from the United States District Court for the Eastern
District of Texas
DENNIS, OWEN, and SOUTHWICK, Circuit Judges.
H. SOUTHWICK, Circuit Judge:
defendant insurance company denied the plaintiff
policyholder's claims under a directors and officers
liability policy. The district court held that the insured
had learned of a related claim when the previous year's
policy was in effect; under clear policy provisions, the
first policy was therefore the one to cover all of the
claims. The court then concluded that all claims were
properly denied because, even though the insured gave timely
notice of the later claims, it had failed to give timely
notice of the initial one.
FACTUAL AND PROCEDURAL BACKGROUND
in late 2012, the plaintiff ADI Worldlink, L.L.C. annually
purchased directors and officers liability insurance policies
from the defendant RSUI Indemnity Company. The 2014 policy
had a coverage period from December 31, 2013 to December 31,
2014, while the 2015 policy covered the subsequent year,
ending December 31, 2015. The 2015 policy was later extended
through January 14, 2016.
provisions in the 2014 and 2015 policies include RSUI's
obligation to pay "all Loss [Worldlink] is legally
obligated to pay" in relation to "a Claim for a
Wrongful Act . . . first made against [Worldlink] during the
Policy Period" and timely noticed by Worldlink to RSUI
under the terms of the policies.
2015 policy also contained a provision that deemed all claims
related in a specific manner to have been made at the time of
the earliest such claim. We label it the 2015
interrelatedness provision, and it stated:
All Claims based on, arising out of, directly or indirectly
resulting from, in consequence of, or in any way involving
the same or related facts, circumstances, situations,
transactions or events, or the same or related series of
facts, circumstances, situations, transactions or events,
shall be deemed to be a single Claim for all purposes under
this policy, . . . and shall be deemed first made when the
earliest of such Claims is first made, regardless of whether
such date is before or during the Policy Period.
purpose of this provision appears obvious. An initial claim
is made; the insured gives notice of the claim; if in later
policy years new claims are made that are related in the
relevant ways to the first one, their handling continues
consistently under that first policy. The relevant claims in
this case concern Wordlink's employment practices,
primarily an alleged failure to pay overtime wages to
nonexempt employees. The insurance dispute arises because of
Worldlink's failure to give notice to RSUI of the first
employee's claim, which it received in August 2014. In
April 2015, other employees filed similar claims against
Worldlink. Finally, in September 2015, Worldlink first
notified RSUI of the claims.
on the 2015 interrelatedness provision, RSUI deemed all the
employment claims to be a single claim that were controlled
by the 2014 policy. The 2014 policy states that "it
shall be a condition precedent to the Insurer's
obligation to pay, that the Insured give written notice of
such Claim to the Insurer as soon as practicable" after
Worldlink learns of the claim. Comparable language is in the
2015 policy. A final deadline for notice was no later than
the expiration of the 2014 policy. Worldlink does not argue
it complied with that obligation as to the 2014 claim.
Because of the absence of notice of the first claim and the
deeming of all later claims to be related to that initial
claim, RSUI denied coverage on all.
sought a declaratory judgment to compel RSUI to cover all the
claims. It also sought damages for breach of contract and
violations of the Texas Unfair Insurance Practices Act, the
Texas Deceptive Trade Practices Act, and the Texas Prompt
Payment of Insurance Claims Statute. The parties filed cross
motions for summary judgment. The district court granted
summary judgment for RSUI. It concluded that timely notice of
the 2014 claim was not given. Further, it found the 2015
claims related back to the 2014 claim and were governed by
the 2014 policy, thus making it proper for RSUI to deny
coverage of all the claims. Because RSUI had no obligation to
cover any claims, the district court held it also had no
liability under the Texas statutes. This same analysis would
reasonably apply to Worldlink's breach of contract claim,
which the district court dismissed without a separate
appeal from the grant of a summary judgment, we generally are
concerned at least in part with whether the district court
properly determined that there were no genuine disputes of
material fact. See Fed. R. Civ. P. 56(a).
Today's appeal concerns only legal issues, though,
namely, the interpretation of insurance policy provisions.
Regardless of the questions posed, we review the district
court's ruling on a summary judgment de novo. RSUI
Indem. Co. v. Am. States Ins. Co., 768 F.3d 374, 377
(5th Cir. 2014).
principal challenge is to the district court's reliance
on the interrelatedness provision in the 2015 policy, joined
with the provision in the 2014 policy obligating the insured
to give timely notice, to deny the claims that arose in 2015
and for which it gave notice. A central component of our
review is the effect of a 2013 Texas Court of Appeals
decision about a similar policy. The only state statutory
claim Worldlink pursues on appeal concerns the Texas Prompt
Interrelatedness of the 2014 and 2015 Claims
was some dispute in district court as to whether Texas law
applies in this diversity suit. The district court determined
that it did, and the issue is not renewed on appeal. We thus
accept that Texas law controls.
relevant to our analysis would be applicable authority from
the Texas Supreme Court. CHS, Inc. v. Plaquemines
Holdings, L.L.C., 735 F.3d 231, 235 (5th Cir. 2013). We
have no such decisions. In their absence, we "defer to
intermediate state appellate court decisions, 'unless
convinced by other persuasive data that the highest court of
the state would decide otherwise.'" Memorial
Hermann Healthcare Sys., Inc. v. Eurocopter Deutschland,
GMBH, 524 F.3d 676, 678 (5th Cir. 2008) (quoting
Herrmann Holdings Ltd. v. Lucent Tech., Inc., 302
F.3d 552, 558 (5th Cir. 2002)).
Texas intermediate court opinion has been the center of
attention in this case: Gastar Exploration Ltd. v. U.S.
Specialty Insurance Co., 412 S.W.3d 577 (Tex.
App.-Houston [14th Dist.] 2013, pet. denied). The parties
have not proposed nor have we found any reason to form a
conviction that the Texas Supreme Court would reject that
court's application of state law to policy provisions
similar to those at issue here. The district court
distinguished Gastar but did not suggest the opinion
was inconsistent with what the Texas Supreme ...