Roofing Designs by JR, LLC v. Bonifacio Tapia dba MBTL Roofing Specialist, LLC, Dissolved; Bonifacio Tapia dba BYTL Roofing Solutions, LLC; and Kinsale Insurance Company

Summary

The United States Bankruptcy Court for the Northern District of Texas granted Kinsale Insurance Company’s motion to dismiss Roofing Designs by JR, LLC’s amended adversary petition. The court held that the underlying complaint did not trigger coverage or a duty to defend under the additional-insured endorsement in the Tapia Policy, and that the plaintiff plausibly alleged no contractual or negligent-defense claim concerning Kinsale’s handling of the defense under the Roofing Designs Policy. The court also concluded that the related bad-faith, Texas Insurance Code, indemnity, and declaratory-relief claims failed.

Holdings

1. The RAC Complaint did not trigger a duty to defend Roofing Designs as an additional insured because it alleged liability based on Roofing Designs' own conduct and did not allege vicarious liability caused solely by Tapia's negligence.
2. Roofing Designs failed to state a claim for indemnity under the Tapia Policy because it did not allege that any settlement or judgment imposed liability on it solely because of Tapia's negligence, and the underlying lawsuit had been resolved.
3. Texas law does not require an insurer's duty to defend to include prosecuting counterclaims or third-party claims, funding affirmative claims, or conducting the defense according to the insured's preferred litigation strategy.
4. Roofing Designs failed to state a cognizable standalone claim for breach of contract based on bad faith and failed to plausibly allege common-law bad faith because Kinsale owed no coverage obligation under the Tapia Policy and did not breach the Roofing Designs Policy.
5. The section 542.003 claim failed because that provision does not create a private cause of action, and the section 541.060 claims failed because they were not pleaded with Rule 9(b) particularity and did not plausibly allege misrepresentation, unreasonable investigation, or failure to settle a covered claim.
6. Roofing Designs failed to state a claim for equitable subrogation because it did not allege that it involuntarily paid a debt primarily owed by Tapia or Kinsale or that equitable relief was warranted.
7. The request for declaratory relief was dismissed because it was duplicative of the substantive coverage and contract claims and did not provide an independent basis for recovery.

Questions Presented

1. Whether the allegations in the underlying RAC Lawsuit triggered a duty to defend or indemnify Roofing Designs as an additional insured under the Tapia Policy.
2. Whether Roofing Designs plausibly alleged breach of contract, negligence, or a duty to provide a particular defense strategy under the Roofing Designs Policy.
3. Whether Roofing Designs plausibly alleged common-law bad faith or a standalone breach-of-contract bad-faith claim.
4. Whether Roofing Designs stated viable claims under Texas Insurance Code sections 541.060 and 542.003.
5. Whether Roofing Designs stated a claim for equitable subrogation.
6. Whether Roofing Designs' requests for declaratory relief were duplicative of its substantive claims.

Disposition

dismissed