ACCEPTED 03-15-00219-CV 5650209 THIRD COURT OF APPEALS AUSTIN, TEXAS 6/12/2015 9:28:01 AM JEFFREY D. KYLE CLERK
CAUSE NO. 03-15-00219-CV FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 6/12/2015 9:28:01 AM IN THE THIRD COURT OF APPEALS JEFFREY D. KYLE Clerk AUSTIN, TEXAS
HALLMARK SPECIALTY UNDERWRITERS, INC. and HALLMARK SPECIALTY INSURANCE COMPANY, Appellants v. TEXAS MUTUAL INSURANCE COMPANY, Appellee
From the 98th Judicial District Court, Travis County, Texas
BRIEF OF APPELLANTS HALLMARK SPECIALTY UNDERWRITERS, INC. and HALLMARK SPECIALTY INSURANCE COMPANY
Wm. David Farmer State Bar No. 06826470 Chad W. Schreiber State Bar No. 24085732 CURNEY, FARMER, HOUSE & OSUNA, P.C. 411 Heimer Road San Antonio, Texas 78232-4854 Telephone: (210) 377-1990 Facsimile: (210) 377-1065 Email: wdfarmer@cfholaw.com Email: cschreiber@cfholaw.com
ATTORNEYS FOR APPELLANTS
ORAL ARGUMENT IS REQUESTED IDENTITIES OF PARTIES AND COUNSEL Pursuant to Rule 38.1(a), Tex. R. App. P., Appellants Hallmark Specialty
Underwriters and Hallmark Specialty Insurance Company certify that the
following is a complete list of all parties and counsel:
(A) Appellants: Hallmark Specialty Underwriters, (Defendants in Trial Court) Inc. and Hallmark Specialty Insurance Company
Trial and Appellate Counsel: Wm. David Farmer State Bar No. 06826470 Chad W. Schreiber State Bar No. 24085732 CURNEY, FARMER, HOUSE, & OSUNA, P.C. 411 Heimer Road San Antonio, Texas 78232 Telephone: (210) 377-1990 Facsimile: (210) 377-1065
(B) Appellee: Texas Mutual Insurance Company (Plaintiff in the Trial Court)
Trial Counsel: R. Scott Placek State Bar No. 00784769 Scott Arnold State Bar No. 00785669 Jonathan Chaltain State Bar No. 24079787 Arnold & Placek, PC 203 East Main Street, Suite 201 Round Rock, Texas 78664 Telephone: (512) 341-7044 Facsimile: (512) 341-7921
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 2 of 40 TABLE OF CONTENTS IDENTITIES OF PARTIES AND COUNSEL ..................................................... 2 TABLE OF CONTENTS ........................................................................................ 3 INDEX OF AUTHORITIES ................................................................................... 5 STATEMENT OF THE CASE ............................................................................... 8 STATEMENT REQUESTING ORAL ARGUMENT ......................................... 9 RECORD REFERENCES……………………………………………………….. 9 ISSUE PRESENTED ............................................................................................. 10 STATEMENT OF FACTS .................................................................................... 11 STANDARD OF REVIEW ................................................................................... 13 SUMMARY OF THE ARGUMENT ................................................................... 14 ARGUMENT .......................................................................................................... 15 1. The Duty of Defense in Texas ..................................................................... 15
2. Appellants' Cross-Motion For Summary Judgment Established that Appellee's Duty of Defense Was Triggered ............................................... 17
A. The Underlying Petition explicitly plead that Guzman was an employee of Absolute. ....................................................................... 18
B. The Underlying Petition contained factual allegations sufficient to establish that Guzman’s injury potentially arose out of and in the course of Guzman’s employment with Absolute. ........................... 19
3. Appellee's Arguments Concerning the Duty of Defense Misapply and Misinterpret Texas Law .............................................................................. 26
A. The Underlying Petition’s failure to explicitly allege an injury in the course of employment does not negate Appellee’s duty to defend.................................................................................................. 27
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 3 of 40 B. The inference that Guzman was injured in the course of his employment is reasonable as it flows logically from the factual allegations contained within the Underlying Petition. ................... 32
CONCLUSION AND PRAYER FOR RELIEF.................................................. 37 CERTIFICATE OF SERVICE ............................................................................ 39 CERTIFICATE OF COMPLIANCE .................................................................. 39 APPENDIX ............................................................................................................. 40
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 4 of 40 INDEX OF AUTHORITIES
Cases Allstate Ins. Co. v. Hallman, 159 S.W.3d 640 (Tex. 2005) ......................................................................... 22, 32 Argonaut Sw. Ins. Co. v. Maupin, 500 S,W.2d 633 (Tex. 1973) ................................................................................18 Canal Ins. Co. v. XMEXTransp., LLC, No. EP-13-CV-156-KC, 2014 WL 4385941 (W.D. Tex. Sept. 4, 2014) ...... 29, 30 Centennial Ins. Co. v. Bailey, No. 05-98-00007-CV, 2000 WL 1515158 (Tex. App.—Dallas Oct. 12, 2000, no pet.) ................................................................................................................ 29, 30 City of Dallas v. Csaszar, 1999 WL 1268076 (Tex. App.—Dallas Dec. 30, 1999, pet. denied)...... 23, 24, 30 D.R. Horton-Tex., Ltd. v. Markel Int'l Ins. Co., 300 S.W.3d 740 (Tex. 2009) ................................................................................15 Deatherage v. Int'l Ins. Co., 615 S.W.2d 181 (Tex. 1981) ................................................................................20 Emp'rs Mut. Cas. Co. v. Northern Ins. Co., No. 3:08-CV-1498-G, 2010 WL 850243 (N,D. Tex. Mar. 11, 2010) ........... 25, 31 Essex Ins. Co. v. Hines, 358 Fed. Appx. 596 (5th Cir. 2010) .............................................................. 31, 32 Fidelity & Guar. Ins. Inc. v. McManus, 633 S.W.2d 787 (Tex. 1982) ................................................................... 16, 29, 36 FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) ..................................................................................13 Gehan Homes, Ltd. v. Emp'rs Mut. Cas. Ins. Co., 146 S.W.3d 833 (Tex. App.—Dallas 2004, pet. denied) ........................ 19, 22, 31 GEICO Gen. Ins. Co. v. Austin Power, Inc., 357 S.W.3d 821 ....................................................................................... 22, 28, 31 Gen. Star Indent. Co. v. Gulf Coast Marine Assocs., Inc., 252 S.W.3d 250 (Tex. App.—Houston [14th Dist.] 2008, pet. denied) ....... 26, 31 Gilbane Guilding Co. v. Admiral Ins. Co., 664 F.3d 589 (5th Cir. 2011) ......................................................................... 33, 34 Gomez v. Allstate Tex. Lloyds, 241 S.W.3d 196 (Tex. App—Fort Worth 2007, no pet.) .....................................26 Gore Design Completions, Ltd. v. Hartford Fire Ins. Co., 538 F.3d 365 (5th Cir. 2008) ......................................................................... 17, 29
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 5 of 40 GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305 (Tex. 2006) ........................................................................ passim Gulf Coast Marine Assocs., Inc., 252 S.W.3d 450 ............................................................................................. 25, 31 Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W.2d 22 (Tex. 1965) .......................................................................... passim Hochheim Prairie Cas. Ins. Co. v. Appleby, 255 S.W.3d 146 (Tex. App.—San Antonio 2008, pet. dism'd)............................26 Indian Harbor Ins. Co. v. KB Lone Star, Inc., No. H-ll-CV-1846, 2012 WL 3866858 (S.D. Tex. Sept. 5, 2012) .......................31 Jones v. Strauss, 745 S.W.2d 898 (Tex. 1988) ................................................................................13 King v. Dallas Fire Ins. Co., 85 S.W.3d 185 (Tex. 2002) ..................................................................... 15, 16, 36 Liberty Mut. Ins. Co. v. Graham, 473 F.3d 596 (5th Cir. 2006) ................................................................................25 Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Merchants Fast Motor Lines, 939 S.W.2d 139 (Tex 1997) .................................................................................17 Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Nat'l Convenience Stores, Inc., 891 S.W.2d 20 (Tex. App.—San Antonio 1994, no writ)....................................24 Nautilus Ins. Co. v. Nevco Waterproofing, Inc., Civ. A. H-04-2986, 2005 WL 3088608 (S.D. Tex. Jul. 11, 2005) ................ 27, 28 Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) ................................................................................13 St. Paul Fire & Marine Ins. Co. v. Green Tree Financial Corp.-Tex., 249 F.3d 389 (5th Cir. 2001) ................................................................................27 St. Paul Ins. Co. v. Tex. Dep't of Transp., 999 S.W.2d 881 (Tex. App.—Austin 1999, pet. denied) .............................. 16, 28 Stumph v. Dallas Fire Ins. Co., 34 S.W.3d 722 (Tex. App.—Austin 2000, no pet.)..............................................19 Texas Workers' Compensation Ins. Fund v. Rodriguez, 953 S.W.2d 765 ............................................................................................. 20, 33 Texas Emp. Ins. Ass'n v. Andrews, 110 S.W.2d 49 (Tex. Comm'n App. 1937).................................................... 20, 22 Tri-Coastal Contractors, Inc. v. Hartford Underwriters, Ins. Co., 981 S.W.2d 861 ....................................................................................................16 Trinity Univ. Ins. Co. v. Cowan, 945 S.W.2d 819 (Tex. 1997) ......................................................................... 16, 36 Union Fire Ins. Co. of Pittsburgh, Pa. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139 (Tex, 1997) ......................................................................... 16, 27
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 6 of 40 Westport Ins. Corp. v. Atchley, Russell, Waldrop & Hlavinka, L.L.P, 267 F. Supp. 2d 601 (E.D. Tex. 2003) .................................................................28
Rules Tex. R. App. P. 38.1...............................................................................................2, 7 Tex. R. App. P. 39.1...................................................................................................8 Tex. R. App. P. 9.4 ...................................................................................................38 Tex. R. Civ. P. 166(a) ..............................................................................................13 Tex. R. Civ. P. 65 .....................................................................................................16
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 7 of 40 STATEMENT OF THE CASE
Pursuant to Rule 38.1(d) Tex. R. App. P., Appellants submit this Statement
of the Case. This case arises out of an action for declaratory judgment filed by
Appellee Texas Mutual Insurance Company, which sought a determination
regarding whether Appellee’s duty of defense under Policy No. SBP-0001227402
20130809, issued to Absolute Oil Field Services, LLC for the policy period of
08/09/13 to 08/09/14, was triggered as it relates to the following lawsuit: Cause
No. DC-14-149; Jose Guzman v. Romaine Llewelyn, et al.; in the 381st District
Court of Starr County, Texas (the “Underlying Lawsuit”). (CR at 3). Appellee and
Appellants subsequently filed cross motions for summary judgment concerning
whether Appellee’s duty of defense was triggered. (CR at 31, 92)
On or about February 23, 2015, the Honorable Amy Clark Meachum signed
an Order under Cause No. D-1-GN-14-003789 granting summary judgment in
favor of Appellee and denying Appellants’ Cross-Motion for Summary Judgment.
(CR. at 178). Appellants filed their Notice of Appeal on April 6, 2015.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 8 of 40 REQUEST FOR ORAL ARGUMENT
Appellants make and file this Request for Oral Argument pursuant to
Rule 39.1, Tex. R. App. P. Oral argument would aid the decisional process in
allowing the parties to emphasize critical points in their arguments as well as to
provide clarification or elaboration on any issue of which the Court may request.
RECORD REFERENCES
The “Clerk’s Record” will be cited herein as follows:
(CR at [pg.]).
There is no Reporter’s Record that will be referenced in this appeal.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 9 of 40 ISSUE PRESENTED
1. Did the Trial Court Err in Denying Appellant’s Cross-Motion for Summary Judgment and Granting Appellee’s Motion for Summary Judgment?
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 10 of 40 STATEMENT OF FACTS
This appeal arises from a duty of defense insurance coverage lawsuit
concerning an event that occurred on or about November 30, 2013, at 285 Private
Road 7615, Devine, Medina County, Texas (the “property”) when Jose Guzman,
an alleged employee of Absolute Oil Field Services, LLC (“Absolute”), was shot
while present on the property. (CR at 3). Following this incident, Guzman filed
suit seeking damages for personal injury under Cause No. DC-14-149, styled Jose
Guzman v. Romaine Llewelyn, Rocky Hernandez, Absolute Oil Field Services,
LLC, and filed in the 381st Judicial District Court, Starr County, Texas (the
“Underlying Lawsuit”). (CR at 12). Guzman’s Original Petition (the “Underlying
Petition”) alleged that, at the time of the accident in question, Absolute maintained
its day-to-day operations on the property. (CR at 13). Moreover, the Underlying
Petition asserted that Romaine Llewelyn, Guzman’s direct supervisor, was present
on the property and was in charge of the activities being conducted on the property.
(CR at 13–14). The Underlying Pleading provided that Guzman was on Absolute’s
premises when Rocky Hernandez fired a shotgun at Guzman, striking him and
causing serious bodily injury. (CR at 14). At the time of Guzman’s injury, Guzman
plead that Llewelyn and Hernandez were both employees of Absolute and were
acting in the course and scope of their respective employment with Absolute. (CR
at 14).
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 11 of 40 Hallmark insured Absolute under a commercial liability insurance policy
featuring Policy No. TXE300190-02 for the policy period of 08/08/13 to 08/08/14.
After the Underlying Lawsuit was filed and tendered to Hallmark, Hallmark
assumed the defense of Absolute under reservation of rights and continues to
defend Absolute at this time. Additionally, TMIC also insured Absolute under a
workers’ compensation/employer’s liability insurance policy featuring Policy No.
SBP-0001227402 20130809 for the policy period of 08/09/13 to 08/09/14 (the
“TMIC Policy”). (CR at 52).
On or about September 12, 2014, Hallmark forwarded correspondence to
TMIC demanding that TMIC share in the defense of the mutual insured in the
Underlying Lawsuit and contribute those defense costs owed under the TMIC
Policy. Subsequently, TMIC filed its declaratory action seeking a determination
from the trial court that TMIC owed no duty of defense to Absolute under the
TMIC policy for those allegations made in the Underlying Lawsuit. (CR at 3).
TMIC then moved for Summary Judgment as to its duty of defense, and Hallmark
filed a Cross-Motion for Summary Judgment asserting that TMIC’s duty of
defense was triggered. (CR at 31, 92). On or about February 23, 2015, the
Honorable Amy Clark Meachum granted TMIC’s Motion for Summary Judgment
and denied Hallmark’s Cross-Motion, leading to this appeal. (CR. at 178).
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 12 of 40 STANDARD OF REVIEW
An appellate court reviews a grant of summary judgment de novo, applying
the same standard as the district court. Provident Life & Accident Ins. Co. v. Knott,
128 S.W.3d 211, 215 (Tex. 2003). Summary judgment is appropriate only if no
genuine issue of material fact exists, and the moving party is entitled to judgment
as a matter of law. Id. The party with the burden of proof must prove it is entitled
to judgment by establishing each element of its claim or defense as a matter of law,
or by negating an element of a claim or defense of the opposing party as a matter
of law. Tex. R. Civ. P. 166(a). When, as is the case at present, both parties moved
for summary judgment and the trial court grants one motion and denies the other,
the appellate court may determine all questions presented. Jones v. Strauss, 745
S.W.2d 898, 900 (Tex. 1988). “The reviewing court should render the judgment
that the trial court should have rendered.” FM Props. Operating Co. v. City of
Austin, 22 S.W.3d 868, 872 (Tex. 2000).
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 13 of 40 SUMMARY OF THE ARGUMENT
The trial court erred in granting Appellee’s Motion for Summary Judgment
and denying Appellants’ Cross-Motion for Summary Judgment regarding whether
Appellee’s duty of defense under the TMIC Policy was triggered by those
allegations made in the Underlying Lawsuit because the Underlying Petition
alleged specifically that Guzman was an employee of Absolute and contained
sufficient factual allegations for the trial court to conclude that Guzman's injury
potentially arose out of and in the course of Guzman’s employment with Absolute
under the eight corners doctrine. In addition, in arguing that the duty of defense
under the TMIC Policy was not triggered, Appellee’s contentions misapplied
and/or misinterpreted Texas law as it relates to both the eight corners doctrine and
the duty of defense.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 14 of 40 ARGUMENT
Appellant’s position in this case is that the trial court erred in granting
Appellee’s Motion for Summary Judgment as to Appellee’s duty of defense under
the TMIC Policy for those allegations made in the Underlying Lawsuit and in
denying Appellants’ Cross-Motion for Summary Judgment as to same. The critical
issue in this case concerns whether the Underlying Petition contained sufficient
factual allegations for the trial court to conclude under the eight corner’s doctrine
that the injury sustained by Guzman, at least potentially, arose out of and in the
course of his employment with Absolute as required under the TMIC Policy. D.R.
Horton-Tex., Ltd. v. Markel Int’l Ins. Co., 300 S.W.3d 740, 743 (Tex. 2009)
(requiring an insurer to defend in any lawsuit that “alleges and seeks damages for
an event potentially covered by the policy”) (emphasis added).
1. The Duty of Defense in Texas.
Under Texas law, an insurer has two distinct and separate duties under a
liability insurance policy; (1) the duty to defend its insured in a lawsuit against
allegations that potentially state a claim within the policy coverage; and (2) the
duty to indemnify the insured as a result of any claim, judgment or settlement that
is actually covered by the policy. King v. Dallas Fire Ins. Co., 85 S.W.3d 185, 187
(Tex. 2002). The sole issue on appeal concerns whether Appellee owes a duty of
defense under the TMIC Policy for those allegations contained in the Underlying
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 15 of 40 Lawsuit and whether the trial court’s actions in denying Appellants’ Cross-Motion
for Summary Judgment and granting Appellee’s Motion for Summary Judgment
were in error.
In determining whether the facts of any given case obligate the carrier to
provide a defense, Texas courts follow the “eight corners” rule (also known as the
“complaint allegation” rule), which requires the examining court to look strictly to
the factual allegations in the underlying pleading and the language of the policy
when determining whether a defense is owed. King, 85 S.W.3d at 187; Trinity
Univ. Ins. Co. v. Cowan, 945 S.W.2d 819, 821 (Tex. 1997); Fid & Guar. Ins. Inc.
v. McManus, 633 S.W.2d 787, 788 (Tex. 1982). The defense obligation is
determined by construing the latest amended pleading. St. Paul Ins. Co. v. Tex.
Dep't of Transp., 999 S.W.2d 881, 883 (Tex. App.—Austin 1999, pet. denied)
(citing Tex. R. Civ. P. 65) (stating that the amended pleading takes the place of the
original).
In assessing the factual allegations within an underlying pleading, the
allegations are considered without regard to their truth or falsity and without
reference to extraneous facts. GuideOne Elite Ins. Co. v. Fielder Rd. Baptist
Church, 197 S.W.3d 305, 308 (Tex. 2006). Extrinsic evidence cannot be
considered when evaluating whether a defense obligation is triggered. GuideOne,
197 S.W.3d at 308; see generally Tri-Coastal Contractors, Inc. v. Hartford
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 16 of 40 Underwriters, Ins. Co., 981 S.W.2d 861 (Tex. App.—Houston [1st Dist.] 1998,
pet. denied). The Texas Supreme Court has continually reaffirmed this well-
established rule, hinting that only a limited and narrow exception applies, which is
not present in this case, GuideOne, 197 S.W.3d at 308.
The Supreme Court of Texas has explained the eight corners rule as it relates
to the duty of defense in the following way:
Where the petition does not state facts sufficient to clearly bring the case within or without the coverage, the general rule is that the insurer is obligated to defend if there is, potentially, a case under the complaint within the coverage of the policy. Stated differently, in case of doubt as to whether or not the allegations of a complaint against the insured state a cause of action within the coverage of a liability policy sufficient to compel the insurer to defend the action, such doubt will be resolved in the insured's favor. Nat'I Union Fire Ins. Co. of Pittsburgh, Pa. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex, 1997) (quoting Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W.2d 22, 26 (Tex. 1965)).
In other words, Texas courts must interpret the allegations in an underlying
petition liberally and resolve in the insured's favor any doubts regarding whether
the allegations trigger a defense by the insurer. Id. To put it plainly, “[w]hen in
doubt, defend.” Gore Design Completions, Ltd. v. Hartford Fire Ins. Co., 538 F.3d
365, 369 (5th Cir. 2008).
2. Appellants’ Cross-Motion For Summary Judgment Established that TMIC's Duty of Defense Was Triggered
Initially, Appellants’ seek to establish that Appellants were entitled to summary
judgment under Texas law regarding whether Appellee’s duty of defense was
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 17 of 40 triggered under the TMIC Policy. As was set forth in Appellants’ Cross-Motion for
Summary Judgment, Appellants were entitled to summary judgment because: (1)
the Underlying Petition alleges specifically that Guzman was an employee of
Absolute; and (2) the Underlying Petition contains sufficient factual allegations to
allow the Court to infer Guzman's injury potentially arose out of and in the course
of employment under the eight corners doctrine.
A. The Underlying Petition explicitly plead that Guzman was an employee of Absolute.
Under the TMIC Policy, in order for Appellee’s duty of defense to be
triggered, the Underlying Petition was required to contain factual allegations that
established Guzman's status as an employee of Absolute. (CR at 66, 67). In the
present case, the factual allegations contained within the Underlying Petition
explicitly plead in the alternative that Guzman was an employee of Absolute. (CR
at 13). Under the eight corners doctrine, the trial court was required to take this
allegation as true for the purposes of assessing Appellee’s duty of defense. See
GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305, 308
(“[A]n insurer's duty to defend is determined by the third-party plaintiffs pleadings,
considered in light of the policy provisions, without regard to the truth or falsity of
those allegations.”)(emphasis added); Argonaut Sw. Ins. Co. v. Maupin, 500
S,W.2d 633, 636 (Tex. 1973) ("The duty to defend does not depend on what the
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 18 of 40 facts are; or what might be determined finally by the trier of the facts. It depends
only on what the facts are alleged to be.”).
Although the Underlying Pleading also asserts multiple alternative theories
regarding Guzman's status on the property (i.e., that Guzman was present as an
employee, independent contractor, or invitee), Texas law is clear that “[a]lternative
allegations . . . will not defeat the duty to defend if combined with allegations that
would trigger coverage." (CR at 13); see Gehan Homes, Ltd. v. Emp'rs Mut. Cas.
Ins. Co., 146 S.W.3d 833, 843 (Tex. App.—Dallas 2004, pet. denied); Stumph v.
Dallas Fire Ins. Co., 34 S.W.3d 722, 729 (Tex. App.—Austin 2000, no pet.).
Therefore, for purposes of assessing the duty of defense under the TMIC Policy,
this initial burden was met regarding Guzman’s status as an employee.
B. The Underlying Petition contains factual allegations sufficient to establish that Guzman’s injury potentially arose out of and in the course of Guzman’s employment with Absolute.
In addition to the above, in order for a duty of defense to be triggered under
the TMIC Policy, the factual allegations within the Underlying Pleading must have
established that Guzman’s bodily injury potentially "[arose] out of and in the
course of the injured employee's employment." (CR at 66, 67). Under Texas law,
the phrase “arise out of and in the course of employment” is fulfilled where it is
“apparent to the rational mind, upon consideration of all of the circumstances, a
causal connection between the conditions under which the work is required to be
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 19 of 40 performed and the resulting injury” exists. Texas Emp. Ins. Ass'n v. Andrews, 110
S.W.2d 49, 51 (Tex. Comm'n App. 1937). Further, even where an injury originates
“outside the sphere of his employer's control,” the injury may still arise out of and
in the course of employment where “the conditions under which the work is
necessarily performed cause exposure to the risk.” Id. “Course and scope of
employment is not limited to the exact moment when the employee reports to
work, the moment when the employee's labors are completed, or the place where
work is done.” See Tex. Workers' Compensation Ins. Fund v. Rodriguez, 953
S.W.2d 765, 768 (Tex. App.—Corpus Christi 1997, pet. denied) (citing
Deatherage v. Int'l Ins. Co., 615 S.W.2d 181, 183 (Tex. 1981)).
Turning to the four corners of the Underlying Petition, the Petition contains
a number of factual allegations that relate to whether Guzman’s injuries arise out
of and in the course of Guzman’s employment with Absolute, which Appellants
contend triggered Appellee’s duty of defense under the TMIC Policy. Specifically,
the Underlying Petition provides:
On or about November 30, 2013, Guzman was an employee of Absolute (CR at 13);
Guzman was on his employer's premises when he sustained injury (CR at 14);
Absolute provided housing accommodations for employees at the premises and used the premises as its headquarters (CR at 13);
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 20 of 40 Guzman was injured where Absolute “maintained its day to day oilfield business activities” (CR at 13, 14);
“Activities [were] being conducted” on the premises and Romaine Llewelyn, as supervisor for Absolute, was in charge of those activities when the accident occurred (CR at 14);
Guzman was on the company's premises when suddenly and without warning, Rocky Hernandez fired a shotgun at Guzman, striking him and causing him serious bodily injury (CR at 14);
Romaine Llewelyn and Rocky Hernandez were employees of Absolute, acting within the course and scope of their respective employment with Absolute at the time of the injury (CR at 14);
Romaine Llewelyn was Guzman's direct supervisor (CR at 13–14);
Romaine Llewelyn was required to “provide a safe workplace” for Guzman and "adequately supervise the employees under his charge” (CR at 16–17);
Absolute “failed to provide place of employment” to Guzman and failed to make the workplace safe (CR at 16–17); and
Guzman's injury was proximately caused by the failure to provide a safe workplace to Guzman and the failure to adequately supervise the employees on the premises, including Guzman. (CR at 16–17).
When applying the cannon of liberal construction to the above-cited facts,
Appellants contend that Appellee’s duty of defense under the TMIC Policy is
triggered by those allegations contained within the Underlying Petition. The facts
cited above clearly establish that an employee of Absolute (Guzman) was injured
on company premises while operations were being performed on those premises.
(CR at 13–14). Further, the factual allegations note that Absolute and Guzman's
direct supervisor, Romaine Llewelyn, did not provide Guzman a safe workplace
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 21 of 40 and/or adequately supervise their employees, which Guzman claimed proximately
caused his injuries. (CR at 16, 17). Despite the fact that the Underlying Pleading
is silent as to what Guzman was doing on the premises at the time of his injury, the
above-cited factual allegations are sufficient for the Court to determine that
Guzman's injury potentially arose out of and in the course of his employment. In
other words, based on the above factual allegations, “the conditions under which
[Guzman’s] work [was] necessarily performed [potentially] cause[d] exposure to
the risk.” Andrews, 110 S.W.2d at 51.
Appellants acknowledge that a court may not “imagine factual scenarios
which might trigger coverage” but stress that the eight corners doctrine does not
require it to “ignore those inferences logically flowing from the facts alleged in the
petition." GEICO Gen. Ins. Co. v. Austin Power, Inc., 357 S.W.3d 821 (Tex.
App.—Houston [14th Dist] 2012, pet. denied) (citing Allstate Ins. Co. v. Hallman,
159 S.W.3d 640, 645 (Tex. 2005)). Moreover, "[i]n construing the allegations of
the underlying suit, the pleadings are strictly construed against the insurer, and
any doubt is resolved in favor of coverage." Gehan Homes, 146 S.W.3d at 846
(emphasis added). Therefore, based on the above, the factual allegations contained
in the Underlying Petition, at the very least, potentially state a covered claim
within the TMIC Policy. As such, under Texas law, Appellee’s duty of defense
was triggered by the factual allegations contained within the Underlying Petition.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 22 of 40 In addition to the above, despite Appellee’s arguments to the contrary, a
pleading that does not specifically allege that an injury arose out of the course and
scope of employment may nevertheless trigger the duty of defense where sufficient
factual allegations exist that allow a trial court to make that inference. For
example, in City of Dallas v. Csaszar, two police officers were sued for verbally
abusing and physically assaulting a third party in violation of federal law. No. 05-
99-00208-CV, 1999 WL 1268076, at *2 (Tex. App.—Dallas Dec. 30, 1999, pet.
denied). The officers in turn requested a defense from the City of Dallas, which
declined to defend the officers because the underlying complaint failed to “directly
and factually allege any basis to assume the officers were acting within the course
and scope of their employment.” Id. at *3. The insuring agreement at issue was
very similar to the TMIC Policy’s insuring agreement in the present case, which
required the City of Dallas to “indemnify and defend a plan member ... against a
loss ... resulting from an act or omission of the plan member during the discharge
of his duties and within the scope of his office, employment, or assigned volunteer
work with the city.” Id. at *4. In concluding the City owed a defense to the
officers, the court noted that “[a]dmittedly, the complaint does not expressly allege
that [the officers] were acting in within the scope of their employment when the
incident occurred.” Id. However, the court nevertheless held that because it was
required to liberally construe the pleadings in favor of coverage and resolve all
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 23 of 40 doubt in favor of the insured, the "complaint was sufficient to allege that the
officers were acting within the course and scope of employment." Id.; see also
Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W.2d 22, 23 (Tex.
1965) ("While we have said above that the court is limited to a consideration of the
allegations and the insurance policy in determining an insurer's duty to defend, we
wish to point out that in considering such allegations a liberal interpretation of their
meaning should be indulged.").
Further, in National Union Fire Ins. Co. of Pittsburgh, Pa. v. Nat’l
Convenience Stores, Inc., the Fourth Court of Appeals considered a situation
wherein an insured’s employee alleged that her supervisor “took advantage of his
supervisory role and used physical superiority to grab or embrace [the employee]
during working hours on company premises against her will.” 891 S.W.2d 20, 21
(Tex. App.—San Antonio 1994, no writ). Also, during a Christmas party on the
insured’s property, the employee was physically assaulted by her supervisor. Id.
The issue before the court was whether the allegations contained within the
underlying pleading concerning these events triggered a defense under the
insured’s commercial liability policy, which excluded injuries “arising out of and
in the course of [a claimant’s] employment.”1 Id. In determining that no duty of
1 The exclusion at issue in National Union is essentially the counterpart to the insuring agreement contained within TMIC’s Policy and is intended to preclude coverage under a commercial liability policy for risks that fall more squarely under employment liability
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 24 of 40 defense was owed, the court recognized that “all of the acts alleged that arguably
resulted in bodily injury occurred on the defendant company’s premises and during
office hours or during an office party” and, as such, arose out of and in the course
of the claimant’s employment with the insured. Id.
In the present case, because the four corners of the Underlying Petition
clearly state that Guzman was: (1) an employee of Absolute, (2) injured on
Absolute's premises while operations were being performed and (3) under the
supervision of Romaine Llewelyn when the injury occurred, and alleges that the
injury in question occurred because Absolute and/or Llewelyn failed to provide a
safe workplace for Guzman, the trial court had more than ample information to
conclude that the potential exists that Guzman’s injuries arose out of and in the
course of his employment with Absolute. As such, because the factual allegations
in the Underlying Petition create the potential for coverage to exist, the trial court
should have properly resolved all doubts in favor of coverage to conclude that the
duty of defense was triggered. See Liberty Mut. Ins. Co. v. Graham, 473 F.3d 596
(5th Cir. 2006) (noting that Texas law required the court to consider the factual
allegations along with any “reasonable inference that flow from the facts alleged”);
Emp'rs Mut. Cas. Co. v. Northern Ins. Co., No. 3:08-CV-1498-G, 2010 WL
coverage like that at issue in this case. The Hallmark policy at issue in this case also contains such an exclusion but, because of the alternative allegations plead by Guzman, Hallmark nevertheless assumed the defense of the insured under reservation of rights.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 25 of 40 850243 (N,D. Tex. Mar. 11, 2010) (noting that the subject allegations “are
admittedly not a model of clarity” but noting that Texas law requires a defense if
allegations potentially support a covered claim); see also Gen. Star Indent. Co. v.
Gulf Coast Marine Assocs., Inc., 252 S.W.3d 450 (Tex. App—Houston [14th Dist]
2008, pet. denied); Hochheim Prairie Cas. Ins. Co. v. Appleby, 255 S.W.3d 146,
150 (Tex. App.—San Antonio 2008, pet. dism'd); Gomez v. Allstate Tex. Lloyds,
241 S.W.3d 196, 204 (Tex. App—Fort Worth 2007, no pet.).
3. Appellee’s Arguments Concerning the Duty of Defense Misapply and Misinterpret Texas Law
Within Appellee’s Motion for Summary Judgment regarding the duty of
defense, Appellee argued that defense under the TMIC Policy was not triggered as
a result of Guzman’s failure to plead that Guzman sustained injury in the course of
his employment with Absolute. (CR at 98). Appellee further contended that “the
nature of [Guzman’s] injury—a shotgun wound— is not one which ‘logically
flows from’ his employment as a[n] oilfield worker” and that no logical inference
exists that would support Appellants’ position. (CR at 99). However, for the
reasons set forth below, Appellee’s arguments in this regard read facts into the
pleadings and/or misapply or misinterpret Texas law with respect to the duty of
defense.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 26 of 40 A. The Underlying Petition’s failure to explicitly allege an injury in the course of employment does not negate Appellee’s duty to defend.
Appellee has asserted that the allegations in the Underlying Petition are
insufficient to trigger its duty of defense because the pleading fails to allege
specifically that Guzman was acting in the course and scope of his employment or
that he was engaged in any employment-related activities or furthering his
employer’s business at the time of the accident. In doing so, Appellee essentially
asks that these omissions be treated as affirmative representations in regard to
course of employment and ignores the logical inferences created from the
remaining facts that were asserted within the Underlying Pleading. Such an
argument not only requires the Court to read facts into the pleading, which is
prohibited under Texas law, but also presents an overly narrow and incorrect
interpretation of the duty of defense.
Contrary to Appellee’s contentions, the failure of the Underlying Petition to
allege specifically that Guzman was acting in the course and scope of his
employment when he sustained injury does not permit Appellee to escape its duty
of defense. See generally Nautilus Ins. Co. v. Nevco Waterproofing, Inc., Civ. A.
H-04-2986, 2005 WL 3088608, at *8 (S.D. Tex. Jul. 11, 2005). Rather, Texas
courts have frequently held that “[w]here the complaint does not state facts
sufficient to clearly bring the cases within or without coverage, the general rule is
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 27 of 40 that the insured is obligated to defend if there is potentially, a case under the
complaint within the coverage of the policy.” St. Paul Fire & Marine Ins. Co. v.
Green Tree Financial Corp.-Tex., 249 F.3d 389, 391-92 (5th Cir. 2001) (quoting
Merchants Fast Motor Lines, 939 S.W.2d at 141). More specifically, “a third
party’s pleadings need not allege a specific offense to evoke an insurer's duty to
defend.” Id. (citing St. Paul Ins. Co. v. Tex. Dept. of Tramp., 999 S.W,2d 881,
886 (Tex. App.—Austin 1999)).
Therefore, contrary to Appellee’s position, the omission of any facts
explicitly alleging Guzman sustained injury in the course of his employment could
nevertheless trigger a duty of defense if the Court finds that, under the facts pled,
Guzman could have been injured during the course of his employment with
Absolute. See Westport Ins. Corp. v. Atchley, Russell, Waldrop & Hlavinka, L.L.P,
267 F. Supp. 2d 601, 612 (E.D. Tex. 2003) (“[I]f the allegations in the underlying
pleadings could even potentially trigger coverage, and the allegations do not on
their face conclusively activate an exclusion, then the insurer must defend its
insured against the claim.”) (emphasis added).
Texas courts have repeatedly rejected Appellee’s overly narrow
interpretation of the duty of defense as an improper interpretation of the eight
corners doctrine. See e.g., Austin Power Inc., 357 S.W.3d at 824 (holding that a
failure to allege a specific date of injury does not preclude a court from
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 28 of 40 determining that a covered loss potentially occurred during the policy period); see
also e.g., Nautilus Ins. Co. v. Nevco Waterproofing, Inc., No. Civ. A, H-04-2986,
2005 WL 3088608, at *8 (S.D. Tex. Jul. 11, 2005) (noting that “longstanding
Texas authorities, as interpreted by the Fifth Circuit, mandate the conclusion that
[an omission relating to when property damage occurs] is not fatal to [a carrier's]
duty to defend.”). Indeed, the interpretation presented by Appellee in its Motion
for Summary Judgment is in direction opposition to Texas law. Specifically,
where a petition does not allege facts that would affirmatively exclude coverage,
and where the possibility exists that an injury is covered, a defense is triggered.
See Fidelity & Guar. Ins. Underwriters, Inc. v. McManus, 633 S.W.2d 787, 788
(Tex.1982) (“If the petition only alleges facts excluded by the policy, the insurer is
not required to defend.”) (emphasis added); Centennial Ins. Co. v. Bailey, No. 05-
98-00007-CV, 2000 WL 1515158 (Tex. App.—Dallas Oct. 12, 2000, no pet.) (not
designated for publication) (same). In other words, “when there is doubt, there is a
duty to defend.” Gore Designs, 538 F.3d at 369.
For example, in Canal Insurance Co. v. XMEX Transport, LLC, the Western
District of Texas recently considered a business auto policy that provided liability
coverage only for autos that were “specifically listed” on the policy or that would
qualify as a “temporary substitute” auto under the policy. Canal Ins. Co. v.
XMEXTransp., LLC, No. EP-13-CV-156-KC, 2014 WL 4385941, at *4 (W.D. Tex.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 29 of 40 Sept. 4, 2014). Though the underlying pleadings in that case indicated that the
vehicle was not specifically described in the policy, the pleading was silent as to
whether the vehicle would qualify as a temporary substitute auto. Id. at *4–6.
Despite the pleading’s affirmative indication that the vehicle was not described in
the policy, the court still found that the insurance carrier had a duty to defend
under the policy. In reaching this conclusion the court stated that, “[w]hile it is
true that none of the three Defendants expressly pleaded that the Truck was being
used as a temporary substitute auto, [w]hen the complaint does not state facts
sufficient to clearly bring the case within or without the coverage, the general rule
is that the insurer is obligated to defend if there is, potentially, a case under the
complaint within the coverage of the policy.’” Id. at *19 (internal citations
omitted). In case of doubt as to whether the allegations state a cause of action
sufficient to compel the insurer to defend the action, such doubt will be resolved in
the insured's favor. Id.; see also Csaszar, 1999 WL 1268076, at *4. As further
support of its conclusion that the duty of defense had been triggered, the court cited
a “highly instructive” Fifth Circuit decision that held that the duty of defense had
been triggered under a business auto policy "based solely on the possibility, not
even hinted to in the pleadings, that the truck was a replacement auto.” (emphasis
added) Id. at 17.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 30 of 40 Numerous other courts confronted with situations in which a pleading does
not contain specific factual allegations that explicitly trigger coverage have
nevertheless found that, where the factual allegations raise the possibility that a
covered loss is plead, a defense is owed. See Indian Harbor Ins. Co. v. KB Lone
Star, Inc., No. H-ll-CV-1846, 2012 WL 3866858, at *14 (S.D. Tex. Sept. 5, 2012)
(citing Gehan Homes, 146 S.W.3d at 845–46) (holding “Texas courts have held
that a carrier is obligated to defend when the underlying petitions are silent about
the time of the damage” so long as coverage is potentially triggered)); see also
Austin Power Inc., 357 S.W.3d at 824-25 (same). The Northern District of Texas,
in Employers Mutual Casualty Co. v. Northern Insurance Co., found that "[e]ven
where the allegations of the underlying complaint are not just unclear but
seemingly inconsistent, if there is a possible reading of those allegations on which
they fall within the scope of the policy, the insurer has a duty to defend.” Emp'rs
Mut. Cas. Co., 2010 WL 850243 at *5 (N.D. Tex. Mar. 11, 2010); see also Essex
Ins. Co. v. Hines, 358 Fed. Appx. 596, 598 (5th Cir. 2010) (“So long as it is not
unreasonable, an interpretation favoring coverage will be adopted even if an
interpretation militating against coverage is more reasonable.”). In other words,
even where a petition does not contain specific allegations explicitly triggering
coverage, with respect to the duty to defend, Texas courts are allowed to “draw
inferences from the petition that may lead to a finding of coverage.” Gen. Star
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 31 of 40 Indem. Co. v. Gulf Coast Marine Assocs., Inc., 252 S.W.3d 450, 456 (Tex. App.—
Houston [14th Dist] 2008, pet, denied).
B. The inference that Guzman was injured in the course of his employment is reasonable as it flows logically from the factual allegations contained within the Underlying Petition.
As discussed above, in determining whether the duty of defense has been
triggered, Texas law requires courts to consider not only the specific allegations
contained within a pleading, but also any reasonable inferences that may flow from
those specific allegations. Hallman, 159 S.W.3d at 645. The inference that
Guzman’s injuries arose out of and in the course of his employment is supported
by those multiple factual allegations cited above contained within the Underlying
Petition and is therefore clearly not unreasonable as Appellee contends. (CR at 13–
14, 16–17).
Appellee argued at length in its Motion for Summary Judgment that it would
be unreasonable to infer that Guzman was in the course of his employment at the
time he was shot because a wound from a gunshot is not the typical injury one
might imagine an oilfield service worker incurring on the job. (CR at 157).
Notwithstanding this assertion, as it pertains to the duty of defense, “[s]o long as it
is not unreasonable, an interpretation favoring coverage will be adopted even if an
interpretation militating against coverage is more reasonable.” Hines, 358 Fed.
Appx. at 598. Further, Texas case law demonstrates that an injury suffered from a
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 32 of 40 completely unexpected cause unrelated to an employee’s typical job duties can still
arise out of and in the course of employment. For example, in Texas Workers’
Compensation Insurance Fund v. Rodriguez, an employee for an offshore safety
equipment company, was injured while jogging to catch a football during one of
his breaks. 953 S.W.2d 765, 767 (Tex. App.—Corpus Christi 1997, pet. denied).
His job duties were grinding fiberglass and helping in assembly; tasks wholly
unrelated to jogging to catch a football. Id. at 766. Still, the Court of Appeals held
that his injury was sustained within the course and scope of his employment. Id. at
769.
In addition, relying heavily from an opinion issued by the Fifth Circuit,
Appellees have also claimed that to find Guzman was within the course of his
employment when he was injured would deviate from the eight-corners rule in
such a way as to shift the burden of proof onto the party disputing coverage to
establish that the pleadings affirmatively negate coverage. (CR at 173). However,
the case on which Appellees rely, Gilbane Building Co. v. Admiral Insurance Co.,
is clearly distinguishable from the one at hand. 664 F.3d 589 (5th Cir. 2011). In
Gilbane, a general contractor was sued by a construction site worker who was
injured after falling from a ladder. Id. at 592. The general contractor sought
coverage under the employer’s commercial general liability policy, but that
coverage would only be triggered if the allegations pled that the worker’s injuries
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 33 of 40 were at least partially caused by the employer. Id. at 593. Although there was no
mention in the pleadings of any sort of negligence on behalf of the employer, the
trial court found that coverage was triggered because the possibility existed that
negligence on behalf of Parr, the injured employee, acting on behalf of the
employer in the course of his job, could have contributed to the worker’s injuries.
Id. at 599. The Fifth Circuit went on to reject this argument on the basis that
nothing existed in the pleadings to support such an assumption. Id. “Simply put,
the petition does not allege any facts suggesting that Parr’s own negligence could
have caused his injuries.” Id. (emphasis added).
That statement by the court clearly distinguishes Gilbane from the case at
hand as ample support can be found in the Underlying Petition for the logical
inference that Guzman was shot in the course of his employment. The Underlying
Petition states that Guzman was an employee of Absolute who was injured on
Absolute’s premises while business operations were being performed. (CR at 13–
14). Further, he was injured by a fellow employee who was acting within the
course of his employment at the time and was under the supervision of the
workers’ shared supervisor who was also acting within the course of his
employment at the time of the incident. (CR at 13–14).
Moreover, Appellee has asserted that it would be difficult to imagine a
situation in which Guzman could have received a gunshot wound while in the
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 34 of 40 course of his employment. (CR at 157). However, in reaching that conclusion,
Appellee incorrectly places all focus on the nature of the injury, which is of little
relevance under Texas law, and ignores all other factual allegations put forth in the
Underlying Pleadings and the logical inferences that flow therefrom. When taking
the correct approach under Texas law and considering all factual allegations put
forth, the more difficult situation to imagine is one in which Guzman himself
was not in the course of his employment when he was (1) injured on the premises
of his employer; (2) by another employee acting within the course of his
employment; (3) who was under the supervision of the same person who also
supervised Guzman himself who was also acting within the course of his
Thus, in order to arrive at the conclusion that it is unreasonable to infer
Guzman was injured in the course of his employment, Appellee must make a
complete departure from established Texas law. Appellee has argued that “oilfield
service workers do not suffer shotgun wounds as a logical result of their
employment.” (CR at 157). Therefore, Appellee contends it is unreasonable to
infer Guzman was injured in the course of his employment. However, in its very
next point of contention, Appellee acknowledges and even uses as support the fact
that Guzman’s assailant, Rocky Hernandez, was alleged to be within the course
and scope of his employment. (CR at 157). Just as oilfield services workers are
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 35 of 40 unlikely to receive gunshot wounds in the course of employment, they are similarly
unlikely to inflict them upon their coworkers. Appellee’s contention in this regard
is neither reasonable nor logical and demonstrates why Appellee’s arguments
regarding this issue are incorrect under Texas law. Indeed, determining whether an
injury was a logical result of employment is not a standard used to determine
whether a duty to defend exists under Texas law. Instead the Court is to take into
consideration all factual allegations in the pleadings, taken as true, as well as the
reasonable inferences flowing therefrom in determining whether the duty has been
triggered. King, 85 S.W.3d at 187; Trinity Univ. Ins. Co. v. Cowan, 945 S.W.2d
819, 821 (Tex. 1997); Fid & Guar. Ins. Inc. v. McManus, 633 S.W.2d 787, 788
(Tex. 1982).
Here, when considering all factual allegations in the Underlying Pleadings,
the inference that Guzman was in the course of his employment at the time of his
injury flows logically from multiple specific allegations and is thus not
unreasonable, triggering Appellee’s duty of defend in the Underlying Lawsuit. As
such, the trial court erred in Granting Appellee’s Motion for Summary Judgment
and denying Appellants’ Cross-Motion for Summary Judgment and Appellants ask
that this Court reverse the decision of the trial court and render judgment in favor
of Appellants’ with respect to those grounds contained within Appellants’ Cross-
Motion for Summary Judgment.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 36 of 40 CONCLUSION AND PRAYER FOR RELIEF
The trial court erred in granting Appellee’s Motion for Summary Judgment
and denying Appellant’s Cross-Motion for Summary Judgment regarding
Appellee’s duty to defend in the Underlying Lawsuit. The duty to defend was
triggered under Appellee’s policy because the Underlying Petition shows that Jose
Guzman was an employee of Absolute Oilfield who was injured, or at the very
least potentially injured, while in the course of his employment.
For these reasons, Appellants Hallmark Specialty Underwriters, Inc. and
Hallmark Specialty Insurance Company, pray that the Court reverse the decision of
the trial court granting Appellee’s Motion for Summary Judgment and denying
Appellants’ Cross-Motion for Summary Judgment and render judgment that
Appellee has a duty to defend in the Underlying Lawsuit. Appellants further pray
for attorneys’ fees and costs of appeal, together with such other and further relief to
which Appellants may be justly entitled.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 37 of 40 Respectfully submitted,
CURNEY, FARMER, HOUSE, & OSUNA, P.C. 411 Heimer Road San Antonio, Texas 78232-4854 (210) 377-1990 (telephone) (210) 377-1065 (facsimile)
By: /s/ Wm. David Farmer Wm. David Farmer State Bar No. 06826470 Email: wdfarmer@cfholaw.com Chad W. Schreiber State Bar No. 24085732 Email: cschreiber@cfholaw.com
Attorneys for Appellants Hallmark Mutual Insurance Company and Hallmark Specialty Insurance Company
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 38 of 40 CERTIFICATE OF SERVICE I certify that a true and correct copy of the foregoing has been served on the following by Electronic Filing Service Provider (EFSP), email, hand delivery, facsimile, and/or certified mail, return receipt requested, on the 11th day of June, 2015:
/s/ Wm. David Farmer Via E-mail: splacek@arnoldplacek.com sarnold@arnoldplacek.com jchaltain@arnoldplacek.com R. Scott Placek Scott Arnold Jonathan Chaltain Arnold & Placek, PC 203 East Main Street, Suite 201 Round Rock, Texas 78664 Telephone: (512) 341-7044 Facsimile: (512) 341-7921
Trial Attorneys for Appellee Texas Mutual Insurance Company
CERTIFICATE OF COMPLIANCE Pursuant to Tex. R. App. P. 9.4(i)(3), I hereby certify that Appellents’ Brief contains 6,325 words.
/s/ Wm. David Farmer
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 39 of 40 APPENDIX Tab 1: Order granting Appellee’s Motion for Summary Judgment and denying Appellants’ Cross-Motion for Summary Judgment
Tab 2: Order granting Appellee’s Request for Payment of Attorney’s Fees and disposing of all issues between the parties
Tab 3: Policy No. SBP-0001227402 20130809 issued by Texas Mutual Insurance Company for the policy period 08/09/13 to 08/09/14.
W:\WDOX\CLIENTS\1532\0676\00565749.DOC Page 40 of 40