557 S.W.3d 817
Tex. App.2018Background
- Bush Construction (insured) was sued by its employee Robert Hall after a workplace injury while operating hy-rail brushcutter; Hall alleged causes of action under the Federal Employers’ Liability Act (FELA) and products-liability/negligence theories.
- Texas Mutual insured Bush under a policy with Part One (workers’ comp benefits paid) and Part Two (third-party liability), but Part Two expressly excluded bodily injury arising from work subject to the FELA.
- Texas Mutual initially defended Bush under a reservation of rights, later concluded the FELA exclusion applied based on Hall’s pleadings, and withdrew its defense; Bush then defended and settled the Hall suit and sued Texas Mutual for breach of contract and various extra-contractual and tort claims.
- The trial court granted Texas Mutual summary judgment on all claims and entered final judgment; Bush appealed.
- The court applied the eight-corners rule to determine duty to defend, examined origins of the claimed injury (not legal theories), and assessed whether any evidence supported Bush’s extra-contractual and tortious-interference claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas Mutual had a duty to defend the Hall suit | Hall’s petition also alleged a products-liability claim against Bush in a non-employer capacity, so coverage under Part Two should apply | Hall’s pleadings show the injury originated from work subject to FELA, and the Policy excludes FELA work; product-liability theory is just another legal theory, not a different origin | No duty to defend; FELA exclusion applied because the origin of injury was work subject to FELA |
| Whether Prompt Payment Act and common-law bad-faith claims survive if no coverage | Bush argued statutory/bad-faith claims could stand despite no coverage | If there is no coverage, extra-contractual claims based on failure to pay/defend are barred | Barred; extra-contractual claims fail when policy provides no coverage |
| Whether Texas Insurance Code § 541.060 claim depends on coverage | Bush contended § 541.060 claim is independent of coverage | Precedent holds such insurance-code claims cannot survive when there is no policy coverage | Barred; § 541.060 claims require underlying coverage and thus fail here |
| Whether there is evidence Texas Mutual tortiously interfered with Bush’s attorney-client relationship | Bush alleged Texas Mutual directed litigation and impeded communication between Bush and its counsel | Texas Mutual moved for no-evidence summary judgment; Bush produced no probative evidence of interference | No evidence; tortious-interference claim fails and summary judgment proper |
Key Cases Cited
- Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) (standard of de novo review for summary judgment)
- Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co., 279 S.W.3d 650 (Tex. 2009) (adopts eight-corners rule for insurer’s duty to defend)
- Ewing Constr. Co. v. Amerisure Ins. Co., 420 S.W.3d 30 (Tex. 2013) (allocation of burdens: insured shows coverage, insurer proves exclusion, insured may show exception)
- Evanston Ins. Co. v. Legacy of Life, Inc., 370 S.W.3d 377 (Tex. 2012) (if one claim potentially covered, insurer must defend entire suit)
- USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479 (Tex. 2018) (extra-contractual insurance claims require underlying coverage)
- Wal-Mart Stores, Inc. v. Rodriguez, 92 S.W.3d 502 (Tex. 2002) (no-evidence summary judgment reviewed under directed verdict/legal-sufficiency standard)