IN THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF TEXAS 

MIDLAND DIVISION 

STATE FARM MUTUAL AUTOMOBILE § 

INSURANCE COMPANY, § 

 § 

Plaintiff, § 

 § 

v. § Civil Action No. 7:20-cv-00091 

 § 

AZTECA TANK MANUFACTURING, § 

INC., formerly doing business as § 

AZTECA FABRICATION INC., § 

CAZA OPERATING, LLC, CAZA § 

PETROLEUM MANAGEMENT, LLC, and § 

CERTAIN UNDERWRITERS AT LLOYD’S § 

LONDON SUBSCRIBING TO POLICY NO. § 

B0702CM303220K, as subrogees of § 

LIBERTY OILFIELD SERVICES, INC., § 

 § 

Defendants. § 

 

PLAINTIFF’S ORIGINAL COMPLAINT 

TO THE HONORABLE JUDGE OF SAID COURT: 

 COMES NOW, Plaintiff, State Farm Mutual Automobile Insurance Company 

(“State Farm”), and files this, its Original Complaint, complaining of Defendants, Azteca 

Tank Manufacturing, Inc., formerly doing business as Azteca Fabrication Inc. (“Azteca”), 

Caza Operating, LLC, Caza Petroleum Management, LLC, and Certain Underwriters at 

Lloyd's, London Subscribing to Policy No. B0702CM303220K as subrogees of Liberty 

Oilfield Services, Inc. (“Lloyd’s”), and seeking, pursuant to the Federal Declaratory 

Judgment Act 28 U.S.C. §§ 2201 and 2202, a declaration of the rights and obligations of 

the interested parties under an insurance policy, which includes the determination of the 

duty to defend and indemnify, and would respectfully show unto this Court as follows: 

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I. 

PARTIES

1. Plaintiff, State Farm, is a corporation organized under the laws of the 

State of Illinois with its principal place of business in Bloomington, Illinois. 

2. Defendant, Azteca, is a corporation organized under the laws of the State 

of Texas with its principal place of business in Monahans, Texas, and may be served 

with process through its registered agent, Tommy L. Moore, at 206 N. Sophie, 

Monahans, Texas 79756. 

3. Defendant, Caza Operating, LLC, is a Texas limited liability company with 

its principal place of business in Midland, Texas, and may be served with process 

through its registered agent, Richard R. Albro, 200 North Loraine, Suite 1550, Midland, 

Texas 79701. 

4. Defendant, Caza Petroleum Management, LLC, is a foreign limited liability 

company, incorporated under the laws of the State of Delaware, with its principal place 

of business in Midland, Texas, with a mailing address of 200 North Loraine, Suite 1550, 

Midland, Texas 79701, and may be served with process through its registered agent, 

The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, 

Wilmington, Delaware, 19801. (Caza Operating, LLC and Caza Petroleum 

Management, LLC will be referred to collectively as “Caza”.) 

5. Defendant, Lloyds is an unincorporated association of certain persons or 

entities in the business of underwriting, subscribing to, or issuing policies of insurance, 

organized and existing by virtue of the laws of the United Kingdom, with a principal 

place of business in London, England, engaging in the business of insurance in the 

State of Texas. This Defendant has not retained a registered agent for service as 

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required by the Texas Insurance Code. Accordingly, this Defendant may be served with 

process by service on the commissioner of the Texas Department of Insurance, who 

should forward a copy of these pleadings to Skierski Jain PLLC, 400 North St. Paul St., 

Suite 510, Dallas, Texas 75201. 

II. 

JURISDICTION AND VENUE 

6. This Court has jurisdiction over this declaratory judgment action under 28 

U.S.C. §§ 2201 and 2202 as State Farm seeks a declaration of its rights and obligations 

under the insurance policy at issue. This Court has diversity jurisdiction over this action 

this under 28 U.S.C. § 1332(a) and (b) because this dispute is between citizens of 

different states, and the amount in controversy exceeds $75,000, exclusive of interest 

and costs. 

7. Venue is proper in the United States District Court for the Western District 

of Texas pursuant to 28 U.S.C. § 1391(b) and (c) because Defendant Caza has its 

principal place of business in this judicial district and division. 

III. 

FACTUAL BACKGROUND 

A. The Underlying Litigation 

1. Underlying Facts 

8. The underlying litigation arises from an industrial accident that occurred on 

September 1, 2017, at an oilfield facility owned by Caza, located in southeastern New 

Mexico. Azteca employees, Edgar Garcia, Ronald Berkheimer, and James Hernandez 

were killed when a storage tank at the facility exploded. Apparently, no Caza 

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employees were on site on the day of the accident. A roustabout crew from Banta Oil 

Field Services, Inc. (“Banta”) was managing and operating the site. 

9. Azteca fabricated and installed the tank where the explosion originated. 

The tank was still under warranty with Azteca and required repair. The tank had a pinhole leak in a collar between the tank and main pipe that connected the tank with eleven 

other tanks used to store flammable hydrocarbons. The tank had been emptied but had 

not been cleaned and still contained some hydrocarbons. As such, the tank had not 

been cleared for welding or other “hot work.” 

10. The Azteca crew consisted of two welders, Garcia and Berkheimer, and 

one all-purpose employee, Hernandez. They drove a Ford F-350 that Azteca owned 

with welding equipment, which doubled as a generator, permanently attached to its 

flatbed. The Azteca employees were at the Caza facility either to inspect or to repair the 

pin-hole leak, although the parties to the underlying litigation dispute this issue. The 

Banta onsite manager told the Azteca crew the location of the leaking tank. The Banta 

manager stated that he told the Azteca employees that the tank had not been cleaned 

and was not ready for hot work. 

11. The explosion occurred about two hours after the Azteca crew arrived. 

Prior to then, witnesses stated that they saw the Azteca employees park the truck near 

the leaking tank and at least two Azteca employees walking around the tanks. The 

witnesses generally agree that they heard a “whooshing” sound in the area of the tanks. 

One witness described this sound as a loud welding torch. Next, witnesses described 

seeing flames shooting from the subject tank, rapidly followed by an explosion centered 

on the tank and an ensuring fire that engulfed he area. Before the emergency 

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responders arrived, the fire compromised two other tanks, which exploded. The 

explosion killed the three Azteca employees. No other personnel were injured. 

12. The authorities inspected the site. Photographs of the scene show cables, 

consistent with welding, leading from the remains of the Azteca truck to the load line 

collar. Remains of welding equipment were photographed near the location of the 

leaking load line collar. Caza specifically alleges in the underlying litigation that there is 

evidence of new welding being done on the load line collar. The plaintiffs allege the 

decedents had not been welding. 

2. Procedural History 

13. The estates and families of the three decedents filed three separate 

lawsuits.1 The suit with regard to Garcia was consolidated with the suit with regard to 

1 The lawsuits were numbered and styled: 

(1) Cause No. D-412-CV-2017-00592; Art Bustos, As Personal Representative of 

the Estate of Edgar Garcia, and Selena Rodriguez, Individually, and as Next 

Friend of Ileana Rodriguez and Sophia Garcia v. Caza Petroleum, Inc.; in the 

4th Judicial District Court of San Miguel County, New Mexico, filed on or 

about September 4, 2017; 

(2) Cause No. D-412-CV-2017-00692; Dave Romero, Jr., As Personal 

Representative of the Estate of James Lewis Hernandez, Rosa Salazar and 

Crystal Hernandez v. Caza Petroleum, Inc.; in the 4th Judicial District Court of 

San Miguel County, New Mexico, filed on or about October 19, 2017; and 

(3) Cause No. D-412-CV-2018-00055; C. Herman Gallegos, As Personal 

Representative of the Estate of Ronald W. Berkheimer and Dulcie D. 

Berkheimer, Individually and as Next Friend of Jacob Berkheimer and 

Kayleigh Berkheimer, Minors v. Caza Operating, LLC; in the 4th Judicial 

District Court of San Miguel County, New Mexico, filed on or about January 

29, 2018. 

Caza Operating, LLC answered in the suits with regard to Garcia and Hernandez, 

stating the plaintiffs incorrectly referred to it as Caza Petroleum, Inc., which was 

converted into Caza Operating, LLC in 2016. 

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Berkheimer.2 The suit with regard to Hernandez was disposed for lack of prosecution.3 

The Hernandez plaintiffs subsequently intervened in the consolidated action with the 

Garcia and Berkheimer plaintiffs.4 The underlying plaintiffs have sued: (1) Caza; (2) 

Banta; (3) Pemberton Plumbing (“Pemberton”), which the underlying plaintiffs allege 

performed services on the site as a pumper or well servicer; (4) Scott Winfield, the sole 

proprietor of Pemberton; (5) Kevin Garret, a production engineer employed by Caza 

and, the underlying plaintiffs allege, Caza “company man,” supervising the site at the 

time of the explosion; and (6) Insperity PEO Services, L.P., Garret’s alleged coemployer. The underlying plaintiffs allege the underlying defendants’ negligence 

caused or contributed to the explosion that killed the decedents. Against Caza, the 

underlying plaintiffs asserted claims for wrongful death, negligence, res ipsa loquitor, 

negligent selection, negligent retention, negligent supervision, respondeat superior, 

spoliation of evidence, and breach for nondelegable duty (i.e., liability arising from 

inherently dangerous activities). The underlying plaintiffs’ claims against the other 

underlying defendants are similar. The underlying plaintiffs have not asserted claims 

against Azteca. 

14. Caza has asserted third-party claims against Banta and Azteca for 

indemnity and contribution for the decedents’ claims, including personal injury and 

wrongful death. Caza has also asserted a negligence claim against Banta for property 

2 The lawsuits with regard to Garcia and Berkheimer were consolidated on or about 

August 28, 2018, on the parties’ stipulated motion, into the cause number assigned to 

the Berkheimer case. 

3 The suit with regard to Hernandez was disposed for lack of prosecution on or about 

April 27, 2018. 

4 On or about February 13, 2019, the Hernandez plaintiffs filed a complaint in 

intervention in the consolidated action with the Garcia and Berkheimer plaintiffs. 

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damage. Further, Caza has asserted claims against Azteca for property damage 

related to the alleged negligence of decedents as employees of Azteca and for alleged 

negligence in the form of products liability for the manufacture and installation of the 

tank, in addition to breach of warranty. 

15. In its answer to Caza’s third-party complaint, Azteca asserted the 

exclusive remedy of the workers compensation statutes as an affirmative defense. 

16. In addition, Lloyd’s filed a complaint in intervention against Azteca seeking 

to recover insurance proceeds paid to Liberty Oilfield Services, Inc. (“Liberty”) for 

property damage to piping and vehicles near the site of the explosion.5 

B. The Insurance Policy 

17. State Farm issued Business Car Policy, Policy Number 342 7142-B01-

43B to Azteca, with a policy period of August 1, 2017 to August 1, 2018. 

18. The policy includes the following exclusions that apply: 

Exclusions 

THERE IS NO COVERAGE FOR AN INSURED: 

. . . . 

4. FOR BODILY INJURY TO THAT INSURED’S EMPLOYEE WHICH 

ARISES OUT OF THAT EMPLOYEE’S EMPLOYMENT. This 

exclusion does not apply to that insured’s household employee who 

is neither covered, nor required to be covered, under workers’ 

compensation insurance; 

5. FOR BODILY INJURY TO THAT INSURED’S FELLOW EMPLOYEE 

WHILE THE FELLOW EMPLOYEE IS IN THE COURSE AND SCOPE 

OF HIS OR HER EMPLOYMENT; 

6. FOR DAMAGES ARISING OUT OF THE OPERATION, 

MAINTENANCE, OR USE OF ANY EQUIPMENT THAT IS TOWED 

BY, MOUNTED ON, OR CARRIED ON ANY VEHICLE. . . . 

5 Lloyd’s filed its complaint in intervention on or about April 26, 2019. 

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7. FOR DAMAGES ARISING OUT OF WORK AFTER IT IS 

CONSIDERED COMPLETED. WORK IS CONSIDERED 

COMPLETED: 

a. IF IT HAS BEEN ABANDONED; OR 

b. IF IT HAS NOT BEEN ABANDONED, THEN AT THE EARLIEST 

OF THE FOLLOWING TIMES: 

(1) WHEN THAT PART OF THE WORK DONE AT A JOB SITE 

HAS BEEN PUT TO ITS INTENDED USE BY ANY PERSON 

OR LEGAL ENTITY OTHER THAN ANOTHER CONTRACTOR 

OR SUBCONTRACTOR WORKING ON THE SAME PROJECT; 

(2) WHEN ALL OF THE WORK TO BE DONE AT THE LOCATION 

WHERE THE DAMAGES AROSE HAS BEEN FINISHED; OR 

(3) WHEN ALL OF THE WORK CALLED FOR IN YOUR 

CONTRACT HAS BEEN FINISHED. 

WORK IS CONSIDERED COMPLETED REGARDLESS OF 

WHETHER ADDITIONAL SERVICING, MAINTENANCE, 

CORRECTION, REPAIR, OR REPLACEMENT IS REQUIRED; 

 . . . . 

11. FOR DAMAGES ARISING OUT OF THE: 

a. HANDLING OR USE OF, OR 

b. EXISTENCE OF ANY CONDITION IN OR WARRANTY OF ANY 

PRODUCT MANUFACTURED, SOLD, OR DISTRIBUTED BY AN 

INSURED IF THE BODILY INJURY OR DAMAGE TO PROPERTY 

OCCURS AFTER THE INSURED RELINQUISHES POSSESSION OF 

THE PRODUCT. 

19. In addition, the policy’s insuring agreement provides: 

Insuring Agreement 

1. We will pay damages an insured becomes legally liable to pay 

because of: 

. . . . 

b. damage to property, including the loss of use of such property 

caused by an accident that involves a vehicle for which that insured 

is provided Liability Coverage by this policy. 

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IV. 

REQUEST FOR DECLARATORY JUDGMENT 

20. There is no coverage for the underlying litigation pursuant to the foregoing 

exclusions and insuring agreement in the State Farm policy. 

21. Pursuant to Exclusion 6, there is no coverage for the accident and Caza 

and Lloyd’s claims for property damage allegedly caused by the decedents as 

employees of Azteca. Exclusion 6 excludes coverage “FOR DAMAGES ARISING OUT 

OF THE OPERATION, MAINTENANCE, OR USE OF ANY EQUIPMENT THAT IS 

TOWED BY, MOUNTED ON, OR CARRIED ON ANY VEHICLE.” Caza alleges the 

explosion and resulting property damage was caused by the decedents performing 

welding or other hot work on the tank. Lloyd’s alleges that the decedents used a 

welding lead cable on the truck to weld part of the tank. Caza and Lloyd’s claims thus 

refer to the welding equipment that was “MOUNTED ON, OR CARRIED ON [the] 

VEHICLE.” Exclusion 6 therefore applies to exclude coverage. 

22. Exclusions 4 and 5 also operate to exclude coverage. Caza has brought 

claims against Azteca for indemnity and contribution for the underlying plaintiffs’ 

personal injury and wrongful death claims. In its underlying third-party complaint, Caza 

alleges that the decedents were employees of Azteca and in the course and scope of 

their employment when the explosion occurred. Caza’s claims are therefore “FOR 

BODILY INJURY TO THAT INSURED’S EMPLOYEE WHICH ARISES OUT OF THAT 

EMPLOYEE’S EMPLOYMENT” under Exclusion 4. Caza’s claims are thus also “FOR 

BODILY INJURY TO THAT INSURED’S FELLOW EMPLOYEE WHILE THE FELLOW 

EMPLOYEE IS IN THE COURSE AND SCOPE OF HIS OR HER EMPLOYMENT” 

under Exclusion 5. As such, Exclusions 4 and 5 apply to exclude coverage. 

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23. In addition, Exclusion 7 applies to exclude coverage. At issue in the 

underlying litigation are the tanks that parties allege Azteca fabricated and installed at 

Caza’s site and thus “COMPLETED REGARDLESS OF WHETHER ADDITIONAL 

SERVICING, MAINTENANCE, CORRECTION, REPAIR, OR REPLACEMENT IS 

REQUIRED” under the policy. Exclusion 7 therefore applies to exclude coverage. 

24. Further, Exclusion 11 applies to exclude coverage. Caza and Lloyd’s 

allege Azteca manufactured and sold the product at issue, specifically the tank, installed 

it at Caza, and then returned to service it. Caza allege the tank was under warranty and 

asserts a claim against Azteca for breach of the warranty. As such, the “DAMAGES 

ARIS[E] OUT OF THE HANDLING OR USE OF, OR EXISTENCE OF ANY 

CONDITION IN OR WARRANTY OF ANY PRODUCT MANUFACTURED, SOLD, OR 

DISTRIBUTED BY AN INSURED.” In addition, “THE BODILY INJURY OR DAMAGE 

TO PROPERTY” is alleged to have “OCCUR[ED] AFTER [Azteca] RELINQUISHE[D] 

POSSESSION OF THE PRODUCT.” Exclusion 11 therefore applies to exclude 

coverage. 

25. There is also no coverage for the underlying litigation pursuant to 

Paragraph 2.b. of the policy’s Insuring Agreement. The accident at issue did not arise 

and is not alleged to have arisen from the truck covered under the policy, but from the 

welding equipment mounted on it. There is therefore no coverage for the accident by 

operation of Paragraph 2.b. of the policy’s Insuring Agreement. 

26. An actual justiciable controversy exists between State Farm and Azteca 

regarding Azteca's coverage obligations under the policy. State Farm asserts that 

losses arising from the underlying litigation are not covered under the policy and that it 

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has no legal duty to defend or indemnify Azteca against the claims made by Caza and 

Lloyd’s in the underlying litigation. Accordingly, Azteca seeks a determination of the 

respective rights and liabilities of the parties under the policy. 

V. 

CONCLUSION AND PRAYER

27. State Farm seeks a determination by this Court that the policy State Farm 

issued to Azteca does provide coverage for Caza and Lloyd’s claims in the underlying 

litigation and that State Farm does not have a duty to defend and indemnify Azteca in 

the underlying litigation. 

WHEREFORE, PREMISES CONSIDERED, Plaintiff State Farm prays that 

Defendants Azteca, Caza, and Lloyd’s be ordered to appear and answer this Complaint 

and that upon final hearing and determination thereof, judgment be entered declaring 

that the policy State Farm issued to Azteca does provide coverage for Caza and Lloyd’s 

claims in the underlying litigation and that State Farm is under no duty to provide a 

defense or indemnity to Azteca, that State Farm is entitled to judgment for costs and 

attorney's fees, and that State Farm be granted any and all further relief to which it may 

show itself to be justly entitled. 

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Respectfully submitted, 

GERMER PLLC 

By: /s/ Debra Bradberry 

Debra Bradberry 

Texas Bar No. 24048362 

dbradberry@germer.com

Barbara L. Hachenburg (Pro hac vice forthcoming)

Texas Bar No. 08667070 

bhachenburg@germer.com

2929 Allen Parkway, Suite 2900 

Houston, Texas 77019 

(713) 650-1313 – Telephone 

(713) 739-7420 – Facsimile 

ATTORNEYS FOR PLAINTIFF 

STATE FARM MUTUAL AUTOMOBILE 

INSURANCE COMPANY 

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