United States Court of Appeals

Fifth Circuit

FILED

September 18, 2003

Charles R. Fulbruge III

Clerk UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 03-20005

ESCO TRANSPORTATION COMPANY; ET AL,

 Plaintiffs,

COMPASS BANK, 

 Plaintiff-Appellant,

VERSUS

GENERAL INSURANCE COMPANY OF AMERICA, 

 Defendant-Appellee.

Appeal from the United States District Court

For the Southern District of Texas, Houston Division

H-01-CV-1727

Before EMILIO M. GARZA and DENNIS, Circuit Judges, and VANCE,*

District Judge.

____________________

* District Judge of the Eastern District of Louisiana,

sitting by designation.
2

PER CURIAM.**

This insurance coverage dispute involves a claim against a

cargo insurance policy made following the theft of a shipment of

clothing from an unattended semitrailer. Compass Bank

("Compass") appeals the district court's grant of summary

judgment in favor of General Insurance Company of America

("General"). For the following reasons, we AFFIRM the district

court's judgment in favor of General.

I. FACTS AND PROCEEDINGS

Esco Transportation Company ("Esco") transported cargo

cross-country. On September 4, 2000, a loaded tractor trailer

owned by Esco was stolen while it was parked unattended on a

public street in East Los Angeles. Evidence indicated that the

cab had been forcibly entered. Esco recovered both the tractor

and the trailer, but it did not recover the cargo in the trailer,

clothing valued at $372,088.80.

Esco submitted a claim to General on its cargo insurance

policy (the "Policy"). The Policy covered loss of cargo:

A. Coverage. We will pay for "loss" to Covered

Property from any of the Covered Causes of Loss. 

. . . 

3. Covered Causes of Loss. We cover your legal

liability for direct physical "loss" to Covered

____________________

** Pursuant to 5th Cir. R. 47.5, the Court has determined that this

opinion should not be published and is not precedent except under the limited

circumstances set forth in 5th Cir. R. 47.5.4.
1 The bankruptcy proceeding was later converted to a Chapter

7 liquidation.

3

Property in accordance with the Tariff, Bill of Lading

or Shipping Receipt except those causes of "loss"

listed in the exclusions. 

The Policy excluded coverage for loss of cargo caused by theft

"while the property in or on any motor vehicle or trailer is

unattended unless the property is contained in a fully enclosed

and securely locked body or compartment and there is visible

evidence of violent, forcible entry thereto" ("Unattended Trailer

Exclusion"). Section E of the "Loss Conditions" section of the

Policy, entitled "Loss Payment", addressed payment for covered

losses: 

We will pay or make good on any "loss" covered under

this Coverage Part within 30 days after: 

1. We reach agreement with you;

2. The entry of final judgment; or 

3. The filing of an appraisal award.

We will not be liable for any part of a "loss" that has

been paid or made good by others.

On September 25, 2000, Esco filed for relief under Chapter

11 of the Bankruptcy Code.1 On October 3, 2000, General denied

Esco's claim under the Policy based on the Unattended Trailer

Exclusion. General concluded that there was no visible evidence

of forced entry into the trailer. In the denial letter, General

also expressly reserved all rights, privileges and defenses under

the Policy. General further clarified, "No statement or act

undertaken by us shall constitute a waiver or relinquishment ...
2 Esco initially sued Safeco Insurance Company of America

("Safeco"). Safeco filed the original answer to Esco's complaint,

denying the allegations in the complaint, including the allegation

that Safeco had issued an insurance policy to Esco. Esco filed an

unopposed motion to change the style of the case, changing the name

of the defendant to General Insurance Company of America. Thus

General's amended answer was the first answer to directly address

specific allegations in Esco's complaint.

4

of any or all said rights, privileges and defenses."

On April 20, 2001, Esco sued General in Texas state court,

alleging breach of contract, violations of the Texas Insurance

Code, TEX. INS. CODE art. 21.21-2, and violations of the Texas

Deceptive Trade Practices Act, TEX. BUS. & COM. CODE §§ 17.46,

17.50. Esco also sought a declaratory judgment of coverage under

the Policy. In May, 2001, General removed the case to federal

court on diversity grounds and amended its answer to assert

affirmative defenses and to allege that conditions precedent to

recovery under the Policy had not been met.2 

General filed a motion for summary judgment, and Esco filed

a motion for partial summary judgment on the issue of General's

obligation to provide coverage for the loss. The district court

granted General's motion as to all extra-contractual claims but

denied it as to the breach of contract claims. The court denied

Esco's motion for partial summary judgment.

On July 8, 2002, Compass moved to substitute itself in place

of Esco as the real party in interest in Esco's suit against

General, contending that it was the successor-in-interest to

Esco's claims and causes of action under the Policy. Compass was
5

a secured creditor of Esco, and Esco secured the loans from

Compass with collateral that included Esco's insurance policies

and proceeds. After the district court granted Compass's motion,

Compass continued to pursue Esco's claims.

General later filed a second motion for summary judgment on

several grounds, including that the Loss Payment provisions in

the Policy which established conditions precedent to coverage had

not been met. The court granted summary judgment based on

Compass's failure to demonstrate that the Loss Payment provisions

had been satisfied and entered final judgment in favor of

General. Plaintiff then moved for a new trial. The district

court denied plaintiff's motion, emphasizing that plaintiff had

failed to present any evidence establishing a loss under the

Policy.

II. DISCUSSION

A. Standard of Review

We review the district court's ruling on a motion for

summary judgment de novo, applying the same legal standard as the

district court. See Wyatt v. Hunt Plywood Co., 297 F.3d 405, 408

(5th Cir.2002). We likewise review matters of contract

interpretation de novo. See T.L. James & Co. v. Traylor Bros.

Inc., 294 F.3d 743, 746 (5th Cir. 2002). Summary judgment should

be granted only when there is "no genuine issue as to any

material fact[.]" Fed. R. Civ. P. 56(c); see also Wyatt, 297
6

F.3d at 408-09. In determining whether there is a dispute as to

any material fact, we consider all of the evidence in the record,

but we do not make credibility determinations or weigh the

evidence. See Reeves v. Sanderson Plumbing Prods., Inc., 530

U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). Instead,

we "draw all reasonable inferences in favor of the nonmoving

party[.]" Id.; see also Wyatt, 297 F.3d at 409. If we

determine, after giving credence to the facts as presented by the

nonmoving party, that "the moving party is entitled to a judgment

as a matter of law," we affirm the grant of summary judgment. 

Fed. R. Civ. P. 56(c). "[S]ummary judgment is appropriate if the

nonmovant fails to establish facts supporting an essential

element of his prima facie claim." GeoSouthern Energy Corp. v.

Chesapeake Operating Inc., 274 F.3d 1017, 1020 (5th Cir. 2001). 

The nonmovant cannot avoid summary judgment by presenting only

"conclusory allegations" or "unsubstantiated assertions" but must

present sufficient evidence to create a genuine issue of material

fact. See Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th

Cir. 1994).

B. Analysis

In its second motion for summary judgment, General argued

that Compass lacked standing to bring a claim for breach of

contract, that Compass could not establish any rights under the

Policy, and that Compass could not show the existence of a
7

triable issue about whether the conditions precedent to coverage

had been met. The district court granted summary judgment based

on Compass's failure to put forth any evidence that either it or

Esco had complied with the Policy's provisions for establishing

loss.

Under Texas law, the insured bears the burden of

establishing that a claimed loss falls within the terms of the

policy. See Western Alliance Ins. Co. v. Northern Ins. Co., 176

F.3d 825, 831 (5th Cir. 1999); Employers Cas. Co. v. Block, 744

S.W.2d 940, 944 (Tex. 1988), overruled on other grounds by State

Farm Fire & Cas. v. Gandy, 925 S.W.2d 696 (Tex.1996). General

contends that summary judgment was warranted because Compass did

not establish the existence of a covered loss under the Policy. 

The Policy provided that General would cover the insured's

"legal liability" for third-party loss "in accordance with the

Tariff, Bill of Lading or Shipping Receipt." The record contains

no evidence of any tariff, bill of lading, shipping receipt, or

other document showing Esco's legal liability, the value of the

cargo, or the owner of the cargo. Compass conceded that Esco has

not reimbursed Sam's Wholesale Club for the value of the cargo. 

When Esco filed its complaint, it asserted that cargo valued at

$372,088.80 was stolen, and Esco therefore was required to

reimburse Sam's Wholesale Club for the stolen cargo. Esco also

submitted an affidavit of an Esco employee with its motion for
8

partial summary judgment that conclusorily asserted that Esco was

required to reimburse Sam's Wholesale Club for the value of the

cargo, without establishing the basis for Esco's liability to

Sam's Wholesale Club. The record contains nothing of evidentiary

value on the issue of Esco's legal liability, much less evidence

establishing Esco's legal liability "in accordance with the

Tariff, Bill of Lading or Shipping Receipt." Compass disputes

General's representation of the record, stating that it supplied

General with a bill of lading and a claim from the cargo owner,

but as the district court noted, the record does not contain any

such evidence. As a result, Compass has failed to establish a

genuine issue of material fact with respect to Esco's legal

liability, and thus whether there was a covered cause of loss

under the Policy. General was therefore entitled to summary

judgment.

Although Compass quarrels with the district court's

conclusion that the insured had to meet one of the three

conditions listed in the Loss Payment provision to establish

liability, we note that Compass failed to establish Esco's legal

liability by any means. The district court emphasized the

absence of any evidence that Esco was indeed liable to Sam's

Wholesale Club in its denial of plaintiff's motion for a new

trial. The Policy covers only legal liability, and we affirm the

district court's conclusion that Compass never established the

existence of Esco's legal liability under the Policy. As a
9

result, we also need not reach the issue of whether the loss is

excluded from coverage under the Unattended Trailer Exclusion.

Compass argues that when General initially denied coverage

to Esco based on the Unattended Trailer Exclusion, it waived any

other defenses to coverage. Compass relies on Lancon v.

Employers Nat'l Life Ins. Co., 424 S.W.2d 321 (Tex. Civ. App. -

Houston [1st Dist.] 1968); Scott v. Indus. Life Ins., 411 S.W.2d

769 (Tex. Civ. App. - Dallas 1967); and Am. Employers Inc. Co. v.

El Paso Val Cotton, 392 S.W.2d 569 (Tex.Civ.App.-El Paso 1965). 

As the court stated in Lancon, "when one specific ground of

forfeiture is urged against a policy of insurance, and the

validity thereof denied on that ground alone, all other grounds

are waived." 424 S.W.2d at 323. In its initial letter denying

coverage, General did not rely on the single ground alone and

instead specifically reserved all rights, privileges, and

defenses under the Policy. Further, when General answered Esco's

claims, it promptly asserted affirmative defenses and alleged

that conditions precedent to recovery under the Policy had not

been met. Because General did not deny Esco's claim on the

Unattended Trailer Exclusion ground alone, we affirm the district

court's finding that General did not waive all other defenses

under the Policy.

III. CONCLUSION

Because Compass failed to meet its burden of establishing
10

Esco's legal liability for the loss and thus did not establish

the existence of a covered loss under the policy, we AFFIRM the

district court's grant of summary judgment for General.