Court Opinion

ID: 4040614
Source: CourtListenerOpinion
Date Created: 2016-09-28 22:35:11.398048+00
Date Added: 2024-06-11T13:44:18.696349
License: Public Domain

ACCEPTED
                                                                                                    14-14-00254-CV
                                                                                      FOURTEENTH COURT OF APPEALS
                                                                                                  HOUSTON, TEXAS
                                                                                              1/15/2015 10:10:13 AM
                                                                                                CHRISTOPHER PRINE
                                                                                                             CLERK
                           GIEGER, LABORDE & LAPEROUSE,                     L.L.C.
                                            FORTY-EIGHTH FLOOR

ERNEST P. GIEGER, JR.'·2                     ONE SHELL SQUARE                     MEGAN A. CAMBRE
KENNETH H. LABORDE',2                                                             ERIC S. CHARLESTON"
LAMBERT M. LAPEROUSE',2                     701 POYDRAS STREET                    CAITLIN J. HILL·
ROBERT I. SIEGEL,,2
                                   NEW ORLEANS, LOUISIANA 70139-4800              FILED IN
                                                                                  JONATHAN S. ORO
                                                                                  BRADLEY J. SCHWAB
                                                                           14th COURT OF APPEALS
ANDREW A. BRAUN',2
LEO R. McALOON 111',2                     TELEPHONE (504) 561-0400                SANDY G. HOY"
JOHN E. W. BAAY 11'·2,.
                                           FACSIMILE (504) 561-1011
                                                                              HOUSTON, TEXAS
                                                                                  IAN R. GOLDBERG 7
ANDREW M. ADAMS',2                                                                MARGARET V. GLASS2
DANIEL G. RAUH'                               WWW.GLLLAW.COM               1/15/2015 10:10:13 AM
                                                                                  DAVID M. SCHROETER
RACHEL G. WEBRE'                                                                  DALLAS V. COOK"
BRENDAN P. DOHERTy',2                                                      CHRISTOPHER A. PRINE
CHRISTOPHER R. TESKE',2
WILLIAM A. BAROUSSE',2                        HOUSTON OFFICE:
                                                                                    Clerk
                                                                                  OF COUNSEL
                                                                                     JANETH.ASCHAFFENBURG
MICHAEL E. HILL',2                                                                   J. MICHAEL DIGIGLIA5
                                                  SUITE 750                          CHARLOTTE A. FIELDS"
                                             1177 WEST LOOP SOUTH                    GINA S. MONTGOMERY
                                          HOUSTON, TEXAS 77027-9064                  ALISTAIR M. WARD
MICHAEL D. CANGELOSI
TARA E. CLEMENT2                          TELEPHONE (832) 255-6000                1 LAW CORPORATION

ELIZABETH A. CHICKERING                    FACSIMILE (832) 255-6001               2 ALSO ADMITTED IN TEXAS

LAUREN C. CANCIENNE 2                                                             3 ALSO ADMITTED IN MISSISSIPPI

ERIC C. WALTON                                                                    4 ONLY ADMITTED IN TEXAS

SIMONE MANUEL ALMON                                                               SALsa ADMITTED IN COLORADO

JAMESON M. TAYLOR                             January 15, 2015                    6 ALSO ADMITTED IN NEW YORK
                                                                                   AND WASHINGTON,    D.C.
EMILY E. EAGAN2
                                                                                  7 ONLY ADMITTED IN TEXAS
MATTHEW F. MORGAN
                                                                                   AND MONTANA
VICTORIA E. EMMERLING

           Hon. Christopher A. Prine
           Clerk, Fourteenth Court of Appeals
           301 Fannin, Suite 245
           Houston, Texas 77002

                                Re: No. 14-14-00254-CV:
                                    Liberty Surplus Ins. Co. et al., v. Exxon MobJ1 Corp.

           Dear Mr. Prine:

                   Appellant Commerce & Industry Insurance Company ("C&I") submits this

           letter brief under Texas Rule of Appellate Procedure 38.7 to advise the Court of new

           authority relevant to the above-captioned insurance coverage appeal. As detailed

           further below, the recent opinion In re Wyatt Field Servo Co., 14-14-00275-CV, 2014
WL 7366037 (Tex. App.-Houston [14th Dist.l Dec. 23, 2014) reasons that the

           liability of Exxon Mobil Corporation ("ExxonMobil") arose from its own operations.

           This supports C&I's argument on appeal that ExxonMobil failed to meet its burden

           of proving its liability arose out of the operations of Wyatt Field Service Company

           ("Wyatt") in order to trigger indemnity coverage under C&I's insurance policy. C&I

           therefore respectfully requests that the Court consider this post-submission letter
GIEGER, LABORDE & LAPEROUSE, L.L.C.

      Mr. Christopher A. Prine, Clerk
      January 15,2015
      Page 2

      brief and the Wyatt opinion (attached as Exhibit A hereto) as additional authority

      in support of C&I's position on appeal.

             This appeal arises from the denial of additional insured coverage to

       ExxonMobil under primary and excess liability insurance policies issued to Wyatt.

      After an explosion at ExxonMobil's Baytown refinery, ExxonMobil settled the

      lawsuit brought by two injured workers under Cause No. 2011-44838 entitled,

       McBride, et al. v. Exxon MobJ1 Corp., et ai., in the 125th Judicial Circuit Court of

      Harris County (the "underlying lawsuit"). The underlying lawsuit then proceeded

      to trial against Wyatt.      The jury in the underlying lawsuit returned a verdict

      finding that Wyatt was not negligent and that ExxonMobil was solely responsible

      for the plaintiffs' injuries. After the trial court granted the workers' motion for a

      new trial, Wyatt sought mandamus relief from this Court.

             In the meantime, ExxonMobil filed suit seeking coverage for its settlement of

      the underlying lawsuit as an additional insured under Wyatt's primary and excess

      liability policies (the "coverage action").   The same trial court that granted the

      injured workers' motion for a new trial also presided over the coverage action and

      granted summary judgment in favor of ExxonMobil and against the insurers.

      Without supplying any reasoning for its ruling, the trial court found the insurers

      had a duty to indemnify ExxonMobil for its settlement. This appeal ensued. On the

      same day that the insurers filed their reply briefs in this appeal, this Court

      conditionally granted Wyatt's petition for writ of mandamus and ordered
GIEGER, LABORDE      Be   LAPEROUSE, L.L.C.

      Mr. Christopher A. Prine, Clerk
      January 15,2015
      Page 3

      reinstatement of the jury verdict in the underlying lawsuit. See Wyatt, 2014 WL
7366037, at *14.

               The Wyatt mandamus opinion reinstating the jury verdict is relevant to this

      appeal. In C&I's opening brief, C&I asserts that the proceedings in the underlying

      lawsuit - including the jury's verdict - are necessary to determining whether

      ExxonMobil's liability arose out of Wyatt's operations. 1 This is because when the

      trial evidence and jury verdict establish that the putative additional insured's

      liability arises out of its own operations, then the additional insured cannot meet its

      burden of proving it is entitled additional insured coverage. (C&I Opening Br. §III

      at p. 29-34)        Additionally, C&I's opening brief also asserts that the trial court

      improvidently granted ExxonMobil's summary judgment motion because a

      determination regarding C&I's indemnity obligation, if any, is necessarily

      premature until final judgment is entered in the underlying lawsuit. (C&IOpening

      Br. §III at p. 36-37) Wyattbears directly on these points.

               In Wyatt, this Court held that the trial court abused its discretion in granting

      a new trial because the jury's verdict absolving Wyatt of liability was not against

      the great weight and preponderance of the evidence. Wyatt, 2014 WL 7366037, at

      *10.     After reviewing the evidence, this Court held that the jury's finding that

      1 This letter brief is intended only to supplement C&I's alternative argument that the trial
      court erred in granting summary judgment because issues of fact exist as to whether
      ExxonMobil's liability arose out of Wyatt's operations. (C&I Opening Br. §III; C&I Reply
      Br. §IV) This letter brief does not supersede or waive any arguments previously raised.
GIEGER, LABORDE & LAPEROUSE, L.L.C.

       Mr. Christopher A. Prine, Clerk
       January 15,2015
       Page 4

       Wyatt was not negligent was supported by credible testimony establishing that

       there was nothing in Wyatt's files to confirm that Wyatt had installed certain safety

       chains in 2008. Id. This Court further reasoned that the jury's finding was also

       supported by evidence establishing that ExxonMobil's design of, and instructions for

       installing, a dummy nozzle system were inadequate.        Id.   This Court therefore

       ordered the trial court to vacate its order granting a new trial and render judgment

       on the jury verdict in Wyatt's favor. Id. at 14.

                The Wyatt opinion supports C&1's position that ExxonMobil failed to meet

       its burden of proving it is entitled to additional insured coverage because

       ExxonMobil's liability in the underlying lawsuit arose out of Wyatt's work.

       ExxonMobil does not dispute that it had the heavy burden on summary judgment to

       "conclusively prove" that it was an additional insured under the C&1 policy.

       (ExxonMobil Br. p. 26) See Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217,223 (Tex.

       1999). The Wyatt opinion reinforces the reasons outlined in C&1's briefing as to

       why ExxonMobil did not meet that burden. As this Court in Wyatt found, credible

       evidence established that Wyatt did not perform the work, and that ExxonMobil's

       installation and design were inadequate. Wyatt, 2014 WL 7366037, at *10. Under

       both scenarios, ExxonMobil's liability arose out of its own operations - not Wyatt's.

      Accordingly, in moving for summary judgment ExxonMobil failed to meet its burden

       to conclusively prove a causal connection between the accident and Wyatt's

       operations.
GIEGER, LABORDE     Be   LAPEROUSE, L.L.C.

      Mr. Christopher A. Prine, Clerk
      January 15,2015
      Page 5

             Further, as explained in C&l's opening brief, a final adjudication of liability

      in the underlying lawsuit is necessary to determine whether Exxon's liability arose

      out of Wyatt's operations. See Evanston Ins. Co. v. A TOFINA Petrochemicals, Inc.,

      256 S.W.3d 660, 668 (Tex. 2008) (explaining that "without a determination of

      liability, it is impossible to say whether [the additional insured's] responsibility for

      the accident, if any, excluded it from coverage"). At the time the trial court granted

      ExxonMobil's motion for summary judgment in the coverage action, the jury verdict

      in the underlying lawsuit had been vacated and a new trial had been ordered.

      Additionally, while the Wyatt Court has now conditionally granted Wyatt's

      mandamus writ and ordered that judgment be rendered on the jury verdict, the

      judgment is not yet final.2 Therefore, if this Court finds that an issue of fact is

      presented regarding whether liability arose out of Wyatt's operations, C&I requests

      this Court to reverse and vacate the judgment in favor of ExxonMobil with

      directions on remand that the coverage action be stayed until final judgment is

      entered in the underlying lawsuit. 3

      2 Plaintiffs have flied a petition for rehearing en bane from the Wyatt court's mandamus
      order.
      3 Because this argument is an alternative to C&I's primary argument on appeal that
      ExxonMobil does not qualify as an additional insured under Endorsement No. 7 (C&I
      Opening Br. 22-28), if the Court reverses on that issue, the Court need not reach the issue
      of whether ExxonMobil's liability arose out of Wyatt's operations, and a stay pending
      judgment in the underlying lawsuit is not required.
GIEGER, LABORDE     & LAPEROUSE, L.L.C.

      Mr. Christopher A. Prine, Clerk
      January 15, 2015
      Page 6

                                                  Respectfully submitted,

                                                   ~~
                                                  BRENDAN P. DOHERTY

                                        CERTIFICATE OF SERVICE

             I hereby certify that on the 15th day of January, 2015, a true and correct copy of the
      above and foregoing instrument was served on all parties and counsel of record, in accordance
      with Rule 21a, T.R.C.P.

      Mike Morris
      Danny L. Van Winkle
      T EKELL, BOOK, ALLEN & MORRIS ,    L.L.P.
      1221 McKinney, Suite 4300
      Houston, Texas 77010

      David M. Gunn
      Beck, Redden & Secrest, LLP
      One Houston Center
      1221 McKinney Street, Suite 4500
      Houston, Texas 77010

      Brian S. Martin
      Rodrigo "Diego" Garcia, Jr.
      THOMPSON, COE, COUSINS & IRONS, L.L.P.
      One Riverway, Suite 1600
      Houston, Texas 77056

                                                  BRENDAN P. DOHERTY