United States District Court, E.D. Texas, Sherman Division
MEMORANDUM OPINION AND ORDER
L. MAZZANT UNITED STATES DISTRICT JUDGE
before the Court is Defendant Amerisure Mutual Insurance
Company's (“Amerisure”) Motion for Summary
Judgment (Dkt. #22) and Plaintiff Employers Mutual Casualty
Company's (“Employers”) Motion for Summary
Judgment (Dkt. #24). Having considered the motions and
relevant pleadings, the Court finds that Amersiure's
Motion for Summary Judgment should be granted (Dkt. #22) and
Employer's Motion for Summary Judgment should be denied
an insurance coverage dispute arising from an underlying
personal-injury case in which the parties ask the Court to
consider four agreements. The first two agreements concern
the relationship between a contractor and subcontractor. As
part of the construction of a church, Mycon General
Contractors, Inc. (“Mycon”) hired Hatfield
Acousticals & Drywall, Inc. (“Hatfield”) as a
subcontractor. Mycon and Hatfield entered into two
agreements-a Subcontract Agreement and Work Order-in which
Hatfield agreed to (1) defend and indemnify Mycon against
certain claims and (2) procure liability insurance that named
Mycon as an “additional insured.” The third and
fourth agreements are Mycon and Hatfield's commercial
general liability insurance policies under which Employers
insured Mycon and Amerisure insured Hatfield. Pursuant to the
Subcontract and Work Order agreements, Hatfield named Mycon
as an additional insured in the Amerisure policy.
employed a drywall mechanic named Vicente Chavez during the
construction project. Mr. Chavez allegedly sustained injuries
during the construction project when a steel beam broke and
struck Mr. Chavez in the head. Consequently, Mr. Chavez sued
Mycon and Lloyd Plyler Construction, L.P.
("Plyler")-a third party to this case-in the 401st
Judicial District Court of Collin County, Texas asserting
claims of negligence and gross negligence (the
Employers and Amerisure dispute who must assume Mycon's
defense in the Underlying Suit (See Dkt. #1). On
February 8, 2019, Employers and Amerisure filed dueling
motions for summary judgment (Dkt. #22; Dkt. #24). On
February 22, 2019, Employers filed a response to
Amerisure's motion for summary judgment (Dkt. #25). On
March 1, 2019, Amerisure filed a response to Employers'
motion for summary judgment (Dkt. #26). On March 8, 2019,
Employers filed a reply in support of its motion (Dkt. #27).
Amerisure did not filed a reply in support of its motion.
purpose of summary judgment is to isolate and dispose of
factually unsupported claims or defenses. Celotex Corp.
v. Catrett, 477 U.S. 317, 323-24 (1986). Summary
judgment is proper under Rule 56(a) of the Federal Rules of
Civil Procedure "if the movant shows that there is no
genuine dispute as to any material fact and 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 when
“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).
Substantive law identifies which facts are material.
Id. 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.
party seeking summary judgment bears the initial burden of
informing the court of its motion and identifying
“depositions, documents, electronically stored
information, affidavits or declarations, stipulations
(including those made for purposes of the motion only),
admissions, interrogatory answers, or other materials”
that demonstrate the absence of a genuine issue of material
fact. Fed.R.Civ.P. 56(c)(1)(A); Celotex, 477 U.S. at
323. If the movant bears the burden of proof on a claim or
defense for 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). Where the nonmovant bears
the burden of proof, the movant may discharge the burden by
showing that there is an absence of evidence to support the
nonmovant's case. Celotex, 477 U.S. at 325;
Byers v. Dall. 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). A
nonmovant must present affirmative evidence to defeat a
properly supported motion for summary judgment.
Anderson, 477 U.S. at 257. Mere denials of material
facts, unsworn allegations, or arguments and assertions in
briefs or legal memoranda will not suffice to carry this
burden. Rather, the Court requires “significant
probative evidence” from the nonmovant to dismiss a
request for summary judgment. In re Mun. Bond Reporting
Antitrust Litig., 672 F.2d 436, 440 (5th Cir. 1982)
(quoting Ferguson v. Nat'l Broad. Co., 584 F.2d
111, 114 (5th Cir. 1978)). The Court must consider all of the
evidence but “refrain from making any credibility
determinations or weighing the evidence.” Turner v.
Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir.
pinpoint the parties' disagreement, the Court first
summarizes the parties' motions. Amerisure bases its
arguments on Mycon's status as an additional insured
(Dkt. #22). Hatfield's policy with Amerisure contains a
Texas Contractor's Blanket Additional Insured Endorsement
that enabled Hatfield to add additional insured parties to
its policy after fulfilling certain conditions (Dkt. #22
¶ 22). Through this provision, and pursuant to the
Subcontract and Work Order agreements, Hatfield named Mycon
as an additional insured party on its policy (Dkt. #22 ¶
1). Amerisure does not contest that Mycon is an additional
insured on the policy and, therefore, Amerisure agrees that
it possesses a duty to defend Mycon as an additional insured
under the policy (Dkt. #22 ¶ 33).
Amerisure notes that its duty to defend Mycon as an
additional insured is limited. Examining the policy,
Subcontract, and Work Order, Amerisure contends that the
coverage available to Mycon as an additional insured is not
primary or noncontributory, but purely excess to any other
primary coverage (Dkt. #22 ¶¶ 34-37). As Mycon's
coverage is not primary or noncontributory, Amerisure turns
to the “other insurance” provisions of the
Amerisure and Employer's policies contain “other
insurance” provisions. Pursuant to Hardware
Dealers and Royal Insurance, Amerisure
maintains that the other insurance provisions found in the
policies are mutually repugnant (Dkt. #22 ¶¶ 38-49)
(citing Hardware Dealers Mut. Fire Ins. Co. v. Farmers
Ins. Exch., 444 S.W.2d 583, 586 (Tex. 1969); Royal
Ins. Co. of Am. v. Hartford Underwriters Ins. Co., 391
F.3d 639 (5th Cir. 2004)). As the other insurance provisions
are mutually repugnant, Amerisure suggests the Court must
disregard the other insurance provisions and apportion the
cost of Mycon's defense on a pro rata basis (Dkt. #22
¶¶ 38-49). In other words, Amerisure believes that
Amerisure and Employers must each fund one-half of
Mycon's defense in the Underlying Suit (Dkt. #22 ¶
agrees with much of Amerisure's argument,
“Amerisure and [Employers] both agree that Mycon is
owed a defense and that the ‘other insurance'
provisions of the [Employers] and Amerisure policies
conflict.” (Dkt. #25 at p. 1). However, pursuant to
American Indemnity, Employers contends that much of
Amerisure's argument is irrelevant (Dkt. #25 at pp. 1-3)
(citing Am. Indem. Lloyds v. Travelers Prop. & Cas.
Ins. Co., 335 F.3d 429 (5th Cir. 2003)). Employers
focuses on the indemnity provision found in the Subcontract
Agreement in which Hatfield agreed to defend and indemnify
Mycon (Dkt. #24 at pp. 4-5). Employers argues that the
indemnity provision is enforceable and the Underlying Suit
triggered the indemnity provision (Dkt. #24 at pp. 9-13).
Therefore, as the indemnity provision shifts exposure for the
Underlying Suit to Hatfield, and Amerisure insures Hatfield,
Employers argues that Amerisure bears the sole duty to defend
Mycon in the Underlying Suit (Dkt. #24 at p. 13).
the parties' arguments, the Court must first determine
whether the Underlying Suit triggered the indemnity
provision. If the Underlying Suit triggered the indemnity
provision, the Court must then decide whether American
Indemnity shifts exposure to Amerisure. If American
Indemnity does not shift the exposure, ...