United States District Court, E.D. Texas, Sherman Division
MEMORANDUM OPINION AND ORDER
L. MAZZANT UNITED STATES DISTRICT JUDGE
before the Court is Plaintiff Allied Property and Casualty
Insurance Company's Motion for Summary Judgment (Dkt.
#22). After considering the motion, the responses, and the
relevant pleadings, the Court finds that Plaintiff's
motion is denied.
Clean N Go, LLC (“Clean N Go”) is the named
insured under a policy of insurance issued by Plaintiff
Allied Property and Casualty Insurance Company
(“Allied”), which is titled “Texas Business
Owners Policy, ” and is numbered ACP BPAC7225400538
(the “Policy”). The Policy has a policy period of
November 7, 2013, to November 7, 2014.
16, 2014, Hector Amaya (“Amaya”) was working for
Clean N Go, drying vehicles at an automated car wash. Amaya
claims that as he was drying a customer's vehicle that
was parked in front of the automated car wash, another
vehicle that was exiting the car wash pinned Amaya between
the two vehicles. On February 11, 2016, a lawsuit was filed
against Clean N Go in Denton County, Texas, District Court,
styled Alvarez, et al. v. Spencer, et al., No.
16-01118-431, which asserted claims of negligence and gross
negligence against Clean N Go (the Amaya litigation” or
“underlying litigation”). Amaya and Elizabeth
Alvarez (“Alvarez”), as next friend of Amaya,
assert that Amaya suffered injuries due to Clean N Go's
failure to provide and maintain a place of employment that is
commenced this action on February 16, 2017, seeking a
declaration that it has no duty to defend Clean N Go (Dkt.
#1). On August 7, 2017, Allied filed the instant Motion for
Summary Judgment (Dkt. #22). On August 21, 2017, Defendant
Clean N Go filed its response (Dkt. #24). Defendants Amaya
and Alvarez joined in on the response (Dkt. #25). On August
30, 2017, Allied filed its reply (Dkt. #28). On September 6,
2017, Defendants filed their sur-reply (Dkt. #30).
purpose of summary judgment is to isolate and dispose of
factually unsupported claims or defenses. See Celotex
Corp. v. Catrett, 477 U.S. 317, 327
(1986). Summary judgment is proper if the pleadings, the
discovery and disclosure materials on file, and any
affidavits “[show] that there is no genuine issue as to
any material fact and that the movant is entitled to judgment
as a matter of law.” Fed.R.Civ.P. 56(a). A dispute
about a material fact is genuine “if the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). The trial court
must resolve all reasonable doubts in favor of the party
opposing the motion for summary judgment. Casey Enters.,
Inc. v. Am. Hardware Mut. Ins. Co., 655 F.2d 598, 602
(5th Cir. 1981) (citations omitted). The substantive law
identifies which facts are material. Anderson, 477
U.S. at 248.
party moving for summary judgment has the burden to show that
there is no genuine issue of material fact and that it is
entitled to judgment as a matter of law. Id. at 247.
If the movant bears the burden of proof on a claim or defense
on which it is moving for summary judgment, it must come
forward with evidence that establishes “beyond
peradventure all of the essential elements of the
claim or defense.” Fontenot v. Upjohn
Co., 780 F.2d 1190, 1194 (5th Cir. 1986). But if the
nonmovant bears the burden of proof, the movant may discharge
its burden by showing that there is an absence of evidence to
support the nonmovant's case. Celotex, 477 U.S.
at 325; Byers v. Dallas Morning News,
Inc., 209 F.3d 419, 424 (5th Cir. 2000). Once the
movant has carried its burden, the nonmovant must
“respond to the motion for summary judgment by setting
forth particular facts indicating there is a genuine issue
for trial.” Byers, 209 F.3d at 424 (citing
Anderson, 477 U.S. at 248-49). The nonmovant must
adduce affirmative evidence. Anderson, 477 U.S. at
257. The Court must consider all of the evidence but refrain
from making any credibility determinations or weighing the
evidence. See Turner v. Baylor Richardson Med. Ctr.,
476 F.3d 337, 343 (5th Cir. 2007).
asserts it is entitled to summary judgment because the claims
in the underlying litigation are not covered under the Policy
because the policy includes an “Employer's
Liability” exclusion that disclaims coverage for bodily
injury to an employee acting in the course and scope of his
employment for the insured. Defendants argue that the Policy
expressly does not exclude all employees, specifically
“temporary workers.” Defendants contend that
looking at the face of the state court petition (the
“Petition”), it is unclear whether Amaya was an
“employee” or “temporary worker” and
Allied had to conclusively show that Amaya was not a
“temporary worker” on the face of the Petition.
Court must “apply Texas law as interpreted by Texas
state courts.” Gilbane Bldg. Co. v. Admiral Ins.
Co., 664 F.3d 589, 593 (5th Cir. 2011) (quoting
Mid-Continent Cas. Co. v. Swift Energy Co., 206 F.3d
487, 491 (5th Cir. 2000)). Under Texas law, “insurance
policies are construed according to common principles
governing the construction of contracts, and the
interpretation of an insurance policy is a question of law
for a court to determine.” Am. Int'l Specialty
Lines Ins. Co. v. Rentech Steel LLC, 620 F.3d 558, 562
(5th Cir. 2010). The Court must interpret the policy to
discern the intention of the parties as it is expressed in
the policy. Id. “Whether a contract is
ambiguous is [also] a question of law.” Id.
(citing Kelley-Coppedge, Inc. v. Highlands Ins. Co.,
980 S.W.2d 462, 464 (Tex. 1998)). An ambiguity is not present
simply because the parties advance conflicting
interpretations, but exists “only if the contractual
language is susceptible to two or more reasonable
interpretations.” Id. (quoting Am. Mfrs.
Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex.
2003)). “Effectuating the parties' expressed intent
is [the Court's] primary concern.” Don's
Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20,
23 (Tex. 2008). “No one phrase, sentence, or section
[of the policy] should be isolated from its setting and
considered apart from the other provisions.”
Id. (quoting Forbau v. Aetna Life Ins. Co.,
876 S.W.2d 132, 134 (Tex. 1994)). A policy's terms should
be given their plain meaning, without inserting additional
provisions in the contract. Id.
Texas law, an insurer may have two responsibilities relating
to coverage-the duty to defend and the duty to
indemnify.” Gilbane, 664 F.3d at 594 (citing
D.R. Horton - Tex., Ltd. v. Markel Int'l Ins.
Co., 300 S.W.3d 740, 743 (Tex. 2009)). The duties to
defend and indemnify are distinct, and one may exist without
the other. Id.; see also Colony Ins. Co. v.
Peachtree Const., Ltd., 647 F.3d 248, 253-54 (5th Cir.
2011). An insurer's duty to defend is determined by the
application of the “eight-corners rule.”
GuideOne Elite Ins. Co. v. Fielder Road Baptist
Church, 197 S.W.3d 305, 308 (Tex. 2006). “The rule
takes its name from the fact that only two documents are
ordinarily relevant to the determination of the duty to
defend: the policy and the pleadings of the third-party
claimant.” Id. (citing King v. Dallas Fire
Ins. Co., 85 S.W.3d 185, 187 (Tex. 2002)). “[T]he
duty to defend does not rely on the truth or falsity of the
underlying allegations; an insurer is obligated to defend the
insured if the facts alleged in the petition, taken as true,
potentially assert a claim for coverage under the insurance
policy.” Colony, 647 F.3d at 253 (citing
GuideOne, 197 S.W.3d at 308). All doubts regarding
the duty to defend are resolved in favor of the duty, and the
pleadings are construed liberally. Zurich Am. Ins. Co. v.
Nokia, Inc., 268 S.W.3d 487, 491 (Tex. 2008). If a
complaint potentially includes a covered claim, the insurer
must defend the entire suit. Id. (citation omitted).
determining whether an insurer has a duty to defend, the
policyholder “bears the initial burden of showing that
the claim [in the underlying action] is potentially within
the insurance policy's scope of coverage.”
Harken Exploration Co. v. Sphere Drake Ins. PLC, 261
F.3d 466, 471 (5th Cir. 2001) (citation omitted).
“However, it is the insurer that carries the burden of
establishing that ‘the plain language of a policy
exclusion or limitation allows the insurer to avoid coverage
of all claims, also within the confines of the eight corners
rule.” Regency Title Company, LLC v. Westchester
Fire Ins., No. 4:11-cv-390, 2013 WL 6054820, at *4 (E.D.
Tex. Nov. 15, 2013) (citing Northfield Ins. Co. v. Loving
Home Care, Inc., 363 F.3d 523, 528 (5th Cir. 2004)). In
addition, “[e]xclusions [in the insurance policy] are
narrowly construed, and all reasonable inferences must be
drawn in the insured's favor.” Gore Design
Completions, Ltd. v. Hartford Fire Ins. Co., 538 F.3d
365, 370 (5th Cir. 2008). An exclusion is ambiguous only if
it is clearly susceptible to multiple reasonable
interpretations. Regency Title Company, 2013 WL
6054820, at *4 (citing Carolina Cas. Ins. Co. v.
Sowell, 603 F.Supp.2d 914, 923 (N.D. Tex. 2009)).
“[The] rules favoring the insured . . . are applicable
only when there is an ambiguity in the policy; if the
exclusions in question are susceptible to only one reasonable
interpretation, the [the rules favoring the insured] do not
apply.” Id. (quoting Am. States Ins. Co.
v. Bailey, 133 F.3d 363, 369 (5th Cir. 1998)).
“Courts should not strain to find an ambiguity, if, in
doing so, they defeat the probable intentions of the parties,
even though the insured may suffer an apparent harsh result
as a consequence.” Ohio Cas. Group of Ins.
Companies v. Chavez, 942 S.W.2d 654, 658 (Tex.
App.-Houston [14th Dist.] 1997, writ denied).
“Furthermore, if a policy provision is susceptible to
only one reasonable interpretation, the court is obligated to
give the words their ‘plain meaning' even if this
means coverage is denied.” Regency Title Co.,
2013 WL 6054820, at *4 (citing Evanston Ins. Co. v.
Legacy of Life, Inc., 645 F.3d 739, 744-45 (5th Cir.