Court Opinion

ID: 4563190
Source: CourtListenerOpinion
Date Created: 2020-09-04 18:00:17.281025+00
Date Added: 2024-06-11T12:15:01.222134
License: Public Domain

Case: 19-20674     Document: 00515553197        Page: 1   Date Filed: 09/04/2020

         United States Court of Appeals
              for the Fifth Circuit
                                                                  United States Court of Appeals
                                                                           Fifth Circuit

                                                                         FILED
                                                                  September 4, 2020
                                No. 19-20674                        Lyle W. Cayce
                                                                         Clerk

 Waste Management, Incorporated; Waste Management
 Hawaii, Incorporated,

                                                      Plaintiffs—Appellants,

                                    versus

 AIG Specialty Insurance Company, formerly known as Chartis
 Specialty Insurance Company,

                                                       Defendant—Appellee.

                 Appeal from the United States District Court
                     for the Southern District of Texas
                          USDC No. 4:16-CV-3676

 Before Jones, Elrod, and Higginson, Circuit Judges.
 Stephen A. Higginson, Circuit Judge:
       Plaintiff-Appellants Waste Management, Incorporated (“WMI”) and
 Waste Management Hawaii, Incorporated (“WMHI”) (collectively
 “Waste”) entered into an insurance contract with Defendant-Appellee AIG
 Specialty Insurance Company (“ASIC”). Following two environmental
 contamination events, the DOJ commenced a grand jury investigation into
 Waste’s actions. The investigation led to an indictment that was resolved
 through a plea agreement in 2015. ASIC denied Waste coverage for all costs
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                                  No. 19-20674

 associated with the criminal proceedings, and Waste filed suit in Texas state
 court against ASIC and AIG Claims, Incorporated (“AIG Claims”), which
 served as the insurance adjuster for ASIC. ASIC removed on the basis of
 diversity jurisdiction, arguing that AIG Claims, a non-diverse party, had been
 improperly joined. The district court agreed and denied Waste’s motion to
 remand. The district court then determined, after a hearing, that ASIC had
 no duty to defend Waste against the criminal allegations and granted
 summary judgment in favor of ASIC. Waste appeals, arguing that the district
 court erred in denying its motion to remand and in granting summary
 judgment for ASIC. We AFFIRM.
                                       I
        Waste operated the Waimanalo Gulch Sanitary Landfill (“WGSL”)
 under a contract with the city of Honolulu, Hawaii. In late 2010 and early
 2011, heavy storms flooded a section of the WGSL. On both occasions,
 contaminated water was discharged into the Pacific Ocean through an open
 manhole. The contamination included medical waste such as syringes, blood
 vials, and catheters, which washed up on nearby beaches.
        The Environmental Protection Agency (“EPA”) investigated, and on
 January 25, 2011, it issued an Administrative Order on Consent (“AOC”).
 Among other things, the AOC required Waste to engage in response work to
 clean up the discharge. The AOC also explicitly reserved the federal
 government’s right to pursue Waste for other criminal and civil penalties.
 Waste complied with the AOC, and on August 24, 2011, the EPA informed
 Waste that the response work had been completed to its satisfaction.
        Meanwhile, in April 2011, the Department of Justice (“DOJ”)
 commenced a grand jury investigation into Waste’s actions. On April 30,
 2014, WMHI and two of its employees were indicted for, inter alia, knowing
 discharge of pollutants into a water of the United States, in violation of the

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 “Criminal Penalties” provision of the Clean Water Act. 33 U.S.C. §§
 1311(a), 1319(c)(2)(A). Pursuant to a plea agreement, which explicitly
 provided that it was separate from any potential civil claims against Waste,
 the defendants ultimately pleaded guilty to negligent discharge of pollutants,
 also in violation of the “Criminal Penalties” provision of the Clean Water
 Act. 33 U.S.C. §§ 1311(a), 1319(c)(1)(A). On October 26, 2015, the federal
 district court in Hawaii imposed a sentence of a $400,000 fine, $200,000 in
 restitution to neighboring businesses, and a $250 assessment against WMHI.
        Civil claims against Waste under the Clean Water Act were tolled
 during the pendency of the criminal proceedings. Thereafter, in April 2019,
 Waste entered into a consent decree to resolve the civil proceedings arising
 out of these pollution incidents.
        Waste sought coverage from ASIC for, inter alia, costs associated with
 defending the criminal proceedings detailed above. According to Waste,
 these costs were covered by its “Pollution Legal Liability” insurance policy,
 effective January 2011 through January 2014. That insurance policy, which
 provided Waste with $50 million dollars of coverage per incident with a $5
 million deductible, contained the following relevant provisions.
        In “COVERAGE D,” ASIC agreed “[t]o pay on behalf of the
 Insured, Loss that the Insured becomes legally obligated to pay as a result of
 a Claim for Clean-Up Costs resulting from a Pollution Condition, beyond the
 boundaries of the Insured Property . . . .” ASIC also agreed that “[w]hen a
 Claim is made against the Insured to which [Coverage D] applies, . . . [ASIC]
 has . . . the duty to defend such Claim, even if groundless, false, or
 fraudulent.” However, “[t]his policy [did] not apply to Claims or Loss . . .
 [d]ue to any criminal fines, criminal penalties or criminal assessments.”
        The policy defined “Claim” as “a written demand received by the
 Insured alleging liability or responsibility and seeking a remedy on the part of

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 the Insured for Loss under [Coverage D].” It defined “Clean-Up Costs” as
 “reasonable and necessary expenses, including legal expenses incurred with
 [ASIC’s] written consent . . ., for the investigation, removal, treatment . . . ,
 remediation . . . , or disposal of soil, surfacewater, groundwater, . . . or other
 contamination [t]o the extent required by Environmental Laws . . . .” In turn,
 it defined “Environmental Laws” as “any federal, state, provincial or local
 laws (including but not limited to, statutes, rules, regulations, ordinances,
 guidance documents, and governmental, judicial or administrative orders and
 directives) that are applicable to the Pollution Condition.”
        AIG Claims handled Waste’s claim on behalf of ASIC, and ASIC
 denied coverage for all costs associated with the criminal proceedings.
        Waste brought suit against ASIC and AIG Claims in Texas state court.
 Waste alleged that ASIC violated its duty to defend and its duty to indemnify
 under the insurance contract, that ASIC breached its duty of good faith and
 fair dealing with Waste, and that both defendants had violated provisions of
 the Texas Insurance Code.
        ASIC timely removed to federal court, arguing that AIG Claims was
 improperly joined solely to defeat federal diversity jurisdiction. 1 Waste
 moved to remand. The district court determined that there was no reasonable
 probability that Waste would recover against AIG Claims. It therefore denied
 Waste’s motion to remand and denied Waste’s subsequent motion for
 reconsideration.
        Waste then filed an amended complaint, which dropped AIG Claims
 as a defendant. Waste and ASIC filed cross-motions for summary judgment
 on whether ASIC had a duty to defend Waste against the criminal allegations.

        1
           Waste and ASIC are diverse, but Waste and AIG Claims are not diverse because
 both are incorporated in Delaware.

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 The district court granted summary judgment in favor of ASIC, finding no
 duty to defend against the criminal allegations. Thereafter, the district court
 granted ASIC’s motion for summary judgment on all remaining claims.
 Waste appeals.
                                        II
        We review the district court’s denial of Waste’s motion to remand de
 novo. See Vantage Drilling Co. v. Hsin-Chi Su, 741 F.3d 535, 537 (5th Cir.
 2014). We also review the district court’s grant of summary judgment de
 novo, applying the same standard as the district court. See Castellanos-
 Contreras v. Decatur Hotels, LLC, 622 F.3d 393, 397 (5th Cir. 2010) (en banc);
 McCorkle v. Metro. Life Ins. Co., 757 F.3d 452, 456 (5th Cir. 2014). Summary
 judgment is appropriate “if the movant shows that there is no genuine
 dispute as to any material fact and the movant is entitled to judgment as a
 matter of law.” Fed. R. Civ. P. 56(a). In making this determination, we view
 all evidence in the light most favorable to the non-moving party. See
 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
                                        III
        Waste first challenges the district court’s denial of its motion to
 remand. The district court determined that AIG Claims was improperly
 joined in order to defeat federal jurisdiction.
        The fraudulent joinder doctrine provides that a district court must
 disregard, for diversity jurisdiction purposes, the citizenship of an improperly
 joined defendant. See Borden v. Allstate Ins. Co., 589 F.3d 168, 171 (5th Cir.
 2009); Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 572 (5th Cir. 2004) (en
 banc). A non-diverse defendant is improperly joined if there was actual fraud
 in the pleading of jurisdictional facts or the plaintiff cannot establish a cause
 of action against the non-diverse defendant. See Mumfrey v. CVS Pharmacy,

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 Inc., 719 F.3d 392, 401 (5th Cir. 2013). Only the second possibility is raised in
 this appeal.
         To determine whether the plaintiff can establish a cause of action
 against the non-diverse defendant, the district court conducts a Federal Rule
 of Civil Procedure 12(b)(6) analysis. See Smallwood, 385 F.3d at 573; see also
 Int’l Energy Ventures Mgmt., L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193,
 208 (5th Cir. 2016) (holding that the federal pleading standard applies when
 determining whether a plaintiff has stated a claim against a non-diverse
 defendant). The “complaint must contain sufficient factual matter, accepted
 as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal,
 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted).
 “[T]he existence of even a single valid cause of action against [non-diverse]
 defendants (despite the pleading of several unavailing claims) requires
 remand of the entire case to state court.” Gray v. Beverly Enters.-Miss., Inc.,
 390 F.3d 400, 412 (5th Cir. 2004).
         Waste argues that it sufficiently alleged that AIG Claims violated
 Texas Insurance Code sections 541.060(a)(2), (a)(4), and (a)(7) by failing to
 attempt to effectuate a prompt, fair, and equitable settlement; failing to
 affirm or deny coverage within a reasonable time; and failing to conduct a
 reasonable investigation. 2
         This court and the Texas Supreme Court have both recognized that
 “Texas law clearly authorizes [Chapter 541] actions against insurance

         2
           Waste also raised a claim under section 541.060(a)(1) in its complaint, but Waste
 failed to argue about or even cite to section 541.060(a)(1) in its opening brief, thereby
 waiving the issue. Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 260 n.9 (5th Cir.
 1995) (“[W]e do not consider issues raised for the first time in a reply brief.”); Brinkmann
 v. Dallas Cty. Deputy Sheriff Abner, 813 F.2d 744, 748 (5th Cir. 1987) (“We will not raise
 and discuss legal issues [the parties have] failed to assert.”).

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 adjusters in their individual capacities.” 3 Gasch v. Hartford Accident & Indem.
 Co., 491 F.3d 278, 282 (5th Cir. 2007); see also Liberty Mut. Ins. Co. v. Garrison
 Contractors, Inc., 966 S.W.2d 482, 486 (Tex. 1998). Nevertheless, there is
 disagreement about which provisions of Chapter 541 apply to adjusters.
 Compare, e.g., Lopez v. United Prop. & Cas. Ins. Co., 197 F. Supp. 3d 944, 950–
 51 (S.D. Tex. 2016) (finding that an adjuster could not be held liable under
 sections 541.060(a)(2), (a)(3), and (a)(4)), Messersmith v. Nationwide Mut.
 Fire Ins. Co., 10 F. Supp. 3d 721, 724–25 (N.D. Tex. 2014) (finding that an
 adjuster could not be held liable under sections 541.060(a)(2) and (a)(7)),
 Montoya v. State Farm Mut. Auto. Ins. Co., No. 16-00005, 2016 WL 5942327,
 at *4 (W.D. Tex. Oct. 12, 2016) (finding that an adjuster could not be held
 liable under section 541.060(a)(2)), Meritt Buffalo Events Ctr., LLC v. Cent.
 Mut. Ins. Co., No. 3:15-CV-3741-D, 2016 WL 931217, at *4 (N.D. Tex. March
 11, 2016) (finding that an adjuster could not be held liable under sections
 541.060(a)(2) and (a)(7)), Mainali Corp. v. Covington Specialty Ins. Co., No.
 3:15-CV-1087-D, 2015 WL 5098047, at *4 (N.D. Tex. Aug. 31, 2015) (finding
 that an adjuster could not be held liable under sections 541.060(a)(2), (a)(3),
 and (a)(7)), and One Way Invs., Inc. v. Century Sur. Co., No. 3:15-CV-1087-
 D, 2015 WL 5098047, at *4–5 (N.D. Tex. Aug. 31, 2015) (finding that an
 adjuster could not be held liable under sections 541.060(a)(2), (a)(4), and
 (a)(7)), with Marminco III Family, L.P. v. Arch Specialty Ins. Co., No. EP-17-
 CV-311-KC, 2017 WL 7797711, at *3–5 (W.D. Tex. Dec. 19, 2017) (finding
 that an adjuster could be held liable under section 541.060(a)(2)), Roach v.
 Allstate Vehicle & Prop. Ins. Co., No. 3:15-CV-3228-G, 2016 WL 795967, at
 *5–6 (N.D. Tex. Feb. 29, 2016) (same), Exch. Servs., Inc. v. Seneca Ins. Co.,
 No. 3:15-CV-01873-M, 2015 WL 6163383, at *4–5 (N.D. Tex., October 16,
 2015) (finding that an adjuster could be held liable under sections

        3
            Chapter 541.151 was formerly codified as Tex. Ins. Code, art. 21.21.

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 541.060(a)(2), (a)(3), (a)(4), and (a)(7)), Denley Grp., LLC v. Safeco Ins. Co.
 of Ind., No. 3:15-CV-1183-B, 2015 WL 586226, at *4 (N.D. Tex. Sept. 30,
 2015) (finding that an adjuster could be held liable under section
 541.060(a)(2)), Linron Props., Ltd. v. Wausau Underwriters Ins. Co., No. 3:15-
 CV-00293-B, 2015 WL 3755071, at *4–5 (N.D. Tex. June 16, 2015) (same),
 and Arana v. Allstate Tex. Lloyds, No. 3:13-CV-0750-D, 2013 WL 2149589, at
 *5 (N.D. Tex. May 17, 2013) (same).
        We need not resolve this dispute because, even assuming that an
 adjuster can be held liable under Texas Insurance Code sections
 541.060(a)(2), (a)(4), and (a)(7), Waste did not allege facts that, taken as
 true, demonstrate a violation of these provisions. See Univ. Baptist Church of
 Fort Worth v. York Risk Servs. Grp., Inc., 776 F. App’x 863, 865 (5th Cir.
 2019). The only relevant, AIG Claims-specific facts that Waste alleged in its
 complaint are that (1) AIG Claims served as the adjuster for ASIC and (2)
 “On July 9, 2013, AIG Claims sent Waste Management a letter denying
 [certain] coverage . . . .” These threadbare factual allegations, along with
 Waste’s conclusory recitation of the elements of a claim under the Texas
 Insurance Code, are insufficient to state a plausible claim for relief. See Iqbal,
556 U.S. at 678 (“Threadbare recitals of the elements of a cause of action,
 supported by mere conclusory statements, do not suffice.”); Roundtree v.
 Dyson, 892 F.3d 681, 685 & n.12 (5th Cir. 2018) (same); 5B Charles Alan
 Wright & Arthur R. Miller, Federal Practice and Procedure § 1357 (3d ed.
 2004) (“[T]he court will not accept conclusory allegations concerning the
 legal effect of the events the plaintiff has set out if these allegations do not
 reasonably follow from the pleader’s description of what happened.”).
        Notably, Waste did not allege that AIG Claims failed to investigate,
 delayed any investigation, misevaluated, misprocessed, made any
 misrepresentation of the policy, or otherwise failed to “effectuate” a fair
 settlement. Cf. Marminco III Family, 2017 WL 7797711, at *4 (involving

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 allegations that the adjuster failed to conduct a reasonable inspection and
 investigation, stated that the damages were less severe than they were, and
 misrepresented the actual cost to repair or replace the damage); Roach, 2016
WL 795967, at *6 (involving allegations that the adjuster conducted a
 substandard inspection, failed to include many of the plaintiff’s damages in
 his report, misrepresented the cause of, scope of, and cost to repair the
 damage, and made these and other misrepresentations to both the plaintiff
 and the insurer); Exch. Servs., 2015 WL 6163383, at *5 (involving allegations
 that the adjuster made numerous intentional errors in estimating the value of
 the plaintiff’s claim, estimated payment of the plaintiff’s claim far below the
 actual cost of repair, conducted an incomplete investigation, failed to
 consider plaintiff’s public adjuster’s estimates, and failed to provide a
 reasonable explanation as to why the defendant was not compensating the
 plaintiff); Denley Grp., 2015 WL 586226, at *4 (involving allegations that the
 adjuster failed to perform a proper and complete investigation, failed to
 obtain a legal opinion on the obligation owed to the plaintiff, ignored the true
 facts of the claim, and unreasonably delayed the investigation, adjustment,
 and resolution of the plaintiff’s claim); Linron Props., 2015 WL 3755071, at *5
 (involving allegations that the adjuster retained an engineer and contractor
 who were known for arriving at findings that favored insurance companies,
 refused to identify damage to the structure, and failed to respond to the
 plaintiff’s inquiries regarding the status of the claim and payment); Arana,
 2013 WL 2149589, at *5 (involving allegations that the adjuster conducted a
 substandard investigation that failed to include many of the plaintiff’s
 damages); see also Centaurus Unity v. Lexington Ins. Co., 766 F. Supp. 2d 780,
 788–89 (S.D. Tex. 2011) (relying on specific allegations directed at the

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  adjuster defendants to find that the plaintiff had stated a claim under Chapter
  541). 4
            The district court did not err in finding that there was no reasonable
  probability that Waste would recover against AIG Claims. Therefore, the
  district court did not err in disregarding AIG Claims’ citizenship and
  determining that there was complete diversity. For these reasons, we
  AFFIRM the district court’s denial of Waste’s motion to remand.
                                             IV
            Next, Waste challenges the district court’s summary judgment
  determination that ASIC had no duty to defend Waste against the criminal
  allegations.
            “When determining whether an insurer has a duty to defend” under
  Texas law, courts “follow the eight corners rule by looking at the four corners
  of the complaint for alleged facts that could possibly come within the scope
  of coverage in the four corners of the insurance policy.” Evanston Ins. Co. v.
  Legacy of Life, Inc., 370 S.W.3d 377, 380 (Tex. 2012). “[I]n case of doubt as
  to whether or not the allegations of a complaint against the insured state a
  cause of action within the coverage of a liability policy sufficient to compel
  the insurer to defend the action, such doubt will be resolved in insured’s
  favor.” Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Merchs. Fast Motor Lines,
  Inc., 939 S.W.2d 139, 141 (Tex. 1997) (per curiam) (quoting Heyden Newport
  Chem. Corp. v. S. Gen. Ins. Co., 387 S.W.2d 22, 26 (Tex. 1965)). But courts

            4
            Because we agree that AIG Claims was improperly joined, we need not address
  ASIC’s alternative argument that any error was not fatal to the judgment because, as in
  Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996), the federal jurisdictional requirements were
  met at the time final judgment was entered.

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  should not “look outside the pleadings, or imagine factual scenarios which
  might trigger coverage.” Id. at 142.
         The insurance policy states that “[w]hen a Claim is made against the
  Insured to which [Coverage D] applies,” ASIC has a duty to defend against
  “such claim.” A “Claim” is defined as “a written demand received by the
  Insured alleging liability or responsibility and seeking a remedy on the part of
  the Insured for Loss under [Coverage D].” Coverage D provides coverage
  when there is a “Claim” for “Clean-Up Costs.” Therefore, we examine the
  four corners of the complaint for facts that could possibly constitute a written
  demand seeking clean-up costs in connection with the criminal proceedings.
         First, Waste argues that the AOC constitutes a claim for clean-up
  costs that triggered ASIC’s duty to defend against the criminal allegations.
  On its face, however, the AOC appears independent from the criminal
  proceedings. The AOC issued months before the DOJ began its grand jury
  investigation and explicitly reserved the federal government’s right to pursue
  Waste for criminal penalties. Moreover, the EPA informed Waste that the
  response work required by the AOC was complete almost three years before
  the grand jury indicted WMHI and two of its employees.
         Despite this independence, Waste argues that federal enforcement
  guidance documents establish that all of the proceedings arising out of these
  pollution incidents are part of a single, coordinated enforcement process.
  Therefore, according to Waste, the existence of a demand for clean-up costs
  in the AOC triggered ASIC’s duty to defend, which continued through the
  conclusion of all proceedings based on the same factual allegations.
         Waste argues that it is appropriate for us to consider the federal
  guidance documents even though they fall outside the eight corners of the
  complaint and insurance policy because the definition of “Clean-Up Costs”
  refers to “Environmental Laws,” which are defined to include “guidance

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  documents.” See In re Deepwater Horizon, 470 S.W.3d 452, 460 (Tex. 2015)
  (“[I]nsurance policies can incorporate limitations on coverage encompassed
  in extrinsic documents by reference to those documents.”).
         Even assuming it is appropriate for us to consider these guidance
  documents, we do not agree that the AOC is a claim that triggered ASIC’s
  duty to defend against the criminal allegations. When there is a claim for
  clean-up costs, ASIC has a duty to defend against “such claim.” This
  language provides a common-sense limit on ASIC’s duty to defend: When
  there is a written demand for clean-up costs covered by the policy, ASIC
  must defend against that written demand. Were we to agree with Waste that
  the AOC, read in combination with the guidance documents, triggered a duty
  for ASIC to defend in all criminal or civil proceedings arising from the same
  pollution incidents, we would effectively be reading this bargained-for
  restriction out of the contract. We are not at liberty to do so. See Am. Mfrs.
  Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003) (“[W]e may
  neither rewrite the parties’ contract nor add to its language.”); Richards v.
  State Farm Lloyds, 597 S.W.3d 492, 499 (Tex. 2020) (“The goal in
  interpreting the contractual duty to defend—as when interpreting any
  contract language—is to ascertain the true intentions of the parties as
  expressed in the writing itself.” (internal quotation marks and citation
  omitted)).
         Alternatively, Waste argues that the indictment constitutes a claim for
  clean-up costs that triggered ASIC’s duty to defend against the criminal
  allegations. The indictment, which was explicitly limited to criminal rather
  than civil penalties, does not expressly seek any remedy from Waste.
  Therefore, on its face, the indictment does not appear to fall within the
  policy’s definition of a “Claim.”

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          Nevertheless, Waste argues that the lack of an explicit demand for a
  remedy merely introduces ambiguity about whether the indictment
  constitutes a claim. Under Texas’s eight corners rule, Waste argues that this
  ambiguity should be resolved in its favor. In essence, Waste argues that ASIC
  had a duty to defend against the criminal allegations because clean-up costs
  were a potential outcome of the criminal proceedings.
          We disagree. While ambiguity about whether the complaint states a
  cause of action within the coverage of the insurance policy should be resolved
  in the insured’s favor, see Nat’l Union Fire Ins., 939 S.W.2d at 141, we will
  not “look outside the pleadings, or imagine factual scenarios which might
  trigger coverage.” Id. at 142. Instead, “[w]e consider the entire agreement
  and, to the extent possible, resolve any conflicts by harmonizing the
  agreement’s provisions, rather than by applying arbitrary or mechanical
  default rules.” Richards, 597 S.W.3d at 497 (quoting Piranha Partners v.
  Neuhoff, 596 S.W.3d 740, 744 (Tex. 2020)). Under the plain language of the
  contract, ASIC only has a duty to defend against written demands seeking a
  remedy from Waste for a covered loss. The indictment does not seek a
  remedy, so it did not trigger the duty to defend. 5
          The district court did not err in finding that there was no claim that
  triggered ASIC’s duty to defend against the criminal allegations. Therefore,
  the district court did not err in granting summary judgment in favor of ASIC
  on this issue.
          The district court also did not err in granting summary judgment in
  favor of ASIC on all remaining claims. Waste’s only challenge to this ultimate

          5
              Because we find that there was no claim that triggered ASIC’s duty to defend, we
  need not address ASIC’s alternative argument that the policy’s exclusion for “Claims or
  Loss . . . [d]ue to any criminal fines, criminal penalties or criminal assessments” precludes
  a finding of a duty to defend against the criminal allegations.

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  summary judgment award is dependent upon its duty to defend argument,
  which we deny above.
        AFFIRMED.

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