

_________________________________________________________________

           Appeal from the United States District Court
                for the Northern District of Texas
_________________________________________________________________
                         December 1, 1999
Before JONES and WIENER, Circuit Judges, and WALTER, District
Judge.*

WIENER, Circuit Judge:

     In this breach of contract and declaratory judgment action

arising out of an insurance defense dispute, Defendant-Third Party

Plaintiff-Appellant Grapevine Excavation, Inc. (“GEI”) appeals the


     *
      District Judge of the Western District of Louisiana, sitting
by designation.
district court’s grant of summary judgment in favor of Third Party

Defendant-Appellee Maryland Lloyds (“Maryland”).                  Following a de

novo review of the record, we reverse and render judgment in favor

of   GEI,   but   remand   the   case       to   the   district    court    for   a

determination of the appropriate remedy.               In addition, we retain

jurisdiction for the limited purpose of deciding whether GEI is

entitled to recover the attorney’s fees incurred in this case, a

question that we have certified to the Supreme Court of Texas.

                                        I

                           FACTS AND PROCEEDINGS

      The present controversy arises out of a suit filed by Tribble

& Stephens, Co. (“T&S”) against GEI and various other defendants.

T&S, a general contractor, was hired by Wal-Mart to construct a

parking lot at its store in Burleson, Texas.                 T&S subcontracted

with GEI to perform excavation, backfilling and compacting work in

connection with T&S’s construction of the lot.1

      In August 1995, approximately six months after GEI completed

work on the project, Wal-Mart discovered that the select fill

materials    provided      and   installed        by   GEI   failed    to    meet

specifications and, as a result, had caused damage to the work of



      1
      T&S agreed to pay GEI $666,000 for its work under the
subcontract.   To guarantee GEI’s performance, Employers Mutual
Casualty Co. (“EMCASCO”) furnished a subcontract bond to T&S for
this amount. In doing so, EMCASCO agreed to indemnify T&S against
all expenses incurred as the result of GEI’s failure to meet the
requirements and specifications of the subcontract.

                                        2
T&S’s paving subcontractor, Moore Construction, Inc. (“Moore”).

Although Wal-Mart initially contemplated requiring T&S to correct

the deficiency by installing an asphalt overlay on the lot, it

ultimately opted to withhold from T&S partial payment of the

balance due under its construction contract.

      Thereafter, T&S filed suit in state court against GEI.2             In

that suit T&S sought a declaratory judgment on the issue of GEI’s

financial responsibility for damage to the parking lot, and alleged

claims of breach of contract, negligence, and violations of the

Texas Deceptive Trade Practices Act (“DTPA”).

      On being named a defendant in the T&S litigation, GEI called

on its commercial general liability insurance (“CGL”) carriers,

Federated Mutual Insurance Company (“Federated”) and Maryland, to

provide a defense.    Federated acquiesced in the demand, subject to

a reservation of its rights, but Maryland refused.              Thereafter,

Federated    filed   this   declaratory   judgment   action     in   federal

district court in Texas seeking a determination of its obligations

under its policy.     GEI counterclaimed against Federated and filed

a   third-party   complaint    against    Maryland   alleging    breach   of

contract and seeking declaratory judgment that Maryland had a duty

to defend.

      The parties filed cross motions for summary judgment and the


      2
      Also named as defendants in T&S’s suit are EMCASCO (GEI’s
surety), Moore (T&S’s paving subcontractor), and American States
Insurance Company (Moore’s surety).

                                    3
court ruled in favor of Federated and Maryland, concluding that

neither insurer had a duty to defend GEI in the T&S lawsuit.                     The

district       court    based     its   ruling,     in    pertinent   part,   on    a

determination that GEI’s performance under its subcontract was an

intentional act and, therefore, did not constitute an “occurrence”

as that term is defined in the Federated and Maryland CGL policies.

GEI now appeals, seeking reversal of the district court’s grant of

summary judgment in favor of Maryland.3

                                           II

                                        ANALYSIS

A.     Standard of Review

       We review a grant of summary judgment de novo, applying the

same       standard    as   the   district      court.4     Summary   judgment     is

appropriate when the evidence, viewed in the light most favorable

to the nonmoving party, presents no genuine issue of material fact

and shows that the moving party is entitled to judgment as a matter

of law.5


       3
      GEI does not appeal the district court’s grant of summary
judgment in favor of Federated.    The Federated policy provided
coverage from January 1, 1994 to January 1, 1995; the Maryland
policy provided coverage from January 1, 1995 to January 1, 1996.
The district court held that there were no allegations indicating
that property damage became apparent until after January 1, 1995,
i.e., until coverage under Federated’s policy had expired.
       4
      Melton v. Teacher’s Ins. & Annuity Ass’n of America, 114 F.3d
557, 559 (5th Cir. 1997).
       5
      River Prod. Co., Inc. v. Baker Hughes Prod. Tools, Inc., 98
F.3d 857, 859 (5th Cir. 1996).

                                           4
B.    Maryland’s Duty to Defend GEI

      The parties agree that Texas law controls whether Maryland has

a duty to defend GEI in the T&S litigation.          Texas courts follow

the “eight corners” or “complaint allegations” rule in making this

determination.6    Under this rule, courts compare the words of the

insurance policy with the allegations of the plaintiff’s complaint

to   determine   whether   any   claim   asserted   in    the   pleading   is

potentially within the policy’s coverage.7          The burden is on the

insured to show that a claim against him is potentially within the

scope of coverage under the policies; however, if the insurer

relies on the policy’s exclusions, it bears the burden of proving

that one or more of those exclusions apply.8             Once the insurer

proves that an exclusion applies, the burden shifts back to the

insured to show that the claim falls within an exception to the

exclusion.9

      Maryland’s CGL policy provides liability coverage to GEI for

"property damage" caused by an "occurrence.”             As defined in the

policy, “property damage” means “[p]hysical injury to tangible


      6
      Canutillo Indep. Sch. Dist. v. National Union Fire Ins. Co.,
99 F.3d 695, 701 (5th Cir. 1996).
      7
      National Union Fire Ins. Co. v. Merchants Fast Motor Lines,
Inc., 939 S.W.2d 139, 141 (Tex. 1997).
      8
      Guaranty Nat’l Ins. Co. v. Vic Mfg. Co., 143 F.3d 192, 193
(5th Cir. 1998); Canutillo, 99 F.3d at 701; Sentry Ins. v. R.J.
Weber, 2 F.3d 554, 556 (5th Cir. 1993).
      9
       Guaranty Nat’l Ins. Co., 143 F.3d at 193.

                                    5
property, including all resulting loss of use of that property.”

The term “occurrence” means “an accident, including continuous or

repeated      exposure    to    substantially           the    same    general       harmful

conditions.”       The     term     “accident,”         however,      is    not    defined.

Maryland concedes that the damage to the parking lot constitutes

“property     damage”     within     the   meaning       of    its    policy.         Hence,

Maryland’s duty to defend turns on (1) whether T&S has alleged in

its   state    court     petition     that       this   damage       was    caused    by   an

“occurrence,”      i.e.,       an   “accident,”         and,    if    so,    (2)     whether

Maryland’s policy nevertheless contains one or more exclusions that

explicitly eschew coverage of T&S’s claims.10



      1.      Damage Caused by an “Occurrence”

      There are two lines of Texas cases construing the definition

of “occurrence” for the purpose of insurance coverage.                            The first

pertains to coverage of claims against an insured for damage caused

by its alleged intentional torts.                 According to this body of law,

damage that is the natural result of voluntary and intentional acts

is deemed not to have been caused by an occurrence, no matter how

unexpected, unforeseen, and unintended that damage may be.11

      10
      GEI’s policy covered the period from January 1, 1995 to
January 1, 1996. It is undisputed that Wal-Mart’s discovery of the
construction deficiencies in the parking lot occurred during this
policy period.
      11
      Argonaut Southwest Ins. Co. v. Maupin, 500 S.W.2d 633, 635
(Tex. 1973)(citing Thomason v. United States Fidelity & Guar. Co.,
248 F.2d 417, 419 (5th Cir. 1957)).

                                             6
     This principle was first enunciated by the Texas Supreme Court

in Argonaut Southwest Insurance Co. v. Maupin.12                        In that case,

Maupin Construction Company sued Argonaut for refusing to defend it

in a trespass suit brought by the owner of a parcel of real

property from which Maupin had removed dirt pursuant to a contract

with the owner’s tenant.           Argonaut’s policy provided coverage for

“injur[ies] to or destruction of property . . . caused by [an

occurrence].”13         The    policy    defined    “occurrence”          as    “(a)    an

accident, or (b) in the absence of an accident, a condition for

which the insured is responsible which during the policy period

causes physical injury to or destruction of property which was not

intended.”14      Maupin contended that its removal of dirt constituted

accidental damage to the owner’s property and, as such, fell within

the scope of coverage.         The supreme court disagreed.15             An actor is

deemed to have committed the tort of trespass, reasoned the court,

if he intentionally and without the owner’s consent enters onto a

piece     of    property,     regardless       whether    he    was     aware   of     the

property’s       ownership    at   the   time.16         As    Maupin    voluntarily,

intentionally, and without the true owner’s consent removed dirt



     12
          500 S.W.2d 633 (Tex. 1973).
     13
          Id. at 634 n.1.
     14
          Id.
     15
          Id. at 635.
     16
          Id.

                                           7
from property belonging to the owner, and as trespass in Texas is

a strict liability tort without a scienter element, the court

concluded that inquiry into whether Maupin expected or intended to

cause damage to the owner was not relevant in determining if a tort

had been committed.

     Both state and federal courts sitting in Texas have relied on

Maupin to deny insurance defense and coverage in a steady stream of

cases (the   “Maupin   line”),   all   of   which   involve   the    alleged

commission of an intentional tort by an insured.17                  In cases

involving claims against an insured for damage arising out of his

alleged negligence, however, a second line of cases has developed,

following Massachusetts Bonding & Ins. Co. v. Orkin Exterminating



     17
      See, e.g., State Fire & Cas. Co. v. Brooks, 43 F. Supp.2d
695, 702 (E.D. Tex. 1998) (concluding that a claim brought against
an insured for damages resulting from “unconsenting sexual acts” is
a claim for damages resulting from an intentional act which is not
a covered “occurrence”); Metropolitan Property & Cas. Co. v.
Murphy, 896 F. Supp. 645, 648 (E.D. Tex. 1995)(concluding that a
woman’s claim against Murphy, for secretly watching her shower,
bathe, dress, and sleep through holes he had drilled in her
bathroom and bedroom walls, was based on allegations of intentional
conduct that did not satisfy the policy’s definition of
“occurrence”); Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819,
828 (Tex. 1997)(concluding that a photo lab clerk’s intentional act
of replicating photographs of a woman and showing them to friends
was not an “accident” within the meaning of the clerk’s homeowners’
liability policy, even though the clerk did not intend to cause
harm to the woman, because the injury of which the woman complained
—— the invasion of her privacy —— could be reasonably anticipated
from the clerk’s conduct); Baldwin v. Aetna Cas. & Sur. Co., 750
S.W.2d 919, 921 (Tex. App. —— Amarillo 1988, reh’g denied) (denying
plaintiff’s claim for damage incurred when his insurer refused to
defend him in a suit brought by the state for alleged repeated and
intentional highway size and weight violations).

                                   8
Co.18 (The “Orkin line”).

      In Orkin, the Texas Supreme Court was called on to resolve an

insurance dispute arising out of a suit brought by Gulf Coast Rice

Mills against an exterminator for damage to rice caused by the

application of pesticide in the rice mill’s facilities.              A jury in

the underlying case found that Orkin had acted negligently in its

application of the pesticide in Gulf Coast’s premises and that such

negligence was the proximate cause of damage to the rice.              In the

insurance litigation that ensued, the supreme court concluded that

the damage for which Orkin had been held liable was caused by an

“accident” within the meaning of the applicable insurance policy.

In   reaching     this   conclusion,       the   court   construed   the   term

“accident” to “include negligent acts of the insured causing damage

which is undesigned and unexpected.”19

      Following Orkin, both state and federal courts in Texas have

interpreted the terms “accident” and “occurrence” to include damage

that is the “unexpected, unforeseen or undesigned happening or

consequence” of an insured’s negligent behavior.20             Many of these

      18
           416 S.W.2d 396 (Tex. 1967).
      19
      Id. at 400; accord Cowan, 945 S.W.2d at 828 (affirming the
continuing validity of Orkin’s holding).
      20
      See, e.g., Lafarge Corp. v. Hartford Cas. Ins. Co., 61 F.3d
389, 395 (5th Cir. 1995)(holding that unintended damage to a
pipeline caused by the defective coating supplied by insured’s
subsidiary was caused by an “occurrence” within the meaning of the
liability policy); Hartford Cas. Co. v. Cruse, 938 F.2d 601, 604-05
(5th Cir. 1991)(concluding that extensive damage to plaintiffs’
home caused by insured’s defectively performed foundation leveling

                                       9
cases have involved claims for damage caused by an insured’s

defective performance or faulty workmanship.21   Furthermore, within

this genre, courts have consistently held that damage wreaked on

the work product of a third party —— as opposed to that of the

insured22 —— is presumed to have been unexpected and, therefore,

constitutes an accident or an occurrence.23


services was unexpected and unintended and, therefore, was caused
by an “occurrence” within the meaning of the policy); Travelers
Insurance Co. v. Volentine, 578 S.W.2d 501, 503 (Tex. App.
1979)(concluding that the destruction of an entire engine as the
result of the malfunction of one repaired valve was unexpected and
unintended); Employers Casualty Co. v. Brown-McKee, Inc. 430 S.W.2d
21, 24 (Tex. App. 1968)(concluding that manufacturer’s alleged
improper construction and repair of concrete grain storage elevator
was an “accident” for the purposes of insurance coverage and
defense because it brought about damage that was “an unexpected,
unforeseen or undesigned happening or consequence from ‘either a
known or unknown cause.’”).
     21
          See supra note 19.
     22
      Maryland’s policy, like many general liability policies, does
not cover “‘property damage’ to ‘your work’ arising out of it or
any part of it . . . .” (Emphasis added). A policy containing this
type of exclusion —— commonly referred to as a “business risk”
exclusion —— treats differently the risk that an insured’s
substandard services or supplies will cause damage to his own work
product and the risk that his slipshodness will injure someone or
something else. Cruse, 938 F.2d at 603.
     23
      See, e.g., Lafarge, 61 F.3d at 395(citing Cruse and Volentine
for the proposition that “there is an accident or occurrence when
the alleged product defect has caused damage to other property”);
Cruse, 938 F.2d at 604-05(considering the “business risk” exclusion
in tandem with the “occurrence” requirement and noting that,
although damage to a builder’s own work caused by his breach of
contract is a cost of doing business that is not covered by a
general liability policy, damage to the work of another is
covered); Volentine, 578 S.W.2d at 503-04(discussing the “business
risk exclusion” and noting that, although the exclusion eschews
coverage of claims against an insured for damage caused by the
insured to his own work, it allows coverage for the insured’s

                                10
      In   granting     summary   judgment   in   favor   of   Maryland,   the

district court rejected the applicability of the Orkin negligence

line of cases and relied instead on the Maupin line of cases which

pertain to intentional torts.         On appeal, GEI contends that this

decision was improper, and we agree.

      The allegations in T&S’s state court “Fourth Amended Original

Petition” provide the measure for Maryland’s defense obligation.24

In that petition, T&S alleges that the parking lot was damaged as

a   result   of   GEI    furnishing   and    installing   substandard      fill

materials.    T&S specifically alleges that, six months after GEI

completed its work, Wal-Mart tested GEI’s materials and found them

to have a California Bearing Ratio (“CBR”) in the range of 3.7 to

4.9, well below the 15 CBR specified in the subcontract.

      Although GEI readily admits that it intentionally performed

under the subcontract, it denies that it intentionally substituted

inferior materials —— and nothing in the facts alleged by T&S

supports a claim of knowing or intentional substitution of inferior

fill matter.       Indeed, the only allegation of knowing conduct

anywhere in T&S’s complaint appears within the context of its DTPA

claim.



liability for damage to other property resulting from the defective
condition of his work).
      24
      See Rhodes v. Chicago Ins. Co., 719 F.2d 116, 120 (5th Cir.
1983)(stating that the duty to defend is determined by examining
the latest amended pleading on which the insurer based its refusal
to defend the action).

                                      11
       It is well settled that an insurer’s duty to defend is

triggered if at least one of several claims in the plaintiff’s

complaint potentially falls within the scope of coverage, even if

other claims do not.25         T&S’s fourth amended petition alleges that

GEI acted        negligently   ——   that   is,   “caus[ed]   damage   which   is

undesigned and unexpected”26 —— which, if proved to be true,

constitutes an “accident” within the definition ascribed to that

term by the Texas Supreme Court.             In Paragraph 5 of the Petition,

T&S summarizes the property damage to the parking lot caused by the

alleged negligence of GEI as follows:            “. . . by virtue of failing

to install the correct select fill, [GEI] negligently damaged the

work    of     [T&S’s]    paving   contractor,   [Moore].”27    Therefore     an

“occurrence” is alleged within the four corners of T&S’s complaint,

and that triggers coverage.            As T&S’s petition thus includes a

claim that has the potential to lead to a covered loss, Maryland

has a duty to defend GEI —— absent an applicable policy exclusion.



       2.      Maryland’s Policy Exclusions

       Having concluded that the allegations in the complaint in the

underlying suit potentially constitute a covered “occurrence,” we

must reverse the holding of the district court unless GEI’s claim

       25
            Id. at 119.
       26
            Orkin, 416 S.W.2d at 400.
       27
            Emphasis added.


                                        12
of coverage is trumped by a policy exclusion.                 Maryland urges the

court to apply both (1) the “contractual liability” exclusion and

(2)   the   “impaired     property”     exclusion.       If    either    exclusion

applies, Maryland has no duty to defend.                     The District Court

disposed of the case on the coverage issue, and therefore never

reached the question of the applicability of the exclusions.

      a.    The Contractual Liability Exclusion

      The contractual liability exclusion denies coverage for claims

arising out of

      b. “Bodily injury” or “property damage” for which
      the insured is obligated to pay damages by reason
      of the assumption of liability in a contract or
      agreement.    This exclusion does not apply to
      liability for damages:
      (1) Assumed in a contract or agreement that is
      an “insured contract” . . .; or
      (2) that the insured would have in the absence
      of the contact or agreement.

This exclusion operates to deny coverage when the insured assumes

responsibility for the conduct of a third party.28                   As GEI is not

being sued    as    the   contractual     indemnitor      of    a    third   party’s

conduct,    but    rather   for   its    own      conduct,     the   exclusion   is

inapplicable.        Moreover,    even       if   the   contractual      liability

exclusion were somehow applicable to situations in which the

insured is being sued for its own conduct, the exclusion would not


      28
      Olympic, Inc v. Providence Washington Ins. Co., 648 P.2d
1008, 1011 (Alaska 1982) (explaining that assumption of liability
in a contract “refers to liability incurred when one promises to
indemnify or hold harmless another, and does not refer to the
liability that results from breach of contract.”).

                                        13
apply here.        It is true, as Maryland notes, that under the

subcontract between GEI and T&S, GEI agreed to indemnify T&S and

hold it harmless for claims arising both from conduct of specified

third parties and from its own conduct.29            Accordingly, Maryland

urges,    GEI’s   alleged   liability    to   T&S   is   “by   reason   of   the

assumption of liability in a contract or agreement” and therefore

excluded from coverage.      This indemnity provision is not, however,

the only source of GEI’s duty to T&S.           Even absent a contractual

indemnity provision, GEI would be liable to T&S —— under generally

applicable contract law —— for damage caused by GEI’s negligent

failure    to     perform   its   contractual       duties     according     the

specifications in the subcontract.30 There are, therefore, at least

two sources from which GEI’s liability to T&S could spring and only


     29
      The relevant      provision   of    the   subcontract      provides     in
pertinent part:

     Subcontractor shall fully protect, indemnify and
     defend T&S, . . . and hold [it] harmless from and
     against any and all claims, demands, causes of
     action, damages, and liabilities . . . for the
     destruction of tangible property (other than the
     work itself) including the loss of use resulting
     therefrom, arising in any manner, directly or
     indirectly, out of or in connection with or in the
     course of or incidental to any work or operation(s)
     of Subcontractor or T&S . . . .

     30
      See, e.g., Sipes v. Langford, 911 S.W.2d 455, 457 (Tex. App.
1995) (“Implicit in every contract is a common-law duty to perform
the terms of the contract with care, skill and reasonable
experience. A breach of this duty is actionable in tort.”); Tips
v. Hartland Developers, Inc., 961 S.W.2d 618, 621 (Tex. App. 1998)
(same).

                                    14
one of them could be deemed an assumption of liability.            When, as

here, liability could be imposed pursuant to either a contractual

indemnity provision or a generally applicable legal principle, the

contractual liability exclusion will not bar coverage.31           For the

forgoing   reasons,   we   conclude    that   the   contractual   liability

exclusion does not apply.32

     b.    The Impaired Property Exclusion

     This exclusion denies coverage for claims arising out of

     m. “Property damage” to “impaired property” or property
     that has not been physically injured, arising out of:

     (1) A defect, deficiency, inadequacy              or   dangerous
     condition in . . . “your work;” or

     (2) A delay or failure by you or anyone acting on your
     behalf to perform a contract or agreement in accordance
     with its terms. . . .

“Impaired property” is defined as

     tangible property, other than . . . “your work,” that
     cannot be used or is less useful because:


     31
      Cagle v. Commercial Standard Ins. Co., 427 S.W.2d 939, 944
(Tex. App. 1968) (“[W]here the express contract actually adds
nothing to the insured’s liability, the contractual liability
exclusion clause is not applicable . . .” (quoting 63 A.L.R.2d
1122)); Aetna Casualty and Surety Co. v. Lumbermens Mutual Casualty
Co., 527 N.Y.S.2d 143, 145 (App. Div. 1988) (“[W]here, as here, the
insured contractor is liable under either the indemnity provision
of its contract or in tort independent of contract, the exclusion
for liability assumed under contract will not apply.”).
     32
      There is an exception to the contractual liabilities
exclusion for liabilities assumed in an “insured contract.” The
parties disagree as to whether GEI’s subcontract falls within the
policy definition of “insured contract.”      As the contractual
liabilities exclusion is inapplicable for the reasons set forth
above though, we do not reach this issue.

                                      15
     a. It incorporates . . . “your work” that is known or
     thought to be defective, deficient, inadequate or
     dangerous; or

     b. You have failed to fulfill the terms of a contract or
     agreement;

     if such property can be restored to use by:
     a. The repair, replacement, adjustment or removal of .
     . . “your work;” or

     b. Your fulfilling the terms of the contract or
     agreement.

     Maryland contends that this provision excludes coverage of

claims for damage33 arising from an insured’s failure to perform its

contractual duties.     GEI agrees to a limited extent, but observes

that, in the instant case, T&S has alleged a claim for negligence

in addition to breach of contract.        Moreover, argues GEI, the

impaired property exclusion does not apply because the property

damage alleged in T&S’s complaint is not damage to “impaired

property.” This is so, GEI insists, because Moore’s asphalt paving

cannot be “restored to use” by “the repair, replacement, adjustment

or removal” of GEI’s underlying defective fill.      We agree.

     In Action Auto Stores, Inc. v. United Capitol Ins. Co., Larson

(the insured) installed gasoline containment systems on Action

Auto’s property pursuant to a contract with Action Auto.34 These


     33
      Maryland suggests that the type of damage covered by the
exclusion clause is “economic loss.” According to the language of
the clause, however, it is clear that “property damage” is the type
of damage covered.    Under Texas law, economic damage does not
constitute property damage. Gibson, 966 F. Supp. at 474.
     34
          845 F. Supp. 417, 419 (W.D. Mich. 1993).

                                   16
containment systems were alleged to have leaked, contaminating the

surrounding soil.35      When Action Auto sued, Larson sought a defense

from its insurer.        The insurer refused to defend Larson, based in

part on a policy exclusion identical to the “impaired property”

exclusion at issue here.36       Applying Michigan law, the court held

that the exclusion was not applicable, reasoning that

      no evidence has been presented that any damage done to
      property surrounding the containment system can be
      remedied by the repair, replacement, or adjustment of the
      [insured’s] work product. Furthermore, such a result is
      illogical as any pollution done to surrounding property
      could not possibly be rectified merely by the removal of
      the defective work product.37

      Similarly here, there has been no suggestion that the damage

to the surface of the parking lot can be restored by “the repair,

replacement, adjustment or removal of” GEI’s underlying work.

Neither has there been any contention that by “fulfilling the terms

of the contract or agreement” GEI can remedy the alleged defect in

Wal-Mart’s parking lot.       To the contrary, the only proposed means

of repairing the lot is to install an asphalt overlay, leaving both

GEI’s work and that of the paving subcontractor intact. Indeed, it

is inconceivable that any remedial or supplemental work could be

done to GEI’s portion of the project, all of which lies underneath

the   surface,      without    removing   and   destroying   the   paving



      35
           Id.
      36
           Id. at 425.
      37
           Id. at 426.

                                     17
subcontractor’s work.      Therefore, while “property damage” has been

alleged, none of the allegations, either alone or in combination,

can be construed as a claim that damage was done to “impaired

property”      as   that   term   is   defined   in   Maryland’s   policy.

Consequently, we conclude that the impaired property exclusion is

inapplicable.

C.   Attorney’s Fees

     GEI claims that it is entitled to recover attorney’s fees and

expenses incurred in pursuing coverage from Maryland in this

action, including those incurred on appeal.

     Chapter 38 of the Texas Civil Practice and Remedies Code first

sets forth the general rule that litigants can recover reasonable

attorney’s fees incurred in a valid claim on, inter alia, a written

contract.38     It then lists to following five exceptions:

     This chapter does not apply to a contract issued by an
     insurer that is subject to the provision of:
          (1) Article 3.62, Insurance Code [this Article
          was repealed in 1991];
          (2) Section 1, Chapter 387, Acts of the 55th
          Legislature, Regular Session, 1957 (Article
          3.62-1, Vernon’s Texas Insurance Code) [this
          Article was repealed in 1991];
          (3) Chapter 9, Insurance Code;
          (4) Article 21.21, Insurance Code; or
          (5) the Unfair Claims Settlement Practices Act
          (Article 21.21-2, Insurance Code).39

     In Dairyland Mutual Ins. Co. v. Childress, an insurance

company was held liable for its policyholder’s attorney’s fees by

     38
          Tex. Civ. Prac. & Rem. Code § 38.001(8).
     39
          Id. § 38.006.

                                       18
a state appellate court because the policyholder had successfully

pursued an action for breach of an insurance contract.40               On appeal

to the Supreme Court of Texas, the insurance company argued that it

was not liable for attorney’s fees under the predecessor to Chapter

38 of the Texas Civil Practice and Remedies code because, as an

insurance company, it was shielded from liability for attorney’s

fees by the predecessor to § 38.006.            The Texas Supreme Court held

that

       Dairyland is a county mutual insurance company and as
       such is not one of the insurors exempt from the
       provisions of Art. 2226 [the predecessor to Chapter 38 of
       the Civil Practice and Remedies Code]. See Tex. Ins.
       Code Ann. Art. 7.22. Therefore, it is not exempt from a
       claim for attorney’s fees pursuant to Art. 2226.41

       Texas appellate courts and this court have disagreed as to the

significance of this statement.              We have interpreted the quoted

passage from Dairyland County to imply that “an insurer who falls

within the provisions of section 38.006 is exempt from the payment

of attorney’s fees and that only those insurers who do not qualify

for the exemption are subject to the payment of attorney’s fees.”42

By   contrast,      Texas   appellate   courts    have   held   that    no   such

implication was intended, and that, consistent with the decision of



       40
            636 S.W.2d 282, 284 (Tex. App. —— Eastland, 1982).
       41
      Dairyland County Mutual Ins. Co. v. Childress, 650 S.W.2d
770, 774 (Tex. 1983).
       42
      Bituminous Cas. Corp. v. Vacuum Tanks, Inc., 975 F.2d 1130,
1133 (5th Cir. 1992); see also Lafarge Corp. v. Hartford Cas. Ins.
Co., 61 F.3d 389, 402-03 (5th Cir. 1995).

                                        19
the court in Prudential Ins. Co. v. Burke,43 the purpose of the

exceptions now codified at § 38.006 is “to exclude only those

claims against insurance companies where attorney’s fees [are]

already available by virtue of other specific statutes.”44

     Given these divergent interpretations of Dairyland County and

the less-than pellucid provisions of the Texas Code that bear on

this issue, we conclude the most principled solution to the issue

is to ask the Supreme Court of Texas, by certified question, to

explain the proper interpretation of Chapter 38 of the Texas Civil

Practice and Remedies Code as they apply to the facts of this case.

We retain jurisdiction over this appeal for the limited purpose of

implementing the answer, if one is forthcoming; or, if no answer is

supplied, then for the purpose of deciding this question ourselves.




                                     III

                                  Conclusion

     We perceive a clearly reconcilable dichotomy, not a tension,

resulting from the distinction between the Maupin and Orkin lines

of Texas cases:         In the former, the damage-causing acts of the

tortfeasor      are     either   actually   or   legally   deemed   to   be



     43
      614 S.W.2d 847 (Tex. App. —— Texarkana), writ ref’d n.r.e.,
621 S.W.2d 596 (1981).
     44
          Id. at 850.

                                      20
intentionally harmful; in the latter, the acts that are performed

intentionally are not intended to cause harm but do so as the

result of negligent performance of those acts.               As in the instant

case,   both   types   of   tortious      acts    frequently    occur   in   the

performance of a contract; the difference lies in the way that the

obligor performs. An obligor who intends his performance to result

in damage —— or, one who commits an act that is legally deemed to

constitute an intentional tort —— is a Maupin tortfeasor.                 On the

other hand, an obligor who intends his performance to be correct,

but who negligently falls short of the appropriate standard and

causes unintentional damage, is an Orkin tortfeasor. Had the only

allegations against GEI accused it of knowingly and willfully

choosing and using the substandard material that damaged the

paving, and doing so to cut corners or gain unearned profit, GEI

would be a Maupin tortfeasor.          As T&S’s allegations against GEI

include negligence, however, GEI is an Orkin tortfeasor.

     GEI adduced sufficient summary judgment evidence to show that

T&S’s complaint contains allegations of property damage caused by

an accident and thus, under the policy, by an “occurrence.”                  This

shifted the burden to Maryland to show that one or more its policy

exclusions apply, and Maryland failed to meet that burden.                   Thus

Maryland   has   a   duty   to   defend     GEI   in   the   underlying    suit.

Accordingly, we (1) reverse the district court’s grant of summary

judgment in favor of Maryland; (2) render summary judgment in favor

of Grapevine; (3) remand the case for the district court to admit

                                       21
and consider evidence regarding the damages that GEI incurred as a

result of Maryland’s breach, and to fashion an appropriate remedy;

and (4) retain jurisdiction for the limited purpose of determining

whether GEI is entitled to recover attorney’s fees incurred in

pursuing this action.

REVERSED,   RENDERED    in   part,   and   REMANDED   in   part;   limited

jurisdiction retained for future determination whether Appellant is

entitled to attorney’s fees.




                                     22
