Opinion ID: 27273
Heading Depth: 2
Heading Rank: 1

Heading: Claimant

Text: First, with respect to CNA’s argument that the duty to defend could not have arisen under the original petition or First Amended Complaint because Bridges was not a “Claimant,” we find that in both pleadings Bridges alleged potential claims as an employee. A “Claimant” whose claims are covered by the policy1 “means a current or former Employee, an applicant for employment with an insured entity, or the [EEOC] or a similar state or federal agency acting on behalf of such current or former Employee or applicant for employment.” “Employee” is also a defined term, which means: an individual whose labor or service is engaged by and directed by an insured entity. This includes but is not limited to part-time, seasonal, volunteer, temporary and leased Employees as well as any individual employed in a supervisory, managerial or confidential position. Independent contractors who claim to be an Employee of an insured entity will be Claimants but only with respect to the conduct of any insured entity’s business. In his original pleadings, Bridges repeatedly and emphatically characterized the drivers as independent contractors and not employees, using those terms with reference to the obligations Andrews Transport had to withhold money for taxes and unemployment insurance from their paychecks. Because Bridges alleged improper withholdings which 1 Interestingly, the duty to defend clause of the policy does not appear to depend on the claim having been filed by a “claimant.” Only the duty to indemnify is conditioned on loss amounts incurred “on account of a Claim by a Claimant.” Andrews has not made this argument, however. 2 depended in part on the drivers’ status as independent contractors, he even stated in all capital type that the money they earned was “NEVER AS EMPLOYEES.” However, the original petition also alleged that, “even if Plaintiffs were to be considered employees of Defendants, they would still not owe SUTA taxes.” The petition further stated that “the unlawful character of the Defendant’s taking of monies from the compensation rightfully due the Plaintiffs is additionally demonstrated by the continued and unending act of such taking beyond the point where the governing statutes command a stop to even an employer’s tax liabilty.” The SUTA deductions and allegedly excessive FUTA deductions, claimed as wrongful either as to independent contractors or to employees, were components of damages in all of the plaintiff truck drivers’ causes of action. Although the primary legal theory was that the drivers were independent contractors from whom taxes and unemployment insurance assessments were wrongfully withheld, the pleadings in the original petition left them room to proceed as employees on some claims. In Superior Insurance Co. v. Jenkins,2 one court of appeals explained that pleadings made in the alternative can trigger the duty to defend.3 In Superior Insurance, the underlying plaintiff had sued the insured claiming intentional torts of assault and 2 358 S.W.2d 243 (Tex.App.–Eastland 1962, writ ref’d n.r.e.). 3 See also Rhodes v. Chicago Ins. Co., 719 F.2d 116, 119 (5th Cir. 1983) (“Whether a complaint pleads in the alternative or alleges more than one cause of action, the insurer is obligated to defend, as long as the complaint alleges at least one cause of action within the coverage of the policy.”). 3 battery, or in the alternative that the insured’s actions were the negligent cause of the plaintiff’s injury.4 The insurance policy expressly excluded coverage for bodily injury “caused intentionally” by the insured, but covered injuries resulting from negligence.5 The court determined that if it eliminated all of the pleadings from the original complaint relating to the intentional allegations, the complaint still alleged facts against the insured falling within the terms of the policy, thus triggering the duty to defend.6 Applying the approach used in Superior Insurance, if we separate out the statements and allegations in the original petition relating to the drivers’ status as independent contractors, there would still be a set of facts and allegations under which the drivers were claiming to be employees who had been wronged by their employer so that they could proceed with their suit under the employee banner. At the very least, “the complaint does not state facts sufficient to clearly bring the case within or without the coverage,”7 and by virtue of the original petition’s alternative reference to illegality even as to employees, we believe that there is, “potentially, a case under the complaint within 4 Superior Ins. Co., 358 S.W.2d at 244. 5 Id. 6 Id. 7 National Union Fire Ins. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997) (quoting Heyden Newport Chem. Corp. v. Southern Gen. Ins. Co., 387 S.W.2d 22, 26 (Tex. 1965)). 4 the coverage of the policy.”8 Accordingly, the district court erred as a matter of law in concluding that CNA properly denied its duty to defend against the original state court petition and First Amended Complaint on the grounds that the drivers were not claimants.