Court Opinion

ID: 4422660
Source: CourtListenerOpinion
Date Created: 2019-08-03 00:00:20.912539+00
Date Added: 2024-06-11T12:33:11.366918
License: Public Domain

Case: 17-41050    Document: 00515061895       Page: 1   Date Filed: 08/02/2019

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                                   United States Court of Appeals
                                                                            Fifth Circuit

                                                                          FILED
                                   No. 17-41050                      August 2, 2019
                                                                        Lyle W. Cayce
ADI WORLDLINK, L.L.C.,                                                       Clerk

             Plaintiff - Appellant

v.

RSUI INDEMNITY COMPANY,

             Defendant - Appellee

                 Appeal from the United States District Court
                      for the Eastern District of Texas

Before DENNIS, OWEN, and SOUTHWICK, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:
      The defendant insurance company denied the plaintiff policyholder’s
claims under a directors and officers liability policy. The district court held
that the insured had learned of a related claim when the previous year’s policy
was in effect; under clear policy provisions, the first policy was therefore the
one to cover all of the claims. The court then concluded that all claims were
properly denied because, even though the insured gave timely notice of the
later claims, it had failed to give timely notice of the initial one.
      We AFFIRM.
    Case: 17-41050     Document: 00515061895      Page: 2   Date Filed: 08/02/2019

                                  No. 17-41050
              FACTUAL AND PROCEDURAL BACKGROUND
      Beginning in late 2012, the plaintiff ADI Worldlink, L.L.C. annually
purchased directors and officers liability insurance policies from the defendant
RSUI Indemnity Company.         The 2014 policy had a coverage period from
December 31, 2013 to December 31, 2014, while the 2015 policy covered the
subsequent year, ending December 31, 2015.           The 2015 policy was later
extended through January 14, 2016.
      Significant provisions in the 2014 and 2015 policies include RSUI’s
obligation to pay “all Loss [Worldlink] is legally obligated to pay” in relation to
“a Claim for a Wrongful Act . . . first made against [Worldlink] during the Policy
Period” and timely noticed by Worldlink to RSUI under the terms of the
policies.
      The 2015 policy also contained a provision that deemed all claims related
in a specific manner to have been made at the time of the earliest such claim.
We label it the 2015 interrelatedness provision, and it stated:
      All Claims based on, arising out of, directly or indirectly resulting
      from, in consequence of, or in any way involving the same or
      related facts, circumstances, situations, transactions or events, or
      the same or related series of facts, circumstances, situations,
      transactions or events, shall be deemed to be a single Claim for all
      purposes under this policy, . . . and shall be deemed first made
      when the earliest of such Claims is first made, regardless of
      whether such date is before or during the Policy Period.

      The purpose of this provision appears obvious. An initial claim is made;
the insured gives notice of the claim; if in later policy years new claims are
made that are related in the relevant ways to the first one, their handling
continues consistently under that first policy. The relevant claims in this case
concern Wordlink’s employment practices, primarily an alleged failure to pay
overtime wages to nonexempt employees.           The insurance dispute arises

                                        2
    Case: 17-41050     Document: 00515061895      Page: 3   Date Filed: 08/02/2019

                                  No. 17-41050
because of Worldlink’s failure to give notice to RSUI of the first employee’s
claim, which it received in August 2014. In April 2015, other employees filed
similar claims against Worldlink. Finally, in September 2015, Worldlink first
notified RSUI of the claims.
      Relying on the 2015 interrelatedness provision, RSUI deemed all the
employment claims to be a single claim that were controlled by the 2014 policy.
The 2014 policy states that “it shall be a condition precedent to the Insurer’s
obligation to pay, that the Insured give written notice of such Claim to the
Insurer as soon as practicable” after Worldlink learns of the claim.
Comparable language is in the 2015 policy. A final deadline for notice was no
later than the expiration of the 2014 policy. Worldlink does not argue it
complied with that obligation as to the 2014 claim. Because of the absence of
notice of the first claim and the deeming of all later claims to be related to that
initial claim, RSUI denied coverage on all.
      Worldlink sought a declaratory judgment to compel RSUI to cover all the
claims. It also sought damages for breach of contract and violations of the
Texas Unfair Insurance Practices Act, the Texas Deceptive Trade Practices
Act, and the Texas Prompt Payment of Insurance Claims Statute. The parties
filed cross motions for summary judgment.           The district court granted
summary judgment for RSUI. It concluded that timely notice of the 2014 claim
was not given. Further, it found the 2015 claims related back to the 2014 claim
and were governed by the 2014 policy, thus making it proper for RSUI to deny
coverage of all the claims. Because RSUI had no obligation to cover any claims,
the district court held it also had no liability under the Texas statutes. This
same analysis would reasonably apply to Worldlink’s breach of contract claim,
which the district court dismissed without a separate analysis.

                                        3
    Case: 17-41050    Document: 00515061895     Page: 4      Date Filed: 08/02/2019

                                 No. 17-41050
                                 DISCUSSION
      On an appeal from the grant of a summary judgment, we generally are
concerned at least in part with whether the district court properly determined
that there were no genuine disputes of material fact. See FED. R. CIV. P. 56(a).
Today’s appeal concerns only legal issues, though, namely, the interpretation
of insurance policy provisions. Regardless of the questions posed, we review
the district court’s ruling on a summary judgment de novo. RSUI Indem. Co.
v. Am. States Ins. Co., 768 F.3d 374, 377 (5th Cir. 2014).
      Worldlink’s principal challenge is to the district court’s reliance on the
interrelatedness provision in the 2015 policy, joined with the provision in the
2014 policy obligating the insured to give timely notice, to deny the claims that
arose in 2015 and for which it gave notice. A central component of our review
is the effect of a 2013 Texas Court of Appeals decision about a similar policy.
The only state statutory claim Worldlink pursues on appeal concerns the Texas
Prompt Payment Statute.

      I. Interrelatedness of the 2014 and 2015 Claims
      There was some dispute in district court as to whether Texas law applies
in this diversity suit. The district court determined that it did, and the issue
is not renewed on appeal. We thus accept that Texas law controls.
      Most relevant to our analysis would be applicable authority from the
Texas Supreme Court. CHS, Inc. v. Plaquemines Holdings, L.L.C., 735 F.3d
231, 235 (5th Cir. 2013). We have no such decisions. In their absence, we
“defer to intermediate state appellate court decisions, ‘unless convinced by
other persuasive data that the highest court of the state would decide
otherwise.’” Memorial Hermann         Healthcare    Sys.,    Inc.   v.   Eurocopter
Deutschland, GMBH, 524 F.3d 676, 678 (5th Cir. 2008) (quoting Herrmann
Holdings Ltd. v. Lucent Tech., Inc., 302 F.3d 552, 558 (5th Cir. 2002)).
                                       4
    Case: 17-41050     Document: 00515061895     Page: 5   Date Filed: 08/02/2019

                                  No. 17-41050
      One Texas intermediate court opinion has been the center of attention
in this case: Gastar Exploration Ltd. v. U.S. Specialty Insurance Co., 412
S.W.3d 577 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). The parties
have not proposed nor have we found any reason to form a conviction that the
Texas Supreme Court would reject that court’s application of state law to policy
provisions similar to those at issue here. The district court distinguished
Gastar but did not suggest the opinion was inconsistent with what the Texas
Supreme Court would hold on the issues the Gastar court decided. Thus, we
consider that decision to be controlling on this appeal. We examine it closely.

            A. Texas Court of Appeals’ Gastar Opinion
      The background for the Texas Court of Appeals’ opinion was that Gastar
Exploration obtained directors and officers liability policies from U.S. Specialty
Insurance Company as its primary insurer and Axis Insurance Company as its
excess carrier. Gastar, 412 S.W.3d at 579. The policies each covered the period
of November 1, 2008 to November 1, 2009. Id. Because the provisions of the
two policies were identical, the court evaluated only the U.S. Specialty policy.
Id. at 579 n.1.    That policy contained an interrelatedness provision that
aggregated claims
      alleging, arising out of, based upon or attributable to the same
      facts, circumstances, situations, transactions or events or to a
      series of related facts, circumstances, situations, transactions or
      events will be considered to be a single Claim and will be
      considered to have been made at the time the earliest such Claim
      was made.
Id. at 580 (emphases omitted).
      Thus, if a claim arising during the policy period was related under this
quoted provision to claims arising before the policy period, U.S. Specialty

                                        5
    Case: 17-41050     Document: 00515061895       Page: 6   Date Filed: 08/02/2019

                                   No. 17-41050
would consider the former claims to predate the policy’s existence and would
not cover them under that policy.
      Gastar was named as a defendant in ten lawsuits, all pertaining to the
same alleged fraudulent investment scheme. Id. at 580–81. Seven of the
lawsuits arose during the 2008-2009 policy period; three predated it. Id. at
581. U.S. Specialty denied coverage of the seven claims brought during the
policy period, asserting they fell into the policy’s interrelatedness provision and
effectively predated the policy. Id.
      Gastar argued that a different provision in the policy permitted
coverage. That provision, labeled an “endorsement,” provided that the insurer
would not be liable to pay on a claim “arising out of, based upon or attributable
to any pending or prior litigation as of 5/31/2000, or alleging or derived from
the same or essentially the same facts . . . [as the] pending [or] prior litigation.”
Id. at 584–85.
      The Gastar court concluded that the endorsement, when read with the
interrelatedness provision, created ambiguity.           That was because the
endorsement excluded new claims only if the prior related claims arose before
May 31, 2000, while the interrelatedness provision excluded coverage of
related claims made prior to November 1, 2008, the beginning date of the
policy. Id. at 584. The court stated: “When provisions of an insurance policy
appear to conflict, a court should first attempt to harmonize [them while] . . .
giv[ing] effect to the entire agreement.” Id. at 583. If that is impossible, and
“more than one reasonable interpretation [of the policy exists, Texas courts]
will hold the contract is ambiguous and adopt the interpretation that most
favors coverage for the insured.” Id. In the specific context of clauses excluding
coverage, Texas courts adopt the insured’s reasonable interpretation even if
the insurer’s position “appears to be more reasonable or a more accurate
reflection of the parties’ intent.” Id.
                                          6
    Case: 17-41050     Document: 00515061895      Page: 7   Date Filed: 08/02/2019

                                  No. 17-41050
      In understanding an authoritative state-court precedent such as Gastar,
it may help to acquire context by examining the arguments made by the
parties. Worldlink and RSUI eased that task by submitting to the district
court the Gastar appellate briefs. Gastar’s brief had a vigorous argument that
the first three suits were not related to the seven later claims, while the insurer
argued the contrary. The dispute over this central point was barely noted in
the Gastar opinion. The court simply said it “need not resolve this issue”
because the interrelatedness provision “does not control.” Id. at 581. Placing
this factual issue aside, the Gastar court held that the interrelatedness
provision “render[ed the endorsement] meaningless because any ‘Claims’ that
would be excluded from coverage by [the endorsement] would already be
excluded by operation of” the interrelatedness provision. Id. at 584. The other
side of the coin was that the interrelatedness provision purported to exclude
claims arising before the policy while the endorsement restored them to
coverage if they fell into “the covered window for Claims related to litigation
filed after May 31, 2000, but before the effective date of the policy.” Id. The
interrelatedness provision and the endorsement “conflict[ed] or at best, when
read together, create[d] an ambiguity.”        Id.   Citing interpretation rules
favorable to insureds, the court held the endorsement controlled and
“restore[d] coverage [of claims] . . . that would have been excluded by” the
interrelatedness provision. Id. at 585.
      We now consider the district court’s application of Gastar in our case.

            B. Gastar’s applicability to the Worldlink-RSUI Policies
      The district court assumed that the 2015 claims were factually related
to the 2014 claim.     That finding then led to the holding that the 2015
interrelatedness provision deemed them all to fall under the 2014 policy. The

                                          7
    Case: 17-41050        Document: 00515061895   Page: 8   Date Filed: 08/02/2019

                                   No. 17-41050
assumption of relatedness is unchallenged on appeal. We thus make the same
assumption for purposes of the following analysis.
      As we have discussed, the Gastar opinion refused to apply that policy’s
interrelatedness provision because of what was labeled an endorsement. We
have not yet quoted a similar provision in the Worldlink-RSUI policies. There
is one, and this is it:
      Exclusion – Prior and/or Pending Litigation Backdated
      The Insurer shall not be liable to make any payment for Loss in
      connection with any Claim made against any Insured . . . alleging,
      arising out of, based upon or attributable to, in whole or in part,
      any litigation involving any Insured that was commenced or
      initiated prior to, or pending as of December 31, 2012, or arising
      out of or based upon, in whole or in part, any facts or circumstances
      underlying or alleged in any such prior or pending litigation.

      The general role of such provisions is described in a treatise:
            When an insurer first issues a D&O policy to a corporation,
      an exclusion is frequently included which eliminates coverage for
      claims arising from pending or prior litigation or from any facts or
      circumstances involved in such litigation. The insurers’ intent is
      to avoid exposure for the “burning building” (i.e., claims which the
      insured knew about or should expect when they purchased the
      policy). This exclusion will reference a date (frequently the
      inception date of the first D&O policy issued by the insurer to the
      insureds) which is used to determine whether the litigation is
      “pending or prior.”
4 NEW APPLEMAN ON INSURANCE LAW LIBRARY EDITION § 26.07[3][e] (2018).
      This statement of purpose indicates the earliest date “frequently” is the
commencement date of the first policy. The Gastar Endorsement, though,
excluded claims predating May 31, 2000, a date the briefing from that case
seems to indicate was before coverage by any policy. The similar provision in
the RSUI policy here extended coverage on related claims to no earlier than
December 31, 2012, which was the commencement date of Worldlink’s first

                                         8
    Case: 17-41050    Document: 00515061895      Page: 9   Date Filed: 08/02/2019

                                 No. 17-41050
policy with RSUI. In Gastar, then, claims that predated any insurance policies
by three years were still provided some protection. In the present case, the
reach of the similar exclusion is only to the commencement date of the first
policy. We do not wish to make too much of the distinction, as indeed there
may be other facts unavailable to us explaining the 2000 date in Gastar. We
can say that the Gastar provision was broader to the extent the insurer did not
foreclose, at least in that provision, earlier claims for which no notice would
have been given because the claimant had not yet been insured. This gives
additional complexity to assessing a failure of notice in Gastar.
      Despite the difference we just discussed, there are certainly similarities
between the provisions regarding prior and pending litigation here and in
Gastar. The provisions were not distinguished by the district court. The
district court simply found no significance to the language because it accepted
the insurer’s argument that RSUI denied coverage to Worldlink for a reason
that was not discussed in Gastar. The 2015 RSUI policy stated that sufficiently
related claims “shall be deemed to be a single Claim for all purposes under this
policy.” The court found that the claims from 2014 and from 2015 were single
claims. Thus, it was essential that this “single Claim” get properly initiated.
The plaintiff’s failure to make a timely report of the 2014 claim was held to
preclude coverage for all the claims.
      In addition, the district court explicitly held that Gastar was not directly
on point. We agree to the extent that the Texas Court of Appeals did not
discuss any obligations for the insured that may have arisen in prior policies.
The focus by the Gastar court was on two groups of lawsuits: those filed against
the insured during the 2008-2009 policy period and others that the court
labeled the “pre-policy suits.” Gastar, 412 S.W.3d at 581. The court’s opinion
does not mention that there were any policies covering the earlier period.

                                        9
    Case: 17-41050      Document: 00515061895     Page: 10   Date Filed: 08/02/2019

                                  No. 17-41050
      As we already mentioned, though, the Gastar briefing reveals there were
earlier policies. The insured had policies with both of its insurers for several
years before the ones at issue in the litigation. Gastar first purchased a policy
from its primary insurer, U.S. Specialty, in November 2006, and renewed or
replaced it up to the policy period of November 2008 – November 2009 that
was relevant to the case. The excess carrier, Axis, first issued a policy to
Gastar in 2003 and renewals or replacement policies continued until the
November 2008 – November 2009 policy year at issue in the lawsuit. The
Gastar court also addressed an interrelationship provision, but it did not go
back to the prior policies that existed but were unmentioned in its opinion to
tease out any obligations that may have arisen at that time that could affect
later related claims.
      This additional information from the Gastar briefs undermines the
district court’s distinction that all the current claims in our case fell within the
period of some policy “and not wholly outside of any policy period” as in Gastar.
Still, we do not find the possible factual error to be significant. While learning
of these prior policies from the Gastar briefing, we also learned the parties had
not made an issue of a failure to give timely notice to the insurer of claims
under earlier policies. We see it as beyond our proper role in interpreting this
state court opinion to try to factor in unraised and unaddressed insurance-
policy provisions.
      Had the parties focused the Gastar court on notice provisions in earlier
policies, we see it as an unanswerable question of whether the court would
have still reached the same result. We take the Texas precedent as it was
written, not as it might have been. What caused that court to rule in favor of
coverage was an inconsistency between the provision on interrelated claims
with the provision that barred related claims only in narrower circumstances.
Id. at 584.
                                        10
   Case: 17-41050     Document: 00515061895     Page: 11   Date Filed: 08/02/2019

                                 No. 17-41050
      We do not have that situation here. Instead, a policy provision construes
the relevant 2015 claims as being subject to the 2014 policy. That earlier policy
would have provided coverage except that the insured failed to comply in 2014
with a notice provision. We conclude the district court was correct to rely on
this difference. We must go beyond Gastar to consider the effect of Worldlink’s
failure to comply with the 2014 policy’s requirement of giving notice before the
end of that policy. As did the district court, we conclude that the absence of
notice, joined with the fact that the 2015 policy deemed all the later claims to
fall under the 2014 policy, prevented coverage of the claims.
      Our refusal to augment the Gastar holding to make it apply even when
no notice of earlier related claims was given under earlier policies is driven by
our limited role. We are here to interpret a contract between two parties. The
straightforward effect of the terms appears clear. Nonetheless, if there were
controlling law that reasonably would reach these terms and demand a
different interpretation, we would adjust our view. We do not have that. The
Gastar court relied on an inconsistency in two provisions. That inconsistency
is not in play here. Instead, we have the operation of several provisions that
must be read in sequence.      The final step in the sequence, a step never
discussed in Gastar, convinces us there is no coverage because notice of the
claim under the controlling policy for these related claims was not timely given.
      Consequently, the 2015 claims arising from lawsuits that were related
to the others brought in 2014 were governed by the earlier policy. The absence
of timely notice means the claims were properly denied.

      II.   The Texas Prompt Payment Claim
      The Texas Prompt Payment Statute requires insurers to respond to
claims’ processing within defined time periods on penalty of damages and
attorneys’ fees. See TEX. INS. CODE ANN. §§ 542.051–061. In the district court,
                                       11
   Case: 17-41050     Document: 00515061895     Page: 12    Date Filed: 08/02/2019

                                 No. 17-41050
Worldlink argued for Texas Prompt Payment relief on the 2015 claims.
Because the district court held “there is no coverage for the 2015 Claims under
the 2015 Policy,” it necessarily denied relief under this statute.
      For the same reason, we conclude there is no relief available to Worldlink
under this statute.
      AFFIRMED.

                                       12
    Case: 17-41050      Document: 00515061895      Page: 13   Date Filed: 08/02/2019

                                    No. 17-41050
JAMES L. DENNIS, Circuit Judge, dissenting:
      As the majority acknowledges, Texas law governs our decision in this
diversity case. In Gastar Exploration Ltd. v. U.S. Specialty Insurance Co., 412
S.W.3d 577 (Tex. App. 2013), a Texas Court of Appeals addressed a claim by a
plaintiff, the insured, that it was covered under an insurance company’s
claims-made-and-reported insurance policy that was worded similarly to the
policy at issue here. In that case, the Texas court ruled in favor of coverage for
the insured, finding an inconsistency in that policy between a provision on
interrelated claims that excluded a claim from coverage under the policy at
issue and a Prior and Pending Litigation Endorsement that “barred related
claims only in narrower circumstances.” Maj. at 11. The majority concludes
that the case before us is different from Gastar because it finds that “that
inconsistency is not in play” in the policy at issue here. Maj. at 11. Because I
disagree and believe Gastar is materially indistinguishable and thus mandates
reversal, I respectfully dissent.
      Here, as in Gastar, the parties entered into claims-made-and-reported
insurance   policies.     The policies    at issue     in both     cases included
“interrelatedness provisions,” which stated that all related claims would be
aggregated together and deemed to have been made at the time of the earliest
such claim. If that earliest claim was made under a prior policy period covered
by a different contract, then the later related claim would also be covered under
that prior contract instead of the present policy. Gastar, 412 S.W.3d at 580;
Maj. at 2. In both Gastar and the case before us, the policies also included
Prior and Pending Litigation Endorsements that excluded claims from
coverage if they arose from litigation initiated prior to a certain date. In both
cases, the cut-off date provided in those endorsements was several years before

                                         13
    Case: 17-41050       Document: 00515061895        Page: 14     Date Filed: 08/02/2019

                                      No. 17-41050
that contract’s policy period began. 1           Gastar held that the two contract
provisions in that case conflicted because “any ‘Claims’ that would be excluded
from coverage by [the] Endorsement would already be excluded by operation of
[the interrelatedness provision].” Gastar, 412 S.W.3d at 584. The majority
declares that “we do not have that situation here,” finding that the
interrelatedness provision did not exclude the 2015 claim from coverage—it
merely rendered it subject to a predecessor policy.                  Because the 2015
interrelatedness provision did not prevent the claim from being covered under
that different, earlier policy, the majority reasons, this is not a case like Gastar
where the interrelatedness condition bars coverage of a claim while the
Endorsement would permit coverage.
       Respectfully, I believe the majority errs by relying on whether the 2015
interrelatedness provision was what ultimately prevented Wordlink from
receiving any insurance coverage for its 2015 claim. Gastar itself demonstrates
that the majority’s analysis relies on a red herring. In determining that the
substantially similar interrelatedness provision at issue in Gastar was an
exclusion, the Texas court did not, as the majority appears to do here, ask
whether that provision precluded insurance coverage altogether for the claim.
Instead, the critical question was whether the provision narrowed what that
particular contract would otherwise cover under the terms of its Insuring
Agreement. Gastar held that the interrelatedness provision—labeled in that
contract as “Condition C”—was “effectively an exclusion because it narrows the

       1 Though the date in Worldlink’s 2015 policy—December 31, 2012—was, as the
majority identifies, the commencement date of its first policy with RSUI, this was still two
years before the policy period governed by the 2015 contract. Maj. at 2, 9.
                                            14
    Case: 17-41050      Document: 00515061895       Page: 15    Date Filed: 08/02/2019

                                    No. 17-41050
coverage originally created by the Insuring Agreement.” 2 412 S.W.3d at 583
(emphasis added). It then elaborated:
             When read in conjunction with the Insuring Agreement,
      Condition C excludes from coverage a Claim that is initially made
      during the Policy Period if it is determined to be related to the facts
      or circumstances underlying another Claim that was made prior
      to the Policy Period. In other words, but for the operation of
      Condition C deeming the later Claim to have been made prior to
      the Policy Period, the insurers would be liable for covering the later
      Claim under the Insuring Agreement (assuming the other policy
      requirements were met) because that Claim was first made during
      the Policy Period.

      Gastar, 412 S.W.3d at 584 (citation omitted).

      As the majority acknowledges, Gastar “did not go back to prior policies
that existed but were unmentioned in its opinion to tease out” whether the
later related claims could still get coverage under those former policies. This
is because foundational contract law principles dictate that contract
interpretation is based, first and foremost, on the language in that contract
itself, without consideration of the effect of a separate, former contract. See
Sefzik v. Mady Dev., L.P., 231 S.W.3d 456, 460 (Tex. App. 2007) (“When
interpreting a contract, the entire instrument, taken by its four corners, must
be read and considered to determine the true intention of the parties.”); Forbau
v. Aetna Life Ins. Co., 876 S.W.2 d 132, 133 (Tex. 1994) (explaining that general
contract interpretation rules apply to the interpretation of insurance contracts

      2  The Insuring Agreement, the interrelatedness provision, and the Endorsement are
all separate provisions of the insurance policies at issue.
                                          15
    Case: 17-41050    Document: 00515061895       Page: 16   Date Filed: 08/02/2019

                                   No. 17-41050
under Texas law).     The court in Gastar adhered to this methodology—it
evaluated the terms of the single contract in dispute, determined that there
was ambiguity within the provisions of that single contract, and resolved that
ambiguity in favor of the insured, as required under Texas law. See Gastar,
412 S.W.3d at 583–85.
      Following Gastar’s reasoning, then, we should read the 2015
interrelatedness provision at issue in this case in conjunction with the 2015
Insuring Agreement, determine what coverage was originally created by that
Insuring Agreement, and ask whether the interrelatedness provision narrows
that coverage. See Gastar, 412 S.W.3d at 583 (“Each insurance policy must be
interpreted according to its own specific provision and coverages. . . . [W]e limit
our examination to the language of the policy.” (citations omitted)). The 2015
Insuring Agreement reads:
            “if a Claim for a Wrongful Act is first made against any
      Insured Person during the Policy Period and reported in
      accordance with [the notice requirements], the Insurer will pay on
      behalf of such Insured Person all Loss such Insured Person is
      legally obligated to pay.”

      (emphasis added).      “Policy period” is then defined as “the period
beginning at the inception date and ending at the expiration date stated in
Item 2. of the Declarations Page,” which in turn designates the Policy Period
as “from 12/31/2014 to 12/31/2015 12:01 AM Standard Time at the Insureds
address.” See Gastar, 412 S.W.3d at 583 (“[W]hen an insurance policy defines
its terms, those definitions control.” (citing Evanston Ins. Co v. Legacy of Life,
Inc., 370 S.W.3d 377, 380 (Tex. 2012)). The 2015 Insuring Agreement, then,
covers claims made and timely reported during the defined Policy Period, from

                                        16
    Case: 17-41050    Document: 00515061895     Page: 17   Date Filed: 08/02/2019

                                 No. 17-41050
December 2014 through December 2015. The 2015 claim falls under this
definition.
      However, because of the effect of the interrelatedness provision, the 2015
policy does not cover the 2015 claim. Instead, the claim is only eligible for
coverage under the terms of the predecessor 2014 policy. Maj. at 3 (“Relying
on the 2015 interrelatedness provision, RSUI deemed all the employment
claims to be a single claim that were controlled by the 2014 policy.”). “In other
words, but for the operation of [the interrelatedness provision] deeming the
later Claim to have been made prior to the Policy Period”—defined in the
contract as “12/31/2014 to 12/31/2015”—“the insurers would be liable for
covering the [] [c]laim under the Insuring Agreement.” See Gastar, 412 S.W.3d
at 584. Because the interrelatedness provision means that the 2015 policy no
longer covers a claim made during the designated Policy Period as it otherwise
would under the Insuring Agreement, the “coverage originally created by [the
2015] Insuring Agreement” has been narrowed. As in Gastar, it is irrelevant
whether the claim is or is not covered under an earlier policy—the only
pertinent question is whether the interrelatedness provision excludes the
claim from coverage under the 2015 policy.           Under Gastar, the 2015
interrelatedness provision is an exclusion.
      Once we establish that the interrelatedness provision here is just as
much an exclusion as the corresponding condition in Gastar, it becomes clear
that these cases are materially indistinguishable.            While the 2015
interrelatedness provision excludes claims from coverage under the 2015 policy
if they relate to claims brought before December 2014, the Endorsement only
excludes claims if they are related to claims from before December 2012.
Accordingly, as in Gastar, the interrelatedness provision “renders [the]
Endorsement [] meaningless because any ‘Claims’ that would be excluded from
                                       17
   Case: 17-41050    Document: 00515061895         Page: 18   Date Filed: 08/02/2019

                                 No. 17-41050
coverage by [the] Endorsement would already be excluded by operation of [the
interrelatedness provision].” Gastar, 412 S.W.3d at 584. As in Gastar, the
provisions “conflict or at best, when read together, create an ambiguity.” Id.
And “[w]hen provisions in an insurance contract conflict, a court must adopt
the interpretation that most favors coverage for the insured.” Id. (citations
omitted).
      For these reasons, I respectfully dissent.

                                      18