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Florida Gas Transmission Company, LLC v. Texas Brine Company, LLC

Court of Appeals of Louisiana, First Circuit

January 11, 2019

FLORIDA GAS TRANSMISSION COMPANY, LLC
v.
TEXAS BRINE COMPANY, LLC, ET AL.

          On Appeal from The 23rd Judicial District Court, Parish of Assumption, State of Louisiana Trial Court No. 34, 316 The Honorable Thomas J. Kliebert Jr., Judge Presiding

          Leopold Z. Sher James M. Garner Peter L. Hilbert Jr. Neal J. Kling Jeffrey D. Kessler Amanda R. Schenck New Orleans, Louisiana Robert Ryland Percy III Gonzales, Louisiana Eric J. Mayer Houston, Texas Travis J. Turner Gonzales, Louisiana Attorneys for Defendant/Appellant, Texas Brine Company, LLC

          Glen E. Mercer Kourtney T. French New Orleans, Louisiana Attorneys for Defendants/Appellees, Zurich American Insurance Company, Steadfast Insurance Company, and American Guarantee & Liability Insurance Company

          BEFORE: McDONALD, CRAIN, AND HOLDRIDGE, JJ.

          CRAIN, J.

         Texas Brine Company, LLC appeals a summary judgment dismissing the plaintiffs claims against certain liability insurers of Texas Brine. In an answer to the appeal, the insurers assert the trial court erred in denying their motion for summary judgment seeking a dismissal of Texas Brine's incidental demand against them. We affirm in part, reverse in part, and render summary judgment in favor of the insurers.

         FACTS AND PROCEDURAL HISTORY

         This is one of several lawsuits arising out of a sinkhole in Assumption Parish that developed on or about August 3, 2012, following the collapse of a salt mine cavern. Florida Gas Transmission Company sued Texas Brine, among other defendants, alleging Texas Brine's salt mining operations caused the collapse of the cavern and the resulting sinkhole, which damaged two of Florida Gas's nearby pipelines. Florida Gas also sued several liability insurers, including Zurich American Insurance Company, alleging the insurers issued policies providing coverage for Texas Brine's alleged liability. Texas Brine filed an incidental demand against Zurich, alleging it was obligated to provide Texas Brine with indemnity and a defense in the litigation.

         Citing policy language limiting coverage to damage that "occurs during the policy period," Zurich filed motions for summary judgment asserting its "pre-2012 policies," the last of which expired on March 1, 2012, do not cover Florida Gas's claims and do not require Zurich to provide a defense to Texas Brine.[1] In a judgment signed on September 13, 2017, the trial court granted summary judgment in favor of Zurich, dismissing Florida Gas's claims against Zurich with prejudice; however, the trial court denied the motion with respect to Texas Brine's claims, stating in written reasons that a genuine issue of material fact precluded summary judgment on Zurich's duty to defend. Texas Brine appealed the dismissal of Florida Gas's claims against Zurich.[2] Answering the appeal, Zurich asserts the trial court erred in denying its motion as to Texas Brine's claims.[3]

         DISCUSSION

         The arguments presented on appeal by Texas Brine and Zurich have been addressed in a related appeal decided by this circuit, Pontchartrain Natural Gas System v. Texas Brine Company, LLC, 18-0244 (La.App. 1 Cir. 10/11/18), ___ So. 3d___, which reviewed a similar motion for summary judgment filed by Zurich and argued to the same trial court at the same hearing as the present motion. In the related appeal, this court affirmed a summary judgment dismissing a different plaintiffs claims against Zurich, then reversed the trial court and rendered summary judgment in favor of Zurich dismissing Texas Brine's incidental demand against the insurer. See Pontchartrain Natural Gas System, ___ So. 3d at___.

         The present case is not materially distinguishable from Pontchartrain Natural Gas System. In support of its motion on coverage, Zurich relies on the same evidence, primarily the policy provision limiting coverage to damage that "occurs during the policy period," and Florida Gas's admissions during discovery that it is not aware of any damage to its pipelines before the sinkhole appeared.

         In opposition to the motion, Texas Brine principally relies on expert affidavits and a report, specifically focusing on one expert's opinion that "earth movement. . . could have damaged the underground pipelines earlier than March 1, 2012." (Emphasis added.) Accepting this statement as credible, which we must do for purposes of the motion, [4] the mere possibility that damage "could" have occurred during a relevant policy period does not create a genuine issue of material fact. Proof that establishes only possibility, speculation, or unsupported probability does not suffice to establish a claim. Todd v. State Through Department of Social Services, 96-3090 (La. 9/9/97), 699 So.2d 35, 43. An expert's speculation that a material fact "possibly" exists or "may have" occurred is not sufficient to create a genuine issue precluding summary judgment. See Mansoor v. Jazz Casino Co., LLC, 12-1546 (La. 9/21/12), 98 So.3d 795 (per curiam); Welborn v. Thompson Construction, 15-1217 (La.App. 1 Cir. 2/26/16), 191 So.3d 1086, 1090. The subject affidavits, as this circuit has previously held, are insufficient to create a genuine issue of material fact. See Pontchartrain Natural Gas System, ___So. 3d at___; Crosstex Energy Sevices, LP v. Texas Brine Company, LLC, 17-0895 (La.App. 1 Cir. 12/21/17), 240 So.3d 932, 937-38, writ denied, 18-0145 (La. 3/23/18), 238 So.3d 963. The trial court did not err in granting summary judgment and dismissing Florida Gas's claims against Zurich.

         Texas Brine's duty-to-defend claim differs from Pontchartrain Natural GasSystem and Crosstex Energy Services, LP only to the extent this case involves a different plaintiff and petition. Florida Gas filed its suit on June 26, 2013, less than a year after the sinkhole appeared in August of 2012. The original petition and first two amending petitions do not suggest any damages occurred before the sinkhole. In the third amending petition, filed on August 17, 2015, Florida Gas alleged "the structural integrity and operating capacity of [its] ... pipelines were compromised as a result of the ...


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