CROSSTEX ENERGY SERVICES, LP, CROSSTEX LIG, LLC, AND CROSS TEX PROCESSING SERVICES, LLC
TEXAS BRINE COMPANY, LLC, ET AL.
FROM THE 23rd JUDICIAL DISTRICT COURT ASSUMPTION
PARISH, LOUISIANA DOCKET NUMBER 34, 202 HONORABLE JASON
Leopold Z. Sher James M. Garner Peter L. Hilbert, Jr. Martha
Y. Curtis Neal J. Kling Jeffrey D. Kessler New Orleans,
Louisiana and Robert Ryland Percy, III Gonzales, Louisiana
and Travis J. Turner Gonzales, Louisiana and Eric J. Mayer
Houston, Texas Attorneys for Defendant/ Third
Party-Plaintiff/ Appellant, Texas Brine Company, LLC
S. Johnson Ingrid K. Laurendine Mandeville, Louisiana
Attorneys for Third-Party Defendants/ Appellees, National
Union Fire Insurance Company of Pittsburg, Pa., And AIG
Specialty Insurance Company in their respective capacities as
alleged pre-2012 insurers of Texas Brine Company, LLC)
BEFORE: WHIPPLE, C.J., MCDONALD, and CHUTZ, JJ.
appeal, an insured appeals a summary judgment in favor of its
insurers concluding the insurers did not owe the insured a
duty to defend against the plaintiffs' claims in the
underlying litigation and dismissing the insured's third
party demand against the insurers with prejudice. We affirm.
AND PROCEDURAL HISTORY
suit is one of several arising from the August 2012
appearance of a sinkhole near Bayou Corne in Assumption
Parish, Louisiana. EnLink f/k/a Crosstex, the plaintiffs
in the underlying litigation, own and operate a natural gas
pipeline that traverses the edge of a salt dome. Texas
Brine operates brine production wells, including
the Oxy Geismar #3 well, on property above the salt dome.
EnLink filed suit against Texas Brine, among others, alleging
the sinkhole was caused, in whole or part, by the failure of
the Oxy Geismar #3 salt cavern and that the sinkhole engulfed
a section of EnLink's pipeline, rendering the pipeline
displaced, damaged, and unusable.
response to EnLink's suit, Texas Brine filed a third
party demand for declaratory judgment seeking defense and
indemnity from insurers, National Union Fire Insurance
Company of Pittsburgh, Pa. (National Union) and AIG Specialty
f/k/a AISLIC(sometimes, collectively AIG Insurers),
under certain pre-2012 liability policies issued to Texas
United Corporation. In due course, the AIG Insurers filed a
motion for summary judgment, claiming they had no duty to
indemnify or defend Texas Brine in this suit, because
EnLink's alleged damages did not occur during the
effective dates of any of the relevant policies, the last of
which indisputably expired on March 1, 2009, more than three
years before the sinkhole appeared. In a judgment signed
February 14, 2017, the district court granted summary
judgment in favor of the AIG Insurers, in their capacities as
Texas Brine's pre-2012 insurers, and dismissed Texas
Brine's third party demand against them.
Brine appealed from the judgment. While the appeal was
pending, EnLink apparently settled its claims against Texas
Brine and those claims were dismissed. According to Texas
Brine, however, this appeal still presents the issue of
whether genuine issues of material fact exist such that the
AIG Insurers owed Texas Brine a duty to defend Texas Brine on
the EnLink claims against it until the date those claims were
resolved and dismissed.
Brine contends the district court erred in granting summary
judgment to the AIG Insurers because there are genuine issues
of material fact as to when EnLink's damage began that
preclude summary judgment on the AIG Insurers' duty to
defend. Specifically, Texas Brine argues the pre-2012 AIG
policies do not limit coverage to property damage that
manifests itself during the policy period but should be
interpreted to cover possible hidden property damage to
EnLink that may have resulted from earth movement that may
have occurred during the policy periods. Texas Brine also
contends the district court erred, because another district
court in other sinkhole-related cases denied summary judgment
to insurers on the duty to defend issue.
motion for summary judgment is a procedural device used to
avoid a full-scale trial when there is no genuine issue of
material fact. Jones v. Anderson, 16-1361 (La.App. 1
Cir. 6/29/17), 224 So.3d 413, 417. After an opportunity for
adequate discovery, a motion for summary judgment shall be
granted if the motion, memorandum, and supporting documents
show there is no genuine issue as to material fact and that
the mover is entitled to judgment as a matter of law.
LSA-C.C.P. art. 966A(3). The only documents that may be filed
in support of or in opposition to the motion are pleadings,
memoranda, affidavits, depositions, answers to
interrogatories, certified medical records, written
stipulations, and admissions. LSA-C.C.P. art. 966A(4).
burden of proof rests with the mover. Nevertheless, if the
mover will not bear the burden of proof at trial on the issue
that is before the court on the motion for summary judgment,
the mover's burden on the motion does not require him to
negate all essential elements of the adverse party's
claim, action, or defense, but rather to point out to the
court the absence of factual support for one or more elements
essential to the adverse party's claim, action, or
defense. The burden is on the adverse party to produce
factual support sufficient to establish the existence of a
genuine issue of material fact or that the mover is not
entitled to judgment as a matter of law. LSA-C.C.P. art.
courts review evidence de novo under the same criteria that
govern the trial court's determination of whether summary
judgment is appropriate. Jones, 224 So.3d at 417.
Thus, appellate courts ask the same questions: whether there
is any genuine issue of material fact and whether the mover
is entitled to judgment as a matter of law. Id.
Because it is the applicable substantive law that determines
materiality, whether a particular fact in dispute is material
can be seen only in light of the substantive law applicable
to the case. Id.
an insurance policy provides or precludes coverage is a
dispute that can be properly resolved within the framework of
a motion for summary judgment. George S. MayM'ICo. v.
Arrowpoint Capital Corp., 11-1865 (La.App. 1 Or.
8/10/12), 97 So.3d 1167, 1171. The party seeking a
declaration of coverage under an insurance policy must
establish every fact essential to recovery and that the claim
falls within the policy coverage. Id. Generally, the
insurer's obligation to defend suits against its insured
is broader than its obligation to indemnify for damage
claims. Arceneaux v. Amstar Corp., 10-2329 (La.
7/1/11), 66 So.3d 438, 450. The issue of whether a liability
insurer has the duty to defend a civil action against its
insured is determined by application of the
"eight-corners rule, " under which an insurer must
look to the "four corners" of the plaintiffs
petition and the "four corners" of its policy to
determine whether it owes that duty. Maldonado v. Kiewit
Louisiana Co., 13-0756 (La.App. 1 Cir. 3/24/14), 146
So.3d 210, 218. The insurer's duty to defend suits
brought against its insured is determined by the factual
allegations of the injured plaintiffs petition, with the
insurer being obligated to furnish a defense unless it is
clear from the petition that the policy unambiguously
excludes coverage. See Arceneaux, 66 So.3d at 450.
Thus, assuming the factual allegations of the petition are
true, if there could be both coverage under the policy and
liability to the plaintiff, the insurer must defend the
insured regardless of the outcome of the suit. Id.
Additionally, the court must liberally interpret the factual
allegations of the petition in determining whether they bring
the plaintiff's claim within the scope of the
insurer's duty to defend the suit brought against its
insured. Maidonado, 146 So.3d at 219. If a petition
does not allege facts within the scope of coverage, however,
an insurer is not legally required to defend a suit against
its insured. Id.
review de novo the documents filed by the parties in support
of and in opposition to the AIG Insurers' motion for
summary judgment See LSA-C.C.P. arts. 966A(4) and
D(2). It is undisputed that the AIG Insurers
provided insurance coverage to Texas United Corporation under
policies effective from March 1, 1991 through March 1, 1995
and from March 1, 1996 through March 1, 2009 (the pre-2012
AIG policies). The AIG Insurers filed pertinent excerpts from