Simco Enterprises, Ltd. v. James River Ins. Co.

Decision Date11 July 2008
Docket NumberCivil Action No. 1:07-CV-860.
Citation566 F.Supp.2d 555
CourtU.S. District Court — Eastern District of Texas

James E. Wimberley, McPherson Monk Hughes Bradley Wimberley & Steele, Port Arthur, TX, for Plaintiff.

Leslie Dean Pickett, James Terry Bailey, Galloway Johnson Tompkins Burr & Smith, Houston, TX, for Defendant.


MARCIA A. CRONE, District Judge.

Pending before the court is Defendant James River Insurance Company's ("James River") Motion for Summary Judgment (# 13). James River seeks summary judgment regarding Plaintiff Simco Enterprises, Ltd.'s ("Simco") action for a declaratory judgment as to the scope of coverage of an insurance policy issued to it by James River as well as Simco's claims that James River breached the insurance contract and violated the Texas Insurance Code. Having reviewed the pending motion, the submissions of the parties, the pleadings, and the applicable law, the court is of the opinion that James River is entitled to summary judgment.

I. Background

This action arises from a personal injury lawsuit styled Thomas E. Williams v. Entergy Gulf States, Inc., Cause No. E-0177439, filed July 31, 2006, which is currently pending in the 172nd District Court of Jefferson County, Texas. In his petition, Thomas Williams ("Williams") alleges that while working in the course and scope of his employment with Simco, a construction and maintenance services provider, he sustained electrical shock injures due to the negligence of Entergy Gulf States, Inc. ("Entergy"), one of Simco's largest customers. More specifically, Williams contends that he was changing a transformer inside an Entergy substation on May 3, 2005, when a line faulter arrested, causing a high current to travel through the grid beneath his feet. When the current was subsequently transmitted to his body, Williams purportedly suffered injuries to his left arm, left leg, neck, and nervous system. Claiming that Entergy's failure to replace the line arresters and provide proper supervision caused these alleged injuries, Williams seeks damages from Entergy for past and future medical expenses, loss of earnings and earning capacity, mental anguish, disfigurement, pain and suffering, and impairment of his ability to perform daily activities.

In September 2006, Entergy notified Simco of the Williams litigation and demanded indemnity protection. Throughout their forty-year business relationship, Simco and Entergy have executed multiple general and job-specific contracts. For the last fifteen to twenty years, in conformance with the parties' regular business practices, these contracts have contained a provision requiring Simco to indemnify Entergy from any and all claims arising out of or related to work performed by Simco, specifically including personal injury actions brought by Simco employees. Accordingly, Entergy demanded that Simco cover all costs incurred in defending against the negligence claims lodged by Williams.

Simco notified James River, its insurance provider, of Entergy's demands in late 2006 and requested coverage under Comprehensive General Liability Policy No. 00003479-1 ("the Policy"), effective for the period March 15, 2005, to March 16, 2006. On August 3, 2007, James River issued its formal response letter denying Simco's claims. Citing exclusions found in the Policy, James River's letter disclaimed any duty to defend or indemnify Simco and/or Entergy in the Williams litigation.

On September 20, 2007, Simco filed the instant suit against James River in the 172nd Judicial District Court of Jefferson County, Texas. Simco requests a declaratory judgment delineating James River's indemnity and/or defense obligations under the terms and conditions of the Policy. If coverage is found to extend to Williams's claims, Simco alleges that James River's denial of coverage constitutes a breach of contract as well as a violation of the Texas Insurance Code. James River removed the case to federal court on November 12, 2007, pursuant to 28 U.S.C. § 1446 on the basis of diversity of citizenship under 28 U.S.C. § 1332.

On March 17, 2008, James River filed the instant motion for summary judgment, arguing that the Policy unambiguously excludes coverage for injuries to Simco's own employees as well as coverage for Entergy as an additional insured under Simco's policy. Consequently, James River contends that Simco's claims for breach of contract and violation of the Texas Insurance Code fail as a matter of law. Although due over three months ago, Simco has not filed a response to James River's motion.

II. Analysis
A. Summary Judgment Standard

Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). The party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and identifying those portions of the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Warfield v. Byron, 436 F.3d 551, 557 (5th Cir.2006); Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir.2005); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Martinez v. Schlumberger, Ltd., 338 F.3d 407, 411 (5th Cir. 2003); Terrebonne Parish Sch. Bd. v. Mobil Oil Corp., 310 F.3d 870, 877 (5th Cir. 2002). Where a defendant moves for summary judgment on the basis of an affirmative defense and, thus, bears the ultimate burden of persuasion, "it must adduce evidence to support each element of its defenses and demonstrate the lack of any genuine issue of material fact with regard thereto." Rushing v. Kansas City S. Ry. Co., 185 F.3d 496, 505 (5th Cir.1999), cert. denied, 528 U.S. 1160, 120 S.Ct. 1171, 145 L.Ed.2d 1080 (2000) (citing Exxon Corp. v. Oxxford Clothes, Inc., 109 F.3d 1070, 1074 (5th Cir.), cert. denied, 522 U.S. 915, 118 S.Ct. 299, 139 L.Ed.2d 231 (1997)); see Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir.1986). To warrant judgment in its favor, the movant "`"must establish beyond peradventure all of the essential elements of the defense."'" Martin v. Alamo Cmty. Coll. Dist., 353 F.3d 409, 412 (5th Cir.2003) (emphasis in original) (quoting Chaplin v. NationsCredit Corp., 307 F.3d 368, 372 (5th Cir.2002) (quoting Fontenot, 780 F.2d at 1194)).

"A fact is `material' if it `might affect the outcome of the suit under governing law.'" Bazan ex rel. Bazan v. Hidalgo County, 246 F.3d 481, 489 (5th Cir.2001) (emphasis in original) (quoting Anderson, 477 U.S. at 248,106 S.Ct. 2505); accord Cooper Tire & Rubber Co. v. Farese, 423 F.3d 446, 454 (5th Cir.2005); Harken Exploration Co. v. Sphere Drake Ins. PLC, 261 F.3d 466, 471 (5th Cir.2001). "Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. "An issue is 'genuine' if it is real and substantial, as opposed to merely formal, pretended, or a sham." Bazan, 246 F.3d at 489 (emphasis in original). Thus, a genuine issue of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505; accord EMCASCO Ins. Co. v. American Int'l Specialty Lines Ins. Co., 438 F.3d 519, 523 (5th Cir.2006); Cooper Tire & Rubber Co., 423 F.3d at 454; Harken Exploration Co., 261 F.3d at 471. The moving party, however, need not negate the elements of the nonmovant's case. See Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir.2005); Wallace v. Texas Tech Univ., 80 F.3d 1042, 1047 (5th Cir.1996) (citing Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994)).

Once a proper motion has been made, the norimoving party may not rest upon mere allegations or denials in the pleadings but must present affirmative evidence, setting forth specific facts, to show the existence of a genuine issue for trial. Celotex Corp., 477 U.S. at 322 n. 3, 106 S.Ct. 2548 (quoting FED. R. CIV. P. 56(e)); Anderson, 477 U.S. at 256, 106 S.Ct. 2505; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 n. 11, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); ECASCO Ins. Co., 438 F.3d at 523; Smith ex rel. Estate of Smith v. United States, 391 F.3d 621, 625 (5th Cir.2004); Malacara v. Garber, 353 F.3d 393, 404 (5th Cir.2003). "[T]he court must review the record `taken as a whole.'" Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) (quoting Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. 1348); see Riverwood Int'l Corp. v. Employers Ins. of Wausau, 420 F.3d 378, 382 (5th Cir.2005). All the evidence must be construed "in the light most favorable to the non-moving party without weighing the evidence, assessing its probative value, or resolving any factual disputes." Williams v. Time Warner Operation, Inc., 98 F.3d 179, 181 (5th Cir.1996); see Reeves, 530 U.S. at 150, 120 S.Ct. 2097; Lincoln Gen. Ins. Co., 401 F.3d at 350; Smith, 391 F.3d at 624; Malacara, 353 F.3d at 398; Brown v. City of Houston, 337 F.3d 539, 541 (5th Cir.2003); Hdrken Exploration Co., 261 F.3d at 471. The evidence of the nonmovant is to be believed, with all justifiable inferences drawn and all reasonable doubts resolved in its favor. Palmer v. BRG of Go., Inc., 498 U.S. 46, 49 n. 5, 111 S.Ct. 401, 112 L.Ed.2d 349 (1990) (citing Anderson, 477 U.S. at 255, 106 S.Ct. 2505); Shields v. Twiss, 389 F.3d 142, 150 (5th Cir.2004); Martin, 353 F.3d at 412; Ma...

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