IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 12-40186

MATERIALS EVALUATION AND TECHNOLOGY CORPORATION,

Plaintiff-Appellant,

v.

MID-CONTINENT CASUALTY COMPANY,

Defendant-Appellee.

Appeal from the United States District Court 

for the Eastern District of Texas

USDC No. 1:10-CV-740

Before STEWART, Chief Judge, and DAVIS, and CLEMENT, Circuit Judges.

PER CURIAM:*

Plaintiff-Appellant Materials Evaluation and Technology Corporation

(“METCO”) appeals the district court’s grant of summary judgment in favor of

Defendant-Appellee Mid-Continent Casualty Company (“Mid-Continent”). The

district court ruled that endorsement “ML 1190,” the Employers’ Liability

Exclusion Endorsement, precluded Mid-Continent’s duty to defend under a

commercial general liability insurance policy. For the following reasons, we

AFFIRM the district court’s grant of summary judgment. 

United States Court of Appeals

Fifth Circuit

F I L E D

March 18, 2013

Lyle W. Cayce

Clerk

* 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.

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I.

A. Insured-Insurer Relationship between METCO and Mid-Continent 

METCO first purchased a commercial general liability policy from MidContinent in 1997 and annually renewed its coverage through at least 2004. Of

particular relevance to this case are the 2002 and 2003 policies. 

The 2002 policy, which was effective from July 18, 2002 to July 18, 2003,

provided, inter alia, for an Employer’s Liability exclusion (the “Exclusion”). The

Exclusion, which is listed in Section 1, subsection 2(e), of the Coverage A Bodily

Injury and Property Damage Liability of the 2002 policy provide in relevant part: 

2. This insurance does not apply to:

(e) Employer’s Liability

“Bodily injury” to:

(1) An “employee” of the insured arising out of

and in the course of:

(a) Employment by the insured; or

(b) Performing duties related to the conduct of

the insured business; 

. . . 

This exclusion applies:

(1) Whether the insured may be liable as an

employer or in any other capacity; and

(2) To any obligation to share damages with or

repay someone else who must pay damages

because of the injury.

This exclusion does not apply to liability assumed

by the insured under an “insured contract.”

Therefore, the Exclusion did not apply to a “contract or agreement . . . under

which [METCO] assume[s] tort liability of another party to pay for ‘bodily injury’

. . . .”

The effective dates for the 2003 policy were July 18, 2003 to July 18, 2004. 

The coverage for the 2003 policy also contained the same Exclusion as the 2002

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policy. However, the 2003 policy differed from the 2002 policy because the 2003

policy included the Employers’ Liability Exclusion Endorsement (the

“Endorsement”). The Endorsement provides in relevant part:

This endorsement modifies insurance provided under

the following:

COMMERCIAL GENERAL LIABILITY COVERAGE

PART

. . . 

This insurance does not apply:

. . . 

2. To any liability or obligation for which any “insured,”

or any company as its insurer, may be held liable to any

person or entity, including any other “insured,” as a

result of “bodily injury” to any employee sustained in

the course of employment or supervision by an

“insured”; or 

. . .

4. To any liability of any “insured” to defend,

indemnify, share payments or damages with, or repay

anyone on account of any obligation arising out of

“bodily injury” to any employee of the nature specified

in . . . 2 above.

This exclusion shall be effective regardless of whether

the liability or obligation is asserted directly or

indirectly against any “insured” as an employer,

contractor, subcontractor, third party defendant, or in

any other capacity.

. . . 

All Other Terms and Conditions Remain Unchanged.

Accordingly, while the 2002 policy provided for coverage arising from an

employee’s injuries if liability arose from a third-party contractual relationship,

the 2003 policy excluded this liability from coverage.

B. METCO-DuPont Agreement and Bertrands’ Bodily Injury Claims

METCO performs materials testing for clients at various industrial sites

in the Gulf Coast region, which requires METCO employees to work at these

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sites. In February 2003, METCO and E.I. du Pont de Nemours and Company

(“DuPont”) executed an agreement (“DuPont Agreement”) whereby METCO

agreed to provide various testing services at a DuPont facility in Beaumont,

Texas. The DuPont Agreement included an indemnity clause, which required

METCO and DuPont to “indemnify, defend and hold harmless the other Party”

for various types of liability. 

In March 2004, two of METCO’s employees, Christopher and Jacqueline

Bertrand, sustained bodily injuries while working at the DuPont facility. The

Bertrands filed suit against DuPont in state court, which DuPont settled. 

Pursuant to the DuPont Agreement’s indemnity clause, DuPont demanded

reimbursement from METCO for fees and litigation expenses in defending and

settling the Bertrands’ claims. METCO refused to indemnify DuPont, and on

June 29, 2010, DuPont sued METCO for breach of contract. METCO

subsequently tendered the DuPont suit to its insurance carrier, Mid-Continent,

for defense and indemnity.

C. Mid-Continent’s Denial of Coverage and METCO and MidContinent’s Lawsuit

In July 2010, Mid-Continent denied METCO’s request to defend, claiming

that METCO’s coverage was excluded under the provisions of the Coverage A

Bodily Injury andProperty Damage Liability insuring agreement under the 2003

policy. METCO then filed the instant action in state court seeking a declaratory

judgment that Mid-Continent had a duty to defend METCO in the lawsuit

brought by DuPont. METCO also advanced claims for breach of contract, breach

of the duty of good faith and fair dealing, reformation of the insurance policy due

to mutual mistake or fraud, and violations of the Texas Insurance Code and the

Texas Deceptive Trade Practices Act. The action was removed to federal court

on the basis of diversity jurisdiction. Mid-Continent subsequently asserted the

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Endorsement as an additional ground in refusing to defend METCO in an

amended answer. 

In the district court, Mid-Continent filed a motion for summary judgment. 

METCO filed a cross-motion for partial summary judgment, claiming, inter alia,

that the terms of the 2002 policy, and not the 2003 policy, control

Mid-Continent’s duty to defend because Texas law presumes that a policy

renewal is made on the same terms of the original policy unless there is evidence

of a contrary agreement. The magistrate judge ruled that the 2003 policy

controls because the Bertrands’ injuries occurred during the effective dates of

that policy. The magistrate judge then applied the eight-corners rule

1

and

concluded that the Endorsement precluded Mid-Continent’s duty to defend

METCO’s claims and that there was no evidence supporting METCO’s

remaining claims. The district court adopted the magistrate judge’s report and

recommendation and granted summary judgment in favor of Mid-Continent. 

METCO now appeals.

II.

We review the district court’s grant of summary judgment de novo. 

Admiral Ins. Co. v. Ford, 607 F.3d 420, 422 (5th Cir. 2010) (citation omitted). 

Summary judgment is appropriate when “the movant shows that there is no

genuine dispute as to any material fact and the movant is entitled to judgment

as a matter of law.” Fed. R. Civ. P. 56(a). We must view all facts and evidence

in the light most favorable to the non-moving party when considering a motion

for summary judgment. Dameware Dev., L.L.C. v. Am. Gen. Life Ins. Co., 688

F.3d 203, 206-07 (5th Cir. 2012) (citation omitted). In this diversity jurisdiction

1 Under Texas’s “eight corners” rule, “the scope of an insurer’s duty to defend against a lawsuit

is determined exclusively by the allegations in the pleadings and the language of the insurance policy.”

Nat’l Cas. Co. v. W. World Ins. Co., 669 F.3d 608, 612 (5th Cir. 2012) (citing Nat’l Union Fire Ins. Co. v.

Merchs. Fast Motor Lines, 939 S.W.2d 139, 141 (Tex. 1997)).

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action, we apply the substantive law of Texas. Coe v. Chesapeake Exploration,

L.L.C., 695 F.3d 311, 316 (5th Cir. 2012) (citation omitted). 

III.

A.

On appeal, METCO does not challenge the district court’s conclusion that

the Endorsement bars coverage of the DuPont lawsuit. Rather, METCO argues

that the 2003 policy is on the same terms as the 2002 policy because a policy

renewal is on the same terms as the original; thus, according to METCO, the

Endorsement is not enforceable. 

We conclude, however, that the 2003 policy is valid and enforceable as

written. The Bertrands were injured in March 2004, and the 2003 policy was

effective from July 18, 2003 to July 18, 2004. Thus, the 2003 policy is the

relevant one for determining METCO’s coverage. Further, the 2003 policy’s

language, as previously stated, specifically negates Mid-Continent’s duty to

defend METCO.2 Therefore, under general contract principles, we conclude that

METCO is bound by the Endorsement included in the 2003 policy. State Farm

Lloyds v. Page, 315 S.W.3d 525, 527 (Tex. 2010) (noting that the interpretation

of an insurance contract is guided by general contract principles of contract

construction and that the primary goal is to examine the policy language to

ascertain the parties’ intent). 

B.

METCO’s asserted bases for relief in reliance on Liverpool & London &

Globe Insurance Co. v. Swann, 382 S.W.2d 521 (Tex. Civ. App.–Beaumont 1964,

no pet.), Harbor Insurance Co. v. Urban Construction Co., 990 F.2d 195 (5th Cir.

2 Moreover, we note Mid-Continent does not have a duty to indemnify because the Endorsement

specifically precludes coverage for “any liability of any insured to indemnify . . . anyone on account of any

obligation arising out of ‘bodily injury’ to any employee . . . [sustained in the course of employment].” 

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1993), and Indiana & Ohio Live Stock Insurance Co. v. Keiningham, 161 S.W.

384 (Tex. Civ. App.–Dallas 1913, writ ref’d) are unavailing.

In Liverpool, the Texas Court of Appeals addressed whether an insured

could recover under his fire insurance policies for fire damage to his store where

the insurance agent sent a letter to the insured offering to renew the policy

based on the request of the insured’s wife. 382 S.W.2d at 522. However, the

agent failed to issue the renewal policy, and the policy expired one day prior to

the fire. Id. In holding that the insurance agent’s letter constituted a policy

renewal offer on the same terms as the original policy, the Liverpool court first

noted that: 

The law is well settled in [Texas] that an insurance

company, through its duly authorized agent, may

contract by parol for the renewal of [an] insurance

policy; and, in the absence of agreement to the contrary,

the presumption is that the renewal is upon the same

terms, conditions, and amount as provided in the

original policy.

Id. (citation and internal quotation marks omitted). 

The matter sub judice is distinguishable from Liverpool. Mid-Continent

issued the 2003 policy, which contained the Endorsement, a condition varying

the terms of the 2002 policy. We thus conclude that the 2003 policy was clearly

an “agreement to the contrary,” and Liverpool’s presumption is not applicable

here.

METCO next contends that it was excused from reading the 2003 policy

because “Texas adopted the majority rule that does not require the insured to

examine the delivered policy and permits him to rely upon the assumption that

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[a renewal policy is on the same terms as the original.]” In support of this

argument, METCO cites to Harbor Insurance.3

In Harbor Insurance, we addressed reformation of an insurance policy

under the majority rule where the insurer and insured committed a mutual

mistake. 990 F.2d at 199-200. In that case, the insurer, Harbor Insurance and

the insured, Urban, had a prior agreement to renew the policy on the same

terms as the previous year’s policy, which included a modifying endorsement. 

Id. at 197. Due to the parties’ mutual mistake, the modifying endorsement was

not attached to the renewal policy. Id. 

Several years later, a construction defect action was commenced against

Urban, which resulted in an arbitration award against Urban. Id. at 198. 

Urban then demanded indemnification by Harbor Insurance for the award. Id.

Harbor Insurance denied the claim and sought a declaratory judgment that it

did not have a duty to indemnify Urban. Id. Harbor Insurance admitted

3 Although not extensively argued by METCO, METCO cites Fireman’s Fund Indemnity Co. v.

Boyle General Tire Co., 392 S.W.2d 352 (Tex. 1965) in support of the proposition that it did not have a

duty to examine the policy. In Boyle, an insurance agent agreed to the insured’s request to provide

coverage for the insured’s employees but the insurance agent did not include the employees under the

policy. Id. at 355. Two employees subsequently stole money from the business. Id. Boyle did not read

the policy until several years after it was issued and sought reformation of the policy. Id. The Texas

Supreme Court explained that “an insured who accepts a policy without dissent, is presumed to know

its contents, but the presumption may be overcome by proof that he did not know its contents when it

was accepted, as by showing that when he received it he put it away without examination, or that he

relied upon the knowledge of the insurer and supposed he had correctly drawn it.” Id. (citation and

internal quotation marks omitted). The Boyle court therefore allowed reformation of the policy. Id. at

358. 

Post-Boyle cases have applied Boyle’s presumption where the policy did not comply with a prior

agreement between the insurance agent and the insured. See Colonial Sav. Ass’n v. Taylor, 544 S.W.2d

116, 119 (Tex. 1976) (concluding that an insured overcame the Boyle presumption when a lienholder,

which had a duty similar to an insurance agent, indicated that it would procure fire coverage of the

property and the lienholder failed to fully insure the property); Ins. Network of Tex. v. Kloesel, 266

S.W.3d 456, 479-81 (Tex. App.–Corpus Christi 2008, pet. denied) (concluding that the insured restaurant

owners overcame Boyle’s presumption where the insured informed the agent prior to the agent’s

procurement of the policy that it wanted to be covered for tainted food, and the procured policy contained

a communicable disease exclusion which excluded coverage of customers’ Hepatitis A claims) 

These cases are distinguishable from the present matter. Boyle, Colonial Savings, and Kloesel 

all involved the insured not examining the policy on the basis that the policies were intended to protect

the insured from the covered risk based on prior communications with an insurance agent or a party that

had a similar duty as an insurance agent.

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however, that the subsequently delivered written policy “did not reflect the

agreement of the parties” because it omitted the modifying endorsement that

was included in the prior policy. Id. at 199. Notwithstanding this admission,

the district court ruled that “as a matter of law an insured is bound by the terms

of a policy when he accepts the policy.” Id. In disagreeing with the district

court, we noted that the majority rule “does not require the insured to examine

the delivered policy and permits him to rely upon the assumption that the

agreement was expressed in the writing.” Id. at 200. Accordingly, we held that

there was a mutual mistake, but we declined to allow for reformation of the

policy because the statute of limitations expired on Urban’s claim. Id. at 201. 

We therefore affirmed the district court’s decision. Id. at 202.

Contrary to what METCO argues, Harbor Insurance does not stand for 

the blanket proposition that a policyholder has a right to assume that “a renewal

policy is on the same terms as the original.” Harbor Insurance specifically dealt

with the issue of reformation under the majority rule where the parties 

committed a mutual mistake based on a prior agreement. Id. at 199-200. In the

instant case, there is no prior agreement supporting the proposition that

METCO and Mid-Continent agreed to not include the Endorsement in the 2003

policy but that the parties, through mutual mistake, subsequently included the

Endorsement in the 2003 policy anyway. Therefore, we conclude that the facts

of this case are misaligned with Harbor Insurance, and we decline to extend our

holding in Harbor Insurance to the facts here.

For similar reasons, METCO’s reliance on Keiningham is misplaced. In

Keiningham,the insured sent an application to his insurer requesting a renewal

of his current livestock insurance policy. 161 S.W. at 384. The insurer

responded by delivering a policy which was “represented to be in compliance

with his application” but which in fact included an additional restrictive

provision. Id. The insured failed to read the policy and did not discover the

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restrictive provision until he attempted to make a claim under the policy. Id. at

384-85. The Keiningham court noted that “the provision in the policy is in

conflict with the application” and held that the insured was not bound by the

restrictive provision. Id. at 385. The court stated, “[t]he application was one

apparently prepared and printed by [the insurer] for its private use and if it

intended to ingraft upon it some new provision after [the insured] had signed

same, some notice of such intention must have been given [to the insured] to

bind him thereto.” Id. at 386. 

We also conclude that METCO’s argument under Keiningham is

unpersuasive because there is no evidence in the record that METCO completed

a policy renewal application or otherwise requested that the 2003 renewal policy

be issued on the same terms as the 2002 policy. 

Liverpool, Harbor Insurance, and Keiningham are clearly distinguishable

from the instant case, and we decline to view them as supportive of METCO’s

contention.

C.

METCO next contends that Mid-Continent did not provide “actual notice”

that the Endorsement was included in the 2003 policy. By way of several

affidavits submitted by administrative officers and its insurance agent, METCO

avers that it was unaware that Mid-Continent included the Endorsement. 

METCO cites Automobile Insurance Co. v. United Electric Service Co., 275

S.W.2d 833 (Tex. Civ. App.–Fort Worth 1955, writ ref’d n.r.e.), and four cases

from other jurisdictions in support of its notice argument.4 

The court in Automobile Insurance concluded that an insured did not

receive sufficient notice of a co-insurance endorsement even though the insurer

delivered “ten single page endorsements, three simple credit memoranda and

4 Gov’t Emps. Ins. Co. v. United States, 400 F.2d 172 (10th Cir. 1968), Whiteside v. New Castle

Mut. Ins. Co., 595 F. Supp. 1096 (D. Del. 1984); Campbell v. Ins. Serv. Agency, 424 N.W.2d 785 (Minn.

Ct. App. 1988); N. River Ins. Co. v. Young, 453 S.E.2d 205 (N.C. Ct. App. 1995) 

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two renewal policies” to the insured’s office manager. 275 S.W.2d at 836. 

Automobile Insurance, however, primarily concerned the reformation of an

insurance policy based on mutual mistake. Here, there is no mutual mistake.

In the instant case, the policy declaration within the 2003 policy contained

the following language with respect to terms and changes made to the policy. 

The Policy Declaration provided: “IN RETURN FOR THE PAYMENT OF THE

PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS POLICY, WE

AGREE WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS

POLICY.” Shortly after this language, the Endorsement (ML 1190) is listed

under the heading of “Form(s) and Endorsement(s) made a part of this policy at

this time.” Additionally, the page in which the Endorsement is discussed

conspicuously states, “THIS ENDORSEMENT CHANGES THE POLICY. 

PLEASE READ IT CAREFULLY,” and “[t]his endorsement modifies insurance

provided under the following: COMMERCIAL GENERAL LIABILITY

COVERAGE PART. . . .”

By receiving the proposed 2003 policy which included notification of the

inclusion of the Endorsement, METCO had sufficient notice that the

Endorsement was included in the 2003 policy. 

D.

METCO further asserts there is evidence of fraud in this case. METCO

argues that Mid-Continent committed fraud by claiming that the 2003 policy

was a “renewal,” thereby misrepresenting the terms of the 2003 policy when it

included the Endorsement because, by definition, a renewal is on the same terms

as the original policy. 

Under Texas law, the party asserting fraud is required to prove: 

(1) that a material representation was made; (2) the

representation was false; (3) when the representation

was made, the speaker knew it was false or made it

recklessly without any knowledge of the truth and as a

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positive assertion; (4) the speaker made the

representation with the intent that the other party

should act upon it; (5) the party acted in reliance on the

representation; and (6) the party thereby suffered

injury.

In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001) (citation omitted).

To support this claim, METCO specifically argues that: (1) MidContinent’s representation was material; (2) Mid-Continent knew the

representation to be false; (3) Mid-Continent intended METCO to sign the 2003

policy on the belief that it was a renewal of the 2002 policy terms; (4) METCO

purchased the renewal policy; (5) METCO relied on Mid-Continent’s

representation; and (6) METCO was injured when Mid-Continent denied

coverage based on the Endorsement. In the alternative, METCO avers that

there is a conflict between the terms of the Endorsement and the Exclusion, and

that the Exclusion controls.

The district court did not address METCO’s reformation claim on the basis

of fraud because METCO failed to object to the magistrate’s report; therefore,

our review is limited to plain error. See Douglass v. United Servs. Auto. Ass’n,

79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc), superceded by statute on other

grounds, 28 U.S.C. § 636(b)(1) (extending the time to file objections from ten to

fourteen days).

Under plain error review, the appellant must show (1) an error; (2) that

is clear or obvious; and (3) that affected the appellant’s substantial rights. 

Baisden v. I’m Ready Prods. Inc., 693 F.3d 491, 506 (5th Cir. 2012) (citation

omitted). 

Although the 2003 policy is a renewal policy, it cannot be characterized as

a renewal on the same terms as the 2002 policy when considered in light of other

language in the 2003 policy. See State Farm Lloyds, 315 S.W.3d at 527 (“[The

court] must read all parts of the contract together, giving effect to each word,

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clause, and sentence, and avoid making any provision within the policy

inoperative.”). The policy declaration page and the Endorsement page explicitly

provide language notifying the insured that the Endorsement changed the terms

of the 2002 policy. Accordingly, Mid-Continent did not make a material

representation that the 2003 policy was on the same terms as the 2002 policy as

argued by METCO. Therefore, METCO has not demonstrated any error, plain

or otherwise. Furthermore, there is no conflict between the Endorsement and

the Exclusion because the Endorsement controls. TIG Ins. Co. v. N. Am. Van

Lines, Inc., 170 S.W.3d 264, 271 (Tex. App.–Dallas 2005) (noting that when there

is a conflict between an endorsement and the policy the endorsement generally

supersedes conflicting printed terms contained in the general policy.) 

Accordingly, the Endorsement contained in the 2003 policy is enforceable,

and METCO’s attempts to attack the Endorsement fail. 

IV.

METCO finally contends that the district court erred in dismissing its

claims relating to breach of contract, breach of the duty of good faith and fair

dealing, and violations of the Texas Deceptive and Trade Practices Act and the

Texas Insurance Code. Because we have concluded that Mid-Continent did not

have a duty to defend or indemnify METCO, these claims fail. 

V.

For the foregoing reasons, we AFFIRM the district court’s grant of

summary judgment.

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