NO. 01-15-00453-CV

In The

FIRST COURT OF APPEALS

At Houston, Texas __________ THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA,

Appellant,

V.

KEVIN ROBERTS, et al,

Appellees. __________ Appealed from the 165th District Court of

Harris County, Texas ________________________________________________________________________ APPELLANT’S BRIEF

________________________________________________________________________ Loren R. Smith

State Bar No. 18643800

Kelly & Smith, P.C.

4305 Yoakum Blvd.

Houston, Texas 77006

Tel.: (713) 861-9900

Fax: (713) 861-7100

ORAL ARGUMENT REQUESTED

ACCEPTED

01-15-00453-cv

FIRST COURT OF APPEALS

HOUSTON, TEXAS

7/20/2015 5:28:02 PM

CHRISTOPHER PRINE

CLERK

 FILED IN 1st COURT OF APPEALS HOUSTON, TEXAS 7/20/2015 5:28:02 PM CHRISTOPHER A. PRINE Clerk
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ii

NO. 01-15-00453-CV

THE INSURANCE COMPANY OF THE STATE OF PENNSYVANIA, Appellant,

V.

KEVIN ROBERTS, et al,

Appellees. ____________________________________________________________

IDENTITY OF PARTIES & COUNSEL

____________________________________________________________

1. The Insurance Company of the State of Pennsylvania – Appellant

2. Loren R. Smith – Counsel for Appellant

State Bar No. 18643800

Kelly & Smith, P.C.

4305 Yoakum Blvd.

Houston, Texas 77006

(713) 861-9900 - Telephone

(713) 861-7100 - Facsimile

lsmith@ksmpc.com

3. Kevin Roberts – Appellee

4. Jason A. Itkin – Counsel for Kevin Roberts

State Bar No. 24032461

Arnold & Itkin

6009 Memorial Drive

Houston, Texas 77007

(713) 222-3800 - Telephone

(713) 222-3850 – Facsimile

5. Exxon Mobil Corporation – Appellee

6. Mike Morris – Counsel for Exxon Mobil Corporation

State Bar No. 14495800

Tekell, Book, Allen & Morris, L.L.P.

1221 McKinney, Suite 4300

Houston, Texas 77010-2010
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iii

(713) 222-9542 - Telephone

(713) 655-7727 – Facsimile
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iv

TABLE OF CONTENTS

IDENTITY OF PARTIES & COUNSEL...................................................................... ii, iii

TABLE OF CONTENTS ...................................................................................................iv

INDEX OF AUTHORITIES ............................................................................................... v

STATEMENT OF THE CASE ..........................................................................................ix

ISSUES PRESENTED FOR REVIEW............................................................................... x

STATEMENT OF FACTS.................................................................................................. 1

SUMMARY OF THE ARGUMENT.................................................................................. 4

ARGUMENT....................................................................................................................... 6

ISSUE 1: . ........................................................................................................................... 6

The trial court erred in holding that ICSP’s worker’s compensation subrogation claims

were waived, as the waiver of subrogation provisions only apply to liabilities assumed

by Savage. As Savage was not obligated to indemnify Exxon for this accident, the

waiver does not apply

ISSUE 2: . ......................................................................................................................... 27

Even if there is an enforceable waiver of subrogation in favor of Exxon, the trial court

erred in holding that ICSP’s right to assert that Roberts’ and Munoz’s third-party

recovery constituted an advance against future benefits was also waived

ISSUE 3: .. ........................................................................................................................ 30

Exxon’s affidavit of T. Lynn Henagan cannot be any basis for affirming the trial

court’s summary judgment

PRAYER FOR RELIEF .................................................................................................... 34

CERTIFICATE OF SERVICE.......................................................................................... 34

CERTIFICATE OF COMPLIANCE AND WORD COUNT........................................... 35
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APPENDIX........................................................................................................................ 36

INDEX OF AUTHORITIES

Cases

Am. Risk Funding Ins. Co. v. Lambert, 59 S.W.3d 254, 259 (Tex. App.—Corpus Christi

2001, pet.denied)............................................................................................................ 31

Approach Operating, LLC v. Resolution Oversight Corp., 2012 Tex. App. LEXIS 5437,

at 7 (Tex. App. Austin July 3, 2012, no pet).................................................................... 8

Evanston Ins. Co. v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660 (Tex. 2008)........ 16

Aubris Resources LP v. St. Paul Fire & Marine Insurance Co., 566 F.3d 483 (5th Cir.

2009) .............................................................................................................................. 17

Capitol Aggregates, Inc. v. Great American Ins. Co., 408 S.W.2d 922, 923-24 (Tex.

1966) .............................................................................................................................. 27

Chambers v. Texas Employers Ins. Assoc., 693 S.W.2d 648 (Tex. App. 1985, writ ref'd

n.r.e.).............................................................................................................................. 30

Chevron U.S.A. v. Cigna, No. 09-97-00032-CV, 1998 Tex. App. LEXIS 5043, 1998 WL

472501, at *3-4 (Tex. App.--Beaumont Aug. 13, 1998, pet. denied).............................. 7

Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 625 (Tex. 1996)................................ 33

Deepwater Horizon, 2015 Tex. LEXIS 141 (Tex. 2015)(emphasis added) ...................... 14

Delaney v. University of Houston, 835 S.W.2d 56, 58 (Tex. 1992).................................. 34

Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex. 1993)............. 25

Employers Casualty Company v. Henager, 852 S.W.2d 655, 659 (Tex.App.—Dallas

1993, writ den’d)............................................................................................................ 27

Energy Serv. Co. of Bowie, Inc. v. Superior Snubbing Servs., 236 S.W.3d 190, 191 (Tex.

2007) .............................................................................................................................. 21

Enserch Corp. v. Parker, 794 S.W.2d 2, 7 (Tex. 1990) .................................................... 21
--vi

Cases (con't)

GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305, 307 (Tex. 2006)

........................................................................................................................................ 10

Hartford Accident & Indem. Co. v. Buckland, 882 S.W.2d 440, 444–56 (Tex.App.—

Dallas 1994, writ denied);.............................................................................................. 31

Home Indemnity Co. v. Pate, 814 S.W.2d 497 (Tex.App.-Houston[1st Dist.] 1991, no

writ)................................................................................................................................ 27

Houston General Ins. Co. v. Campbell, 964 S.W.2d 691, 695 (Tex.App.—Corpus Christi

1998, review den’d) ....................................................................................................... 28

Ischy v. Twin City Fire Ins. Co., 718 S.W.2d 885, 888 (Tex. App. Austin 1986, writ ref’d

n.r.e.).............................................................................................................................. 30

Jackson v. Land & Offshore Services, Inc., 855 F.2d 244 (5th Cir. 1988)........................ 31

Kelly v. Red Fox Cos. of New Iberia, Inc., 123 Fed. Appx. 595 (5th Cir. 2005)............... 31

Ken Petroleum Corp. v. Questor Drilling Corp., 24 S.W.3d 344, 355 (Tex. 2000) ........... 7

Ken Petroleum Corp. v. Questor Drilling Corp., 976 S.W.2d 283, 290 (Tex. App. Corpus

Christi 1998) .................................................................................................................. 12

Ledig v. Duke Energy Corp., 193 S.W.3d 167, 178-79 (Tex.App.—Houston[1st Dist.]

2006, no pet.)(citing Gonzalez v. United Carpenters & Joiners, 93 S.W.3d 208, 211

(Tex.App.—Houston[14th Dist.] 2002, no pet.))............................................................ 34

Liberty Ins. Corp. v. SM Energy, 2012 U.S. Dist. LEXIS 174069 (S.D. Tex. Dec. 7, 2012)

........................................................................................................................................ 23

Nicklos Drilling Co. v. Cowart, 907 F.2d 1552 (5th Cir. 1990)........................................ 31

Pasadena Refining System, Inc. v. McCraven, Nos. 14-10-00837-CV, 14-10-00860-CV,

2012 Tex. App. LEXIS 3823, 2012 WL 1693697 (Tex. App.--Houston [14th Dist.]

May 15, 2012, pet. dism'd by agr.)................................................................................. 17

Performance Ins. Co. v. Frans, 902 S.W.2d 582, 585 (Tex.App.---Houston [1st Dist.]

1995, writ denied) .......................................................................................................... 28
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Cases (con't)

Petro-Weld, Inc. v. Luke, 619 F.2d 418 (5th Cir. 1980) ..................................................... 31

Prewitt and Sampson v. City of Dallas, 713 S.W.2d 720, 722 (Tex.App.-Dallas 1986, writ

ref’d n.r.e.) ..................................................................................................................... 27

Reliance Ins. Co. v. Hibdon, 333 S.W.3d 364 (Tex. App.--Houston [14th Dist.] 2011, pet.

den’d)............................................................................................................................... 8

State Farm Fire & Casualty Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993) (plurality

opinion).......................................................................................................................... 33

Tesoro Petroleum Corp. v. Nabors Drilling United States, 106 S.W.3d 118, 133-134

(Tex. App.-Houston[1st Dist.] 2002, writ den’d). ......................................................... 20

Texas Mutual Ins. Co. v. Ledbetter, 251 S.W.3d 31, 38-39 (Tex. 2008)........................... 27

Texas Workers’ Compensation Insurance Fund v. Knight, 61 S.W.3rd 91 (Tex.App.—

Amarillo 2001, no pet.).................................................................................................. 24

Trahan v. Liberty Mut. Ins. Co., 571 Fed. Appx. 319 (5th Cir. Tex. 2014) ........................ 2

Travelers Insurance Company v. Seidel, 705 S.W.2d 278, 281 (Tex.App.-San Antonio

1986, writ dism’d).......................................................................................................... 28

Statutes

Longshore and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901–950................... 30

28 TEX. ADMIN. CODE § 21.202 (West 2015)................................................................ 26

TEX. REV. CIV. STAT. ANN. art. 8306, § 3(d)(Vernon Supp. 1989)(emphasis added) 22

Tex. Rule of Civ. Proc. 166a(c)........................................................................................... 2

Tex. Rule of Civ. Proc. 166a(f) ......................................................................................... 33

Tex. Rule of Civ. Proc. 94 ................................................................................................. 29

Texas Labor Code Chapter 417 ............................................................................................ 6
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NO. 01-15-00453-CV

THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA,

Appellant,

V.

KEVIN ROBERTS, et al,

Appellees. ____________________________________________________________ APPELLANT’S BRIEF

____________________________________________________________ TO THE HONORABLE COURT OF APPEALS OF THE FIRST SUPREME JUDICIAL

DISTRICT:

Appellant, The Insurance Company of the State of Pennyslvania (“ICSP"), submits

this brief in appeal of the lower court's order and judgment rendered in favor of Appellees,

KEVIN ROBERTS (“Roberts”) and EXXON MOBIL CORPORATION (“Exxon"). This

appeal is from the 165th District Court of Harris County, Texas, Cause No. 2013-03033, Hon.

Jeff Shadwick presiding, in which Roberts was the Plaintiff, Exxon was the Defendant and

Third-Party Plaintiff, and ICSP was the Third-Party Defendant and Cross-Plaintiff.
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ix

STATEMENT OF THE CASE

Roberts filed suit against Exxon in a case assigned to the 165th District Court of Harris

County. The claims were for personal injuries sustained from an explosion and discharge of

hot water on January 12, 2013 on premises owned and controlled by Exxon. ICSP was the

worker’s compensation carrier for Savage. ICSP has paid and continues to pay workers’

compensation medical and indemnity benefits to or on behalf of Roberts and Munoz. Around

the time it reached a settlement with Roberts, Exxon joined ICSP as a third-party defendant

to Roberts’ lawsuit, on a declaratory judgment claim. The case was subsequently removed

and then remanded by the federal court. Exxon thereafter settled the claims of Munoz.

Appellants and Munoz refused to honor the subrogation claims of ICSP, contending ICSP

had waived its subrogation rights. ICSP pleaded cross-claims against Appellants for

subrogation and conversion, seeking to recover reimbursement of the amount of benefits paid

and a credit against future benefits.

ICSP and Appellants filed cross-motions for summary judgment pertaining to the

waiver issues. The sitting judge of the 165th District Court, the Hon. Elizabeth Ray, denied

Appellants’ motion for summary judgment on January 20, 2015. Shortly thereafter, Judge

Ray stepped down from the bench. Exxon thereafter filed a motion for reconsideration,

which was heard by the sitting judge of the 55th District Court, the Hon. Jeff Shadwick. On

April 15, 2015, Judge Shadwick granted the motion for rehearing, and entered a final
--x

summary judgment in favor of Appellants on May 11, 2015, that ICSP take nothing on its

claims for subrogation and for a credit against future benefits.

On May 13, 2015, ICSP timely filed its notice of appeal. ICSP seeks an order from

this Court reversing the trial court’s summary judgment that ICSP take nothing on its

subrogation claims, and remanding the case to the trial court for a new trial on ICSP’s claims.

ISSUES PRESENTED FOR REVIEW

ISSUE 1:

The trial court erred in holding that ICSP’s worker’s compensation subrogation claims

were waived, as the waiver of subrogation provisions only apply to liabilities assumed

by Savage. As Savage was not obligated to indemnify Exxon for this accident, the

waiver does not apply.

ISSUE 2:

Even if there is an enforceable waiver of subrogation in favor of Exxon, the trial court

erred in holding that ICSP’s right to assert that Roberts’ and Munoz’s third-party

recovery constituted an advance against future benefits was also waived.

ISSUE 3:

Exxon’s affidavit of T. Lynn Henagan cannot be any basis for affirming the trial

court’s summary judgment.
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STATEMENT OF FACTS

Legend: “CR” denotes Clerk’s Record. On January 12, 2013, Roberts and Arturo Munoz (“Munoz”) were working for Savage

Services on a tank in the flexicoker unit of Exxon’s Baytown refinery. (CR.6; CR.79, Exhibit 9 (Appendix “D”)) 1 While on the process of working on that tank, there was an

explosion which caused a discharge of hot water. (CR.6) As a result, Roberts and Munoz

sustained severe burns and other personal injuries. Id. Pursuant to a policy of insurance

with Savage, ICSP was called upon to pay workers’ compensation medical and indemnity

benefits to or on behalf of Roberts and Munoz. (CR.217; 79, Exhibit 9 (Appedix “D”)) As of

March 6, 2015, ICSP had paid benefits totaling $115,189.64 on behalf of Roberts, and

$571,296.88 on behalf of Munoz, as a result of the accident the subject of this lawsuit.

(CR.164, Ex.4 (Appendix “E”))

This lawsuit was filed by Roberts against Exxon on January 16, 2013. (CR.5) In

March of 2014, Exxon filed a motion for continuance of the March 31, 2014 trial setting and

a motion for leave to add ICSP as a third-party defendant. (CR.27) Both motions were

granted. (CR.32) On or about March 28, 2014, Exxon reached a settlement with Roberts of

his personal injury claims asserted in this lawsuit, in a confidential amount. (CR.53) After

ICSP filed its answer, Exxon filed a motion for summary judgment against ICSP on its

waiver defense, and set it on the Court’s submission docket for June 30, 2014. (CR.86)

1 The district clerk failed to include the summary judgment exhibits to the requested

documents in the clerk’s record. ICSP is concurrently requesting a supplemental record with

these documents. Relevant omitted portions of the Exhibits are made part of the Appendix.
--2

Exxon filed a counterclaim for indemnity against Roberts pertaining to his indemnity

obligations under the settlement agreement, on June 13, 2014. (CR52) ICSP removed the case

to federal court on June 13, 2014 based upon diversity jurisdiction. (CR.280) The Hon.

Judge Nancy Atlas originally denied remand of a related state court case filed in the 125th

District Court by Exxon against ICSP, which had been removed by co-Defendant Starr

Indemnity & Liability Insurance Company, one of Exxon’s general liability carriers. (CR.87)

However, based upon a subsequent ruling by the Fifth Circuit in Trahan v. Liberty Mut. Ins.

Co., 571 Fed. Appx. 319 (5th Cir. Tex. 2014), Judge Atlas reconsidered and remanded the

Starr Indemnity case, and on the same day remanded this case as well. Id. After remand, the

case was set for trial on the September 2, 2014 two-week docket, but was not reached. Id.

In September 2014, Exxon reached a settlement with Roberts’ co-employee, Munoz

on his personal injury claims, in a confidential amount. (CR.86.163.180) Munoz was not

represented by counsel. (CR.163; CR.165; Exhibit 5, p.12 (Appendix “F”)) As part of this

settlement, Exxon agreed to indemnify Munoz for any claim byICSP related to the settlement,

and to be responsible for Munoz’s future worker’s compensation benefits should ICSP receive

a statutory credit against future benefits. Id.

ICSP filed a motion for partial summary judgment against Appellants on the waiver

issue on September 19, 2014. (CR.65) Exxon filed an amended motion for summary

judgment against ICSP the waiver defense on September 23, 2014. (CR.77) The motion was

a traditional motion for summary judgment on Appellant’s affirmative defense of waiver

pursuant to Tex. Rule of Civ. Proc. 166a(c), not a no-evidence motion pursuant to Tex. Rule
--3

of Civ. Proc. 166a(i). Id. Roberts filed a joinder with Exxon’s motion against ICSP on

September 24, 2014. (CR.190) The motions were set on the submission docket for October

13, 2014. (CR.83) Exxon also filed a motion to compel the depositions of the organizational

representatives of Savage and ICSP. (CR.98)

As admitted by Exxon’s counsel in open court in a hearing on October 20, 2014 in the

insurance coverage case which was pending in the 125th District Court,2 Exxon accepted

responsibility for this accident:

MR. MORRIS: Yes, your Honor. I think it’s important that the Court have a

overview. January 12th 2013, there is an accident out at the Baytown refinery. A

tremendously hot water was dumped on two contractors Kevin Roberts and

Arturo Munoz. Now both Mr. Roberts and Mr. Munoz were employees of

Savage.

. . . . That accident happens and Mr. Roberts within a few days hires Jason

Itkin who files a suit. That suit lands in the 165th. It’s against ExxonMobil.

ExxonMobil believes that it is an additional insurer on policies issued to Savage

and makes that claim. ExxonMobil also investigates the accident and determines

that it is responsible for the injuries to these men.

Mr. Munoz elects not to hire a lawyer. He represents himself. Mr. Itkin

over here aggressively prosecutes the case against ExxonMobil, requests for

production, inspections of the area and it is clear that ExxonMobil feels

responsible for what happened to these two men.

(CR.165; Exhibit 5, p.11-12 (Appendix “F”))

On February 19, 2015, the Hon. Judge Elizabeth Ray issued an order denying

Appellants’ motion for summary judgment against ICSP. (CR.158) On February 19, 2015,

Judge Ray issued an order denying Exxon’s motion to compel the depositions of the

2 The coverage case was removed for a second time by Defendant Starr Indemnity &

Liability Insurance Company on June 4, 2015.
--4

organization representatives of Savage and ICSP. (CR.160) Judge Ray never ruled on

ICSP’s motion for partial summary judgment. Shortly thereafter, Judge Ray stepped down

from the bench. Exxon thereafter filed a motion for reconsideration, which was heard by the

sitting judge of the 55th District Court, the Hon. Jeff Shadwick. (CR.212) On April 15,

2015, Judge Shadwick granted the motion for rehearing, entering a memorandum order and

opinion. (CR.241) Judge Shadwick entered a final summary judgment in favor of

Appellants on May 11, 2015, that ICSP take nothing on its claims for subrogation and for a

credit against future benefits. (CR.268) As reflected in the final summary judgment, Exxon

non-suited its cross-claim against Roberts for indemnity without prejudice. (CR.269)

On May 13, 2015, ICSP timely filed its notice of appeal. (CR.270) ICSP seeks an

order from this Court reversing the trial court’ssummary judgment thatICSP take nothing on

its subrogation claims, and remanding the case to the trial court for a new trial on ICSP’s

claims.

SUMMARY OF THE ARGUMENT

ICSP appeals from the trial court’s order granting Appellants’ motion for summary

judgment, denying its right to recover past benefits paid to Roberts and Munoz, and denying

its credit against future benefits.

ICSP’s first issue asserts that the trial court erred in holding that ICSP’s worker’s

compensation subrogation claims were waived. The one sentence in the insurance clause

requiring a waiver of subrogation expressly limits the waiver to liabilities assumed by

Savage. Case law from the Texas Supreme Court and this Court interpreting this limitation
--5

look solely to the indemnity clause to determine if the limitation applies. As there is no

dispute that Exxon accepted responsibility for this accident and Savage was not obligated to

indemnify Exxon for this accident, the waiver does not apply. As Appellants settled without

honoring ICSP’s subrogation lien, they are liable for the amount of the lien under a cause of

action for conversion.

ICSP’s second issue asserts that even if there is an enforceable waiver of subrogation

in favor of Exxon, the trial court erred in holding that ICSP’s right to assert that Roberts’ and

Munoz’s third-party recovery constituted an advance against future benefits was also waived.

The Texas Legislature has recognized that a carrier’s right of subrogation is distinct from its

right to treat a third-party recovery by an injured worker as an advance against future

benefits. A finding that a waiver in favor of Exxon also waived ICSP’s right to assert a

statutory credit against future benefits to Roberts and Munoz would be contrary to the

provisions of the waiver endorsement, which provides that the agreement shall not operate

directly or indirectly to benefit anyone not named in the Schedule.

In the trial court’s memorandum order and opinion, it stated that it was not

considering Exxon’s summary judgment affidavits, and as such did not need to rule on

ICSP’s objections. In ICSP’s third issue, it asserts that Exxon’s affidavit of T. Lynn

Henagan cannot be the basis for affirming the trial court’s summary judgment. As the trial

court expressly did not consider the affidavits, ICSP would submit that they cannot be the

basis for affirming the trial court’s summary judgment. However, to the extent that ICSP is

incorrect, ICSP submits that any consideration of Exxon’s affidavit of T. Lynn Henagan over
--6

ICSP’s objections would have been erroneous, that the trial court erred in not sustaining the

objections, and the evidence should not be considered on appeal.

This Court should reverse the trial court’s summary judgment, and remand the case to

the trial court for a new trial on ICSP’s claims.

ARGUMENT

ISSUE 1: The trial court erred in holding that ICSP’s worker’s compensation

subrogation claims were waived, as the waiver of subrogation provisions only apply to

liabilities assumed by Savage. As Savage was not obligated to indemnify Exxon for this

accident, the waiver does not apply.

ARGUMENT AND AUTHORITIES FOR ISSUE 1:

Texas Labor Code Chapter 417 provides a worker’s compensation carrier a “first

money” right of subrogation against any third party which may be liable for a compensable

injury. However, Appellants asserted that ICSP has waived its subrogation rights, and refused

to honor ICSP’s subrogation claim when they settled their claims last year. Additionally,

Exxon settled with Munoz, who was unrepresented, also without honoring ICSP’s subrogation

claim. As part of this settlement, Exxon agreed to indemnify Munoz for any claim by ICSP

related to the settlement, and to be responsible for Munoz’s future worker’s compensation

benefits should ICSP receive a statutory credit against future benefits. Although the settlement

amounts were confidential, it is undisputed that these settlements were well in excess of the

amount of ICSP’s subrogation claim. (CR.86.163.180)
--7

A. Waiver requirements.

ICSP’s insurance policy contains a Blanket Waiver of Subrogation Endorsement,

which provides that ICSP shall waive its subrogation rights for limited occurrences. (CR.78,

Exhibit 3, p.8 (Appendix “G”)) In particular, the endorsement provides in part:

We have the right to recover our payments from anyone liable for an injury covered by

this policy. We will not enforce our right against the person or organization named in

the Schedule, but this waiver applies only with respect to bodily injury arising out of the

operations described in the Schedule where you are required by a written contract to

obtain this waiver from us.

This agreement shall not operate directly or indirectly to benefit anyone not named in

the Schedule.

. . . .

(X) Blanket waiver

Any person or organization for whom the Named Insured has agreed by written

contract to furnish this waiver.

This is standard form WC 42 03 04A, dated January 2000. Id. As noted by the clear language

of the endorsement, subrogation is only waived where Savage is required by a written contract

to obtain this waiver.

Both sides agree that in order to have a valid waiver of subrogation, two

conditions must be met. First, Lilly must obligate itself to a waiver pursuant to an

underlying contract with Approach (here, the MSA), and second, it must obtain a

separate endorsement from its insurance carrier waiving those rights. See, e.g.,

Chevron U.S.A. v. Cigna, No. 09-97-00032-CV, 1998 Tex. App. LEXIS 5043, 1998

WL 472501, at *3-4 (Tex. App.--Beaumont Aug. 13, 1998, pet. denied) (not

designated for publication) (enforcing waiver of subrogation clause); see also Ken

Petroleum Corp. v. Questor Drilling Corp., 24 S.W.3d 344, 355 (Tex. 2000) (noting

subrogation waiver in underlying contract and separate endorsement, but holding

insurer's claims were outside scope of waiver).
--8

Approach Operating, LLC v. Resolution Oversight Corp., 2012 Tex. App. LEXIS 5437, at 7

(Tex. App. Austin July 3, 2012, no pet). The waiver in the written contract cannot be inferred,

but must be explicit.

Approach contends the "express terms of the MSA" similarly required a waiver of

subrogation. Unlike the cases discussed above, however, the MSA contains no

explicit mention of subrogation. And Approach points to no authority indicating we

may infer a waiver of subrogation. On the contrary, Texas courts require explicit

waivers of subrogation and will not read them into contracts. For example, in

Reliance Ins. Co. v. Hibdon, the court refused to find a waiver of subrogation in favor

of a company's employee when the clause only explicitly mentioned the employer.

Id, at 14 (Tex. App. Austin July 3, 2012, no pet)(emphasis added)(citing Reliance Ins. Co. v.

Hibdon, 333 S.W.3d 364 (Tex. App.--Houston [14th Dist.] 2011, pet. den’d)). In this case,

Savage was not required to secure a waiver of subrogation under the terms of its agreement

with ExxonMobil; as such, ICSP’s subrogation rights were not waived.

B. The Exxon contract with Savage does not trigger the blanket waiver

endorsement in ICSP’s policy.

Contrary to Appellants’ assertions, Exxon’s contract with Savage does not require a

waiver of subrogation based upon the facts of this case. The paragraph cited by Appellants

in support of their waiver contention, section 14(a), provides in relevant part:

14. Insurance

(a) Coverages.

. . . Notwithstanding any provision of an Order to the contrary, [Savage’s] liability

insurance policy(ies) described above shall: (i) cover [Exxon] as additional insureds in

connection with the performance of Services; and (ii) be primary as to all other

policies (including any deductibles or self-insured retentions) and self insurance

which may provide coverage. [Savage] and its insurer(s) providing coverage in this
--9

Section shall waive all rights of subrogation and/or contribution against [Exxon] and

its Affiliates to the extent liabilities are assumed by [Savage], except [Savage]

expressly agrees not to cause itself or its insurer(s) to waive any rights of subrogation

and/or contribution against [Exxon] and its Affiliates under any workers’

compensation and employers’ liability insurance, or similar social insurance in

accordance with law which may be applicable to those employees of [Savage], when

[Exxon] elects to furnish or arrange same.

(CR.78, Exhibit 1,p.4 (Appendix “H”)) The provision of the waiver sentence limiting the

waiver “to the extent liabilities are assumed by [Savage]” limits the waiver of subrogation to

only those liabilities for which Savage is obligated to indemnify Exxon.

In this case, the indemnity clause in fact obligates Exxon to indemnify Savage for

claims arising out of this accident, as the accident arose out of the negligence of Exxon, not

Savage:

12. Third Party Indemnity. [Exxon] and [Savage] shall indemnify, defend, and

hold each other harmless from all claims, demands, and causes of action asserted

against the indemnitee by any third party (including, without limitation, [Exxon]’s and

[Savage]’s employees) for personal injury, death, or loss of or damage to property

resulting from the indemnitor’s negligence, Gross Negligence or Willful Misconduct.

Where personal injury, death, or loss of or damage to property is the result of joint

negligence, Gross Negligence or Willful Misconduct of [Exxon] or [Savage], the

indemnitor’s duty of indemnification shall be in proportion to its allocable share of

such joint negligence, Gross Negligence or Willful Misconduct. If either party is

strictly liable under law, the other party’s duty of indemnification shall be in the same

proportion that its negligence, Gross Negligence or Willful Misconduct contributed to

the personal injury, death, or loss of damage to property for which a party is strictly

liable. The term “negligence” in these General Terms and Conditions shall include

active or passive negligence. “Gross Negligence” is defined by the law governing the

Order; however, if such law does not define the term “gross negligence,” it means any

act or failure to act (whether sole, joint or concurrent) which seriously and

substantially deviates from a diligent course of action or which is in reckless disregard

of or indifference to the harmful consequences. “Willful Misconduct” is defined by

the law governing the Order; however, if such law does not define the term “willful

misconduct,” it means and intentional disregard of good and prudent standards of

performance or of any of the terms of the Order.
--10

(CR.78, Exhibit 1,p.4 (Appendix “H”)) In particular, Roberts contended in this case that his

injuries were caused by the negligence and gross negligence of Exxon, not the negligence of

Savage.3 (CR.78, Exhibit 1,p.3) Additionally, as noted above, Exxon has admitted to

responsibility for this accident. Exxon has never contended that Savage was in any manner

negligent, nor even so much as even moved to designate Savage as a responsible third party,

in the course of over a year of litigation with Roberts. (CR.278-284;249-250) ISCP is

asserting subrogation for damages sustained by Roberts and Munoz in the accident the

subject of this lawsuit. Exxon assumed the liability for the accident and the damages

sustained by Roberts and Munoz, not Savage. As Savage did not agree in the contract to

assume the liabilities for this accident, the waiver of subrogation clause of the contract is not

triggered, and ICSP has therefore not agreed to waive its right of subrogation against Exxon.

C. The waiver of subrogation endorsement only applies to the liability of Exxon

which Savage agreed to assume via the indemnity provision.

Appellants argue that the provision “to the extent liabilities are assumed by [Savage]”

includes the obligation to purchase worker’s compensation insurance, and therefore triggers

the waiver of subrogation obligation for any insurance Savage is required to secure.

Appellants argue that the insurance purchase obligation should fairly be categorized as a

“liability” in the context of this paragraph. Essentially, under this logic, the phrase is

3 In an analogous context, the eight-corners rule provides that when an insured is sued by a

third party, the liability insurer is to determine its duty to defend solely from terms of the

policy and the pleadings of the third-party claimant. See GuideOne Elite Ins. Co. v. Fielder

Rd. Baptist Church, 197 S.W.3d 305, 307 (Tex. 2006).
--11

redundant, because if Savage assumes the “liability” to secure insurance, it automatically

assumes the “liability” to waive subrogation for that insurance. The Texas Supreme Court has recognized that a clause limiting the waiver provision

to liabilities assumed did not waive the carrier’s right of subrogation, when the corresponding

indemnity clause did not apply. See Ken Petroleum Co., et al v. Questor Drilling Corp., et

al, 24 S.W.3d 344 (Tex. 2000). In Ken Petroleum Co., the contract between Ken Petroleum

and Questor contained mutual indemnification clauses, where the parties were required to

indemnify each other for claims by their respective employees. The “Insurance” clause then

provided the following waiver clause: “For liabilities assumed hereunder by contractor

[Questor], its insurance shall be endorsed to provide that the underwriters waive their

right of subrogation against Operator. Operator [Ken Petroleum] will, as well, cause its

insurer to waive subrogation against Contractor for liability it assumes.” Ken

Petroleum Co., 24 S.W.3d at 355. The Court of Appeals held the waiver was applicable: “But in this case, KEN's policy provides that Underwriters expressly allowed for such

waiver. Appellants' argument that Underwriter's waiver of subrogation was limited only to

those situations in which KEN was required to indemnify Questor is without merit.” Ken

Petroleum Corp. v. Questor Drilling Corp., 976 S.W.2d 283, 290 (Tex. App. Corpus Christi

1998). However, the Texas Supreme Court reversed, finding that the waiver provision did

not apply to waive Ken Petroleum’s insurance carrier’s right of subrogation against Questor

for liability payments made to the family of a Questor employee killed on the job site:
--12

Questor's contentions are not well-founded. Ken Petroleum agreed to cause

its underwriters to waive their subrogation rights only as to amounts Ken

Petroleum might have to pay under its agreement to indemnify Questor. Ken

Petroleum did not agree to indemnify Questor for injuries to or the death of Questor's

employees. To the contrary, Questor agreed that it would indemnify Ken Petroleum if

a Questor employee were injured or killed. The foregoing provision did not waive the

rights of the Underwriters to enforce, as subrogees, the indemnity obligations Questor

owed to Ken Petroleum.

Questor next points to an endorsement to Ken Petroleum's policy with the

Underwriters entitled "WAIVER OF SUBROGATION WHEN REQUIRED BY

CONTRACT" which says:

It is agreed that, with respect to such insurance as is afforded by this

Cover Note, the company waives any right of subrogation against the

"principal" named below by reason of any payment made on account of injury,

including death resulting therefrom or on account of property damage

sustained by any person or entity while the assured is engaged in any of the

operations described in the Schedule of this Cover Note.

"Principal" means any party to whom the named assured is contractually

obligated to waive its legal rights of indemnification.

Questor is not a party to the contract of insurance between Ken Petroleum and

its Underwriters. Questor must look to its own contract with Ken Petroleum to

determine what subrogation rights it may insist that Ken Petroleum require its insurers

to waive. Sections 13 and 14.9 of the drilling contract require Ken Petroleum to cause

its insurers to waive their subrogation rights only with regard to Ken Petroleum's

agreement to indemnify Questor for the death of or injury to Ken Petroleum

employees and certain others. The drilling contract does not require Ken Petroleumto

cause its insurers to waive subrogation rights when they pay amounts that Questor

should have paid under its agreement to indemnify Ken Petroleum. If Ken Petroleum

is not contractually obligated to Questor to enforce a waiver of subrogation, Questor

cannot insist that Ken Petroleum assert a waiver of subrogation when Ken Petroleum

and the Underwriters both agree that the Underwriters stepped into Ken Petroleum's

shoes by paying $ 450,000 to settle the Hemphill litigation.

Ken Petroleum Co., 24 S.W.3d at 355-56 (emphasis added). The Court in Ken Petroleum

recognized that Ken Petroleum had the obligation to secure insurance, yet did not consider

this obligation to be one of the “liabilities assumed.”
--13

Similarly, the Texas Supreme Court held earlier this year that an insurance obligation

dependent on “liabilities assumed” was only triggered if there is an enforceable indemnity

agreement. The following is the Court’s summary of its holdings:

As to the first question, we hold that (1) the Transocean insurance policies

include language that necessitates consulting the drilling contract to determine BP's

status as an "additional insured"; (2) under the terms of the drilling contract, BP's

status as an additional insured is inextricably intertwined with limitations on the

extent of coverage to be afforded under the Transocean policies; (3) the only

reasonable construction of the drilling contract's additional-insured provision is that

BP's status as an additional insured is limited to the liabilities Transocean assumed

in the drilling contract; and (4) BP is not entitled to coverage under the Transocean

insurance policies for damages arising from subsurface pollution because BP, not

Transocean, assumed liability for such claims. We therefore answer the first certified

question in the negative, and based on our analysis of that issue, do not reach the

second question.

In re Deepwater Horizon, 2015 Tex. LEXIS 141 (Tex. 2015)(emphasis added). The case

arose out of “the April 2010 explosion and sinking of the Deepwater Horizon oil-drilling rig,

which claimed eleven lives and resulted in subsurface discharge of oil into the Gulf of

Mexico at alarming rates for nearly three consecutive months.” The Court accepted a

certified question from the Fifth Circuit as to whether BP was entitled to coverage for

subsurface pollution under an additional insured endorsement of Transocean’s insurance

policy. The analysis and holding of the Court relevant to this case follows:

In the Drilling Contract, BP and Transocean agreed to a "knock-for-knock"

allocation of risk that is standard in the oil and gas industry. Among other indemnity

provisions, Transocean agreed to indemnify BP for above-surface pollution

regardless of fault, and BP agreed to indemnify Transocean for all pollution risk

Transocean did not assume, i.e., subsurface pollution. Without limiting Transocean's indemnity obligations, the Drilling Contract

further required Transocean to carry multiple types of insurance at its own expense.

Among the required policies, Transocean was obliged to carry comprehensive general
--14

liability insurance, including contractual liability insurance for the indemnity

agreement, of at least $10 million. Transocean was also charged with naming BP, its

affiliates, officers, employees, and a host of other related individuals and entities:

as additional insureds in each of [Transocean's] policies, except Workers'

Compensation for liabilities assumed by [Transocean] under the terms of

[the Drilling] Contract. (Emphasis added.)

To the extent the terms of the Drilling Contract are incorporated into

Transocean's insurance policies, the proper construction of the emphasized portion of

the foregoing additional-insured provision becomes central to the resolution of the

coverage issue before us.

. . . . After BP made a demand for coverage, the Insurers sought a declaration that

BP would not be entitled to additional-insured coverage for subsurface-pollution

claims arising from the Deepwater Horizon incident because the Drilling Contract

limits the additional-insured obligation to "liabilities assumed by [Transocean]

under the terms of [the Drilling] Contract."

. . . . There is no dispute that (1) BP is an additional insured under the Transocean

policies for some purposes, (2) the Drilling Contract is an Insured Contract as defined

by the insurance policies, and (3) the Insurers are not parties to the Drilling Contract.

The parties, however, join issue regarding whether and to what extent the policies

incorporate provisions in the Drilling Contract that may limit BP's status as an

additional insured.

. . . .

In sum, BP contends that its worldwide operations are automatically covered for

all "liability imposed by law," including subsurface pollution from the Deepwater

Horizon incident, because it is undisputed that (1) the Drilling Contract is an "Insured

Contract," (2) the Drilling Contract obligates Transocean to provide additionalinsured coverage, (3) BP is thereby an "Insured" as that term is specially defined in

the insurance policies, and (4) no limitations on the scope of coverage are expressly

included in the policies.

. . . .
--15

As Urrutia demonstrates, an insurance policy may incorporate an external limit

on additional-insured coverage. In such cases, the external limit is, in effect, an

endorsement to the insurance policy that "suppl[ies] the limits of coverage and

extend[s] those benefits to the customer identified therein as accepting the [insured's]

offer of insurance." Id. at 443. By tying additional-insured coverage to the terms of an

underlying agreement, the parties procure only the coverage the insured is

contractually obligated to provide, thereby minimizing the insurer's exposure under

the policy and the named insured's premiums. See id. ("The endorsement . . . allowed

[the insured] to determine in the rental contracts themselves which customers would

be insured and the amount of their respective coverage.").

. . . . Applying the only reasonable construction of the additional-insured provision, we

conclude that BP is an additional insured only as to liabilities assumed by

Transocean under the Drilling Contract and no others. Because Transocean did

not assume liability for subsurface pollution, Transocean was not "obliged" to

name BP as an additional insured as to that risk. Because there is no obligation to

provide insurance for that risk, BP lacks status as an "Insured" for the same.

. . . . Second, BP's argument conflates duty with scope. We have long recognized

that the contractual duties to indemnify and to maintain insurance may be separate and

independent.n17 Consequently, a statute invalidating an indemnification clause does

not relieve a party of a separate duty to obtain insurance. See Getty, 845 S.W.2d at

804; see also Tex. Civ. Prac. & Rem. Code § 127.005 (exempting from the Texas

Oilfield Anti-Indemnity Act certain indemnity agreements supported by liability

insurance furnished by the indemnitor). But simply because the duties to indemnify

and maintain insurance may be separate and independent does not prevent them from

also being congruent; that is, a contract may reasonably be construed as extending the

insured's additional-insured status only to the extent of the risk the insured agreed to

assume.

FOOTNOTES

n17 See ATOFINA, 256 S.W.3d at 670 ("We disapprove the view that this kind

of additional insured requirement fails to establish a separate and independent

obligation for insuring liability." (emphasis added)); Getty Oil Co. v. Ins. Co.

of N. Am., 845 S.W.2d 794, 804 (Tex. 1992) ("[T]he additional insured

provision of the contract does not support the indemnity agreement, but rather

is a separate obligation." (emphasis added)).
--16

Such is the case here. The Drilling Contract required Transocean to name BP

as an additional insured only for the liability Transocean assumed under the contract.

Accordingly, Transocean had separate duties to indemnify and insure BP for certain

risk, but the scope of that risk for either indemnity or insurance purposes extends only

to above-surface pollution. Article 20.1 of the Drilling Contract, on which BP relies,

provides that Transocean's duty to maintain insurance does not alleviate its duty to

indemnify BP. This merely confirms our holding in Getty Oil Co. v. Insurance Co. of

North America that indemnity and insurance clauses can impose separate and

independent duties. 845 S.W.2d at 804. Article 20.1 does not provide that the scope of

the indemnity and insurance duties are different. Instead, the additional-insured clause

confirms they are congruent regarding the risk at issue by requiring Transocean to

insure BP "for liabilities assumed by [Transocean] under the terms of this

Contract." Because the scope of Transocean's duty to indemnify governs the

scope of Transocean's duty to insure BP, we decline BP's request to ignore the

indemnity obligation when construing the Drilling Contract.

In sum, we answer the first certified question in the negative because BP is not

covered for the damages at issue by virtue of the limitations on the scope of its

additional-insured status imposed in the Drilling Contract and incorporated into the

Transocean insurance policies by reference.

Id, at 5 – 40 (emphasis added). The analysis in determining whether an additional insured

endorsement is triggered under Deepwater Horizon is no different that the analysis in this

case as to whether a waiver of subrogation endorsement is triggered in this case. Indeed,

Appellants recognize that these endorsements are analogous, arguing in a summary judgment

response: “The language at issue in Pasadena Refining, while it did apply to additional

insured coverage rather than a waiver of subrogation issue, is undeniably similar to the

language found in the ICSP Endorsement. Both the ICSP Policy and the Pasadena Refining

policy provide for either a waiver of subrogation or additional insured coverage when

required by contract.” (CR.206) As did BP in Deepwater Horizon, Appellants rely heavily

on the opinions of Evanston Ins. Co. v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660
--17

(Tex. 2008), Aubris and Pasadena Refining.4 Appellants make the similar argument that

ATOFINA, Aubris and Pasadena Refining support their contention that “the insurance

requirement which Savage assumed liability for in the Exxon-Savage contract, including

liability to secure a workers’ compensation insurance policy containing waiver of workers’

compensation subrogation rights in favor of Exxon, is separate and independent and not

remotely interconnected with any contractual indemnity provisions contained in the

ExxonMobil-Savage contract.” (CR.197) The Court in Deepwater Horizon distinguished

these cases, holding: “But simply because the duties to indemnify and maintain insurance

may be separate and independent does not prevent them from also being congruent; that is, a

contract may reasonably be construed as extending the insured's additional-insured status

only to the extent of the risk the insured agreed to assume.” Deepwater Horizon, at 39.

Appellants argue: “Here, all the necessary language to determine whether the waiver

of subrogation applies is contained in paragraph 14 of the Savage contract. One does not

have to look to the indemnity clause in paragraph 12.” (CR.260) To the contrary, as this

case involves damages sustained by a third parties to the contract (Roberts and Munoz), the

indemnity clause must necessarily be referenced to determine whether Exxon or Savage

assumed liability for those damages. The need to reference the indemnity clause is supported

by paragraph 14(b) of the contract, which provides in part: “Supplier’s insurance shall apply to

4 “In addition to ATOFINA, BP relies on Aubris Resources LP v. St. Paul Fire & Marine

Insurance Co., 566 F.3d 483 (5th Cir. 2009), and Pasadena Refining System, Inc. v.

McCraven, Nos. 14-10-00837-CV, 14-10-00860-CV, 2012 Tex. App. LEXIS 3823, 2012 WL

1693697 (Tex. App.--Houston [14th Dist.] May 15, 2012, pet. dism'd by agr.), as supporting

a construction of the insurance policies that does not permit consideration of the Drilling
--18

Supplier’s indemnity and defense obligations under the Order except, with respect to Services

subject to the law of the State of Texas, each party agrees to maintain the insurance and limits

as specified in this Section or selfinsurance during the duration of this Agreement in support of

the mutual indemnifications, if any, agreed to in Sections 11, 12, and 13 above.” (CR.78;

Exhibit 1, p.4 (Appendix “H”)) 5 Under Appellants’ logic, the Court in Deepwater Horizon

could have held that Transocean’s obligation to secure an additional insured endorsement in

favor of BP was a “liability assumed” under the agreement, rendering BP an additional

insured irrespective of whether Transocean was required to indemnify BP for a particular

risk. BP in fact argued that it was “automatically covered for all ‘liability imposed by law,’ .

. . because . . .(2) the Drilling Contract obligates Transocean to provide additional-insured

coverage. . . .” Deepwater Horizon, at 12-13. This rejected argument mirrors Appellants’

argument in this case that the obligation to secure worker’s compensation insurance is one of

the “liabilities assumed” by Savage. Quite simply, the Court’s holding in Deepwater Horizon

forecloses Appellants’ argument that the waiver of subrogation clause in its contract with

Savage is independent of the indemnity clause.

This Court, in following Ken Petroleum, has also applied the term “liabilities

assumed” solely to the indemnity requirement, holding that while there was a waiver of

Contract.” Deepwater Horizon, at 12. 5 Section 11 is an additional indemnity clause, which covers damages to Savage’s tools,

equipment and rented items, and damages to Exxon’s adjacent property. Section 13 is an

additional indemnity clause for each party’s gross negligence and willful misconduct.

Notably, Roberts pleaded the accident was the result of the gross negligence of Exxon, a

claim for which Exxon agreed to “bear full responsibility” under Section 13. CR.13,Ex.4,p.3
--19

subrogation for claims which the carrier’s insured assumed liability under the indemnity

agreement, there was no waiver for claims for which there was no indemnity requirement.

In this case, the indemnity agreement between Nabors and Tesoro plainly limits the

parties' waiver of subrogation to the liabilities each assumed under the drilling

contract. Nabors did not assume liability for losses to its rig caused by Tesoro's gross

negligence. Tesoro remained liable for such losses. Nabors, however, recovered its

losses from its insurance carrier, Zurich. Therefore, if Nabors were to bring suit

against Tesoro to recover for the loss of its rig, it would be seeking a double recovery

for the same loss from both Zurich and Tesoro. We hold, therefore, that Zurich, in

subrogation to Nabors's rights against Tesoro for gross negligence, is not barred from

seeking recovery from Tesoro of the insurance proceeds Zurich paid Nabors.

We overrule Zurich's issue three to the extent it contends that Zurich has a right

of subrogation to those claims against Tesoro as to which Nabors assumed liability

under the indemnity agreement in the drilling contract and waived its insurers'

subrogation rights. We sustain issue three to the extent it contends that Zurich is not

barred from bringing suit against Tesoro in subrogation to Nabors's claims for losses

to Nabors's due to Tesoro's gross negligence or willful misconduct, which are beyond

the scope of the indemnity agreement.

Tesoro Petroleum Corp. v. Nabors Drilling United States, 106 S.W.3d 118, 133-134 (Tex.

App.-Houston[1st Dist.] 2002, writ den’d).6 It is important to note that in Ken Petroleum,

the Court held that Ken Petroleum was entitled to subrogate against Questor for its liability

payments and defense costs, even though it had agreed in the contract to secure its own

coverage for its own liability to the injured worker.7 As such, the Court did not apply the

waiver of subrogation to Ken Petroleum’s insurance by the mere fact that it had contractually

agreed to secure this coverage. This is, however, what Appellants have argued – that the

6 As noted above, Roberts pleaded gross negligence claims in this lawsuit, as well. (CR.7)

7 Similarly, in Tesoro Petroleum, “Nabors obtained a certificate of insurance listing Zurich

as its insurer for damage to Nabor’s drilling rig.” Tesoro Petroleum Corp. v. Nabors Drilling

United States, 106 S.W.3d at 122. After the blowout, Zurich sought subrogation against

Tesoro for the damage to the rig.
--20

mere fact that Savage agreed to secure worker’s compensation insurance under the policy

constitutes a per se agreement to waive subrogation under that policy. Indeed, the very

Pasadena Refining and ATOFINA cases cited by Appellants would suggest that the

contractual assumption of liability is separate from the contractual obligation to secure

insurance.

Texas Labor Code § 417.004, which is a section of the Chapter which addresses the

worker’s compensation carrier’s subrogation rights, also uses the liabilities assumed language

in describing an indemnity obligation. In particular, this section provides:

Sec. 417.004. EMPLOYER LIABILITY TO THIRD PARTY. In an action for

damages brought by an injured employee, a legal beneficiary, or an insurance carrier

against a third party liable to pay damages for the injury or death under this chapter

that results in a judgment against the third party or a settlement by the third party, the

employer is not liable to the third party for reimbursement or damages based on the

judgment or settlement unless the employer executed, before the injury or death

occurred, a written agreement with the third party to assume the liability.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

The Texas Supreme Court has interpreted the “written agreement with the third party to

assume the liability” under Section 417.004 to mean an indemnity agreement. See Energy

Serv. Co. of Bowie, Inc. v. Superior Snubbing Servs., 236 S.W.3d 190, 191 (Tex. 2007)(”The

new Act referred instead to an agreement ‘executed . . . with the third party’ seeking

indemnity.”); Enserch Corp. v. Parker, 794 S.W.2d 2, 7 (Tex. 1990)(“The Texas Workers'

Compensation Act provides that a subscribing employer has no liability to reimburse or hold

another person harmless for a judgment or settlement resulting from injury or death of an

employee "in the absence of a written agreement expressly assuming such liability." TEX.

REV. CIV. STAT. ANN. art. 8306, § 3(d)(Vernon Supp. 1989)(emphasis added). This
--21

provision, commonly referred to as the Texas Workers' Compensation Bar, prohibits

indemnity in a workers' compensation context unless one party expressly agrees to indemnify

the other in writing.”). Under Appellant’s logic, if an employer entered into a contract with a

third party that it included an obligation to secure worker’s compensation insurance for its

own employees, the third party could join the employer as a defendant to the lawsuit even in

the absence of an indemnity agreement.

In a case from the Southern District of Texas involving the application of a waiver

clause to a worker’s compensation carrier’s subrogation rights, the reviewing court also

referenced the contract’s indemnity clause in interpreting the scope of the limiting term of the

waiver clause “as respects risks and liabilities assumed by Contractor. . . .” In that case, the

indemnity clause was so broad that it was clear that the employer was assuming the

defendant’s liability: “The state-court suit is a claim against St. Mary ‘arising out of or

related to bodily injury or death’ of Select's employees for ‘medical, compensation or other

benefits.’ (Id., ¶ 11.2). Under the unambiguous language of the MSC, Select assumed St.

Mary's liability in that suit.” Liberty Ins. Corp. v. SM Energy, 2012 U.S. Dist. LEXIS

174069 (S.D. Tex. Dec. 7, 2012). However, in this case the indemnity clause in Exxon’s

contract is not nearly as broad, and does not call for Savage to assume liability for the claims

of Roberts and Munoz.

In the memorandum order of April 15, 2015, the trial court provided the following

comment: “ISCP’s argument only works if Exxon’s settlement payments were for Savage’s

liability (the contractual exclusion ICSP focuses upon.) This defies common sense and is
--22

not supported by the evidence. Robert’s Petition is against Exxon, not Savage. Exxon’s

settlement with Roberts is in resolution of its own liability, not Savage’s.”

(CR.242)(emphasis added) This comment suggests confusion on the part of the trial court.

The parties have never argued that Exxon’s settlement payments were for Savage’s liability.8

ICSP agrees that such an argument would defy common sense; however, this is not ICSP’s

argument. ICSP recognizes, and fact urges that Exxon’s settlements with Roberts and Munoz

were in resolution of Exxon’s own liability. ICSP’s argument is that there is no waiver of

subrogation unless Savage assumes Exxon’s liability, via the indemnity clause. It is

undisputed that Savage did not agree to indemnify Exxon for this accident. Given that no

one has asserted that Savage was liable for the accident, the trial court’s comment is

puzzling.

An assumed liability is the agreement on the part of one party to pay for damages

sustained by another party; it not the agreement to pay insurance premiums prior to the work

being performed or any damages ever being sustained. Bootstrapping the insurance purchase

requirements to the “assumed liabilities” of the waiver clause would result in a reading that is

nonsensical. Under Appellants’ interpretation, the clause would be translated as follows:

“[Savage] and its insurer(s) providing coverage in this Section shall waive all rights of

subrogation and/or contribution against [Exxon] and its Affiliates [for Savage’s obligation to

secure worker’s compensation insurance. . . .]” In other words, Savage is required to waive

8 Savage could have never been held liable for the accident, as it had worker’s compensation

coverage, and therefore was immune from liability to Roberts or Munoz pursuant to Tex.

Labor Code § 408.001(also known as the exclusivity provision or worker’s compensation
--23

subrogation against Exxon for the insurance premiums it is required to pay. However, a

worker’s compensation carrier can only subrogate for “damages” sustained by an injured

employee. See Tex. Labor Code § 417.001(a; Texas Workers’ Compensation Insurance

Fund v. Knight, 61 S.W.3rd 91 (Tex.App.—Amarillo 2001, no pet.). Insurance premiums

required to by paid by an employer are not damages. The Exxon / Savage contract only

obligated Savage to pay premiums to an insurance carrier to secure a worker’s compensation

policy. It did not obligate Savage to pay worker’s compensation benefits itself to its own

employees. ICSP is not seeking subrogation against Exxon for the insurance premiums paid

by Savage. ICSP is seeking subrogation for the insurance benefits it, not Savage, made to

Roberts and Munoz, for the damages Roberts and Munoz sustained as a result of the conduct

of Exxon. ICSP, not Savage was liable to pay worker’s compensation benefits to Roberts. In

fact, Texas allows an employer to decline to participate in the worker’s compensation system.

In that event, however, the employer loses its common law defenses to claims by its own

employees; i.e. becomes a “bare employer.”

D. The indemnity clause is unenforceable as it does not comply with the fair notice

doctrine.

Additionally, Section 12, the indemnity clause, is unenforceable, as it does not comply

with the express negligence doctrine by providing that Savage is required to indemnify

Exxon for its own negligence, and it does not comply with the conspicuousness requirement

as nothing appears on the face of the contract to attract the attention of a reasonable person

when he looks at it. See Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508

bar).
--24

(Tex. 1993). By contrast, Section 11 contains a provision complying with the fair notice

doctrine: “. . . EVEN IF THE LOSS OR DAMAGE RESULTS FROM PURCHASER’S

NEGLIGENCE.” (CR.78, Exhibit 1,p.3 (Appendix “H”)) As there is no indemnity

obligation on the part of Savage, there are no liabilities assumed by Savage, and there is no

waiver of subrogation.

E. The waiver only applies to general liability coverage.

Alternatively, the limitation in the Exxon waiver clause, Section 14(a), limiting the

waiver “to the extent liabilities are assumed by [Savage]”, should be interpreted to limit the

waiver only to Savage’s general liability insurance coverage, and not its worker’s

compensation coverage. The worker’s compensation policy does not provide coverage for any

indemnity obligation assumed by Savage. Worker’s compensation coverage only provides for

the payment of medical or indemnity benefits to the policyholder’s employees, or death

benefits to the employees’ beneficiaries. Worker’s compensation coverage is not third party

liability coverage;9 it is first party insurance coverage.10 The worker’s compensation policy is

a three party agreement between the carrier, employer and employee. Aranda v. Ins. Co. of N.

Am., 748 S.W.2d 210, 212 (Tex. 1988). General liability insurance may provide coverage to

companies other than the policyholder in support of an indemnity obligation. The worker’s

compensation policy does not provide coverage for any indemnity obligation assumed by

Savage, nor can an unaffiliated company such as Exxon be added as an additional insured to

9 See 28 TEX. ADMIN. CODE § 21.202 (8) (West 2015(“Third-party coverage--Benefits and

other rights provided by an insurance contract to any person other than the insured.)

10 See 28 TEX. ADMIN. CODE § 21.202 (5) (West 2015)(“First-party coverage--Benefits and
--25

Savage’s worker’s compensation coverage, as Exxon is not an alternate employer for Savage’s

employees. F. Appellants are liable for the amount of ICSP’s lien as a result of their settlement.

Both Roberts and Munoz settled their claims against Exxon, without honoring ICSP’s

subrogation claims. As part of the Robertssettlement, Roberts agreed to indemnifyExxon for

any claim by ICSP related to the settlement. However, as part of the Munoz settlement, Exxon

agreed to indemnify Munoz for any claim by ICSP related to the settlement, and to be

responsible for Munoz’s future worker’s compensation benefits should ICSP receive a statutory

credit against future benefits. Appellants’ settlement, and the payment of settlement funds to

Roberts and Munoz without reimbursing ICSP’s first-money subrogation lien, constitutes

conversion. See Texas Mutual Ins. Co. v. Ledbetter, 251 S.W.3d 31, 38-39 (Tex. 2008)

(“When an injured worker settles a case without reimbursing a compensation carrier,

everyone involved is liable to the carrier for conversion – the plaintiffs, the plaintiffs’

attorney, and the defendants.”); see also Capitol Aggregates, Inc. v. Great American Ins. Co.,

408 S.W.2d 922, 923-24 (Tex. 1966)(”The carrier was held entitled to recover from the third

party and the workman, jointly and severally, the amount of the settlement to the extent

necessary to reimburse itself as provided in Section 6a.”); Prewitt and Sampson v. City of

Dallas, 713 S.W.2d 720, 722 (Tex.App.-Dallas 1986, writ ref’d n.r.e.); Home Indemnity Co.

v. Pate, 814 S.W.2d 497 (Tex.App.-Houston[1st Dist.] 1991, no writ); Employers Casualty

Company v. Henager, 852 S.W.2d 655, 659 (Tex.App.—Dallas 1993, writ den’d); Houston

other rights provided by an insurance contract to an insured.”)
--26

General Ins. Co. v. Campbell, 964 S.W.2d 691, 695 (Tex.App.—Corpus Christi 1998, review

den’d) (“If a third-party tortfeasor and its insurer wrongfully pay out to the employee money

that belongs to the compensation carrier, the third-party tortfeasor and its insurance company

are liable for the total amount paid by the carrier.”); Performance Ins. Co. v. Frans, 902

S.W.2d 582, 585 (Tex.App.---Houston [1st Dist.] 1995, writ denied); Travelers Insurance

Company v. Seidel, 705 S.W.2d 278, 281 (Tex.App.-San Antonio 1986, writ dism’d). ICSP

pleaded claims against Appellants for conversion, and since subrogation was not waived,

ICSP was entitled to recover from Appellants the amount of its lien against the Roberts

settlement, and from Exxon in the amount of its lien against the Munoz settlement. G. Conclusion.

Since waiver is an affirmative defense, it is Appellants’ burden to prove it applies as a

matter of law.11 Additionally, as Appellants filed a traditional motion for summary

judgment, they had the burden to prove as a matter of law that waiver applies. As Appellants

did not prove their affirmative defense of waiver as a matter of law, this Court should reverse

the trial court’s summary judgment, and remand the case to the trial court for further

proceedings.

11 See Tex. Rule of Civ. Proc. 94; Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d
--27

ISSUE 2: Even if there is an enforceable waiver of subrogation in favor of Exxon, the

trial court erred in holding thatICSP’s right to assert that Roberts’ and Munoz’sthird- party recovery constituted an advance against future benefits was also waived.

ARGUMENT AND AUTHORITIES FOR ISSUE 2:

Even if ICSP’s subrogation rights have been waived, this does not waive ICSP’s right

to assert a credit against future benefits which may be owing to Roberts and Munoz pursuant

to Tex. Labor Code § 417.002(b) in the respective amounts of their recovery. Tex. Labor

Code § 417.002 provides:

Sec. 417.002. RECOVERY IN THIRD-PARTY ACTION. (a) The net amount

recovered by a claimant in a third-party action shall be used to reimburse the insurance

carrier for benefits, including medical benefits, that have been paid for the compensable

injury.

(b) Any amount recovered that exceeds the amount of the reimbursement

required under Subsection (a) shall be treated as an advance against future benefits,

including medical benefits, that the claimant is entitled to receive under this subtitle.

(c) If the advance under Subsection (b) is adequate to cover allfuture benefits,

the insurance carrier is not required to resume the payment of benefits. If the advance is

insufficient, the insurance carrier shall resume the payment of benefits when the

advance is exhausted.

The Legislature has recognized that a carrier’s right of subrogation is distinct from its right to

treat a third-party recovery by an injured worker as an advance against future benefits (under

Tex. Labor Code § 417.002(b)). In particular, Tex. Labor Code § 417.003(d) provides that

the worker’s attorney can only recover attorney’s fees out of the carrier’s recovery for

amounts paid in the past, not the amount of future benefits the carrier is relieved from paying

pursuant to Tex. Labor Code § 417.002(b):

505, 508 (Tex. 1993).
--28

(d) For purposes of determining the amount of an attorney's fee under this

section, only the amount recovered for benefits, including medical benefits, that have

been paid by the insurance carrier may be considered.

Prior to this amendment to the statute in 1993, Texas appellate courts had allowed attorneys

to recover attorney’s fees from the carrier for not only the past amount of benefits

reimbursement, but also the present value of the benefits the carrier was relieved of paying

pursuant to the advance provision. See Ischy v. Twin City Fire Ins. Co., 718 S.W.2d 885, 888

(Tex. App. Austin 1986, writ ref’d n.r.e.); Chambers v. Texas Employers Ins. Assoc., 693

S.W.2d 648 (Tex. App. 1985, writ ref'd n.r.e.).

In an analogous context involving a carrier’s credit rights for future worker’s

compensation benefits to be paid under the the Longshore and Harbor Workers'

Compensation Act, 33 U.S.C. §§ 901–950, the Fifth Circuit has held no fewer than five times

that an enforceable waiver of subrogation does not waive the carrier’s right to a credit against

future benefits. See Petro-Weld, Inc. v. Luke, 619 F.2d 418 (5th Cir. 1980); Petroleum

Helicopters, Inc. v. Collier, 784 F.2d 644 (5th Cir. 1986); Nicklos Drilling Co. v. Cowart, 907

F.2d 1552 (5th Cir. 1990); Jackson v. Land & Offshore Services, Inc., 855 F.2d 244 (5th Cir.

1988); Kelly v. Red Fox Cos. of New Iberia, Inc., 123 Fed. Appx. 595 (5th Cir. 2005); but see

Hartford Accident & Indem. Co. v. Buckland, 882 S.W.2d 440, 444–56 (Tex.App.—Dallas

1994, writ denied); Am. Risk Funding Ins. Co. v. Lambert, 59 S.W.3d 254, 259 (Tex. App.—

Corpus Christi 2001, pet.denied).12 The right of offset or credit under the Texas Worker’s

12 The Texas Supreme Court has never addressed this issue. Lambert followed Buckland

without further analysis. Buckland based its holding on the Ischy and Chambers opinions

which were subsequently abrogated by statute. Buckland also noted that its holding was
--29

Compensation Act for a third party recovery is substantially the same as the right provided

under Section 933(f) of the Longshore Act. The Texas statute dictates that any third-party

recovery by a claimant be treated as an “advance” against future benefits, and that until the

advance is exhausted, the carrier is not obligated to pay any future benefits. As it categorizes

any third party recovery by the claimant as an advance fund which must first be exhausted, it

is similar to “Section 33(f) [, which] fixes the liability of the employer-carrier for

compensation in the future after a third party settlement or judgment has been obtained. It

simply cannot be read to mean that the employer-carrier is liable to presently pay

compensation in addition to the amount received from the third party without first exhausting

that fund, and thus provide a double recovery in this case . . . .” See Petro-Weld, Inc., 619

F.2d at 420-421. There is no rational basis to distinguish these holdings based upon the fact

that they involve different statutes. They both involve worker’s compensation statutes that

have similar offset or credit provisions in their third-party recovery statutes. They are similar

in that they provide a first money right of reimbursement to the carrier, and are intended to

reduce the burden of insurance to the general public.13 Finally, a finding that a waiver in

favor of Exxon also waived ICSP’s right to assert a statutory credit against future benefits to

Roberts and Munoz would be contrary to the provisions of the waiver endorsement, which

“governed by former article 8307, section 6a of the Texas Revised Civil Statutes since

Buckland's injuries occurred prior to January 1, 1991.” Buckland, 882 S.W.2d at 441, fn.1.

13 “First-money reimbursement is crucial to the worker's compensation system because it

reduces costs for carriers (and thus employers, and thus the public) and prevents double

recovery by workers.” Tex. Mut. Ins. Co. v. Ledbetter, 251 S.W.3d 31, 35 (Tex. 2008).
--30

provides that the agreement shall not operate directly or indirectly to benefit anyone not

named in the Schedule.

ISSUE 3: Exxon’s affidavit of T. Lynn Henagan cannot be any basis for affirming the

trial court’s summary judgment.

ARGUMENT AND AUTHORITIES FOR ISSUE 3:

ICSP objected to portions of Exxon’s affidavit of T. Lynn Henagan (CR.79; Exhibit 8

(Appendix “I”)) pursuant to Tex. Rule of Civ. Proc. 166a(f), and provided a proposed order

supporting the objections. (CR.87-89) The trial court indicated in its opinion that it was not

basing its opinion on the affidavits filed by Appellants: “The parties have agreed that all

remaining issues in this case are entirely issues of law. The parties agree, and this Court

rules, that the contracts in play are not ambiguous. Accordingly, this Court did not use and

does not need to rule on the Affidavits and objections thereto which purport to tell the Court

how to interpret the contracts.” (CR.241-242)

As the trial court expressly did not consider the affidavits, ICSP would submit that

they cannot be the basis for affirming the trial court’s summary judgment. See Cincinnati

Life Ins. Co. v. Cates, 927 S.W.2d 623, 625 (Tex. 1996); State Farm Fire & Casualty Co. v.

S.S., 858 S.W.2d 374, 380 (Tex. 1993) (plurality opinion); Delaney v. University of Houston, 835 S.W.2d 56, 58 (Tex. 1992). However, to the extent that ICSP is incorrect, ICSP submits

that any consideration of Exxon’s affidavit of T. Lynn Henagan over ICSP’s objections

would have been erroneous, that the trial court erred in not sustaining the objections, and the

evidence should not be considered on appeal. ICSP reurges the objections to the extent the

evidence could form the basis of any opinion by this Court, as follows:
--31

A. General Objections. Any consideration of paragraphs 6 – 7 and 9 - 11 of Henagan’s affidavit , a supervisor

for Exxon Risk Management, would have been erroneous as inadmissible parol evidence. “Parol evidence is only admissible to show ‘(1) the execution of a written agreement was

procured by fraud, (2) an agreement was to become effective only upon certain

contingencies, or (3) the parties’ true intentions if the writing is ambiguous.’” Ledig v. Duke

Energy Corp., 193 S.W.3d 167, 178-79 (Tex.App.—Houston[1st Dist.] 2006, no pet.)(citing

Gonzalez v. United Carpenters & Joiners, 93 S.W.3d 208, 211 (Tex.App.—Houston[14th

Dist.] 2002, no pet.)). Appellants did not argue that Exxon’s standard form “Standard

Procurement Agreement for Downstream or Chemical Services with Incidental Goods” the

basis of their waiver claim was either (1) procured by fraud; (2) effective only upon certain

contingencies, or (3) ambiguous. As such, the parol evidence offered by Henagan is

inadmissible. It was presumably offered as an attempt to broaden the reach of the waiver of

subrogation clause.

Additionally, ICSP objected to Henagan’s attempts to interpret the contract in

paragraphs 6 – 7 and 9 - 11. The contract speaks for itself. The interpretation of the contract

is a question of law for the Court, not a question of law or fact for Henagan to interpret.

Henagan then proceeds to misinterpret the contract.
--32

B. Specific Objections.

1. Paragraph 6.

In paragraph 6, Henagan states that “Savage assumed liability to maintain workers’

compensation and employer’s liability insurance. . . .” Henagan’s self-serving use of the

term “assumed liability” is misplaced; “assumed responsibility” is a more accurate

description of the requirement. The act of securing first party worker’s compensation

insurance covering Savage’s own employees (not Exxon’s), is not an act of “assuming

liability.” The only possible reason for Henagan’s misuse of this term is to support an

argument by Exxon that the act of securing worker’s compensation insurance constitutes one

of the “liabilities” “assumed by Supplier” under the waiver provision of section 14(a) of

Exxon’s form contract.

The last two sentences of paragraph 6 of Henagan’s affidavit are improper in that they

state a legal conclusion as to insurance coverage, and are conclusory, as to the responsibility

of Savage’s insurance carriers to secure coverage. This is a question of law for the Court, not

a question of law or fact for Henagan to interpret. Henagan has not laid any foundation as an

attorney to provide a legal conclusion.

2. Paragraph 7.

In paragraph 7 of Henagan’s affidavit, Henagan states that under section 14(a) of

Exxon’s form contract “Savage agreed that Savage and its insurers providing coverage under

paragraph 14(a) were to waive all rights of subrogation.” This states an improper legal

conclusion, is conclusory and violates the parol evidence rule. It misstates the waiver clause,
--33

because Savage did not agree to waive “all rights of subrogation”; Savage only agreed to

waive subrogation for liabilities assumed by Savage.

3. Paragraph 9.

Paragraph 9 attempts to describe Exxon’s course and dealing, “practice, and intent,”

which constitutes inadmissible parol evidence.

4. Paragraph 10.

Paragraph 9 attempts to describe Exxon’s course and dealing, “practice, and intent,”

which constitutes inadmissible parol evidence. Additionally, the second sentence, that “the

cost of the premiums for such coverage including waiver of subrogation is passed through to

ExxonMobil in the pricing and compensation to be paid under the contract” is conclusory,

unsupported and without any foundation. The witness, who works in Risk Management,

does not lay and foundation for his alleged knowledge of contract and pricing negotiations

between Savage and Exxon.

5. Paragraph 11.

In paragraph, Henagan provides an impermissible legal conclusion that Savage waived

subrogation for this accident. The paragraph is inadmissible as violative of the parol

evidence rule, conclusory, unsupported and without any foundation. The witness, who works

in Risk Management, does not lay and foundation for his alleged knowledge of contract and

pricing negotiations between Savage and Exxon.
--34

PRAYER FOR RELIEF

WHEREFORE, ICSP prays that this Court reverse the trial court’ssummary judgment

that ICSP take nothing as to its claims pertaining to Roberts, Munoz and Exxon, remand the

case to the trial court for a new trial on ICSP’s intervention interests; that ICSP recover its

taxable costs of Court, and for such other and further relief as just.

Respectfully submitted,

KELLY & SMITH, P.C.

/s/ Loren R. Smith__________________

Loren R. Smith

Texas Bar No. 18643800

4305 Yoakum Blvd.

Houston, Texas 77006

713/861-9900

713/861-7100 - FAX

ATTORNEYS FOR APPELLANT THE

INSURANCE COMPANY OF THE

STATE OF PENNSYLVANIA

CERTIFICATE OF SERVICE

I hereby certify that on July 21, 2015, a true and correct copy of the foregoing was

forwarded by electronic transmission to the following counsel of record:

Jason A. Itkin

Arnold & Itkin

6009 Memorial Drive

Houston, Texas 77007

Attorneys for Plaintiff Kevin Roberts

Mike Morris

Tekell, Book, Allen & Morris, L.L.P.

1221 McKinney, Suite 4300

Houston, Texas 77010-2010

Attorneys for Third-Party Plaintiff Exxon

Mobil Corporation

/s/ Loren R. Smith__________________

Loren R. Smith
--35

CERTIFICATE OF COMPLIANCE AND WORD COUNT

I hereby certify that this document was produced on a computer using Microsoft Word

and contains 10,013 words, as determined by the computer software’s word-count function,

excluding the sections of the document listed in Texas Rule of Appellate Procedure 9.4(i)(1).

/s/ Loren R. Smith__________________

Loren R. Smith
--36

APPENDIX

APPENDIX “A”: Trial Court’s memorandum order and opinion granting Exxon’s

Motion for Rehearing, signed April 15, 2015

APPENDIX “B”: Final Summary Judgment, signed May 11, 2015

APPENDIX “C”: Texas Labor Code Chapter 417

APPENDIX “D”: Stipulation of Facts

APPENDIX “E”: Affidavit of Lisa Dean

APPENDIX “F”: Portion of Transcript of October 20, 2014 Hearing in 125th

APPENDIX “G”: Waiver of Subrogation Endorsement from ICSP Policy

APPENDIX “H”: Relevant Portions of Exxon / Savage Contract

APPENDIX “I”: Affidavit of T. Lynn Henagan
"ECOROER'S MEMORANDUI M " I poor qua tW n,,s ms\lume1111s o 

al the 11me of ,ma91C1g 

The parties have agreed that all the remaining issues in this case are entirely 

I 

I 

questions of law. The parties agree, and the Court rules, that the contracts in play 

comments further as follows: 

The Court's rulings are for the reasons set out in Exxon's motions. The Court 

Exxon's Motion to Abate or in the Alternative for continuance is l\100T. 

2014) is GRANTED. 

Corporation's First Amended Motion for Summary Judgment (filed September 23, 

I 

Exxon's Motion for Rehearing Mobil is GRANTED, and further Exxon 

ICSP's Motion is DENIED. 

argument of counsel, the Court finds as follows: 

Continuance filed by Exxon Mobil Corporation, Motion for Rehearing of Exxon 

Mobil Corporation's First Amended Motion for Summary Judgment, and DefendLt 

The Insurance Company of the State of Pennsylvania's Motion for Final Summl,-y 

Judgment ("ICSP's Motion"), the briefing, summary judgment evidence ind 

Upon consideration of The Motion to Abate or in the Alternative Motion for 

ORDER 

EXXON MOBIL CORPORATION 

vs 

KEVIN ROBERTS 

.P.~ 

CAUSE NO. 2013-03033 if h. 

§ IN THE DISTRICT COURT OF' rJ( 

§ !i i M0b1'l 

§ .. I ,:'\ 

~ HARRIS COUNTY, T ~ ! ~9 ._. 

§ .... ;- I :;'::::! • ..i 

';! o --t n·III L.. • 

§ i:I O <JI + o 

~ § I Oal t_!!j - - .-...:, -:, § !.< g ~;· 

§ i u., ~-= 

§ 165TH JUDICIAL DIST 
·' 

c. 

b. 

a. 

EXXON MOBIL CORPORATION 

vs. HARRIS COUNTY, TEXAS 

§ 

§ 

§ 

§ 

§ 16STH JUDICIAL ~TRICT 

FINAL JUDGMENI ='fa 

'Ci '= ON TIIlS DAY came on to be beard Defendant Exxon Mobil Co~tion 's Final Summary 

<:~~ 

..'~ 

Judgment against The Insurance Company of the State of Pennsylv~~'ICSP"). The Court, after 

(;~~ ""~ 

reviewing the summary judgment record and agreement of co~ entered an Order on April 15, 

~ 2015 granting the First Amended Summary Judgment of ~n Mobil Corporation against The 

~ Insurance Company of the State of Pennsylvania. It ~etefore, 

. . &;- 

ORDERED, that the Order on Defendant Ex~ Mobil Corporation's First Amended Motion 

. =~ 

for Summary Judgment pursuant to Rule \t~ of the Texas Rules of Civil Procedure is hereby 

~ 

made final, and the Court consistent with tg Summary Judgment hereby enters a declaration that: 

ID ~-=- 

The Insurance Co~of the State of Pennsylvania waived all contractual and 

statutory subroga~ghts against Exxon Mobil Corporation; 

~ 

The Insurance ~pany of the State of Pennsylvania has waived its rights under Tex. 

Labor Code~pter 417 to recover from Exxon Mobil Corporation or Plaintiff 

Kevin Rq~~ or Arturo Munoz any workers' compensation benefits paid in the past 

or to c~ credit or set off against compensation benefits to be paid in the future; 

e ':!'fl 

~eJg~\1:rance Company of the State of Pennsylvania is not entitled to reimbursement 

~~the net amount recovered by Kevin Roberts or Arturo Munoz in any settlement 

~ Exxon Mobil Corporation for past benefits paid pursuant to Tex. Labor Code 

~~417.002(a); and 

d. The Insurance Company of the State of Pennsylvania is not entitled to a statutory 

credit or set off against workers' compensation benefits to be paid Kevin Roberts or 

Arturo Munoz in the future pursuant to Tex. Labor Code§ 417.002(b). 

KEVIN ROBERTS IN THE DISTRICT COURT OF 

NO. 2013-03033 

4123/201512:33:02 PM 

Chris Daniel - District Clerk 

Harris County 

Envelope No: 5005007 

By: HENDERSON, MARCELLA L 

Fried: 4/23/201512:33:02 PM 
2 

Danny Van Winkle 

1~ 

TEKELL, BOOK,~~ & MORRIS, L.L.P. 

1221 McKinney,$~~4300 

Houston, Texas~0-2010 

(713) 222-9s4n~ 

(713) 655-~- Fax 

Att.orneyf/fi} Exxon Mobil Corporation 

in All Capacities 

ExxonMobil previously filed and asserted a counter-claim for indemnity against Kevin Roberts 

expenses against ICSP which is hereby non-suited and dismissed without prejudice as moot Further, 

The Court further notes that Kevin Roberts filed and asserted a claim for attorneys' fees and 
LABOR CODE

CHAPTER 417. THIRD-PARTY LIABILITY

Sec. 417.001. THIRD-PARTY LIABILITY. (a) An employee

or legal beneficiary may seek damages from a third party

who is or becomes liable to pay damages for an injury or

death that is compensable under this subtitle and may also

pursue a claim for workers' compensation benefits under

this subtitle.

(b) If a benefit is claimed by an injured employee or

a legal beneficiary of the employee, the insurance carrier

is subrogated to the rights of the injured employee and may

enforce the liability of the third party in the name of the

injured employee or the legal beneficiary. The insurance

carrier's subrogation interest is limited to the amount of

the total benefits paid or assumed by the carrier to the

employee or the legal beneficiary, less the amount by which

the court reduces the judgment based on the percentage of

responsibility determined by the trier of fact under

Section 33.003, Civil Practice and Remedies Code,

attributable to the employer. If the recovery is for an

amount greater than the amount of the insurance carrier's

subrogation interest, the insurance carrier shall:

(1) reimburse itself and pay the costs from the

amount recovered; and

(2) pay the remainder of the amount recovered to

the injured employee or the legal beneficiary.

(c) If a claimant receives benefits from the

subsequent injury fund, the commission is:

(1) considered to be the insurance carrier under

this section for purposes of those benefits;

(2) subrogated to the rights of the claimant;

and

(3) entitled to reimbursement in the same manner

as the insurance carrier.

APPENDIX “C”
(d) The commission shall remit money recovered under

this section to the comptroller for deposit to the credit

of the subsequent injury fund.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.13, eff.

Sept. 1, 1997; Acts 2003, 78th Leg., ch. 204, Sec. 4.09,

eff. Sept. 1, 2003.

Sec. 417.002. RECOVERY IN THIRD-PARTY ACTION. (a)

The net amount recovered by a claimant in a third-party

action shall be used to reimburse the insurance carrier for

benefits, including medical benefits, that have been paid

for the compensable injury.

(b) Any amount recovered that exceeds the amount of

the reimbursement required under Subsection (a) shall be

treated as an advance against future benefits, including

medical benefits, that the claimant is entitled to receive

under this subtitle.

(c) If the advance under Subsection (b) is adequate to

cover all future benefits, the insurance carrier is not

required to resume the payment of benefits. If the advance

is insufficient, the insurance carrier shall resume the

payment of benefits when the advance is exhausted.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 417.003. ATTORNEY'S FEE FOR REPRESENTATION OF

INSURANCE CARRIER'S INTEREST. (a) An insurance carrier

whose interest is not actively represented by an attorney

in a third-party action shall pay a fee to an attorney

representing the claimant in the amount agreed on between

the attorney and the insurance carrier. In the absence of

an agreement, the court shall award to the attorney payable

out of the insurance carrier's recovery:

(1) a reasonable fee for recovery of the

insurance carrier's interest that may not exceed one-third

of the insurance carrier's recovery; and

(2) a proportionate share of expenses.

(b) An attorney who represents the claimant and is

also to represent the subrogated insurance carrier shall

make a full written disclosure to the claimant before
employment as an attorney by the insurance carrier. The

claimant must acknowledge the disclosure and consent to the

representation. A signed copy of the disclosure shall be

furnished to all concerned parties and made a part of the

commission file. A copy of the disclosure with the

claimant's consent shall be filed with the claimant's

pleading before a judgment is entered and approved by the

court. The claimant's attorney may not receive a fee under

this section to which the attorney is otherwise entitled

under an agreement with the insurance carrier unless the

attorney complies with the requirements of this subsection.

(c) If an attorney actively representing the insurance

carrier's interest actively participates in obtaining a

recovery, the court shall award and apportion between the

claimant's and the insurance carrier's attorneys a fee

payable out of the insurance carrier's subrogation

recovery. In apportioning the award, the court shall

consider the benefit accruing to the insurance carrier as a

result of each attorney's service. The total attorney's

fees may not exceed one-third of the insurance carrier's

recovery.

(d) For purposes of determining the amount of an

attorney's fee under this section, only the amount

recovered for benefits, including medical benefits, that

have been paid by the insurance carrier may be considered.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 417.004. EMPLOYER LIABILITY TO THIRD PARTY. In

an action for damages brought by an injured employee, a

legal beneficiary, or an insurance carrier against a third

party liable to pay damages for the injury or death under

this chapter that results in a judgment against the third

party or a settlement by the third party, the employer is

not liable to the third party for reimbursement or damages

based on the judgment or settlement unless the employer

executed, before the injury or death occurred, a written

agreement with the third party to assume the liability.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.
Page l of J 

EXHIBIT 

By authorized r tative of The Insurance 

Company oft~ State (Pennsylvania. ' 

~~ q-.v.~11 

By Authorized Representative ofExxon Mobil 

Corporation 

So stipulated this day of _ 

5. Savage paid an additional premium to add Endorsement WC420304A titled, "Texas 

Waiver of Our Right to Recover from Others Endorsement" to ICSP Policy No. 

WC009-87-6293. Pertinent copies of the workers' compensation and employer 

liability insurance policy issued by ICSP to Savage redacted to remove references ro 

premium amounts is attached hereto as Exhibit 3. 

4. The producer, Marsh USA Risk & Insurance Services, issued the Certificate of 

Liability Insurance attached as Exhibit 2. 

3. At the time of the January 12, 2013 accident in the ExxonMobil Delayed Coker Unit, 

both Roberts and Munoz were performing services for Savage pursuant to the 

Agreement for Downstream or Chemical Services with Incidental Goods No.: 

2088773 (sometimes referenced as A2088773) between ExxonMobil and Savage. 

(Pertinent parts of Agreement No.: 2088773 including Amendment 6 and 7 and 

Exhibits A and A~l redacted to remove references to pricing, are attached as Exhibit 

I). 

2. The January 12, 2013 accident in the ExxonMobil Delayed Coker Unit involving 

Savage employees, Roberts and Munoz, was reported that day to Savage's insurance 

broker and select underwriters, including Savage's workers' compensation insurance 

carrier in Texas, The Insurance Company of The State of Pennsylvania ("ICSP"). 

1. On January 12, 2013, Savage Refinery Services, LLC ("Savage") employees, Kevin 

Roberts ("Roberts") and Arturo Munoz ("Munoz") sustained bodily injuries in the 

course and scope of their employment for Savage. 

This stipulation of facts is being entered into between The Insurance Company of the State 

of Pennsylvania (hereinafter "ICSP") and Exxon Mobil Corporation (hereinafter referred to as 

"ExxonMobil"). 

STIPULATION OF FACTS 

FAX NO. 7138617100 P. 02/33 AUG-15-2014 FRI 10:14 AM Kelly and Smilh P.C. 

.. T 
CAUSE NO. 2013-03033 

KEVIN ROBERTS IN THE DISTRICT COURT 

VS. 165thJUDICIAL DISTRICT 

EXXON MOBIL CORPORATION HARRIS COUNTY, TEXAS 

AFFIDAVIT 

STATE OF TEXAS 

COUNTY OF DALLAS 

BEFORE ME, the undersigned authority, personally appeared Lisa Dean who, being by 

me duly sworn, deposed as follows: 

"My name is Lisa Dean. I am of sound mind, over the age of eighteen (18) years, am fully 

competent to make this Affidavit, and have personal knowledge of the facts herein stated. 

I am employed as a Senior Technical Specialist, Workers' Compensation for AIG. In that 

capacity, I am a duly authorized representative of the third-party defendant, The Insurance 

Company of the State of Pennsylvania ("ICSOP") as it pertains to the worker's compensation 

claims involving Kevin Roberts and Arturo Munoz. ICSOP has paid benefits to or on behalf of Mr. 

Roberts in the total amount of $115,189.64 (all medical) as a result of the accident the subject of this 

lawsuit. Attached as Exhibit "A" to this affidavit is a true and correct copy of ICS OP's payment 

ledgers for Mr. Roberts' claim, documenting these payments. ICSOP has paid benefits to or on 

behalf of Mr. Munoz in the total amount of $571,296.88 (medical of $514,205.58 and indemnity of 

$57,091.30) as a result of the accident the subject of this lawsuit. Attached as Exhibit "B" to this 

affidavit is a true and correct copy of ICSOP's payment ledgers for Mr. Munoz's claim, 

documenting these payments. 

"I am a custodian of records for the attached business records of ICSOP. Attached hereto 

are twenty-three (23) pages of records from ICSOP regarding the above-referenced claims. These 

said pages of records are kept by ICSOP in the regular course of business, and it was the regular 

course of business of ICSOP for an employee or representative of ICSOP with knowledge of the act 

or event recorded to make the record or to transmit information thereof to be included in such 

record; and the record was made at or near the time or reasonably soon thereafter. The records 

attached hereto are the original or exact duplicates of the original." 

AIG/Roberts/Affidavit 

EXHIBIT 4
Notary Public In and For 

The State of Ix 

Name Printed; Lisa Dean 

SUBSCRIBED and SWORN TO before me, by Sci SQ1k:S who is 

known personally to me, the undersigned Notary Public, on this day of 

, 2015, to certify which witness my hand and seal of office. 

LISA S. GILES 

- -be Notary Public. State of Texas 

/ 4w Commission Expires 

vvIt'" %Alt& July 29, 2017 

Ala/Roberts/Affidavit 
Motion hearing

October 20, 2014

 11

 1 in the 165th.

 2 THE COURT: Yes, sir. Thank you very

 3 much. Response?

 4 MR. MORRIS: Yes, your Honor. I think

 5 it's important that the Court have a overview.

 6 January 12th 2013, there is an accident out at the

 7 Baytown refinery. A tremendously hot water was dumped

 8 on two contractors Kevin Roberts and Arturo Munoz. Now

 9 both Mr. Roberts and Mr. Munoz were employees of Savage.

10 Savage was a contractor of ExxonMobil and when they

11 entered into a contract for the work out there,

12 ExxonMobil and Savage sat down and said we want all

13 employees to be covered by worker's compensation

14 insurance but we are going to have an election here.

15 Either Exxon will carry the comp or Savage will carry

16 the comp and they look at the premium charges and in

17 this particular case the parties agreed that Savage

18 would be liable to carry the worker's compensation

19 insurance and that further in that event they would

20 secure a waiver of worker's compensation subrogation

21 rights from the carrier. Just the opposite occurred if

22 Exxon elected to furnish the worker's comp under an

23 older controlled insurance program. In that situation

24 Savage agreed not to secure a waiver of subrogation

25 rights.

Kendra Garcia, CSR, RPR

125th District Court

713-368-6144
Motion hearing

October 20, 2014

 12

 1 So that happens before the accident. That

 2 accident happens and Mr. Roberts within a few days hires

 3 Jason Itkin who files a suit. That suit lands in the

 4 165th. It's against ExxonMobil. ExxonMobil believes

 5 that it is an additional insurer on policies issued to

 6 Savage and makes that claim. ExxonMobil also

 7 investigates the accident and determines that it is

 8 responsible for the injuries to these men.

 9 Mr. Munoz elects not to hire a lawyer. He

10 represents himself. Mr. Itkin over here aggressively

11 prosecutes the case against ExxonMobil, requests for

12 production, inspections of the area and it is clear that

13 ExxonMobil feels responsible for what happened to these

14 two men.

15 So immediately Itkin, Mr. Itkin, spends a

16 lot of time putting together his expert reports, the

17 medical. ExxonMobil reviews that. We begin to

18 negotiate with our carriers to try to come involved, to

19 try to resolve the case, they refuse to do it to some

20 extent and eventually the Roberts case gets concluded.

21 Now during all of this, as the Court knows, the waiver

22 of worker's compensation subrogation is a key to getting

23 the third party cases settled and a decision has to be

24 made who is going to be responsible for that and of

25 course Exxon and, I believe, Mr. Roberts believe that

Kendra Garcia, CSR, RPR

125th District Court

713-368-6144
WQ 42 OS CMA Coun~"1-- •• _. _ ••• _ ••• _ ••• t.~ #. ~-""1"- 

(Ed. 011110) 

3. PN.nu,n 

The Pf""1Lrn o!Wgl lb< l1'A ....,.,..,,_ - bl ,..._. ol lllt ~ -""''*' on peyl'OI In oon· 

.-ion wilh - pe.Somlfd la< tt,o - -ifl or ..,...-.Cl) "'*'II GUI of .. ""'"""""' doocil>Od. 

4. MVence Prnvm: 

(X) _W_ . 

Mt - or _-.1ar- b N- - ,_ "'9fd by ...... OOl1t.« lo...,,,,.,, 1NI -· 

2. 0,,.""'lont: 

,. ( > 8-kw ....... 

Tlllt - oPIIIO& Offf lo tt,e - pro,ldod by h pot,,( - T- It - l'I ltm U of 1"" 

l'l!Onntllonl'IIIIO· . 

We""'" tt,o IIIJl,l lo - cu__. - -- re,., 1i:$rY -- "711,11 pdl,:y. We wt1 not - 

- right 0911inal 1he pason ot ............ - l'l lho -· 11U1 '* - """"'ort, _.,, ,npool lO bodl)' lnjury~OUl<lllht--· d 11dl'l .. ~_.,.._........,..,,-...-1o-llM 

w-rrwn ... 

Ttite,Mb.,.,.o,t-not--~or---to--not.....ilnO..~ 

Tl» PIMMil tor No"""'"'''"'' It_,., .. 8el S fe 

'""_. .. _ _,_ ... __ .... .,_ ..... _ 

TW1 -••it.,,,_. 1:z;o, 111,1 04/011%011 tonno, plll al "*Y No, IIC . 009·87-~) 

-lu"'VMlf RRYICH tOllf'OMTIOII 

8y THE 111$UltAHC? (;IIWWf flt' '!'Hf STAI~ flt' PEIIIIYL.VMIIA 

T- l'lt Otldo!Nl -t •"-- 11,e pdlof 10 - l 111111:h,d - on N -""' dolt ol lhl pell,y - I -

. . 

Tl>CAa WNVIIII OP OUll llltlfT TO - ,ilOII OTHflll DIOOll~T 
S!l'A(f:a.1!,,Jiog) Savice, • Dowldltw Pqc l 

07,0:IA)6 

(r;) Pt,en lfAdllSS!'!.,.,.,,,,, &,,la ahallCIOftlPlt!SII& ~ b lossofordl-,e to Purchuec'scxbtlfll propenywlllch Is tn '*°""'ok' 

p~ IO CM wu orcac Wat She when: 5a'ric:Q arc perf'onncd wtlktl mutts tor, lbs •sJl,c:wcc of Se,ppllcr Ind A» "'>' rcwhlffl conscqucnelal. 

,p<clal o, iadirut ...._. or Jog or -pe.led "'°'"' IUllllncd by hrd,uv, -. ... S.pplior'I ""'°"Jilw~l)r sholl n01 c,,uod 1t.c ,....,.1 

f'OCO'f'Ulb:Jo by Supplier• its~ WldQ CM YUd Md collcctilllc inswa,i,c;c. wried by Suppiler and wbcontr~on. or tile aenownt whkh 

wowd M¥C bc:f:l rcw,uabkNda' al..,.._. itafl ?km. ,equira,mcs, and wannic:s Imposed on tllt in.sur«t by lhe tnsurcr11c being o, had 

Ma tfld. ~ hll ,.,__ s.,p&a, ,..,.. liebilky eo Purdmc:t ro, ,each loss or dilllmag. and ror any rc:wlting con,equcnti1~ spedal or ind:irct:C 

~ « k11:s o! aer' ·: 7 ,n,&, ~ ~ Pwdma" CIC.ec:edi:Dt the amolffllS so recovenble. IV&N IF TRt LOSS OR DAMAGE 

RESUl.TS FROM ~ PIEGUG&HCB; howcnr. Sq,pticn rcqom:ibiiity DU iocJltdc the value or any dcduct)ble or ff'lf·IMUr~ 

~ 'QMe lodu G'lllt il'lSl.naoc. 

(b) ~"'"'-'1..-.~ l~:«~oiorJ.,,.. ltl\'f#IC*IY'c llll*" WKlnpr•jlllwt.11 11t1•i ,~· .. tcJ ,tOtlhiU Ci. 1.Vflfk !,:h11 lo\l1M.il ~"" t!.1 

1$..-d or l~--\1 fur• le tlk-W'otk~N :"tf'ono;do, ih • 11,,'d i die \\',.-11:. """-'" ru,3lls fl'u,n Iii~· n...~11 '"' ~ tJ(c,,:..,nirn,,.,•r. 

"'" - 10 ,_ upoo ~ flcnl'w 1'y -. ., •Pon doll,wy IO hrc111sa's prcmflc, Of olllct sl1e c!<sl&n•'"" by Pun:h.,.,, wblchevtr 

OCQln ctftin. 

S. Dia Stl>PI• .... ~II""'* 5-..- $0pfllor Of II, p,opcny o, ,..,trw,. .-, &\lpplllt 10 pfrftnft lht 0 1111 lax ... CX«pl 

r .. .,,.- .... - ..... .., • .- kr.dodod lndlcprlccotlheS<fflcallldpods My ...,,11...,,, onc11., 1o<11 .., .. 

lndfor• 11Xa """°" - .,- .. tM *Ill' otS~ll><Olk<l nl ,..,n k-llCly- o• aN 1n.-, u,ocll. llowt><r, S.Pl>llct 

shall nol _, or - 1111 ..,.. -., ..,. ,_. oo s.n;.., « pa ro, """' PIN<- 11,mbllcl • properly coroplelod IIX...,.kln 

Catlllao .. s.,,... .... .......,,._. ... -~...,,_....,. .. , ,_ aoc111o1ulics1N1 Pun:llucr•ayl...,rwlfl ,_110 

Sopp11cn_10_..,.., _.,,. __ ..,.._"'~• _...... 

6. It ts ... r ---' .. --. M ..,.1 .. IOd lo,..,,_ b)I oodco, - Ot ...... 10 Supplier • 

..., ,.,,.., _ _,,_.,.. ra ,..._. ... - .. .....,._ ... --. ,.,._....,,pay s-,,11ct ..,11 n,, sen1 .. ....,..,,.,, 

..., ,..ipd.., -..i prior 101111 I I IGe Ot"' • ·., lld lb<..,.. Illa& a,,,,tlcr-1)'....,,. lo ...,._,Ina or lumlnllln11h1 ScrAcu. p,<Widod------·- -"'")', ,tMy-•-!opplletlO-My,....or..._dod SONk• b)l no<l<a IO Sl,pplJs, Md $llppla' - Ooo _,, ._ii,. la oo ,_....., ......_ be lilWc ro, any ,_ cl&l .... ....,..., or ll>Mlkl• 

- "'s.,,11« °'., 111 _., - ... - "'"'•• _.i.i.-"' o, lodl..., d-. '°" or1,11clpo1Cd p,on, or 

ictmltw Slll.t'llld:IC to z+U•w:4 Sln1ca.. 

1. C)apa°'ffl ,...,...._,_.., __ lho5'n,-il\0t"-in,•y,.....ioo(,)ohn0rdw,blllkolre<Ci¥0onlyir.-1n 

........ - or ...... - - i,y - .... su,,IIOt rci-to Onla"~ I\ o,..,. Order, b.....,.,, ""'' ... roodll'y my 

--o(III& ~ -! Onlor_lO .. _ ..... aonill"' Onie, lspcrmielod IOdo ,o in s«tlolt l.C. ob<m,, 

I. tw t ,.,'°"'"' Allotsu,,titit'lctrct ;e• t tnaonlDdapaastdmaipty~E:dlibltH.10lkcxtnt1fplicabte..1nd,lt 

....,.. __ ... _ .....,_('WOllt5ae') ... ...,.,..,.... .... ,......,._.,...,,._dry, b-.-rll)',lnd 

lrll!kpolJcJ<s-.: t I ~~--!xli;bkG.il''-po,""4.n-11>&<hil>ilOorsudlOlherpolioicsas,-.idcd 

ia als - l'rlal 10 · Scmccs °" • Wclf\ Sllf, •••Ii•~~ e. Wodi s... olid- wbclher ony bcaldl or ..r.ty - 

aiJI"""" - ...,... ., _"',.._,.-......,_.._or ,pccl5o opasillC prlClicc, :.-. to p,oyido &,pp!lct'1 ...,.1oyccs. 

t t-*"4 lmd l&IDIIW-. I mft pllc:o IOwa,t. llld &wliair wlU t:nswtlba b -,loyeu. Slit:: ~&don., Md .... ll'C....,. o( tr,y kllown ____ ...,. _ _._.,_~and_.i,., ........... ,._ffllYll"'ltiofto. in "'so1rdl....,;o.,.mo<1tl'yor 

..,,- ... ,....,....,_o, or-.;.- .. -...- oad"""1roq.-.,. by nocif,eo1loo 10Sllppll«- """Y or in 

Wricina, viCholl COO'fl)4,:.& ..- .,.._,prfflliol ~ sirils oodce. 

9. Qmrk Hf tra• F« _, - pat,,wd 11 ,,._., ..nncry 0< - pfal~ SUA,licr INII .....,..,.. on,s;1e all dewls olid uut. 

--...-~.,........, ...., • ._..,,, '" pcrformod;,, ,...,..l,kM11M1>1'010,yroPurd.l,e1; 

__ ,....,..._ I ....... dl!ooo(III_ ... ....._ f«-paibrmcdMOll)'looollonorP•-Olhcrtt.on,refiliCl)'Ot 

d,cmlotl ....... Si,ppl,s - 1111,,.. _ ..-sail ioort 4*is a -ldpol - - .-ltln& "- S.pz,I ..... .,..r111oo, Md hop 111d 

ltne M1 wcwt *:t lltMlrt Slnica ,n. ~ .. a COllldoo Mbt J ID P'Wdma'. 

JO. J,l!I& topplitt- __....,. __ o<-, tlod .. ftocod- ........ lho lWll «........, '"°P"1Y •'"""""" by S,pplle,'o employees. 

-- ., _ __.. ,I ;= ~ lholl '"*->lj\,, cldtild, - and llold ,..,_bonftlooo llo«n Ill suob ,..,.,, ond lions. 1r 

,,q--. hpplicr lholl AaWl--1111 -(oo- . .-,_,. _, or,n ,,.,.,. and u, .. ro, llbo< and "'""'1tb ..,, I• 

l>c pab Ill .. 0..,,,, la-,...,.,.,....__, __ k law,,.,....., Ill)' wfll>llokl • .....,,.._ in 1n ..,..., Sd fl>nJ\ 

lo l!lclilloll 0. ._ .,.b ,..,_ II- 10 ~ IO bo poid $11pp11cr on.r (1) lw S,,.lccs arc -,kltd ., nquln:d ond ""'_1,., ptliod 

Rqlild 1'y ..,._ llw 1111 ...... - - c,( I HQ or d ... OI' (2) - II - 111111 111 clllmt - ...... psld ond llcM 

tM10't'N. .. ~ ,.,._ 1111'/, It 1n7 ._, ,...,.. IMl SU,,lcr pw • ~ IC flO COit • Pu..._.. IIO remow 9111 cf1Jms o, It.ls, or 

,.._..,.__..,_._, __ or _ by........, -orocb-.. ollolwlllcb w~I• to &IPl>llor, toptkwlelo 

., _,... k ""- ---lil wT!linS, ..,,,.,.""Ir ,...tdo"' ..,..._,. tttndb)> 1catt otcredh. -••• ,-.,u balcllelNywlntont--• • n >•-.lnMd1• ,•oc,lllS.,,hnot,11p11oo,...,11t1111ilk1•--""' 1 • ..,..,.1 .. 1onor 
12. Il'"' Pu!f ir,,,.ojty. l'llrct,-.;... ~icr •u lodcmnlly, ddrlld, oMI hold. Old! ocilc< '*"""' from 111-demlndJ. W '""" °' 

ocooo as•n<d ,pio,t m, ln6em,,i1oc "1 uy drild p,,,y (iodudi111, without llmitatlon, _,_., ""' Supplier'• ... p1oyu1) roe pcnONI injury, 

dna. ot *I ct or dam9 to p-ope:rty ruuJtili& ftoal lbe kldcmnkor't ncgli&c,ncc:,. Oroq lfc1,H&C9CC or Willf'II.J M~ 'Nl'»eR: pertOMI inj.y, 

«a. or Joss o1 o, c1a.,. to propc,,y 1, the ,,.... or jofoc nog11- <Inns llcgHgi"" « wm-.i Mi- of -- ...i S..;,p"1. ,i.o 

lodannkor's •1111 of inci<,,,oi(ocalioo sbaJI be in ~ Jo its olJoal>le "'°"' of such joint nq)ip,,oo, 0.... Negliplcc or WilJl;al M-. Ir 

cilbc, 1*17 is-y liable.- J,w, d,e - lllllrl *Iyo( ,......,,n..,;o. 111111 be In Ill< ,.... propc,r1ioa 1hll ill ,q11--. Chu l<eglipcc oc 

WUIM M- -- "' ... -· injury, - .. Jou o(.,, ·- lo - ror ... ith • - is SDictly iollle nc ..... "lqll_., in ll>c,t ()cncrol Ttmo ond Conditlooo llloll loclodo ..,;,. or pu,lv, neg......._ -a...,~ Is...,_ by the tlW _...,. 

abt c.dcr; howr,,ao-. it sveh bw doilll ftOC dd'1M lht....,.. •g,on ncgJlgen~ .. Ir mcau any 11et or flin -» ICC (wbcdler ,ok,.joint or OOOC"JrrCl'I) whttb 

JCrioul)' ao,c1 nitnc.mJI)' dcviMft nvm a dHiga,1 oowt1 or .c&fon g,r -'idl i1 in roc:lda:s disrcrpd or or il!dift"t:N:occ to u.c hana!'111 : 1 1 ,.-.. 

....,.,lllul Miscoodud" is clttl•ol by Ille law.., ........ di< Order, lowcwr. 11 ,uct, law - "'"de&• lb<...,_ ..... IM •- • k - ., . 

-.-J cs._.i of SoOcl ucl pr,dail --olpato_,. « olMY of lllt oenns oldie Or*<. 

ll. Grm Nf Y SI tef Wl!Oel Mfmtcl,st, Norwbscud .. •)1h911 to die con1twy la Olis A&fCCIM* or• Order, eldl PM1 ...,, _. MJ 

raponsibiJ;ry, _,....,lo, its Orou Neal•- ar wm11,1 Mis-.tld ut,lbotlllle to its_.,... .. 1or •I* ,1to1, ,-1 ud, in an 

....... wm a P111Y be req•lrld a, ""- or -& 11,o Olhcr - r., a- 11ea1,- o, WiW - llllribwble 10 d>o - .,...,. 

...._w .. .--1so.,pmoooet. . 

14. lMlttect 

('1 Cr!CJIIL Supplier llloll "'11 wl ,,.;- lo '°'" OI ._ lllo lollowloa - ..i -....: (I) IOf &H ill u11plo)'l:CS -- ill 

,-..,. s.r.lcft, ---••Joo and ....,.11111>11117 r- °' oiinR&rsadol _ m _d_ wkh applic&We law- 

- be ..,tk:&Mo IO lhoea ..,,..,.-, ('I) IIS no- MCI "'*'""'f Con,m .. 111 Ocnasl Uobilf1r......,.. - Md pole,, llmhs « a - 

Sl.llDO,OOQ. - is ......... , ... Idiot_ .. ,.i,,,,. - .. ,..,..., ._ ........ - - - ..... ()) • .- .. 

U&l>IJb-1- covono1 owocd, -..wood, -- ,_n cq,,ep ..... - pou., 11to1U or• 1eu1 st.OCl0,000 ....,.II,........,., - 

or p,ope,1f .._ ......... hnl eoch - (4) IIS.,,,licr pctft,m\1 Stnl,o, ill I•- - - IO llol - c 11 < loo 

,olicy (~ -l•J -- co all .... ,..,.. ...... r,, perfb,mloJ -., n""1 ,o 111o u.,. 1..ot,p•"·-~ Md H- Wot'u.rl c-,......... A<1. (M> ...s,.""' , clal'" ....., ......, ......,,_ uc11or 1e1 .... .,..,,,... by an....,..,.. o< s"l'P;., kHd oo doc - ot 

'"tlomwed .. ,...an .. ,lu.ll1 a,, u. '*'°"' °'""" ........... h Cl'Nttd .. I ca.Ira •rillna l.tOR'S.,,. ... pofkyi IINI liii) ......... ., .. "hi 

~m· lll&JJ IK ,_ • • <Jal'" ....,., .,. I- (J) Ir s.p,li• pelfonns Sct,,lco o-.. -• v,-.. ,. Co- 8 

·-. mario!lle) ...... w0f1ln , - pollc)' (I)-., ... - .. ln<J ... - ... - ,-Jdl .. lir:b or. - 

Sl.000,000 par-W.,,1, lftd (h)cxl00dlo1.,...,. -t11, U.1. L.oop,orome1'1 UICI Hwo, 'fl'o.1oon ~- Act 10 lod..io ..... _ot 

lllo Ouctr Cootl>uol Sl>clJ'uods ""' (6) Ir- .. to bo ....... ,.,,.... ... Sonko, -1 .. ~ ..i _,,, --· ·~ 

..._ lbr a- or - o1-r,mldli,, 11oo111 ort1 - Sl,'00,000 r., _ _,""'"willt,..,._ - • oo - - 

"'11· Not~u,-loionol• °'"'" lllo..-y, S4,pplin'I IIIIHIICy lnM,.. pollq(ics)-abov• _, co-- ..,.. AJIIJ ..... • ..ur, ....... ......, ••• --loo ""11 c11a ,...- or Sertloa; IOd (10 bo l'""*l' " 10 111 - poffdca (1nc:IUd "' "" 

- orldt,Ju,Nd -•> IOd"lfl-wMdl moy pro>idoeonr..., ......,and l11 llw,.,(1) ,.....,._ ........ ill !lit - 

•lllll wol•• ,u ""* or ....,don ll'lllot ... .-.....,, ,.,..._ ... 111 Afflll- oo tho - lllbllidct ero - II)',..,,_,, 

S\.:ppllM~ "'"''°' '° ...... 1 ... rr« IU ""'""11) IO ,.., .... MY...,.,, of MtOplion en<lloro001,ikllon....,, _.., 111 AID,_ 

"*MY~ con:; Sn IDd mplo)'wt MtiMUcy ~ or 11,ntlw toeW ~ ta ....-.C• whll a- """lc.h IN)' k appUulM to 

-~ofs,,pplf•. _,.... ..... .._ ..... rs..,_,__ 

(ti,) 9Desr lneme 8 S &l!I. T1M: lbo't1 oblipdou or hppHcr ucl'or ~ fnMtr1 •• qA)' to s.,,tfet'J Ml~lnMM ,....... """"' 

clecblibtc:s. n. ..WfflUIII lnMU()O r.qui,cnlutl ••to.di a1>ove AIU nae lknh or wafvc • ,u1>"11Cfl' 0t c.cwlltl t .,, nsponJibillks to tll ~ 

l*1t or - S.,plitl'J ln-oo shell om)' IO S,wlltt'I -..,111 end d......,. obJiP"°"' •ndcr the Ord« w,epo. """ ...,... 10 - 

~ 10111o i..ordlo -·•"r.,,..,,ooh J11111'-.,...,....,..,. 1N ...... an<111m .... lld to ,w. Section«""..__.._,.. '"""°"°'thll"-ln suppo~or1ho11 .. o1-1-.~ 1r1111Y,,. .. d to In Stoston, II, 12, end 13 .. ..,. Sopplcr....,1 .... .., 

tue::u .0141Cnto rMirttala nonNJ Ind cutto,wy ~ IM.II IINlll not ,...arc 11bconWldon 10 '*'1 lnNttn0t CMI wo.ir• ~IM OO't'ffllCt of 

h ,_,_ ea,kd by S<Q,llu «"'"-«Illa -Id 1 ..... opiJIII llebl111)1 w&htcl by"'"*-· Upcn - by Pt- s..,pilu-.a.,JI 

~ave lU-.umcr<•l- lO lht roqoalcr""lllod ,cp;o. oflloe-hed .,....,.. polltlol oocllor-- of-_.r,"'I .... no 

.,..,_-1,c - or~ thoqcd..WlaS.rvltoa .. 1,,....... wilhoo1t1oirty(JO)oll-dly,pri«"- _,. rk "'I_,., 

u,.a """'"' i,,. ....._, s.i,pller ihlll h ..... Its - Jlmolsn dlo - ......... of ........ MIUI"'' or s..i,,,tor. Swppliar ...i 11s 

wt,..(lnb r._.i...., 111_"'6M not . tqin Srwiec1 Hiii ..,. iQ .... ot1he _.........._ _ rciqulfcd ot SbpplMf lfld b ,ubc::o,•ic:kNI is in bu IIN ~e IIIClCCRllr)' If 

(c) hrctwK AlbrMlffl• As"' 1*ctne1r.,. IM•,.,._.., opl:ion _, cxpcac. ,.._..,...., *' IO tmmh or to~ ror Sllpllfi,c:r wJ or 

~ plrt. of 1111: im11rw,c:c ri:qui,td h• lhia: Section. If Pwchucr" olccll ~ alttmalivc.. it thlll • $Ille: in • OOlkc to 5-ppfier. Ind lk Sl,J!plkn 

co, ; +Wion NII k mtuced by In lfflOU\ G9* to IN 8'1pplieit COii of lhc illN"""- N Cl .tw,ildve, Ind at PurclM,er't optkla Ind e:,q,c:mc. 

- - dta to l'anll,. or ro ._ r., 9,opllcr °" ,.......,.. Iha Supplier carrlts, 0< IO - "" ..._'blllly. R>r •JI « .,, pon c< d>e 

~ _lpcl:ified iii SecdiOII ll(b). lf1'1rdlaw dec:tl lWs a>tcmlfiws.,. ii Shall ,o mtc in• JIOtioe ro$.wkr, ancl it.Supptk:n COJ:; s1tiOII s.WI be 

.., .. ~ ........... 

IS. l•,mm altd Jedeaitt Btfer"'fHfe, lrit is j~ally Of ilalutorrly chtormlkd thal lhc I~ required~« lb: iAdcnni.Eies 

vot-ar'it)' llnd IIWl'ually UIUrKd Hffllirwlcr cx«ed h maximum ~ry limits pttmittcd ... IPP~ bw, it il ~ lhllt aid ~ 

~ « lndmnhies sball 1utomtfc1Hy be amended lO conform ro tlic ffiMinn montta,y lnits pumtned w6er su,dt, IIW. 

16. Qa t(Afflll&tl) NfMM Nd MUX,. S.pplier ... , not wo ICIY Affilit&e~t name., er.de um.. o, na-.tt iD uy ldffl1if~ °' ~ '° the piibllc;. or mate pubtkily rdc:mcs or anD01DKemcna '°®CmlnC Cw Order. SCTVka. or rded aic:ii,;.ks. Ill •IY ror..c. wiebow1 htttiasa''J 

prier uprc:# writlcn COIIXIIL 

17. C••fi:d!ft!t!I Jpfprp•titt, Svi>,lier shall head fn ronfWcncc Ill rcd\ol-eal and busha infonnlioo ffllOC a¥aileb1o to Supplk:r by f>lll!fdlas,u or 

Aft"llbies or dtwk,ped ot acqun:d by Supple io ,erformaoce of 1111 Order. Supplier sWI 1'01, wilhoul Purc:hlllds prior wrincn ....,,...,.._ UJ11 ~ 

l,ibnidon for any p.rpo.se orkr dwl pctfonnMOC or the appliwblc Order, Putthar accc:pu ., oblUlk>o o! contidencc wtlh rispcc:I IO iecms 

Kquircd or iilJomleuoa dbctosed. DO anc, llow llbctcd, co P\lrffillll' by $lppller untess ,pocfficall1 p,ovided tor in a aepar11c,. wriac:t1 cooredc:cliatio, 

a,ttt..'l'llffll I• tk *"""c of M'f connckrldalil)' apmc:n1, S!J.Pplict alt.II no1. p$1t.~ mt)' ~iccP'9 AOticts on IO)' inJo,.,,....,on. no fN!lcr the form of 

itt recordt"S t1lat Suriplter Jl"O•fclies to Pur.:llase, htfcvnde:r, Sttould S'4>Pllff place 1111 nodOOI Oft •Y dtlWlng. KCOfd or othw doamenl. Pu:rdMx, is 

lwet,y authorized to n111llly, oblitt111, ttfflO\IC. o, diSl'qwd tMl$, pl'OYisJons. Su~k=r dlaN not tllle .-7 pM*.,...,t,s. \'~ OC' otbt:t rttONftt\p ol 

P\Rtauds o, Affillales" property .,.i\hout Purthascr"J prior wrirtcn consmt. 

SPA~Enlbling)s.tvkes· Oownttrum Pqc4 

0'110l'06 
EXHIBIT 

j s 

4. "Among other findings and conclusions, the team's investigation determined 

that Kevin Roberts and Arturo Munoz were bolting and unbolting flanges on 

piping to coker drums 3 and 4 in the ExxonMobil Coker Unit, when hot water 

exited a flange on piping of coker drum 3, causing burn injuries to Kevin 

Roberts and Arturo Munoz. This work was being performed in the Coker Unit 

3. "I was part of an ExxonMobil team assembled to respond to the January 12, 

2013 accident in the ExxonMobil Coker Unit in the ExxonMobil Baytown 

refinery involving Savage Refinery Services, LLC employees, Kevin Roberts 

and Arturo Munoz." 

2. "I am currently a supervisor with ExxonMobil Risk Management a division of 

Exxon Mobil Corporation. I have worked for ExxonMobil Risk Management 

since 1989." 

1. "My name is T. Lynn Henagan. I am over eighteen years of age. I am fully 

competent to make this affidavit. The factual statements contained herein are 

within my personal knowledge and are true and correct." 

BEFORE ME, the undersigned authority, on this day personally appeared T. Lynn 

Henagan, known to me to be the person whose name is subscribed hereto, and after being 

duly sworn, the witness stated on oath as follows: 

STATE OF TEXAS § 

§ 

COUNTY OF HARRIS § 

AFFIDAVIT OFT. LYNN HENAGAN 

THE INSURANCE COMP ANY OF THE § 

ST A TE OF PENNSYLVANIA § 

§ 

VS. § CIVIL ACTION NO. 4: 14-cv-00053 

§ 

§ 

EXXON MOBIL CORPORATION § 

§ 

IN THE UNITED STA TES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF TEXAS 

HOUSTON DIVISION 

Case 4:14-cv-00053 Document 44 Filed in TXSD on 09/10/14 Page 1 of 4 
2 

8. "As a member of the ExxonMobil Risk Management Department and as part 

of my responsibilities to the ExxonMobil team assembled to respond to the 

January 12, 2013 accident, I contacted my counter-parts in the Savage Risk 

Management Department and requested documentation of the workers' 

compensation coverage. and liability coverages that Savage had assumed 

liability to provide under the Savage "Contract. .Savage's Risk Management 

Department provided a policy of workers' compensation insurance issued by 

7. "Pursuant to the Savage Contract, attached as Exhibit l, paragraph 14(a) on 

page 4, Savage agreed that Savage and its insurers providing coverage under 

paragraph 14(a) were to waive all rights of subrogation." 

6. "Pursuant to the Savage Contract No. A2088773 paragraph 14 attached as 

Exhibit I, Savage assumed liability to maintain workers' compensation and 

employer's liability insurance in accordance with applicable law and liability 

insurance coverages for the benefit ofExxonMobil including Savage's normal 

and customary commercial general liability insurance coverage and policy 

limits or at least $2,000,000.00, whichever is greater, providing coverage for 

injury, death, or property damage resulting from each occurrence. The Savage 

Contract, attached as Exhibit l , required that Savage's liability policies cover 

ExxonMobil as an additional insured in connection with the performance of 

services. The Savage Contract further required that any additional insured 

coverage is primary to all other policies (including any deductibles or selfinsured retentions) and self-insurance which may provide coverage." 

5. "At the time of the accident, both Kevin Roberts and Arturo Munoz were 

performing services for Savage Refinery Services, LLC (Savage) pursuant to 

the Agreement for Downstream or Chemical Services with Incidental Goods 

No. 2088773 (sometimes referenced as A2088773) between ExxonMobil and 

Savage. (Pertinent parts of Agreement No. 2088773 including Amendment 6 

and 7 and Exhibits A and A-1 redacted to remove references to pricing, are 

attached to my affidavit as Exhibit 1 ). As noted above, Savage employees, 

Roberts and Munoz, were performing services on ExxonMobil premises at the 

time of the accident in question. Savage employees' presence, including that 

of Roberts and Munoz, on ExxonMobil's premises arose from work and 

services they performed for Savage in connection with Agreement No. 

2088773 ("Savage Contract") between Savage and ExxonMobil." 

which consists of various piping, drums and vessels which are affixed to the 

land on which the Refinery sits." 

Case 4:14-cv-00053 Document 44 Filed in TXSD on 09/10/14 Page 2 of 4 
3 

10. "ExxonMobil's practice, and intent, is also for all workers, like Kevin Roberts 

and Arturo Munoz, at the ExxonMobil Baytown refinery to be covered by 

workers' compensation insurance coverage either by a policy of workers' 

compensation insurance furnished or arranged by ExxonMobil or a policy of 

workers' compensation insurance furnished or arranged by the worker's direct 

employer. When the worker's employer assumes liability to secure and 

provide workers' compensation insurance coverage, the cost of the premiums 

for such coverage including waiver . of subrogation is passed through to 

ExxonMobil in the pricing and compensation to be paid under the contract. 

When ExxonMobil elects to assume liability to furnish and arrange to provide 

workers' compensation insurance coverage, for workers' like Kevin Roberts 

and Arturo Munoz, the contract expressly provides that the contractor will not 

cause itself or its insurers to waive subrogation." 

9. "As a long time employee of the ExxonMobil Risk Management Department, 

I have personal knowledge of the workers' compensation insurance, liability 

insurance, additional insured, and waiver of subrogation requirements 

contained in the Standard Procurement Agreement for Downstream or 

Chemical Services with Incidental Goods which ExxonMobil negotiates with 

its contractors like Savage. ExxonMobil does not specify the manner and 

method by which a contractor chooses to put its liability insurance program in 

place, but does contractually require the contractor like Savage to make 

ExxonMobil an additional insured on the contractor's normal and customary 

commercial general liability insurance coverage leaving to the contractor like 

Savage to decide whether to structure that commercial general liability 

insurance coverage with primary, excess, umbrella, bumbershoot policies 

together with various deductibles and self-insured retentions that the contractor 

like Savage would contractually agree to satisfy. ExxonMobil's practice, and 

intent, is to require contractors like Savage to add ExxonMobil as an additional 

insured on all of Savage's policies that provide commercial general liability 

insurance coverage." 

The Insurance Company of the State of Pennsylvania (ICSP) and insuring 

employees of Savage injured in the course and scope of employment for 

Savage at the ExxonMobil Baytown Refinery. (Pertinent parts of ICSP's 

PoJicy No. WC 009-87-6293 redacted as to estimated total annual 

remuneration and estimated annual premiums is attached to my affidavit as 

Exhibit 2). Savage, through its brokers and agents, also forwarded certificates 

of liability insurance, copies of which are attached to my affidavit as Exhibit 

3." 

Case 4:14-cv-00053 Document 44 Filed in TXSD on 09/10/14 Page 3 of 4 
, ~· 

4 

~ 

'NoYPUBc ANii~ 

nm STATE OF TEXAS 

SWO~JO AND SUBSCRIBED BEFORE ME by the said T. LYNN HE!NAOAN 

on this the~ day of September, 2014. 

"Further, Afflant saycth not." 

11. "In the present cue, Savage agreed to assume liability to provide workers' 

compensation insurance coverage for its employees, Kevin Roberts Ind Arturo 

Munoz, aocl to secure waiver ot wortcen' compensedon subroption rights in 

favor of ExxonMobil fiom its workers' compensation insurance carrier, 

pusing the cost of such workers' componntioo insunocecovenac and waiver 

of subropdon ripts onto ExxonMobil." 

12. "On or about March 28, 2014, Kevin Roberti entered into a confidential 

settlement aaz-eoment, th1 consJderation for which was not fully tendered by 

Chanis Europe Limited under LiabJlity Policy No. CUOO I 1508 and NatJonal 

Union Piro Insurance Company of Pittsburgh. Pa. under Liability Poliey No. 

OL-972-50-90 until on or about Juno 4, 2014." 

13. "On August 27, 2014, Arturo Munoz and wife, Candice Reyes, si111ed a 

confidential seulement qreement. the consideration for whJcb was not 1\al)y 

fbndad until Septembor l. 2014. National Union Fire lnswance Company of 

Pittsburgh. Pa. (Nadoaal Union) under Liability Poliey No. OL-972.,0-90 

apeed co contribute. buthu not yet paid, t 5', of the Arturo Mwioz seulement 

based on the other liability imurmce provisions contained In tho National 

Union and Starr Indemnity A Liability Company policies." 

14. "National Union dcni~ c,ovmge to Exxon Mobil Corporacion under Liability 

Policy No. 13273101 based in part'on National Union's contention that Starr's 

Liability Policy No. MASll.SB 00005012 must be exhlmted beton National 

Uai011's Polley No. 132?3101 is trigend." 

Case 4:14-cv-00053 Document 44 Filed in TXSD on 09/10/14 Page 4 of 4