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.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 08-20629

Summary Calendar

BJB CONSTRUCTION LLC

Plaintiff

v.

ATLANTIC CASUALTY INSURANCE COMPANY

Defendant-Third Party Plaintiff-Appellant

v. 

TEXAS MUTUAL INSURANCE CO.

Third Party Defendant-Appellee

Appeal from the United States District Court 

for the Southern District of Texas

USDC No. 4:07-CV-157

Before JOLLY, BENAVIDES, and CLEMENT, Circuit Judges.

PER CURIAM:*

This is an appeal from a summary judgment granted in favor of Texas

Mutual Insurance Co. (“Texas Mutual”) holding that Texas Mutual was not

obligated to defend a party in the underlying lawsuit and that Atlantic Casualty

United States Court of Appeals

Fifth Circuit

F I L E D

July 13, 2009

Charles R. Fulbruge III

Clerk
No. 08-20629

2

Insurance Company (“Atlantic”) was not entitled to reimbursement from Texas

Mutual. For the following reasons, we affirm the judgment of the district court.

I.

Antonio Ruiz, the plaintiff in the underlying lawsuit, asserted claims

against BJB Construction, L.L.C. (“BJB Construction”) and E. Garza &

Associates, Inc. (“E. Garza”). Ruiz alleged that he sustained injuries on or about

April 4, 2004, when scaffolding collapsed at a job site in Houston, Texas. Ruiz

claimed his injuries were caused by the negligence of E. Garza and BJB

Construction and that both E. Garza and BJB Construction were negligent in

the following respects: (1) failure to maintain and/or provide proper equipment

to workers and/or subcontractors and independent contractors; (2) failure to

provide adequate safety policies and practices; (3) failure to provide adequate

safety equipment; (4) failure to provide proper assistance; (5) failure to provide

properly trained supervisors and/or directors; and (6) requiring Ruiz to perform

tasks under the conditions stated above.

Atlantic insured E. Garza under a commercial general liability policy and

Texas Mutual insured E. Garza under a Texas workers’ compensation/employers’

liability policy. E. Garza provided a copy of Ruiz’s petition to both Atlantic and

Texas Mutual, requesting that the carriers provide it a defense to the action.

Atlantic tendered a defense to E. Garza and to BJB Construction under a

reservation of rights. Texas Mutual, believing that the allegations in the

petition did not implicate coverage under its policy, did not tender a defense to

E. Garza. The underlying lawsuit settled in 2007, with Atlantic paying a

$275,000 settlement and incurring E. Garza’s defense costs.

Atlantic filed a declaratory judgment action in which Atlantic sought

reimbursement and contribution from Texas Mutual for defense costs incurred

and settlement monies paid by Atlantic on behalf of E. Garza in the underlying

suit. Texas Mutual counterclaimed for a declaratory judgment that it had no
No. 08-20629

3

duty to defend or indemnify E. Garza in the underlying lawsuit and, therefore,

no liability to Atlantic. Both Atlantic and Texas Mutual filed motions for

summary judgment regarding whether Texas Mutual had a duty to defend or

indemnify E. Garza in the underlying lawsuit. Atlantic then filed a motion for

leave to amend its complaint, which the district court denied. In a memorandum

opinion and order, the district court granted Texas Mutual’s motion for summary

judgment, holding that Texas Mutual owed E. Garza no duty to defend or to

indemnify in the underlying lawsuit. Final judgment was entered on April 23,

2008, providing that (1) “Texas Mutual owed E. Garza no duty of defense or

indemnity,” (2) “Texas Mutual has no duty to reimburse Atlantic for the costs of

defense and settlement,” and (3) “Atlantic take nothing in its claims against

Texas Mutual.” Atlantic filed a Rule 59(e) Motion on May 6, 2008, which the

court denied. Atlantic filed the instant appeal on September 15,2008.

II.

This Court reviews a district court’s grant of summary judgment de novo,

applying the same standards as the district court. Strong v. Univ. Healthcare

Sys., L.L.C., 482 F.3d 802, 805 (5th Cir. 2007). Summary judgment is proper if

the record reflects “that there is no genuine issue as to any material fact and

that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c).

Under Texas law, which governs this diversity suit, evaluation of the

petition and the policy is conducted pursuant to the “eight corners” rule.

Guaranty Nat’l Ins. Co. v. Vic Mfg. Co., 143 F.3d 192, 193 (5th Cir. 1998) (citing

Nat’l Union Fire Ins. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139,

141 (Tex. 1997)). Under this rule, “the court compares the four corners of the

insurance policy with the four corners of the plaintiff’s pleading to determine

whether any claim alleged by the pleading is potentially within the policy

coverage.” Id. Courts “must focus their review on the pleading’s factual

allegations, not on the legal theories asserted.” Nat’l Union, 939 S.W.2d at 142.
No. 08-20629

 In determining whether Texas Mutual had a duty to defend E. Garza in the

1

underlying suit, the district court considered deposition testimony submitted by Texas Mutual

that established that Ruiz worked for Francisco Garcia and not E. Garza. Although “[f]acts

outside the pleadings, even those easily ascertained, are ordinarily not material to the [duty

to defend]determination,” Liberty Mut. Ins. Co. v. Graham, 473 F.3d 596, 600 (5th Cir. 2006),

4

A court interprets the allegations liberally and resolves all doubts regarding the

duty to defend in favor of the insured, but the court may not read facts into the

pleadings, look outside the pleadings, or imagine factual scenarios that might

trigger coverage. Id. at 141–42; see also Trinity Universal Ins. Co. v. Cowan, 945

S.W.2d 819, 825 (Tex. 1997) (refusing to “read facts into the pleadings” for the

purpose of establishing a duty to defend).

Texas Mutual’s policy is a workers’ compensation and employer’s liability

policy that provides coverage for claims by E. Garza’s employees or their

survivors for injuries or deaths occurring to E. Garza’s employees in the course

and scope of their employment. Unlike Atlantic’s policy, Texas Mutual’s policy

is limited to claims arising from on-the-job injuries by E. Garza’s employees and

does not provide commercial general liability coverage.

In his pleadings in the underlying lawsuit, Ruiz never alleged that E.

Garza was his employer. E. Garza was a subcontractor on a construction project

during the period covered by the insurance policies. Ruiz pleaded allegations of

negligence relating to E. Garza’s failure to provide: proper equipment, adequate

safety policies and practices, adequate safety equipment, proper assistance, and

properly trained supervisors. Ruiz made the same allegations against both of

the defendants in the underlying suit. He did not state any additional facts that

would support an employment relationship. As reasoned by the district court,

the allegations are focused on control of the workplace environment, not Ruiz’s

employment. A court cannot read facts into the pleadings to establish a

plausible employment relationship. Thus, under the eight-corners rule, the

petition did not allege a claim within the Texas Mutual policy’s coverage.1
No. 08-20629

intermediate Texas appellate courts and this court have held that extrinsic evidence may be

looked to when (1) the pleadings in the underlying lawsuit fail to allege facts implicating or

excluding coverage and (2) the extrinsic evidence goes only to the coverage issue and does not

contradict anything in the pleadings. W. Heritage Ins. Co. v. River Entm’t, 998 F .2d 311, 313

(5th Cir. 1993); State Farm Fire & Cas. Co. v. Wade, 827 S.W.2d 448, 452–53 (Tex. App. 1992).

This exception has been acknowledged by the Texas Supreme Court, though it has not been

explicitly accepted. See, e.g., Zurich Am. Ins. Co. v. Nokia, 268 S.W.3d 487, 497–98 (Tex.

2008). In any event, the district court’s consideration of such evidence was not error

because—even excluding the deposition testimony— the pleadings did not allege a claim that

was within the policy’s coverage. 

 We do not find that the district court abused its discretion in denying Atlantic leave 2

to amend its complaint because the additional allegations were immaterial to the outcome of

the suit. See Cent. Laborers’ Pension Fund v. Integrated Elec. Servs. Inc., 497 F.3d 546, 551

(5th Cir. 2008) (holding that it is not an abuse of discretion to deny leave to amend when

amendment would have been futile). 

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Furthermore, because Texas Mutual had no duty to defend E. Garza, Texas

Mutual has no obligation to indemnify E.Garza and no liability to Atlantic for

settlement costs. See Noble Energy, Inc. v. Bituminous Cas. Co., 529 F.3d 642, 2

649 (5th Cir. 2008) (noting that the duty to indemnify under an insurance policy

is narrower than the duty to defend).

The judgment of the district court is AFFIRMED.