                  United States Court of Appeals
                               For the Eighth Circuit
                            ___________________________

                                 No. 18-2970
                         ___________________________

                           Westfield Insurance Company

                                       Plaintiff - Appellant

                                          v.

                            Miller Architects & Builders

                                      Defendant - Appellee
                                   ____________

                      Appeal from United States District Court
                           for the District of Minnesota
                                  ____________

                            Submitted: October 15, 2019
                                Filed: January 30, 2020
                                  ____________

Before LOKEN, SHEPHERD, and STRAS, Circuit Judges.
                          ____________

STRAS, Circuit Judge.

       When a number of problems arose during the construction of a luxury
apartment complex, the property owner sought damages against the general
contractor, Miller Architects and Builders, in arbitration. Miller asked its insurer,
Westfield Insurance Company, to defend it, but Westfield sued Miller in federal
court instead. Westfield was unsuccessful in its effort to get a declaration freeing it
of its duty to defend Miller, and we agree with the district court 1 that it was not
entitled to one.

                                           I.

       The construction project was plagued with problems from the start, which
eventually led the property owner to terminate Miller a little over a year after
construction began. Over the next few months, workers allegedly discovered
“significant” architectural and structural problems caused by Miller and its
subcontractors. This discovery led to threats of legal action, which prompted Miller
to seek coverage under its commercial general liability insurance policy with
Westfield. Westfield warned Miller at the time that it was likely to deny coverage.

       Westfield followed through on its warning once the property owner sought
damages against Miller in arbitration. Rather than defending Miller, Westfield filed
an action in federal district court seeking a declaration relieving it of its obligation
to both defend and indemnify Miller. Miller took the opposite position and filed a
counterclaim against Westfield.

       The district court concluded that Westfield would have to defend Miller
because some claims are arguably covered by the policy. So on the duty-to-defend
claim, the court entered final judgment against Westfield. See Fed. R. Civ. P. 54(b).
As for the duty to indemnify, the court was not yet ready to say whether Westfield
would be responsible for any damages awarded in the arbitration, so it stayed
resolution of that question. On appeal, Westfield renews its argument that it has no
duty to defend Miller.




      1
        The Honorable Paul A. Magnuson, United States District Judge for the
District of Minnesota.
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                                          II.

       Under Minnesota law, an insurer’s duty to defend is broader than its duty to
indemnify. Specifically, all Miller must show at the duty-to-defend stage is that one
of the property owner’s claims is “arguably within the [policy’s] scope.” Jostens,
Inc. v. Mission Ins. Co., 387 N.W.2d 161, 165 (Minn. 1986) (internal quotation
marks and citation omitted); Murray v. Greenwich Ins. Co., 533 F.3d 644, 649 (8th
Cir. 2008) (applying Minnesota law). If it can, then the burden shifts to Westfield
to establish that the claims “fall clearly outside the scope of coverage” under one or
more policy exclusions. Jostens, 387 N.W.2d at 166 (emphasis added); Remodeling
Dimensions, Inc. v. Integrity Mut. Ins. Co., 819 N.W.2d 602, 616 (Minn. 2012). At
both of these steps, our review is de novo, see RSUI Indem. Co. v. New Horizon Kids
Quest, Inc., 933 F.3d 960, 963 (8th Cir. 2019), and we must give the policy,
including individual terms and exclusions, its plain and ordinary meaning, Midwest
Family Mut. Ins. Co. v. Wolters, 831 N.W.2d 628, 636 (Minn. 2013).

       We begin and end with a claim that is arguably covered under the policy: the
damage caused by a leaky roof. See Jostens, 387 N.W.2d at 165. The property
owner has alleged in the arbitration that water has come through a defectively
installed roof and has damaged the “finishes and electrical work in the building’s
interior.” This claim arguably falls under the initial grant of coverage in the policy,
which includes “property damage” caused by an “occurrence.” The harm to finishes
and electrical work qualifies as “property damage” under Minnesota law, see, e.g.,
Remodeling Dimensions, 819 N.W.2d at 611, and “faulty construction” is an
“occurrence,” see, e.g., Ohio Cas. Ins. Co. v. Terrace Enters., Inc., 260 N.W.2d 450,
452–53 (Minn. 1977). Miller has satisfied step one.

        The second step is to consider the three exclusions raised by Westfield. See
Jostens, 387 N.W.2d at 165–66. We can treat two of them together because they
both depend on where the faulty work and the damage occurred. The first, exclusion
(j)(5), provides no coverage for “[p]roperty damage” to “[t]hat particular part of real
property” upon which “contractors or subcontractors” are still “performing
                                         -3-
operations, if the property damage [arose] out of those operations.” (Internal
quotation marks omitted). The second, exclusion (j)(6), applies to “[p]roperty
damage” to “[t]hat particular part of any property that must be restored, repaired or
replaced because [Miller’s] work was incorrectly performed on it.” (Internal
quotation marks omitted). By using the words “property damage” in conjunction
with “to . . . [t]hat particular part of [the] property,” both exclusions are triggered
only when the faulty work and the damage are to the same “part” of the property.
Suffice it to say, it is far from clear that the roof, which is on the building’s exterior,
and the finishes and electrical work, which are in the building’s interior, are the same
“particular part of [the] property.”

       In an effort to bring the alleged property damage within one of these
exclusions, Westfield urges us to interpret the phrase “[t]hat particular part of [the]
property” as including the whole apartment complex, because Miller’s responsibility
extended to the entire project. Even assuming that Westfield has accurately
described Miller’s role, its interpretation gives little meaning to the three consecutive
limiting words that narrow the exclusion’s scope. The first of the three is “part,”
which means a “piece, or segment of a whole”—that is, something less than the
whole. The American Heritage Dictionary of the English Language 1284 (5th ed.
2016) (emphasis added); Webster’s Third New International Dictionary 1645
(2002). The second is the immediately preceding adjective “particular,” which
describes “some but not all of the members of a class or group,” further narrowing
the scope of what is excluded. American Heritage, supra, at 1286; Rodney
Huddleston & Geoffrey K. Pullum, The Cambridge Grammar of the English
Language 558 (2002). Finally, the word “that” serves a similar narrowing function
by singling out one “particular part” from all others. American Heritage, supra, at
1802–03; The Cambridge Grammar, supra, at 538–39. The bottom line is that
Westfield’s interpretation reads out the words “[t]hat particular part” and would
allow the excluded “part” to swallow the otherwise-included whole.

       Westfield fares no better with its reliance on exclusion (l). As relevant here,
it excludes “[p]roperty damage to [Miller’s] work,” but it “does not apply if . . . the
                                           -4-
work out of which the damage [arose] was performed . . . by a subcontractor.”
(Internal quotation marks omitted). By its terms, this exclusion “does not apply”
here because a subcontractor built and installed the roof.

       In sum, the claims against Miller do not “clearly” fall outside the scope of
coverage. Jostens, 387 N.W.2d at 166. The alleged damages from the leaky roof
are arguably within the policy’s scope and there are no clearly applicable exclusions.
Under these circumstances, Westfield cannot “escape [its] duty” to defend Miller.
Id.

      We accordingly affirm the judgment of the district court.
                     ______________________________




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