Carnes Funeral Home, Inc. v. Allstate Ins. Co.
| Decision Date | 23 December 2020 |
| Docket Number | Civil Action H-20-780 |
| Citation | 509 F.Supp.3d 908 |
| Parties | CARNES FUNERAL HOME, INC., Plaintiff, v. ALLSTATE INSURANCE COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Texas |
Alexander N. Beard, Haley Adele Heinrich, Saunders, Walsh & Beard, McKinney, TX, for Plaintiff.
Roy L. Stacy, David G. Allen, Pamela Jean Touchstone, Stacy Conder Allen LLP, Dallas, TX, for Defendant.
Pending before the court are the following motions: (1) a motion for summary judgment filed by plaintiff Carnes Funeral Home, Inc. ("Carnes") (Dkt. 11); (2) a motion for leave to file an amended answer and counterclaim filed by defendant Allstate Insurance Company ("Allstate") (Dkt. 12); and (3) a motion for summary judgment filed by Allstate (Dkt. 16). Having considered the motions, responses, supplements to the motions for summary judgment (Dkts. 20–21), replies, and the applicable law, the court is of the opinion that Carnes's motion for summary judgment (Dkt. 11) should be GRANTED; Allstate's motion for summary judgment (Dkt. 16) should be GRANTED IN PART AND DENIED IN PART; and (3) Allstate's motion to amend (Dkt. 12) should be GRANTED AS UNOPPOSED IN PART AND DENIED PART.
This case is about whether a funeral home's insurer has a duty to defend and indemnify it in a state-court case relating to the funeral home's alleged negligence. Carnes purchased a Commercial General Liability Policy with a Funeral Directors Liability Coverage Endorsement (the "Policy") from Allstate. Dkt. 1. The term of coverage was July 24, 2017, through July 24, 2018. Id. The plaintiff in the underlying lawsuit filed its claim against Carnes in the 80th Judicial District Court of Harris County, Texas, and Carnes requested that Allstate provide for its defense under the Policy. Id. Allstate agreed to defend Carnes but reserved its rights to withdraw the defense. Dkt. 11, Ex. C.
Carnes filed this lawsuit on March 4, 2020, seeking a declaratory judgment that Allstate has a duty to defend Carnes in the underlying lawsuit under the Policy. Dkt. 1. Allstate filed an answer, and it now seeks to file an amended answer that includes a counterclaim. Dkts. 5, 12. The parties have also filed cross motions for summary judgment. Dkts. 11, 16.
On January 15, 2018, Laura Lee Jones (the "Decedent") passed away. Dkt. 20, Ex. A (second amended petition in Parras v. Carnes , No. 2019-67238 (Oct. 12, 2020)). Kristin Parras, who is the plaintiff in the underlying lawsuit, is the Decedent's daughter. Id. Parras contacted Carnes to transport her mother's body from Harris County Institute of Forensic Sciences ("HCIFS") to the funeral home to be cremated. Id. Parras contends that "removal"—the term used for picking up and transporting a body in the funeral industry—is a professional service offered by Carnes. Id.
On January 19, 2018, Carnes sent two licensed funeral directors to HCIFS, and they placed the Decedent in a special vehicle—a "removal vehicle"—that is allegedly designed with multiple roll up doors on each side and removable trays and tables for loading bodies. Id. Carnes was picking up eight bodies at HCIFS, including the Decedent. According to the underlying petition, when Carnes was traveling back to the funeral home, it "carelessly allowed the body of Ms. Jones to fall out of the vehicle on Old Spanish Trail in Houston, Texas" and Carnes "failed to realize the body of Ms. Jones left the vehicle and continued on leaving the body behind." Id. This allegedly happened because the licensed funeral home directors failed to use a checklist when placing the Decedent in the removal vehicle and thus did not notice that they failed to set the "stop" on the gurney and did not close the roll up door. Id. The Decedent was found in a ditch on the side of the road by good Samaritans. Id. The good Samaritans contacted authorities, who eventually notified Carnes, which retrieved the body. Id. According to Parras, the Executive Director of Carnes said that it appeared " ‘a door was not properly secured, which allowed the decedent to come out ....’ " Id.
Parras filed a lawsuit against Carnes in state court, asserting claims for violations of the Texas Deceptive Trade Practices Act ("DTPA") and negligence. Id. Among other things, she contends that Carnes failed to train its employees, failed to inspect the vehicle, failed to follow the transportation checklist and its own policies and procedures, and failed to properly supervise the removal of the Decedent. Id. She asserts that, as a result, she has suffered mental anguish and will suffer additional mental anguish in the future. Id. She has amended her state-court petition two times.
The court turns now to the instant lawsuit, which relates to whether Allstate must defend Carnes against Parras's claims in the underlying lawsuit. Allstate filed its answer on March 17, 2020. Dkt. 5. On September 4, 2020, it filed an opposed motion to amend its answer so that it could add a counterclaim. Dkt. 12. Carnes's complaint seeks a declaratory judgment that Allstate has a duty to defend, and Allstate seeks to add a counterclaim requesting a declaration that not only does it not have a duty to defend, it does not have a duty to indemnify. Id.
Carnes is not opposed to Allstate filing an amended answer, but it is opposed to allowing Allstate to add a counterclaim for a declaratory judgment relating to indemnity. Dkt. 14. Carnes asserts that Allstate already agreed that the only issue in this case is the duty to defend, the duty to indemnify is not justiciable at this time, and the new proposed counterclaim for a declaration on the duty to indemnify will unduly prejudice Carnes in connection with its motion for summary judgment on the duty to defend issue. Id.
Allstate replies that it seeks resolution of both issues for judicial economy purposes because there is no duty to indemnify for the same exact reasons there is no duty to defend. Dkt. 15. It asserts that while generally the duty to indemnify cannot be adjudicated until there is a judgment in the underlying lawsuit, there is an exception when the court can determine whether there is a duty to indemnify based only on the pleadings in the underlying lawsuit and it is precluded for the same reason the duty to defend is precluded. Id. Allstate asserts that this exception applies here.
Whether the court allows the counterclaim on the duty to indemnify will depend on the outcome of the motions for summary judgment. If the court determines there is a duty to defend, the exception will not apply, and the parties agree that it would be premature to consider the indemnification issue.
Carnes requests that the court enter summary judgment in its favor and declare that Allstate has a duty to defend it in the underlying case. Dkt. 11. Carnes contends that the Funeral Directors Liability Coverage Form provides coverage. Id. Carnes asserts that because Parras seeks damages for "mental anguish" in the underlying lawsuit, and the anguish allegedly arose out of Carnes's "wrongful act" during the policy period when Carnes was rendering professional services as a funeral director, the duty to defend is triggered. Id. It notes that neither "professional services" nor "arising out of" is defined in the Policy, but that if one considers these phrases under their ordinarily and commonly understood meaning, this suit sits squarely within the scope of coverage provided by the Policy. Id. It asserts that "there can ... be no doubt that Parras alleges that Carnes's acts, errors and/or omissions were in the rendition of professional services as a funeral home director ." Id.
Allstate opposes Carnes's motion and separately moves for summary judgment in its favor and a declaration that there is no duty to defend or indemnify. Dkt. 16. It argues that coverage is precluded because neither the Commercial General Liability Coverage Form, which Carnes does not mention in its complaint, nor the Funeral Directors Liability Coverage Form applies. Id. With regard to the Commercial Liability Coverage Form, Allstate argues that the allegations in the underlying lawsuit do not involve "bodily injury" or "property damage" as defined in the Commercial Liability Coverage Form portion of the Policy, and even if the Policy did cover these types of claims, they are barred by the "Auto" exclusion in the Commercial Liability Coverage Form portion of the Policy. Id.
With regard to the Funeral Directors Liability Coverage Form, Allstate notes that the Policy covers negligent acts, errors, or omissions "in the rendering of professional services as a funeral director or embalmer," which it contends means that "the negligent conduct must actually occur in the process of a ‘professional service’ being performed." Dkt. 17. Allstate asserts that the incident described in the underlying lawsuit did not involve the "rendering of professional services as a funeral director" and the claims thus do not fall within the scope of the Policy. Id. It points out that under Texas law "professional services" are "more than ordinary tasks, and instead [the phrase] refers to activities that are particular to a specialized vocation." Id. Allstate argues that the alleged harmful conduct here, allowing the body to fall out of a moving vehicle because Carnes failed to properly secure the door, cannot be a "professional service" because it did not involve specialized knowledge, labor, or skill, and it was not a mental or intellectual activity. Id. Additionally, driving the body to the funeral home is, according to Allstate, an ordinary task and not a "professional service." Id.
Allstate argues that no set of facts that could be introduced at the trial in the underlying lawsuit would allow for coverage, and the court should therefore grant summary judgment in its favor on not only on the...
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