Liberty Surplus Insurance Corporation and Commerce & Industry Insurance Company v. Exxon Mobil Corporation

Affirmed and Opinion filed December 17, 2015.

In The

Fourteenth Court of Appeals

NO. 14-14-00254-CV

LIBERTY SURPLUS INSURANCE CORPORATION AND COMMERCE &
INDUSTRY INSURANCE COMPANY, Appellants

V.

EXXON MOBIL CORPORATION, Appellee

On Appeal from the 125th District Court
Harris County, Texas
Trial Court Cause No. 2011-44838A

OPINION

In this insurance-coverage dispute, the trial court granted appellee Exxon
Mobil Corporation’s traditional motion for partial summary judgment, holding that
a contractor’s primary and excess commercial general liability policies provided
additional-insured coverage to Exxon for personal-injury claims arising out of the
contractor’s services. Exxon and the insurers resolved the remaining issues by
stipulation, and the trial court rendered judgment in Exxon’s favor for its costs of
settling the personal-injury suit and in prosecuting the coverage dispute. On
appeal, the insurers argue that the underlying contract between Exxon and the
contractor, Wyatt Field Service Company, required Wyatt to provide Exxon
additional-insured coverage only for liability arising out of Wyatt’s ongoing
operations, and that the insurance policies incorporate such a coverage limitation.
The insurers further argue that summary judgment was improper because there is a
fact issue about whether the Exxon’s liability arose out of the Wyatt’s operations.
We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

Exxon and Wyatt were parties to a five-year contract under which Wyatt
would perform “Services” as set forth in various work orders from Exxon’s
affiliates. The contract also required Wyatt to maintain $5 million of commercial
general liability insurance. The parties agreed that the policies must cover Exxon
and its affiliates “as additional insureds in connection with the performance of
Services,” and must be primary to all other policies, including deductibles or self-
insured retentions.

In 2008, Wyatt was assigned to work on a flexicoker unit at Exxon’s
Baytown refinery during an intensive maintenance period known as a
“turnaround.” The flexicoker unit includes a cylindrical heating tank in which
petroleum coke accumulates, and five nozzles are attached around the tank’s
circumference. Most of the time, these are non-operational “dummy nozzles,” and
a chain attaches the dummy nozzle to the outside of the tank to prevent the nozzle
from being pulled all the way out and releasing the heated coke. Before a
turnaround, the “dummy nozzles” are replaced with “quench nozzles” to help cool
the coke, and then the dummy nozzles and chains are reinstalled. Wyatt was

2
assigned to reinstall the dummy nozzles and chains, and it completed the services
around the end of October 2008.

Three years later, one of the dummy nozzles unexpectedly pulled all the way
free from its packing, and the escaping steam and coke burned several of
contractor LWL, Inc.’s employees who were working on the unit. After the
accident, it was discovered that the safety chain had been installed in the wrong
location so that it did not properly secure the dummy nozzle.

The injured workers—David McBride, Glenn Burns, Francisco Escobedo,
and Richard Tudon—sued Exxon in the 125th District Court in Harris County.
After Exxon designated Wyatt as a responsible third party, the plaintiffs added
Wyatt as a defendant, and Exxon and Wyatt asserted cross-claims against each
other. Those cross-claims between Exxon and Wyatt were severed from the claims
of the injured workers.

Meanwhile, Exxon demanded defense and indemnity from two entities that
we will refer to collectively as “the Insurers”: Liberty Surplus Insurance
Corporation (“Liberty”), which issued Wyatt’s primary commercial general
liability insurance policy, and Commerce & Industry Insurance Company
(“Commerce”), which issued Wyatt’s excess umbrella insurance policy. The
Insurers denied that they provided Exxon additional-insured coverage for the
injured workers’ claims, and they did not contribute to Exxon’s costs of defense or
to its settlement with the injured workers. Exxon filed a separate suit against the
Insurers and Wyatt in the 215th District Court of Harris County,1 and that suit was

1
In the same action, Exxon asserted claims against another insurer and LWL, Inc., but
the additional insurer settled the claims against it, and Exxon ultimately dismissed its claims
against LWL.

3
consolidated in the 125th District Court with the cross-claims between Exxon and
Wyatt that had been severed from the personal-injury suit.

In this, the consolidated case, Exxon filed a traditional motion for partial
summary judgment concerning the Insurers’ liability, arguing that the policies
covered the injured workers’ claims against Exxon as an additional insured.
Although Liberty later filed its own traditional motion for summary judgment, the
trial court granted Exxon’s summary-judgment motion before Liberty’s motion
was heard. After the trial court ruled in Exxon’s favor on the issue of the Insurers’
liability, Exxon and Wyatt dismissed their claims against one another. Exxon and
the Insurers resolved all other matters by stipulation, and the trial court rendered
final judgment in accordance with the earlier summary-judgment ruling and the
parties’ stipulations.2 The Insurers now appeal that ruling.

II. STANDARD OF REVIEW

A movant for traditional summary judgment has the burden of showing that
there is no genuine issue of material fact and that it is entitled to judgment as a
matter of law. TEX. R. CIV. P. 166a(c); Mann Frankfort Stein & Lipp Advisors,
Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). If the movant initially
establishes a right to summary judgment on the issues expressly presented in the
motion, then the burden shifts to the nonmovant to present to the trial court any
issues or evidence that would preclude summary judgment. See City of Houston v.
Clear Creek Basin Auth., 589 S.W.2d 671, 678–79 (Tex. 1979). We review a
summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott, 128

2
The parties stipulated to the amount of Exxon’s necessary fees and expenses in
prosecuting this case; to the amount of Exxon’s damages; to the amount and allocation of
liability and settlement credit; to the date on which prejudgment interest began to accrue; and to
the maximum amount of reasonable and necessary attorneys’ fees to be paid in connection with
appeals.

4
S.W.3d 211, 215 (Tex. 2003). When reviewing a traditional summary judgment,
we consider all the evidence in the light most favorable to the nonmovant,
crediting evidence favorable to the nonmovant if a reasonable factfinder could, and
disregarding contrary evidence unless a reasonable factfinder could not. See Mack
Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006).

III. CONSTRUCTION OF THE POLICIES’ ENDORSEMENTS

In their first issue, the Insurers argue that the trial court erred in granting
Exxon’s motion for summary judgment because Exxon was an additional insured
only for liability arising from Wyatt’s ongoing operations, not for liability arising
from Wyatt’s completed operations.3 This argument depends for its success on
whether the Insurers are correct in asserting that one particular additional-insured
policy endorsement is the only such endorsement that applies to Exxon. Because
the parties’ dispute turns on the proper construction of the insurance policy, we
begin our review by setting out the pertinent rules of construction that govern our
analysis.

A. Rules of Construction

An insurance policy generally is governed by the same rules of construction
that apply to other contracts. RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113,
118 (Tex. 2015). As with any written contract, our primary concern is to identify
the parties’ intentions as expressed in the document. See J.M. Davidson, Inc. v.
Webster, 128 S.W.3d 223, 229 (Tex. 2003). We accordingly begin our analysis
with the policy’s language. See JAW The Pointe, L.L.C. v. Lexington Ins. Co., 460
S.W.3d 597, 602 (Tex. 2015) (“In determining a question of insurance coverage,
3
Liberty additionally argues that, for the same reasons, the trial court erred in denying
Liberty’s summary-judgment motion. The record shows, however, that the trial court granted
summary judgment in favor of Exxon not only before Liberty’s motion was heard, but before
Exxon had responded to the motion.

5
we look first to ‘the language of the policy because we presume parties intend what
the words of their contract say.’” (quoting Gilbert Tex. Constr., L.P. v.
Underwriters at Lloyd’s London, 327 S.W.3d 118, 126 (Tex. 2010) (sub. op.))).
We strive to harmonize the entire agreement, giving effect to all of the policy’s
words and provisions so that none are rendered meaningless. Id.at 603.

Next, we “consider the terms of an underlying contract to the extent the
policy language directs us to do so.” In re Deepwater Horizon, 470 S.W.3d 452,
464 (Tex. 2015) (citing Urrutia v. Decker, 992 S.W.2d 440, 442 (Tex. 1999)).
“Unless obligated to do so by the terms of the policy, however, we do not consider
coverage limitations in underlying transactional documents.” Id. at 460. If the
policy does not incorporate any coverage limitations from the underlying contract,
then “the insurer’s obligation depended on what it contracted to do, not what the
insured contracted with another person to do.” Id. at 461.

If the parties offer differing constructions of the policy but only one is
reasonable, then the policy is unambiguous and we will adopt that construction.
See RSUI Indem. Co., 466 S.W.3d at 118. But if the policy’s provisions are
unclear or inconsistent, and after applying the pertinent rules of construction, more
than one interpretation is reasonable, then the contract is ambiguous. See, e.g.,
J.M. Davidson, Inc., 128 S.W.3d at 229 (addressing contracts generally); Gonzalez
v. Mission Am. Ins. Co., 795 S.W.2d 734, 737 (Tex. 1990) (specifically addressing
insurance policies). An ambiguous contract is construed against the drafter.
Gonzalez, 795 S.W.2d at 737. Thus, an ambiguous policy is construed against the
insurer and in favor of coverage. See, e.g., id.; see also RSUI Indem. Co., 466
S.W.3d at 118. Whether a contract is ambiguous is a question of law for the court
to decide; the parties’ mere disagreement about the contract’s meaning does not
create an ambiguity. See In re Deepwater Horizon, 470 S.W.3d at 464.

6
B. Endorsement 3, Covering Both Ongoing and Completed Operations

Liberty’s policy includes three endorsements that potentially make Exxon an
additional insured. Commerce’s policy insures any person or entity that is
included as an additional insured under Liberty’s policy, “but not for broader
coverage than would be afforded” by Liberty’s policy. In effect, then, the three
endorsements apply to both policies.

We will begin our review with Endorsement 3, because it is the first of the
policy endorsements on which Exxon relied in its summary-judgment motion. The
text of that endorsement is as follows:

ENDORSEMENT NO. 3

WHO IS AN INSURED (Section II) is amended to include as an
insured any person or organization with whom you have agreed to add
as an additional insured by written contract but only with respect to
liability arising out of your operations or premises owned by you.
Thus, our first question is whether there is a written contract in which Wyatt
agreed to add Exxon to Wyatt’s insurance policies as an additional insured.

1. The policy directs us to the underlying contract to determine who
is an additional insured.
The answer to this question is not disputed: in the underlying written
contract, the parties agreed that Wyatt would maintain $5 million of commercial
general liability insurance that must “cover [Exxon] and its Affiliates as additional
insureds in connection with [Wyatt’s] performance of Services.” The parties
therefore agree that Exxon is an additional insured in some circumstances.

2. The policy does not direct us to the underlying contract to
determine the scope of coverage.
Next, we must determine whether the endorsement incorporates any
coverage restrictions that may be found in the underlying contract. “[W]e
7
determine the scope of coverage from the language employed in the insurance
policy, and if the policy directs us elsewhere, we will refer to an incorporated
document to the extent required by the policy.” See In re Deepwater Horizon, 470
S.W.3d at 460 (emphasis added). The endorsement directs us to look to Wyatt’s
contract to determine who is an additional insured—that is, whether the one
claiming coverage is a “person or organization with whom you [Wyatt] have
agreed to add as an additional insured by written contract”—but it does not direct
us to the contract to determine the scope of coverage. See id. (“Unless obligated to
do so by the terms of the policy, however, we do not consider coverage limitations
in underlying transactional documents.”). The endorsement instead provides its
own coverage limitation by specifying that the who-is-an-insured section of the
policy is amended to add organizations such as Exxon as additional insureds, “but
only with respect to liability arising out of your [Wyatt’s] operations.”

The Insurers argue that because the policy requires us to look at the
underlying written contract to determine who is an insured, we must also refer to
the contract’s terms to determine the scope of the insurance coverage. We agree
that an insurance policy may limit additional-insured coverage to the coverage
required by an underlying contract, but we disagree that by referring to an
underlying contract, the policy necessarily incorporates all of the contract’s terms.
See id. at 461. The policy instead must clearly manifest the intent to include the
extrinsic document as part of the policy. See id. at 460; see also Urrutia, 992
S.W.2d at 442 (“Texas law has long provided that a separate contract can be
incorporated into an insurance policy by an explicit reference clearly indicating the
parties’ intention to include that contract as part of their agreement.”). A few case
comparisons serve to illustrate the difference between policy language that

8
incorporates an underlying contract’s limitations on coverage and policy language
that does not do so.

Urrutia provides a simple example of policy language linking the scope of
coverage to the terms of an underlying contract. In that case, Penske Truck
Leasing Company’s commercial business auto policy contained an endorsement
that amended the definition of “insured” to include “[b]oth lessees and rentees of
covered autos as insureds, but only to the extent and for the limits of liability
agreed to under contractual agreement with the named insured.” Urrutia, 992
S.W.2d at 441. This language clearly manifested the intention to include the rental
agreements as part of the policy, “allow[ing] Penske to determine in the rental
contracts themselves which customers would be insured and the amount of their
respective coverage.” Id. at 443.

In re Deepwater Horizon contains a more complex example of policy
language in which the scope of coverage is determined by the underlying
contract’s coverage limitations. In that case, the policies extended “Insured” status
to “[a]ny person or entity to whom the ‘Insured’ is obliged by oral or written
‘Insured Contract’ . . . to provide insurance such as afforded by [the] Policy.” In re
Deepwater Horizon, 470 S.W.3d at 457. The policy defined an “Insured Contract”
as “any written or oral contract or agreement entered into by the ‘Insured’ . . . and
pertaining to business under which the ‘Insured’ assumes the tort liability of
another party to pay for ‘Bodily Injury’ [or] ‘Property Damage’ . . . to a ‘Third
Party’ or organization.” Id. at 457–58. The Texas Supreme Court explained that
“under the express terms of the policies, additional-insured status hinges on (1) the
existence of an oral or written contract, (2) pertaining to the business of an
‘Insured’, and (3) under which an ‘Insured’ assumes the tort-liability of another
party and is ‘obliged’ to provide insurance to such other party.” Id. at 458. The

9
policies further provided that “where required by written contract, bid or work
order, additional insureds are automatically included hereunder . . . .” Id. The
underlying contract required BP to be named as an additional insured on
Transocean’s policies “except . . . for liabilities assumed by [Transocean] under the
terms of this contract.” Id. at 465. Focusing on the policies’ use of the terms
“obliged” and “where required,” as well as on the use of the defined term “Insured
Contract,” see id. at 464, the court concluded that the policies linked BP’s status as
an insured to the extent of Transocean’s contractual indemnity obligations. Id. at
465.

A counter-example is found in Evanston Insurance Company v. ATOFINA
Petrochemicals, Inc., in which the Texas Supreme Court determined that the
relevant policy language did not incorporate coverage limitations from the
underlying contract. See 256 S.W.3d 660 (Tex. 2008) (op. on reh’g). In that case,
ATOFINA and Triple S Industrial Corporation were parties to a service contract in
which Triple S agreed to indemnify ATOFINA for personal-injury and property
claims sustained during the performance of Triple S’s work, except to the extent
that the loss was attributable to ATOFINA’s sole or concurrent negligence,
misconduct, or strict liability. Id. at 662. Triple S agreed to carry both primary
comprehensive general liability insurance and an umbrella liability policy that
“[i]nclud[ed] coverage for contractual liability insuring the indemnity agreement.”
Id. at 662–63. Section III.B.5 of the policy defined an “insured” to include “[a]
person or organization for whom you [Triple S] have agreed to provide insurance
as is afforded by this policy; but that person or organization is an insured only with
respect to operations performed by you or on your behalf, or facilities owned or
used by you.” Id. at 664. Although the policy referred the reader to an underlying
agreement to identify who is an insured, the court determined that this language

10
did not incorporate the underlying contract’s limitations to the scope of coverage.
See id. (“Instead of looking, as the court of appeals did, to the indemnity
agreement in the service contract to determine the scope of any coverage, we base
our decision on the terms of the umbrella insurance policy itself.”).

A further example is found in this court’s decision in Pasadena Refining
System, Inc. v. McCraven, Nos. 14-10-00837-CV & 14-10-00860-CV, 2012 WL
1693697 (Tex. App.—Houston [14th Dist.] May 15, 2015, pet. dism’d by agr.)
(mem. op.). There, the underlying contract provided that Pasadena Refining was to
be added as an additional insured to Austin Industrial Services’ policy, but (a) only
in the minimum amount required by contract, (b) only with respect to liability
arising out of work done by or on behalf of Austin, and (c) only to the extent that
the contract required Austin to indemnify Pasadena Refining Id. at *14. We
concluded that, under the unambiguous language of the additional-insured
endorsement, see id. at *14–15, Austin’s policy incorporated the underlying
contract’s limitation on the amount of coverage, but neither limited coverage to
Austin’s contractual indemnity obligation nor incorporated that provision from the
contract. See id. at *16.

A comparison of the language of Endorsement 3 with the policy language in
these four cases illustrates that the endorsement does not incorporate coverage
limitations from the underlying contract. It instead “include[s] as an insured any
person or organization with whom [Wyatt] ha[s] agreed to add as an additional
insured by written contract but only with respect to liability arising out of
[Wyatt’s] operations or premises owned by [Wyatt].” (emphasis added). Thus, it
refers the reader to the written contract when identifying who is an insured, but not
when limiting the circumstances under which such a person or organization is
considered to be an insured. Because we do not consider the underlying contract’s

11
coverage limitations “[u]nless obligated to do so,”4 we do not consider any such
coverage limitations from the underlying contract in connection with Endorsement
3.5

Under the unambiguous language of Endorsement 3, Exxon is an additional
insured with respect to liability arising out of Wyatt’s operations. It therefore is
unnecessary for us to consider the coverage available under the remaining, more
restrictive endorsements.

4
See In re Deepwater Horizon, 470 S.W.3d at 460.
5
Even if the policy did incorporate the insurance provision of the underlying contract—
and it does not—the Insurers still would not prevail. They contend that the only applicable
endorsement is Endorsement 7, which applies only to claims arising out of Wyatt’s ongoing
operations. Their argument focuses on the contract provision requiring Wyatt to provide
insurance to “cover [Exxon and its affiliates] as additional insureds in connection with [Wyatt’s]
performance of Services.” Commerce asserts that the insurance provision must refer to ongoing
operations because performance “is an active verb.” Liberty argues that performance restricts
the meaning of Services, or alternatively, that it renders the insurance provision of the service
contract ambiguous, and so must be construed against Exxon as the contract’s drafter.
Both are mistaken. “Performance” is a noun, and can be used to refer to a future
performance, an ongoing performance, or a past performance. See 2 THE COMPACT EDITION OF
THE OXFORD ENGLISH DICTIONARY 2132 (1971) (defining “performance” as, inter alia, “[t]he
carrying out of a command, duty, purpose, promise, etc.; execution, discharge, fulfilment” and as
“[s]omething performed or done; an action, act, deed, operation”). Here, it was used without any
temporal limitation. The inclusion of the word “performance” does not make the contract
ambiguous, because contracts generally do involve an “agreed exchange of performances.” See,
e.g., Williams v. Glash, 789 S.W.2d 261, 263–64 (Tex. 1990) (quoting RESTATEMENT (SECOND)
OF CONTRACTS § 152 (1981)). And—not surprisingly—this contract refers both to “performance
of Purchaser’s obligations” by the Exxon affiliate that places a work order with Wyatt, and to the
“performance of Services” by Wyatt.
Finally, even if we agreed both that the policy incorporated the underlying contract, and
that the contract required coverage for ongoing operations, Endorsement 3 would still apply.
Endorsement 3 covers claims arising from both ongoing and completed operations; Endorsement
7 limits coverage to claims arising from ongoing operations, but not completed operations. The
endorsements “contain disparate limiting language in their definitions of ‘insured’”; thus, “each
who-is-an-insured clause operates to grant coverage independently.” See ATOFINA, 256 S.W.3d
at 668. We therefore would be required to apply the endorsement that is most favorable to the
insured. See, e.g., id. at 668–69; Gonzalez, 795 S.W.2d at 737; RSUI Indem. Co., 466 S.W.3d at
118. Here, that is Endorsement 3.

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 IV. NO GENUINE ISSUES OF MATERIAL FACT

In their second issue, the Insurers contend that the trial court erred in
granting summary judgment because there is a genuine issue of material fact about
whether the injured workers’ claims fall within the coverage afforded to Exxon
“with respect to liability arising out of [Wyatt’s] operations. Both Insurers make
the legal argument that Exxon cannot conclusively establish that claims against it
fall within the scope of coverage unless and until Wyatt is found to be liable to the
injured workers.6 In a variation on this argument, Commerce argues that Exxon
did not establish that the claims against it arose out of Wyatt’s operations, because
in the injured workers’ personal-injury suit against Wyatt, the jury found that
Wyatt was not negligent and that Exxon was solely responsible for the workers’
damages. Finally, Commerce makes the broader evidentiary argument that Exxon
failed to meet its burden to establish that its liability arose out of Wyatt’s work or
operations.

A. Coverage is Neither Dependent on a Finding that Wyatt’s Negligence
Caused the Accident Nor Excluded by a Finding that Exxon’s
Negligence was the Sole Cause of the Accident.
In arguing that coverage is dependent on a finding that Wyatt caused the
accident and is excluded if Exxon was found to be the sole cause of the accident,
the Insurers rely on the procedural posture of the workers’ separate personal-injury
suit. After the injured workers settled with Exxon, they tried their claims against
Wyatt. Although a jury found that Wyatt was not negligent and that Exxon was
solely responsible for the workers’ injuries, the trial court granted the workers’
motion for a new trial. Wyatt challenged that ruling through a petition for writ of
6
This argument is inapplicable to Liberty’s duty to defend Exxon. See King v. Dall. Fire
Ins. Co., 85 S.W.3d 185, 187 (Tex. 2002) (“The duty to defend and the duty to indemnify are
distinct and separate duties. An insurer’s duty to defend is determined solely by the allegations
in the pleadings and the language of the insurance policy.”) (footnotes omitted).

13
mandamus filed in this court. See In re Wyatt Field Serv. Co., No. 14-13-00811-
CV, 2013 WL 6506749 (Tex. App.—Houston [14th Dist.] Dec. 10, 2013, orig.
proceeding) (per curiam) (mem. op.). While that proceeding was pending, the
Insurers argued unsuccessfully in the trial court that summary judgment was
premature because the workers’ claims against Wyatt had not yet been retried.
Although we denied Wyatt’s first petition for failure to include a complete
reporter’s record, see id. at *3–4, Wyatt filed a second petition for writ of
mandamus while the appeal in this case was pending. See In re Wyatt Field Serv.
Co., 454 S.W.3d 145, 148 (Tex. App.—Houston [14th Dist.] 2014, orig.
proceeding [mand. pending]). The workers’ claims were not retried, because we
conditionally granted Wyatt’s petition for writ of mandamus to set aside the order
for a new trial. Id. at 163.

Whether or not the case is retried is immaterial to this coverage issue.
Although the Insurers assume that the existence of coverage depends on whether
Wyatt was negligent, the same argument about similar policy language was
considered and rejected by the Texas Supreme Court in ATOFINA. In that case, a
contractor performed services at ATOFINA’s refinery. See ATOFINA, 256
S.W.3d at 663. One of the contractor’s employees drowned while working at the
refinery, and ATOFINA demanded coverage under the contractor’s policy. Id.
Under the pertinent policy language, ATOFINA was “an insured only with respect
to operations performed by [the contractor].” See id. at 664. The insurer argued
that the death was caused solely by ATOFINA’s negligence, and thus, the
occurrence “did not ‘respect . . . operations performed by [the contractor].” Id.

In evaluating that argument, the Texas Supreme Court examined the case of
Granite Construction Co. v. Bituminous Insurance Cos., in which the Seventh
Court of Appeals construed a policy that provided additional-insured coverage

14
“only with respect to liability arising out of operations performed for such
insured”—language that is virtually indistinguishable from the relevant language in
this case. See id. at 664 (quoting Granite Constr. Co. v. Bituminous Ins. Cos., 832
S.W.2d 427, 428 (Tex. App.—Amarillo 1992, no writ)). The Texas Supreme
Court explained that “Granite adopted a fault-based interpretation of ‘arising out of
operations,’ recognizing coverage only if an insured’s wrongful act during the
operation caused the injury.” Id.

The Texas Supreme Court rejected that argument, explaining as follows:

[R]egardless of the underlying service agreement’s terms, we do not
follow Granite because the fault-based interpretation of this kind of
additional insured endorsement no longer prevails. Instead, we
interpret “with respect to operations” under a broader theory of
causation. Generally, an event “respects” operations if there exists “a
causal connection or relation” between the event and the operations;
we do not require proximate cause or legal causation. . . . The
particular attribution of fault between insured and additional insured
does not change the outcome.
Id. at 666 (footnotes omitted, emphasis added).

As Commerce correctly points out, the existence of a duty to indemnify
often depends on the resolution of disputed facts. See, e.g., Utica Nat’l Ins. Co. of
Tex. v. Am. Indem. Co., 141 S.W.3d 198, 204–05 (Tex. 2004) (sub. op.); Farmers
Tex. Cnty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81, 84 (Tex. 1997) (per curiam).
But that is not so in every case. See D.R. Horton-Tex., Ltd. v. Markel Int’l Ins. Co.,
300 S.W.3d 740, 745 (Tex. 2009) (“Where disputed facts are proven in the liability
case, whether none, some, or most of the material coverage facts will have been
established in that underlying suit depends on the circumstances of the case and
other legal and equitable principles.”). Under the terms of the policies here,
Exxon’s additional-insured coverage was neither dependent on a finding that
Wyatt was negligent nor excluded if Exxon’s negligence were found to be the sole
15
proximate cause of the workers’ injuries. Exxon was an additional insured “with
respect to liability arising out of [Wyatt’s] operations,” and for the reasons
discussed in ATOFINA, this language does not require proximate cause or legal
causation.

The outcome of the injured workers’ personal-injury case therefore does not
affect the outcome of this insurance dispute, because the injured workers and
Exxon were required to prove different things. The workers sought to hold Wyatt
liable under a negligence theory of liability, which requires proof that Wyatt
proximately caused their damages. See Kroger Co. v. Elwood, 197 S.W.3d 793,
794 (Tex. 2006) (per curiam) (“To establish negligence, a party must establish a
duty, a breach of that duty, and damages proximately caused by the breach.”).
Exxon, however, was not required to prove that Wyatt proximately caused the
workers’ damages. See ATOFINA, 256 S.W.3d at 666. The jury’s negligence
findings in the underlying case accordingly do not constitute or create a genuine
issue of material fact precluding summary judgment. See Harris County v. Ochoa,
881 S.W.2d 884, 889 (Tex. App.—Houston [14th Dist.] 1994, writ denied) (“A
motion for a summary judgment cannot be defeated by the existence of an
immaterial fact issue.”).

This is not to say that evidence developed in the trial of the underlying
personal-injury action would not be important in determining whether the Insurers
had a duty to indemnify Exxon. But the parties to this case were free to use that
evidence to resolve the factual questions in their coverage dispute—and as
discussed below, Exxon did so. See D.R. Horton-Tex., Ltd., 300 S.W.3d at 741
(“In determining coverage, a matter dependent on the facts and circumstances of
the alleged injury-causing event, parties may introduce evidence during coverage
litigation to establish or refute the duty to indemnify.”) (emphasis added).

16
B. Exxon Met Its Burden to Establish that Its Liability Arose Out of
Wyatt’s Operations.
Lastly, Commerce contends that Exxon failed to establish that Wyatt
installed the dummy nozzle and the chain that would have prevented the dummy
nozzle from pulling free. We disagree.

Exxon’s summary-judgment evidence included a transcript of the trial
testimony of Robert Merryman, Exxon’s turnaround planner in 2008. Merryman
explained how work assignments from the 2008 turnaround were documented in
Exxon’s “Primavera” computer program, and he authenticated documents printed
or created from the program. He then tracked the task of reinstalling the dummy
nozzles from its initial assignment, through its reassignment to Exxon’s on-site
maintenance contractor, and its final assignment to Wyatt. He explained that the
documents showed that Wyatt’s work was complete by October 30, 2008. When
he was asked during cross-examination if he agreed with an attorney’s opinion that
a document showing the assignment to Wyatt was “not very clear,” he answered,
“No.” Finally, Merryman was asked whether, in all the documents he had
reviewed or been shown during the course of the litigation, he had seen anything to
suggest that anyone other than Wyatt had done the work. He answered, “No, sir.”

Exxon also produced the authenticated accident report of Timothy J.
McCarthy, which included photographs and diagrams of the cylindrical heating
tank of the flexicoker unit and the dummy nozzles, together with explanations of
where the chain to each nozzle should have been attached; where the chains instead
had been attached; and the amount of chain “slack” created by the incorrect
placement. These materials supported the conclusion of the accident-investigation
team that the accident would not have happened but for the incorrect placement of
the dummy nozzle’s chain.

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 In addition to this material, Exxon produced the Insurers’ denial-of-coverage
letters, in which each Insurer appeared to acknowledge that Wyatt performed the
work on the flexicoker in October 2008. In its letter, Liberty stated, “We
understand that Wyatt’s work on the Flexicoker unit was completed in October
2008,” and Commerce similarly stated, “Wyatt completed its work on the at-issue
flexicoker unit in October 2008.” Liberty went even further, stating in its
summary-judgment response that it was undisputed that “Exxon hired Wyatt to
install a valve on a flexicoker unit,” and that “three years after Wyatt installed the
valve . . . , four workers . . . were injured when the valve allegedly came loose.”

In sum, Exxon’s evidence showed that Wyatt did the work, and the Insurers
did not respond with controverting evidence. Exxon was sued because of the work
that Wyatt did. After reviewing the summary-judgment evidence in the light most
favorable to the Insurers and drawing all reasonable inferences in their favor, we
conclude that Exxon met its burden to establish that the claims against it fall within
its additional-insured coverage “with respect to liability arising out of” Wyatt’s
operations. We accordingly overrule the Insurers’ second issue.

V. CONCLUSION

Having overruled each of the issues presented, we affirm the trial court’s
judgment.

/s/ Tracy Christopher
Justice

Panel consists of Justices Christopher, Donovan, and Wise.

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