ACCEPTED 14-14-00254-CV FOURTEENTH COURT OF APPEALS HOUSTON, TEXAS 1/15/2015 10:10:13 AM CHRISTOPHER PRINE CLERK GIEGER, LABORDE & LAPEROUSE, L.L.C. FORTY-EIGHTH FLOOR
ERNEST P. GIEGER, JR.'·2 ONE SHELL SQUARE MEGAN A. CAMBRE KENNETH H. LABORDE',2 ERIC S. CHARLESTON" LAMBERT M. LAPEROUSE',2 701 POYDRAS STREET CAITLIN J. HILL· ROBERT I. SIEGEL,,2 NEW ORLEANS, LOUISIANA 70139-4800 FILED IN JONATHAN S. ORO BRADLEY J. SCHWAB 14th COURT OF APPEALS ANDREW A. BRAUN',2 LEO R. McALOON 111',2 TELEPHONE (504) 561-0400 SANDY G. HOY" JOHN E. W. BAAY 11'·2,. FACSIMILE (504) 561-1011 HOUSTON, TEXAS IAN R. GOLDBERG 7 ANDREW M. ADAMS',2 MARGARET V. GLASS2 DANIEL G. RAUH' WWW.GLLLAW.COM 1/15/2015 10:10:13 AM DAVID M. SCHROETER RACHEL G. WEBRE' DALLAS V. COOK" BRENDAN P. DOHERTy',2 CHRISTOPHER A. PRINE CHRISTOPHER R. TESKE',2 WILLIAM A. BAROUSSE',2 HOUSTON OFFICE: Clerk OF COUNSEL JANETH.ASCHAFFENBURG MICHAEL E. HILL',2 J. MICHAEL DIGIGLIA5 SUITE 750 CHARLOTTE A. FIELDS" 1177 WEST LOOP SOUTH GINA S. MONTGOMERY HOUSTON, TEXAS 77027-9064 ALISTAIR M. WARD MICHAEL D. CANGELOSI TARA E. CLEMENT2 TELEPHONE (832) 255-6000 1 LAW CORPORATION
ELIZABETH A. CHICKERING FACSIMILE (832) 255-6001 2 ALSO ADMITTED IN TEXAS
LAUREN C. CANCIENNE 2 3 ALSO ADMITTED IN MISSISSIPPI
ERIC C. WALTON 4 ONLY ADMITTED IN TEXAS
SIMONE MANUEL ALMON SALsa ADMITTED IN COLORADO
JAMESON M. TAYLOR January 15, 2015 6 ALSO ADMITTED IN NEW YORK AND WASHINGTON, D.C. EMILY E. EAGAN2 7 ONLY ADMITTED IN TEXAS MATTHEW F. MORGAN AND MONTANA VICTORIA E. EMMERLING
Hon. Christopher A. Prine Clerk, Fourteenth Court of Appeals 301 Fannin, Suite 245 Houston, Texas 77002
Re: No. 14-14-00254-CV: Liberty Surplus Ins. Co. et al., v. Exxon MobJ1 Corp.
Dear Mr. Prine:
Appellant Commerce & Industry Insurance Company ("C&I") submits this
letter brief under Texas Rule of Appellate Procedure 38.7 to advise the Court of new
authority relevant to the above-captioned insurance coverage appeal. As detailed
further below, the recent opinion In re Wyatt Field Servo Co., 14-14-00275-CV, 2014
WL 7366037 (Tex. App.-Houston [14th Dist.l Dec. 23, 2014) reasons that the
liability of Exxon Mobil Corporation ("ExxonMobil") arose from its own operations.
This supports C&I's argument on appeal that ExxonMobil failed to meet its burden
of proving its liability arose out of the operations of Wyatt Field Service Company
("Wyatt") in order to trigger indemnity coverage under C&I's insurance policy. C&I
therefore respectfully requests that the Court consider this post-submission letter GIEGER, LABORDE & LAPEROUSE, L.L.C.
Mr. Christopher A. Prine, Clerk January 15,2015 Page 2
brief and the Wyatt opinion (attached as Exhibit A hereto) as additional authority
in support of C&I's position on appeal.
This appeal arises from the denial of additional insured coverage to
ExxonMobil under primary and excess liability insurance policies issued to Wyatt.
After an explosion at ExxonMobil's Baytown refinery, ExxonMobil settled the
lawsuit brought by two injured workers under Cause No. 2011-44838 entitled,
McBride, et al. v. Exxon MobJ1 Corp., et ai., in the 125th Judicial Circuit Court of
Harris County (the "underlying lawsuit"). The underlying lawsuit then proceeded
to trial against Wyatt. The jury in the underlying lawsuit returned a verdict
finding that Wyatt was not negligent and that ExxonMobil was solely responsible
for the plaintiffs' injuries. After the trial court granted the workers' motion for a
new trial, Wyatt sought mandamus relief from this Court.
In the meantime, ExxonMobil filed suit seeking coverage for its settlement of
the underlying lawsuit as an additional insured under Wyatt's primary and excess
liability policies (the "coverage action"). The same trial court that granted the
injured workers' motion for a new trial also presided over the coverage action and
granted summary judgment in favor of ExxonMobil and against the insurers.
Without supplying any reasoning for its ruling, the trial court found the insurers
had a duty to indemnify ExxonMobil for its settlement. This appeal ensued. On the
same day that the insurers filed their reply briefs in this appeal, this Court
conditionally granted Wyatt's petition for writ of mandamus and ordered GIEGER, LABORDE Be LAPEROUSE, L.L.C.
Mr. Christopher A. Prine, Clerk January 15,2015 Page 3
reinstatement of the jury verdict in the underlying lawsuit. See Wyatt, 2014 WL
7366037, at *14.
The Wyatt mandamus opinion reinstating the jury verdict is relevant to this
appeal. In C&I's opening brief, C&I asserts that the proceedings in the underlying
lawsuit - including the jury's verdict - are necessary to determining whether
ExxonMobil's liability arose out of Wyatt's operations. 1 This is because when the
trial evidence and jury verdict establish that the putative additional insured's
liability arises out of its own operations, then the additional insured cannot meet its
burden of proving it is entitled additional insured coverage. (C&I Opening Br. §III
at p. 29-34) Additionally, C&I's opening brief also asserts that the trial court
improvidently granted ExxonMobil's summary judgment motion because a
determination regarding C&I's indemnity obligation, if any, is necessarily
premature until final judgment is entered in the underlying lawsuit. (C&IOpening
Br. §III at p. 36-37) Wyattbears directly on these points.
In Wyatt, this Court held that the trial court abused its discretion in granting
a new trial because the jury's verdict absolving Wyatt of liability was not against
the great weight and preponderance of the evidence. Wyatt, 2014 WL 7366037, at
*10. After reviewing the evidence, this Court held that the jury's finding that
1 This letter brief is intended only to supplement C&I's alternative argument that the trial court erred in granting summary judgment because issues of fact exist as to whether ExxonMobil's liability arose out of Wyatt's operations. (C&I Opening Br. §III; C&I Reply Br. §IV) This letter brief does not supersede or waive any arguments previously raised. GIEGER, LABORDE & LAPEROUSE, L.L.C.
Mr. Christopher A. Prine, Clerk January 15,2015 Page 4
Wyatt was not negligent was supported by credible testimony establishing that
there was nothing in Wyatt's files to confirm that Wyatt had installed certain safety
chains in 2008. Id. This Court further reasoned that the jury's finding was also
supported by evidence establishing that ExxonMobil's design of, and instructions for
installing, a dummy nozzle system were inadequate. Id. This Court therefore
ordered the trial court to vacate its order granting a new trial and render judgment
on the jury verdict in Wyatt's favor. Id. at 14.
The Wyatt opinion supports C&1's position that ExxonMobil failed to meet
its burden of proving it is entitled to additional insured coverage because
ExxonMobil's liability in the underlying lawsuit arose out of Wyatt's work.
ExxonMobil does not dispute that it had the heavy burden on summary judgment to
"conclusively prove" that it was an additional insured under the C&1 policy.
(ExxonMobil Br. p. 26) See Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217,223 (Tex.
1999).
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ACCEPTED 14-14-00254-CV FOURTEENTH COURT OF APPEALS HOUSTON, TEXAS 1/15/2015 10:10:13 AM CHRISTOPHER PRINE CLERK GIEGER, LABORDE & LAPEROUSE, L.L.C. FORTY-EIGHTH FLOOR
ERNEST P. GIEGER, JR.'·2 ONE SHELL SQUARE MEGAN A. CAMBRE KENNETH H. LABORDE',2 ERIC S. CHARLESTON" LAMBERT M. LAPEROUSE',2 701 POYDRAS STREET CAITLIN J. HILL· ROBERT I. SIEGEL,,2 NEW ORLEANS, LOUISIANA 70139-4800 FILED IN JONATHAN S. ORO BRADLEY J. SCHWAB 14th COURT OF APPEALS ANDREW A. BRAUN',2 LEO R. McALOON 111',2 TELEPHONE (504) 561-0400 SANDY G. HOY" JOHN E. W. BAAY 11'·2,. FACSIMILE (504) 561-1011 HOUSTON, TEXAS IAN R. GOLDBERG 7 ANDREW M. ADAMS',2 MARGARET V. GLASS2 DANIEL G. RAUH' WWW.GLLLAW.COM 1/15/2015 10:10:13 AM DAVID M. SCHROETER RACHEL G. WEBRE' DALLAS V. COOK" BRENDAN P. DOHERTy',2 CHRISTOPHER A. PRINE CHRISTOPHER R. TESKE',2 WILLIAM A. BAROUSSE',2 HOUSTON OFFICE: Clerk OF COUNSEL JANETH.ASCHAFFENBURG MICHAEL E. HILL',2 J. MICHAEL DIGIGLIA5 SUITE 750 CHARLOTTE A. FIELDS" 1177 WEST LOOP SOUTH GINA S. MONTGOMERY HOUSTON, TEXAS 77027-9064 ALISTAIR M. WARD MICHAEL D. CANGELOSI TARA E. CLEMENT2 TELEPHONE (832) 255-6000 1 LAW CORPORATION
ELIZABETH A. CHICKERING FACSIMILE (832) 255-6001 2 ALSO ADMITTED IN TEXAS
LAUREN C. CANCIENNE 2 3 ALSO ADMITTED IN MISSISSIPPI
ERIC C. WALTON 4 ONLY ADMITTED IN TEXAS
SIMONE MANUEL ALMON SALsa ADMITTED IN COLORADO
JAMESON M. TAYLOR January 15, 2015 6 ALSO ADMITTED IN NEW YORK AND WASHINGTON, D.C. EMILY E. EAGAN2 7 ONLY ADMITTED IN TEXAS MATTHEW F. MORGAN AND MONTANA VICTORIA E. EMMERLING
Hon. Christopher A. Prine Clerk, Fourteenth Court of Appeals 301 Fannin, Suite 245 Houston, Texas 77002
Re: No. 14-14-00254-CV: Liberty Surplus Ins. Co. et al., v. Exxon MobJ1 Corp.
Dear Mr. Prine:
Appellant Commerce & Industry Insurance Company ("C&I") submits this
letter brief under Texas Rule of Appellate Procedure 38.7 to advise the Court of new
authority relevant to the above-captioned insurance coverage appeal. As detailed
further below, the recent opinion In re Wyatt Field Servo Co., 14-14-00275-CV, 2014
WL 7366037 (Tex. App.-Houston [14th Dist.l Dec. 23, 2014) reasons that the
liability of Exxon Mobil Corporation ("ExxonMobil") arose from its own operations.
This supports C&I's argument on appeal that ExxonMobil failed to meet its burden
of proving its liability arose out of the operations of Wyatt Field Service Company
("Wyatt") in order to trigger indemnity coverage under C&I's insurance policy. C&I
therefore respectfully requests that the Court consider this post-submission letter GIEGER, LABORDE & LAPEROUSE, L.L.C.
Mr. Christopher A. Prine, Clerk January 15,2015 Page 2
brief and the Wyatt opinion (attached as Exhibit A hereto) as additional authority
in support of C&I's position on appeal.
This appeal arises from the denial of additional insured coverage to
ExxonMobil under primary and excess liability insurance policies issued to Wyatt.
After an explosion at ExxonMobil's Baytown refinery, ExxonMobil settled the
lawsuit brought by two injured workers under Cause No. 2011-44838 entitled,
McBride, et al. v. Exxon MobJ1 Corp., et ai., in the 125th Judicial Circuit Court of
Harris County (the "underlying lawsuit"). The underlying lawsuit then proceeded
to trial against Wyatt. The jury in the underlying lawsuit returned a verdict
finding that Wyatt was not negligent and that ExxonMobil was solely responsible
for the plaintiffs' injuries. After the trial court granted the workers' motion for a
new trial, Wyatt sought mandamus relief from this Court.
In the meantime, ExxonMobil filed suit seeking coverage for its settlement of
the underlying lawsuit as an additional insured under Wyatt's primary and excess
liability policies (the "coverage action"). The same trial court that granted the
injured workers' motion for a new trial also presided over the coverage action and
granted summary judgment in favor of ExxonMobil and against the insurers.
Without supplying any reasoning for its ruling, the trial court found the insurers
had a duty to indemnify ExxonMobil for its settlement. This appeal ensued. On the
same day that the insurers filed their reply briefs in this appeal, this Court
conditionally granted Wyatt's petition for writ of mandamus and ordered GIEGER, LABORDE Be LAPEROUSE, L.L.C.
Mr. Christopher A. Prine, Clerk January 15,2015 Page 3
reinstatement of the jury verdict in the underlying lawsuit. See Wyatt, 2014 WL
7366037, at *14.
The Wyatt mandamus opinion reinstating the jury verdict is relevant to this
appeal. In C&I's opening brief, C&I asserts that the proceedings in the underlying
lawsuit - including the jury's verdict - are necessary to determining whether
ExxonMobil's liability arose out of Wyatt's operations. 1 This is because when the
trial evidence and jury verdict establish that the putative additional insured's
liability arises out of its own operations, then the additional insured cannot meet its
burden of proving it is entitled additional insured coverage. (C&I Opening Br. §III
at p. 29-34) Additionally, C&I's opening brief also asserts that the trial court
improvidently granted ExxonMobil's summary judgment motion because a
determination regarding C&I's indemnity obligation, if any, is necessarily
premature until final judgment is entered in the underlying lawsuit. (C&IOpening
Br. §III at p. 36-37) Wyattbears directly on these points.
In Wyatt, this Court held that the trial court abused its discretion in granting
a new trial because the jury's verdict absolving Wyatt of liability was not against
the great weight and preponderance of the evidence. Wyatt, 2014 WL 7366037, at
*10. After reviewing the evidence, this Court held that the jury's finding that
1 This letter brief is intended only to supplement C&I's alternative argument that the trial court erred in granting summary judgment because issues of fact exist as to whether ExxonMobil's liability arose out of Wyatt's operations. (C&I Opening Br. §III; C&I Reply Br. §IV) This letter brief does not supersede or waive any arguments previously raised. GIEGER, LABORDE & LAPEROUSE, L.L.C.
Mr. Christopher A. Prine, Clerk January 15,2015 Page 4
Wyatt was not negligent was supported by credible testimony establishing that
there was nothing in Wyatt's files to confirm that Wyatt had installed certain safety
chains in 2008. Id. This Court further reasoned that the jury's finding was also
supported by evidence establishing that ExxonMobil's design of, and instructions for
installing, a dummy nozzle system were inadequate. Id. This Court therefore
ordered the trial court to vacate its order granting a new trial and render judgment
on the jury verdict in Wyatt's favor. Id. at 14.
The Wyatt opinion supports C&1's position that ExxonMobil failed to meet
its burden of proving it is entitled to additional insured coverage because
ExxonMobil's liability in the underlying lawsuit arose out of Wyatt's work.
ExxonMobil does not dispute that it had the heavy burden on summary judgment to
"conclusively prove" that it was an additional insured under the C&1 policy.
(ExxonMobil Br. p. 26) See Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217,223 (Tex.
1999). The Wyatt opinion reinforces the reasons outlined in C&1's briefing as to
why ExxonMobil did not meet that burden. As this Court in Wyatt found, credible
evidence established that Wyatt did not perform the work, and that ExxonMobil's
installation and design were inadequate. Wyatt, 2014 WL 7366037, at *10. Under
both scenarios, ExxonMobil's liability arose out of its own operations - not Wyatt's.
Accordingly, in moving for summary judgment ExxonMobil failed to meet its burden
to conclusively prove a causal connection between the accident and Wyatt's
operations. GIEGER, LABORDE Be LAPEROUSE, L.L.C.
Mr. Christopher A. Prine, Clerk January 15,2015 Page 5
Further, as explained in C&l's opening brief, a final adjudication of liability
in the underlying lawsuit is necessary to determine whether Exxon's liability arose
out of Wyatt's operations. See Evanston Ins. Co. v. A TOFINA Petrochemicals, Inc.,
256 S.W.3d 660, 668 (Tex. 2008) (explaining that "without a determination of
liability, it is impossible to say whether [the additional insured's] responsibility for
the accident, if any, excluded it from coverage"). At the time the trial court granted
ExxonMobil's motion for summary judgment in the coverage action, the jury verdict
in the underlying lawsuit had been vacated and a new trial had been ordered.
Additionally, while the Wyatt Court has now conditionally granted Wyatt's
mandamus writ and ordered that judgment be rendered on the jury verdict, the
judgment is not yet final.2 Therefore, if this Court finds that an issue of fact is
presented regarding whether liability arose out of Wyatt's operations, C&I requests
this Court to reverse and vacate the judgment in favor of ExxonMobil with
directions on remand that the coverage action be stayed until final judgment is
entered in the underlying lawsuit. 3
2 Plaintiffs have flied a petition for rehearing en bane from the Wyatt court's mandamus order. 3 Because this argument is an alternative to C&I's primary argument on appeal that ExxonMobil does not qualify as an additional insured under Endorsement No. 7 (C&I Opening Br. 22-28), if the Court reverses on that issue, the Court need not reach the issue of whether ExxonMobil's liability arose out of Wyatt's operations, and a stay pending judgment in the underlying lawsuit is not required. GIEGER, LABORDE & LAPEROUSE, L.L.C.
Mr. Christopher A. Prine, Clerk January 15, 2015 Page 6
Respectfully submitted,
~~ BRENDAN P. DOHERTY
CERTIFICATE OF SERVICE
I hereby certify that on the 15th day of January, 2015, a true and correct copy of the above and foregoing instrument was served on all parties and counsel of record, in accordance with Rule 21a, T.R.C.P.
Mike Morris Danny L. Van Winkle T EKELL, BOOK, ALLEN & MORRIS , L.L.P. 1221 McKinney, Suite 4300 Houston, Texas 77010
David M. Gunn Beck, Redden & Secrest, LLP One Houston Center 1221 McKinney Street, Suite 4500 Houston, Texas 77010
Brian S. Martin Rodrigo "Diego" Garcia, Jr. THOMPSON, COE, COUSINS & IRONS, L.L.P. One Riverway, Suite 1600 Houston, Texas 77056
BRENDAN P. DOHERTY