642 S.W.3d 551
Tex.2022Background
- Skanska (general contractor) ran a contractor-controlled insurance program (CCIP) providing workers’ compensation and CGL coverage; Skanska excluded certain equipment vendors from CCIP.
- Berkel (subcontractor) leased a crane from Maxim and agreed in the Equipment Lease to name Maxim as an additional insured on Berkel’s CGL policy; both parties also had separate CGL policies issued by Zurich.
- A Berkel employee operating Maxim’s crane injured Skanska employee Tyler Lee; Lee received workers’ compensation benefits under Skanska’s CCIP and sued Berkel and Maxim; a jury apportioned 90% fault to Berkel and 10% to Maxim.
- Maxim settled with the Lees and sought indemnity/coverage from Berkel’s insurer Zurich as an additional insured; Zurich refused coverage invoking the Texas Anti‑Indemnity Act (TAIA).
- The Texas courts (and the court of appeals) treated Lee as a statutory co‑employee of Berkel for TWCA purposes, giving Berkel an exclusive‑remedy defense; the federal district court later granted summary judgment for Zurich on Maxim’s coverage claim, and the Fifth Circuit certified whether TWCA co‑employee status satisfies the TAIA employee exception.
- The Texas Supreme Court answered the certified question: no—TAIA’s employee exception uses the ordinary meaning of “employee,” and TWCA deeming for workers’ compensation does not convert a third‑party worker into an indemnitor’s employee for TAIA purposes.
Issues
| Issue | Maxim's Argument | Zurich's Argument | Held |
|---|---|---|---|
| Whether TAIA §151.103’s "employee" includes a worker deemed a co‑employee of the indemnitor under the TWCA | TWCA’s statutory deeming should define “employee” for TAIA §151.103, so the additional‑insured coverage is enforceable | TAIA’s employee exception uses the ordinary meaning; TWCA §406.123(e) applies only to workers’‑comp law and cannot be imported into TAIA | No — "employee" in §151.103 bears its common meaning; TWCA statutory co‑employee status does not trigger the TAIA exception |
| Whether importing TWCA definitions is required by statutory context or to avoid absurd results | Expanding "employee" prevents unfairness (e.g., equipment vendors should not bear sole tort liability when others are protected by TWCA) | Legislature separated the schemes; TAIA expressly preserves workers’‑comp protections and gives no basis to import TWCA definitions | Rejected — policy/fortuity arguments do not create an absurdity that changes the plain statutory text |
Key Cases Cited
- Tex. Dep’t of Transp. v. Needham, 82 S.W.3d 314 (statutory construction principles)
- Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644 (use plain statutory text to discern intent)
- In re Estate of Nash, 220 S.W.3d 914 (apply common meaning when statute unambiguous)
- Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433 (TWCA statutory‑employer doctrine explained)
- HCBeck, Ltd. v. Rice, 284 S.W.3d 349 (deemed employer entitles party to exclusive‑remedy defense)
- TIC Energy & Chem., Inc. v. Martin, 498 S.W.3d 68 (TWCA defines terms differently by context)
- Cadena Comercial USA Corp. v. TABC, 518 S.W.3d 318 (context must supply alternative definition to displace ordinary meaning)
- Berkel & Co. Contractors, Inc. v. Lee, 543 S.W.3d 288 (court of appeals: TWCA exclusive‑remedy analysis in underlying tort case)