Opinion ID: 3218595
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Heading: Hartford’s Duty to Indemnify

Text: “An insurer’s duty to defend and indemnify are distinct and separate duties.” Farmers Tex. Cnty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81, 82 (Tex. 1997). An insurer may have a duty to defend a lawsuit but may not have a duty to indemnify the insured. Id. Alternatively, an insurer may not have to defend a lawsuit but may eventually have a duty to indemnify. See D.R. Horton-Texas, Ltd. v. Markel Int’l Ins. Co., 300 S.W.3d 740, 743–45 (Tex. 2009); Colony Ins. Co. v. Peachtree Constr., Ltd., 647 F.3d 248, 254 (5th Cir. 2011). These duties can arise independently of one another because the duty to defend is determined by pleadings, but the duty to indemnify is determined by the facts that are eventually ascertained in the underlying lawsuit. See D.R. Horton-Texas, 300 S.W.3d at 744. Accordingly, the duty to indemnify typically cannot be adjudicated until there has been a judgment in the underlying suit because facts proven at trial may differ slightly from the allegations. See Griffin, 955 S.W.2d at 83–84; Peachtree, 647 F.3d at 254–55. The Texas Supreme Court has identified one situation when a duty to indemnify can be resolved solely on the pleadings in the underlying lawsuit. See Griffin, 955 S.W.2d at 84. In Griffin, the court held that an insurer can obtain a declaratory judgment on its duty to indemnify based only on the pleadings in the underlying suit if “the same reasons that negate the duty to defend likewise negate any possibility the insurer will ever have a duty to indemnify.” Id. (emphasis omitted). In that case, the plaintiff alleged a driveby shooting caused injuries, and the insurance policy covered “auto accident[s].” Id. The court reasoned that there was no set of facts that could be proved in the underlying lawsuit that could transform an alleged drive-by shooting into an auto accident covered under the policy. Id. When a case is not analogous to Griffin, an insurer cannot obtain resolution of the duty to indemnify solely on the basis of the pleadings in the 10 Case: 15-10443 Document: 00513571779 Page: 11 Date Filed: 06/29/2016 No. 15-10443 underlying lawsuit. See D.R. Horton-Texas, 300 S.W.3d at 744–45. The insurer may have to wait to resolve its duty to indemnify until after a trial in the underlying litigation because facts established at trial determine the duty to indemnify. Id. at 745. Alternatively, the parties may offer extrinsic evidence to prove or negate the insurer’s duty to indemnify if the underlying lawsuit never goes to trial or if trial does not develop the facts necessary to determine policy coverage. Id. at 744; Peachtree, 647 F.3d at 254–55. Hartford argued below, and the district court accepted, that Griffin allowed the court to adjudicate the duty to indemnify based on the pleadings in the underlying lawsuits. Hartford claimed that like Griffin, “nothing will change the fact that advice provided with respect to the movement and removal of a 550 ton stator requires specialized knowledge and training.” The district court concluded that because there was no duty to defend, there was also no duty to indemnify. The court stated “none of the allegations in any of the underlying lawsuits states facts that would invoke coverage under any of the three insurance policies at issue.” Hartford submits that one of our court’s recent decisions supports the district court’s resolution. See LCS Corr. Servs., Inc. v. Lexington Ins. Co., 800 F.3d 664 (5th Cir. 2015). We held there that an insurer had no duty to defend the insured, a corporation that operated a detention center, in an inmate’s Section 1983 lawsuit. Id. at 671–72, 674. A medical services exclusion applied based on allegations in the complaint that officials at the detention center refused to provide the inmate additional doses of medicine. Id. at 671, 674. The court held there was also no duty to indemnify, finding Griffin applicable. Id. at 668 n.4, 672, 674. “In the context of this case, it follows that there is no duty to indemnify for the same reasons . . . there is no duty to defend . . . .” Id. at 672. 11 Case: 15-10443 Document: 00513571779 Page: 12 Date Filed: 06/29/2016 No. 15-10443 LCS Corrections Services is distinguishable. The sole alleged act of negligence in LCS Corrections Services was a failure to provide medication to an inmate. Id. at 671. The Griffin exception applied there because the panel reasoned that no facts proved at a trial could transform the failure to provide medication into something that was not medical services. Id. at 674. Unlike in LCS Corrections Services, the underlying lawsuits here involve complex facts and multiple allegedly negligent parties. The factual allegations do not negate any possibility that Hartford will ever have a duty to indemnify because, as DP Engineering argues, there is “an array of possible factual and legal scenarios,” that could have caused the crane and stator to fall, some of which may create coverage. The allegations in the underlying lawsuits here do not conclusively foreclose that facts adduced at trial may show DP Engineering also provided non-professional services, which would be covered under the policy. Unlike the alleged drive-by shooting in Griffin, which under no set of facts could become an “auto accident,” the rendition of professional services alleged here could co-exist with the rendition of non-professional services that contributed to the accident. Because we hold that Griffin does not apply, we reverse the district court’s grant of summary judgment to Hartford on the duty to indemnify. The district court should not have determined the duty to indemnify based on the pleadings in the underlying lawsuit. See D.R. Horton-Texas, 300 S.W.3d at 744–45; Peachtree, 647 F.3d at 254–55. The district court may need to “defer resolution of indemnity issues until the liability litigation is resolved.” Griffin, 955 S.W.2d at 84. Alternatively, if trials in the underlying lawsuits do not occur or if the trials do not resolve all factual issues related to coverage, the parties may offer additional evidence to determine whether Hartford has a duty to indemnify. See D.R. Horton-Texas, 300 S.W.3d at 744. 12 Case: 15-10443 Document: 00513571779 Page: 13 Date Filed: 06/29/2016 No. 15-10443