Court Opinion

ID: 179909
Source: CourtListenerOpinion
Date Created: 2010-11-25 01:02:22+00
Date Added: 2024-06-11T17:25:50.021411
License: Public Domain

Case: 10-20296 Document: 00511303926 Page: 1 Date Filed: 11/24/2010

           IN THE UNITED STATES COURT OF APPEALS
                                                                         United States Court of Appeals
                                                                                  Fifth Circuit
                          FOR THE FIFTH CIRCUIT                               FILED
                                                                         November 24, 2010

                                                                            Lyle W. Cayce
                                     No. 10-20296                                Clerk
                                   Summary Calendar

ATLANTIC CASUALTY INSURANCE COMPANY

                                                   Plaintiff-Appellee
v.

HORATIO GONZALEZ

                                                   Defendant-Appellant

                   Appeal from the United States District Court
                       for the Southern District of Texas,
                                 No. 4:08-CV-3583

Before DAVIS, SMITH, and SOUTHWICK, Circuit Judges.
PER CURIAM:*
       Appellant Horatio Gonzalez appeals a Summary Judgment in favor of
Atlantic Casualty Insurance Co. (Atlantic) finding that Atlantic had no duty to
defend or indemnify its insured, PV Roofing Corp., against a lawsuit filed in
Texas state court by Gonzalez. Gonzalez argues that policy exclusions do not
excuse Atlantic from the duty to defend. We agree with the District Court that

       *
         Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
    Case: 10-20296 Document: 00511303926 Page: 2 Date Filed: 11/24/2010

                                  No. 10-20296

Atlantic has no duty to defend its insured under the broad language of the policy
exclusion. Accordingly, we affirm the judgment of the district court.
                                        I.
      This case arises out of an underlying state court lawsuit by Gonzales
against PV Roofing for injuries that resulted from PV Roofing’s alleged
negligence. Gonzalez’s original complaint alleged that, while an employee of PV
Roofing, he “lost both arms and legs as a result of an electrocution injury when
a ladder came into contact with power lines and electrocuted him.” Gonzalez
amended his petition to allege he was injured “while working in a home.”
Gonzalez then filed a second amended petition that eliminated any reference to
working.
      Gonzalez’s third and fourth amended petitions allege that he was injured
while “at a home in Houston” and was: (1) not an employee of PV Roofing; (2) not
an independent contractor of PV Roofing; (3) not a subcontractor of PV Roofing;
and (4) not an employee of an independent contractor or subcontractor of PV
Roofing. He also alleges that PV Roofing “was engaged in residential roofing
activities” and had control over “the job”.
      Uncontroverted record evidence shows that PV Roofing engaged Bernardo
Mejia as an independent contractor to complete a job for PV Roofing. Mejia was
a personal friend of Gonzalez. On the day of the accident, Mejia went to do his
final inspection at the job site and took Gonzalez with him. Mejia got on an
aluminum ladder to make a repair. When he finished, he climbed down the
ladder and moved around the house to make another repair. Gonzalez followed
him with the ladder. Mejia asked Gonzalez to hand him the ladder; when
Gonzalez did so, it came into contact with a high voltage power line and

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                                     No. 10-20296

Gonzalez was electrocuted. Gonzalez was not paid by Mejia or PV Roofing for
any services, and PV Roofing was not aware that Gonzalez would be at the job
site.
         Atlantic, PV Roofing’s insurer, filed suit in the district court seeking a
declaration that it had no duty to defend or indemnify PV Roofing in the state
court lawsuit. In its Rule 57 petition, Atlantic argued that it had no duty to
defend or indemnify PV Roofing because Gonzalez’s injury fell under a policy
exclusion. The exclusion states:
         This insurance does not apply to:
         (i)“bodily injury” to any “employee” of any insured arising out of or
                 in the course of:
                 (a) Employment by any insured; or
                 (b) Performing duties related to the conduct of any insured’s
                        business
         (ii) “bodily injury” to any “contractor” arising out of or in the course
                 of the rendering or performing services of any kind or nature
                 whatsoever by such “contractor” for which any insured may
                 become liable in any capacity . . .
         With respect to this endorsement only, the definition of “Employee”
         in the DEFINITIONS (Section V) of CG0001 is replaced by the
         following:
         “Employee” shall include, but is not limited to, any person or
         persons hired, loaned, leased, contracted or volunteering for the
         purpose of providing services to or on behalf of any insured, whether
         or not paid for such services and whether or not an independent
         contractor.
         As used in this endorsement, “contractor” shall include but is not
         limited to any independent contractor or subcontractor of any
         insured . . . and any and all persons working for or providing
         services and or materials of any kind for these persons or entities
         mentioned herein.

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      Atlantic and Gonzalez filed cross motions for summary judgment, and the
district court granted Atlantic’s motion, issuing a Declaratory Judgment
declaring that Atlantic had no duty to defend or indemnify PV Roofing in
Gonzalez’s underlying state court lawsuit. The court reasoned that Gonzalez
qualified as an “employee” under the broad policy definition, and his claim for
bodily injury was excluded from coverage. Gonzalez appeals that Declaratory
Judgment.
                                        II.
      Summary judgment is appropriate when “there is no genuine issue as to
any material fact and . . . the moving party is entitled to a judgment as a matter
of law.” Fed.R.Civ.P. 56(c). “We review a district court’s grant of summary
judgment de novo,” viewing the evidence “in the light most favorable . . . to the
non-movant.” Goodman v. Harris County, 571 F.3d 388, 393 (5th Cir. 2009).
      Texas law governs this insurance dispute. An insurer's “duty to defend is
determined by the third-party plaintiff's pleadings, considered in light of the
policy provisions, without regard to the truth or falsity of those allegations.”
Zurich American Ins. Co. v. Nokia, Inc., 268 S.W.3d 487, 491 (Tex. 2008). An
insurer has a duty to defend if there is a possible “case under the complaint
within the coverage of the policy.” Id. (internal quotation and citation omitted).
      Although Texas generally applies a strict eight corners rule, Guideone
Elite v. Fielder Rd. Baptist Church, 197 S.W.3d 305, 308-09 (Tex. 2006), this
Circuit has held that reference to extrinsic evidence is acceptable when a
petition’s factual allegations are insufficient to determine if there is a possible
case for coverage. W. Heritage Ins. Co. v. River Entm’t, 998 F.2d 311, 313 (5th
Cir. 1993). This exception to the eight corners rule applies when the applicability

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of policy exclusions cannot be determined by the allegations in the complaint.
See Liberty Mut. Ins. Co. v. Graham, 473 F.3d 596, 603 (5th Cir. 2006).
                                       III.
      The question in this case is whether Atlantic’s policy excludes coverage to
PV Roofing for Gonzalez’s claim based on the exclusion for injuries to employees
or contractors. Although Gonzalez's complaint alleges that he was not an
employee or a contractor of PV Roofing, those allegations were conclusory
because no facts are alleged supporting those conclusions.
      As the District Court observed, Gonzalez’s complaint “contains no facts
describing what Gonzales was actually doing when he was injured, or the nature
of his relationship with PV Roofing or Bernardo Mejia.” Because Gonzalez
alleged insufficient facts to permit us to determine whether the exclusions are
applicable, it is appropriate to consider extrinsic record evidence to determine
whether Atlantic had a duty to defend PV Roofing. See W. Heritage Ins. Co., 998
F.2d at 313; Liberty Mut., 473 F.3d at 603.
      Gonzalez testified that he does not remember what happened after
arriving at the job site with Mejia. According to Mejia’s deposition testimony,
however, Gonzalez moved the ladder at Mejia’s request so Mejia could make a
roof repair as part of his subcontracting work for PV Roofing. Gonzalez has not
contested this testimony or the use of this extrinsic evidence.
      Despite Gonzalez’s arguments that he was not an employee of PV Roofing
because he received no payments from Mejia or PV Roofing, had no relationship
with PV Roofing, and did not volunteer to help PV Roofing, we agree with the
District Court that Gonzales fell within the broad definition of “employee” in the
policy’s exclusion. Under the policy, a person is an “employee” if he is

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                                  No. 10-20296

“volunteering for the purpose of providing services to or on behalf of any
insured.” Gonzalez “volunteered” to help Mejia, who was repairing a roof on PV
Roofing’s behalf. When Gonzalez moved the ladder to assist Mejia in making the
repair, his actions were also on behalf of PV Roofing. The policy does not require
that Gonzalez have a direct, formal relationship with PV Roofing for his actions
to qualify as a service “to or on behalf of” the insured. As a volunteer who was
performing a service on behalf of PV Roofing, Gonzalez was an “employee”, and
the “employee” exclusion effectively excluded coverage to PV Roofing for
Gonzalez’s injury.
                                       IV.
      Because Atlantic’s policy provides no possibility of coverage to PV Roofing
for Gonzalez’s injury, Atlantic has no duty to defend or indemnify PV Roofing,
and we need not reach Gonzalez’s arguments concerning the proper construction
of other parts of the exclusion. Accordingly, we AFFIRM the summary judgment
of the district court.
      AFFIRMED.

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