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Employers Mutual Casualty Co. v. Amerisure Insurance Co.

United States District Court, E.D. Texas, Sherman Division

August 7, 2019

EMPLOYERS MUTUAL CASUALTY COMPANY
v.
AMERISURE INSURANCE COMPANY

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT UNITED STATES DISTRICT JUDGE

         Pending 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 (Dkt. #24).

         BACKGROUND

         This is 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.

         (Image Omitted)

         Hatfield 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 "Underlying Suit").

         Here, 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.

         LEGAL STANDARD

         The 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. 1981).

         The 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. 2007).

         ANALYSIS

         To 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).

         However, 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).[1] As Mycon's coverage is not primary or noncontributory, Amerisure turns to the “other insurance” provisions of the insurance policies.

         Both Amerisure and Employer's policies contain “other insurance” provisions.[2] 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 ¶ 49).

         Employers 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).

         Reviewing 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, ...


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