Motion for Summary Judgment in A Better Communications Group, Inc. and MasTec North America, Inc. vs Advanced Cellular Solutions, LLC and StarStone National Insurance Company| Trellis.Law

On April 08, 2020 a Motion,Ex Parte was filed involving a dispute between A Better Communications Group, Inc., Mastec North America, Inc., and Advanced Cellular Solutions, Llc, Starstone National Insurance Company, for Contract - Other Contract in the District Court of Fort Bend County.

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Filed
3/11/2022 2:25 PM
Beverley McGrew Walker
District Clerk
Fort Bend County, Texas
Erica Rodriguez
CAUSE NO. 20-DCV-272825

A BETTER COMMUNICATIONS GROUP, IN THE DISTRICT COURT
INC. and MASTEC NORTH AMERICA, INC.,
Plaintiffs,
Vv.
FORT BEND COUNTY, TEXAS
ADVANCED CELLULAR SOLUTIONS, LLC
and STARSTONE NATIONAL INSURANCE
COMPANY,
Defendants. 434TH JUDICIAL DISTRICT

A BETTER COMMUNICATION GROUP, INC. AND MASTEC
NORTH AMERICA, INC.’S MOTION FOR SUMMARY JUDGMENT

TO THE HONORABLE COURT:

Plaintiffs A Better Communications Group, Inc. (“ABC”) and MasTec North America,

Inc. (“MasTec”) file this Motion for Summary Judgment against StarStone National Insurance

Company (‘‘StarStone”) for breach of contract for failing to indemnify additional insureds ABC

and MasTec under an excess liability insurance policy issued to subcontractor Advanced Cellular

Solutions, LLC (“Advanced Cellular’). For the reasons set forth below, ABC and MasTec are

entitled to judgment as a matter of law.

I
SUMMARY OF ARGUMENT

The underlying lawsuit (the “Scott Lawsuit”)! arises out of an incident that occurred on or

about February 12, 2016, in which underlying plaintiff Wesley Scott, an employee of Advanced

Cellular, sustained serious personal injuries when he fell from a cell tower. On the date of the

incident, Scott was at the jobsite working as a cell phone tower climber for Advanced Cellular.

At approximately 5:00 pm, Scott began his descent from the tower wearing a full-body harness

1 The underlying lawsuit is styled as Cause No. 18-DCV-248954; Wesley Scott v. Capital Safety, Inc.; 3M
Company; American Tower Corporation; American Towers, LLC; American Towers, Inc.; American Tower
Management, LLC; American Tower, LP; and MasTec North America, Inc.; In the 434th Judicial District Court of
Fort Bend County, Texas.

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT — PAGE 1
and a dual lanyard with a snaphook at each end. To descend safely, Scott would remain attached

to the tower by at least one snaphoo t all times (and would have two snaphooks attached to the

tower at all times except when repositioning one of the hooks to allow him to move/descend).

Scott began his descent on the inside of the tower and had to move to the outside of the tower at

abouhe 50 foot level to avoid some equipment. Shortly after moving to the outside of the

tower, Scott slipped and fell off the tower, sustaining significant injury

Prior to the filing of th Scott awsuit, ABC entered into a written master service

gree nt with Advanced Cellular (the “MSA”) whereby Advanced Cellular agreed to provide

services upon request of ABC When the incident occurred, Scott was performing services

behalf of Advanced Cellular under the MSA Importantly, under the MSA need ellular

agreed to procure general liability and excess insurance naming ABC and MasTec as additional

insureds. Although ABC and MasTec repeatedly requested indemnity from StarStone for the

Scott Lawsuit, StarStone denied additional ins dco rage to ABC and MasTec, refused to

attend mediation, and eschewed its indemnity obligations to ABC and MasTec as additional

insureds. Given the catastrophic injuries sustained by Scott, the ScottLawsuit claims were settled

on behalf 0 ABC a MasTec for a confidential sum. The excess policy issued to Advanced

Cellular by StarStone was triggered by the payment on behalf of StarStone additional insureds,

ABC and MasTec, in settlement of the Scott Lawsuit claims. StarStone a contractual

obligation toindemnif ABC and MasTec for the ScottLawsuit settlement.

Instead, StarStone breached its policy and ignored its obligations as an insurer when it

disregarded its duty to indemnify ABC and MasTec as additional insure Notably, StarStone

erroneously reli on a n employe liability exclusion in the primary olicy due to the

StarStone policy follow form provision which states that Sta tone would provide coverage in

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accordance with the same terms, conditions, and exclusions as are contained in the primary

policy unless there are inconsistent terms, conditions, or exclusions contained in the StarStone

policy. Here, the StarStone policy contains an inconsistent employers’ liability exclusion and,

therefore, the primary policy’s employers’ liability exclusion is not the relevant exclusion.

Rather, the StarStone policy’s employers’ liability exclusion is the relevant exclusion. As

established below, the StarStone policy’s employers’ liability exclusion is inapplicable to the

claims asserted against ABC and MasTec and does not preclude StarStone’s duty to indemnify

ABC and MasTec as additional insureds. Nonetheless, StarStone selectively relied upon an

inapplicable employers’ liability exclusion and wrongfully denied coverage to ABC and MasTec.

StarStone’s claim handling in the Scott Lawsuit has been misleading and its basis for

denial ever changing, yet consistently incorrect. StarStone wrongfully refused to provide

insurance to ABC and MasTec, breaching its policy contract, and is obligated to pay damages to

ABC and MasTec in the amount of the confidential settlement, over the $1 million primary, plus

interest and attorneys’ fees.

IL.
UNDISPUTED FACTS

A. Construction Services Agreement Between ABC and MasTec

ABC entered into a Construction Services Agreement with MasTec dated December 30,

2015 (the “CSA”). See Exhibit A, the CSA, at 00003528. ABC performed services as an

independent contractor of MasTec. /d. at 00003533. Section 15 of the CSA sets forth the

insurance requirements that ABC must carry for the benefit of MasTec. Jd. at 00003540-

00003541. Specifically, ABC is required to provide general liability insurance with limits of $1

million per occurrence and $2 million in the aggregate and excess or umbrella liability insurance

with a limit of not less than $5 million for bodily injury. /d. at 00003540. The CSA provides that

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT — PAGE 3

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the general liability policies of insurance shall include MasTec as an additional insured on a

primary and non contributory basis, with respect to all ongoing work and completed operations

perfor d by [ABC] at

The Master Service Agreement Between ABC and Advanced Cellular

ABC ente ed into the MSA with Advanced Cellular on February 2, 2016 See Exhibit

the MSA, at . Exhibit A to the MSA requires Advan d Cellular to “[iJinclud ABC []
and the End Customer, its affiliates, and their directors, officers, and employees as Additioal

Insureds.” at . Specifically, Exhibit A requires commercial general liability coverage

with limits of $1 million per occurrence and $2 million n the general aggregate. . Further,

Exhibit A requires umbrella/excess coverage with limits of $10 million in the aggregate at

. Exhibit A also specifies that the commercial gene ral liability and umbrella/excess

coverage maintained by Advanced Cellular “will be primary and non contributory with respect

to any insurance or elf insurance that is maintained by ABC [] and End Customer.” The

MSA defines “End Customer” as “the entity for which ABC Group has agreed to provide

Services and [sic] for purposes of this Agreement.” at Here, the “End Customer”

sTec. Accordingly, the MSA requires Advanced Cellular to add ABC and MasTec as

additional insureds on its commercial general li ility and umbrella/excess policies.

he United Specialty Policy

United Specialty Insurance Company (“United Specialty”) iss primary policy number

USA 4098560 to Advanced Cellula for the policy period from August 3, 2015 to August 3, 2016

(the “United Specialty Policy”). See Exhib United Specialty Policy, at The

United Specialty Policy has a $1per “ccurrence” limit. . at 001304

The United Specialty olicy provides the following are included as additional insureds to

thepolic

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Section II Who Is An Insure is amended to include as an additional
insured any person or organization for whom you ar performing
operations when you and such person or organization have agreed in
writing in a contract or agreement that such perso organization be
added as an itional insured on your policy. Such person or
organization is an additional insured only ith respect to liability for
“bodily injury’ oo > «e ‘property damage” or “personal and advertising injury”
caused, in whole or inpart,

Your acts or omissions

The acts or omissions of those acting on your behalf;

in the performance of your onging operations for the additional insured.

A person s or organization s status as an additional insured under this
endorsement ends when your operations for tha ditional insured are
completed.

The United Specialty Policy also includes the ollowing severability of interests

provision:

Separation Of Insureds

Except with respect to the Limits of Insurance, and any rights or duties
specifically ass ned in this Coverage Part to the first Named Insured,
this insurance applies:

sifeac Named Insured were the only Named Insured;
and

b. Separately to each insured.

The United Specialty Policy includes the following exclusion:

nited SpecialtyPolicy:

e. Employer’s Liability

“Bodily injury” to:

qd) An “employee” of the nameinsur ed arising out of and in the course of:

(a) Employment by the named insured; or

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(b) Performing duties related to the conduct of the named
insured’s business; or

Q) The spouse, child, parent, brother or sister of that “employee” as a
consequence of Paragraph (1) above.

This exclusion applies:

qd) Whether the named insured may be liable as an employer or in any other
capacity; and

Q) To any obligation to share damages with or repay someone else who
must pay damages because of the injury.

ORK

Id. at 001356. United Specialty denied additional insured coverage to ABC and MasTec under

the United Specialty Policy based on the application of the United Specialty employer’s liability

exclusion.

D. The StarStone Policy

Torus Specialty Insurance Company, now known as StarStone, issued following form

excess liability insurance policy number a: Advanced Cellular for the policy

period from August 3, 2015 to August 3, 2016 (the “StarStone Policy”). See Exhibit D, the

Starstone Policy, at 000970. The StarStone Policy has a $10 million per “occurrence” limit. Jd.

The StarStone Policy provides excess liability coverage as follows:

SECTION I. - COVERAGE

A This Policy shall provide the Insured with Excess Liability Insurance
coverage in accordance with the same warranties, terms, conditions,
exclusions and limitations as are contained, on the Inception Date of this
Policy, in the Followed Policy set forth in Item 7. of the Declarations of
this Policy, subject to the premium, limits of liability, retention, policy
period, warranties, exclusions, limitations and any other terms and
onditions of this Policy including any and all endorsements attached
hereto, inconsistent with or supplementary to the Followed Policy.

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT — PAGE 6

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Id. at 000993. The United Specialty Policy is the “Followed Policy.” /d. at 000973. Accordingly,

the StarStone Policy provides coverage in excess to the amount of the per “occurrence” limit of

liability stated in the schedule of underlying insurance, or $1 million.

The StarStone Policy includes the following exclusion:

EMPLOYER’S LIABILITY EXCLUSION

The Policy is amended as follows:

SECTION IV - EXCLUSIONS, is amended to include the following exclusion:

This Policy shall not apply to bodily injury to:

1 An employee of the insured arising out of and in the course of:

a. Employment by the insured; or

b. Performing duties related to the conduct of the insured’s
business; or

The spouse, child, parent, brother or sister of that employee as a
consequence of a. above.

This exclusion applies:

1 Whether the insured may be liable as an employer or in any other
capacity; and

To any obligation to share damages with or repay someone else who
must pay damages because of the injury.

This exclusion does not apply to liability assumed by the insured under a contract
or agreement.

Id. at 000981. Importantly, the StarStone Policy excludes coverage for “‘bodily injury’ to an

employee of the insured arising out of and in the context of employment by the insured.” Id.

(emphasis added). In contrast, the United Specialty Policy excludes coverage for “‘bodily injury’

to an ‘employee’ of the named insured arising out of and in the course of employment by the

named insured.” See Exhibit C at 001356 (emphasis added).

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT — PAGE 7

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StarStone initially denied additional insured coverage to ABC and MasTec based on the

application of StarStone’s employer’s liability exclusion. See Exhibits E and F at 002035-002036

and 002042-002043, respectively. However, in a supplemental letter, StarStone denied additional

insured coverage to ABC and MasTec based on the application of employer’s liability exclusion

in an underlying United Specialty primary policy, despite the existence of Starstone’s own

separate employer’s liability exclusion. See Exhibit G at 00000926. Moreover, StarStone claims

these exclusions are not inconsistent, which, as established below, is factually and legally

incorrect. Id.

StarStone also states the MSA is not an enforceable contract since “it is unsigned and

states that it is between ABC Group, Inc. and ACE Solutions, LLC.” See Id. at 00000925.

However, the MSA is between ABC and Advanced Cellular, and is properly executed by both

parties. See Exhibit B at 001796. StarStone also claims the MSA only obligates Advanced

Cellular to provide additional insured status for ABC and MasTec under Advanced Cellular’s

commercial general liability policy and the express terms of the MSA do not obligate Advanced

Cellular to obtain excess or umbrella coverage for the benefit of purported additional insureds.

See Exhibit G at 00000926. However, the MSA does not expressly state that the excess or

umbrella policy does not apply to additional insured coverage. See Exhibit B at 001827. Instead,

a review of Advanced Cellular’s excess or umbrella coverage (i.e., StarStone’s excess policy)

reflects it applies to putative additional insureds (i.e., ABC and MasTec) for covered claims (i.e.,

the Scott Lawsuit).

Ti.
STANDARD OF REVIEW

A. Standard of Review

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT — PAGE 8

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A court should grant a motion for summary judgment when there is no genuine issue of

material fact and the moant is entitled to judgment as a matter of law. ex. R. Ci . 166a(c).

Summary ju ent is proper if the d fendant establishes all elements of its defense or disproves

t least one element of the plaintiff's cause of action. Sci. Spectrum, Inc. v. Marti » 941 S.W.2d

12 (Tex. 1997) The trial court must assume that all allega ns in the non movant’s

pleadings are true a indulge every reasonable inference in favor of the non movant. Id.

Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1997). Afte the defendant produces evidence

entitling it to summary judgment, the burden shift 0 the plaintiff to pre ent evidence creatin

fact issue. Walker, 924 S.W.2d at 377.

Interpretation of Insurance Policies Under Texas Law

“Under Texas law, insuran e policies are interpreted under the rules of interpretation and

construction that apply to contracts genera ly. National Union Fire Ins. Co. of Pittsburgh, Pa. v.

CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). When interpreting a policy, the court’s

primary concern is to ascertain the true intent of the parties as expressed in the written contract

3 ublic Nat. Bank of D allas v. National Bankers Life Ins. Co.27 S.W.2d 76, 79 (Tex.

Civ. AppDallas 1968, writ ref dn.r.e.) (“In this connec ion it must be emphasized that it is not

the intention which the parties may have had, but failed to express in the instrument, but it is the

intention which by said instrument they did express.”)

The policy must be considered as a whole, and each part the policy should be given

effect. Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 1 (Tex. 1994). Specific rovisions in

the policy control over conflicting general policy language. . The terms used in an insurance

policy are given their ordinary and g nerally accepted meaning, unless the policy shows the

words were meant in a technical or different sense. urity Mut. Cas. Co. v. Johnson, 584

S.W.2d 703, 704 (Tex. 1979

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“While the insured bears the initial burden of showing the claim against it is coered by

the policy, the insurer bears the burden of proving the applicability of an clusion that permits i

to deny coverage. Once the insurer proves the applicability of an exclusion, the burden then

shifts back to the insured to demonstrate that it ha coverage under an exception to the

exclusion.” Comsys Info. Tech. Services, Inc. v win City Fire Ins. Co. 130 $.W.3d 181, 193

ex. App.Houston [14th Dist.] 2003, pet . denied) (citations omitted). “The court must adopt

the construction of an exclusioary clause urged by the insured as long as that const ruction is not

unreasonable, even if the construction u ged by the insurer a ars to be more reasonable or a

more accurate reflection of the parties intent. National Union Fire Ins. Co. of Pittsburgh Pa. v.

Hudson Energy Co., Inc., 811 S.W.2d 552 (Tex. 1991) (citing Glover v. National Ins.

Underwriter , 545 S.W.2d 755, 76 Tex.1977); Continental Cas Co. v. Warr » 254 $.W.2d

763 (1953) In particular, exceptions or limitations on liabil ty are strictly construed

against the insurer and in favor of the insured. (ci Ramsay v. Maryland A . Gen. Ins.

Co. W.2d 344, 349 (Tex.1976); Warren, 254 S.W.2d at 763

RGUMENTS AND UTHORITY

ABC and MasTec bring a breach of contrac claim against StarStone for failing to

ndemn_ y them as additional insureds under e StarStone Policy. set fort below, ABC an

MasTec are entitled to summary judgment as a matter of law because there are no genuine issues

of material fa t regarding StarStone’s breach of its duty to indemnify r the StarStone Policy.

StarStone’ Breach of the StarStone Policy

The essential elements of a breach contract claim are (1) the existence of a valid

contract; (2 performance or tendered performance by the plaintiff ) breach of the contract by

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the defendant; and (4) damages sustained by the plaintiffs as a result of the breach. Aguiar v.

Segal, 167 S.W.3d 443, 450 (Tex. App.—Houston [14th Dist.] 2005, pet. denied).
ABC and MasTec qualify as additional insureds to the StarStone Policy as required by

the MSA and defined by the StarStone Policy. ABC and MasTec each tendered its request for

additional insured coverage to StarStone. See Exhibits J and K. StarStone wrongfully denied

coverage to ABC and MasTec based on the application of the employer’s liability exclusion in

the United Specialty Policy. See Exhibits E and F. However, the relevant exclusion is the

employer’s liability exclusion contained in the StarStone Policy—as it is inconsistent with the

employer’s liability in the United Specialty Policy—and it does not apply to preclude coverage

to ABC and MasTec.?

StarStone refused to participate in settlement discussions or mediation despite its duty to

indemnify ABC and MasTec as additional insureds. The Scott Lawsuit claims were settled on

behalf of ABC and MasTec for a confidential sum. The StarStone Policy was triggered by the

confidential settlement payment on behalf of StarStone insureds ABC and MasTec in excess of

2 StarStone’s denial correspondence misrepresented the terms of the policies. Initially, StarStone disclaimed
coverage based on the StarStone Policy’s employer’s liability exclusion. See Exhibits E and F. StarStone noted “the
United Specialty [] Policy includes a virtually identical exclusion, the Action Over Exclusion, which likewise
operates to negate coverage for this claim.” See Exhibits E and F at 002036 and 002043, respectively. Based on
these letters, it is apparent StarStone failed to appreciate the inconsistency between the exclus ns. StarStone was
subsequently advised of this inconsistency and urged to reconsider its position before mediation. See Exhibit L.
Specifically, StarStone was informed its own policy (i.e., the StarStone Policy) includes a narrower employer’s
liability exclusion than the United Specialty Policy and, therefore, the StarStone Policy does not follow form to
inconsistent exclusions contained in the United Specialty Policy. See id.

Instead of acknowledging its mistake and accepting coverage, StarStone supplemented its disclaimer letters
and denied coverage to ABC and MasTec erroneously relying upon the employer’s liability exclusion contained in
the United Specialty Policy because the United Specialty Policy’s exclusion was conveniently more favorable to
StarStone despite the existence of StarStone’s own separate employer’s liability exclusion. See Exhibit G. To
support its reliance upon the United Specialty Policy’s exclusion, StarStone claimed that “[t]he Employer’s Liability
Exclusion to the StarStone Policy is not inconsistent with the Action Over Exclusion.” See id. at 00000926 (noting
the referenced “Action Over Exclusion” is the employer’s liability exclusion contained in the United Specialty
Policy). As established herein, this statement is simply untrue based on the express language used in each exclusion
and the StarStone Policy’s insuring agreement. Instead, it is an attempt by StarStone to avail itself of the benefit of a
narrower exclusion, avoid its indemnity obligations under the StarStone Policy, and eschew its responsibilities as an
insurer.

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT — PAGE 11

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$1 million in settlement of the ott Lawsuit claims. Since the confidential settlement payment

was in excess of $1 million, the United Specialty Policy was effectively exhausted. Continental

as. Co. v. N. Am. Capacity Ins. Co.3 F.3d 79, 90 (Sth Cir. 2012) (so long as the retained

amount waspaid, the excess insurer is tr iggered and obligated to indemnify).

oreover, ecaus e StarStone denied coverage to ABC and MasTec, it cannot challenge

he reasonableness of the settlement in the Scott Lawsuit. See Evanston Ins. Co. v. ATOFINA

Petrochemicals, Inc., 256 S.W.3d 660 ex. 2008) (holding that the insur 's denial of

coverage barred it from challenging the reasonableness of its insured’s ettlement in the

underlying litigation and the insurer was bound to pay its respective share of t settlement

StarStone not ABC or MasTec, should have paid the settlement and indemnified ABC and

MasTec for the Scott Lawsuit settlement in excess of $1 million StarStone therefore eached

e StarSton e Policy by not indemnifying ABC and MasTec as additional insureds. As a result of

StarStone’s breach,ABC and MasTec s uffered damages.

The StarStone Policy Follows Fo m to the United Specialty Policy’s
efinitions of Insured and Separation f Insureds Provision

The StarStone Policy provides it “shall provide the insured with Excess Liability

Insurance Coverage,” subject to the terms, conditions, and exclusions of the nited Specialty

Policy unless different or inconsistent, terms, condition , and exclusions are contained in the

StarStone Policy Exhib at (emphasis ded The StarStone Policy does not

include its own definitions of “insureds”. Without its own definition he StarStone Policy

therefore follows fo m to th United Specialty Policy’s definition of “insured,” which includes

additional insuredsSee Exhibit C a

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Likewise, the StarStone Policy does not include a supplementary or inconsistent

severability of interests provision.* Therefore, the StarStone Policy follows form to the United

Specialty Policy’s severability of interests provision, which states:

7. Separation Of Insureds

Except with respect to the Limits of Insurance, and any rights or duties
specifically assigned in this Coverage Part to the first Named Insured,
this insurance applies:

a. As if each Named Insured were the only Named Insured;
and

b. Separately to each insured.

See id. at 001317.

The Texas Supreme Court has found the severability of interests provision “is a plain and

unambiguous provision.” Commercial Standard Ins. Co. v. American General Ins. Co., 455

S.W.2d 714, 721 (Tex. 1970). The term “the insured” in a policy “can refer to the named insured

and one or more additional insureds.” /d. (noting that “[t]he words do not always mean the

named insured and one or more omnibus insureds; otherwise, we would be giving meaning to the

word ‘collectively’ and ignoring the word ‘severally. oo» ). While evaluating the meaning of the

term “severally,” the Texas Supreme Court has determined:

the term ‘the insured’ as used in this policy must be examined by first
applying the ‘severability of interests’ test. ‘The insured’ does not refer to all
insureds; rather, the term is used to refer to each insured as a separate and distinct
individual apart from any and every other person who may be entitled to
coverage thereunder. When a claim is made against one who is an ‘insured’
under the policy, the latter is ‘the insured,’ for the purpose of determining the
company’s obligations with respect to such claim.

Id.

3 The StarStone Policy provides it “shall provide the insured with Excess Liability Insurance Coverage,”
subject to the terms, conditions, and exclusions of the United Specialty Policy unless different or inconsistent, terms,
conditions, and exclusions are contained in the StarStone Policy. See Exhibit D at 000993.

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT — PAGE 13

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Pursuant to this provision, the term “ [t]he insured’ does not refer to all insureds; rather,

the term is used to refer to each insured as a separate and distinct individual apart from any and

every other person who y be entitled to coverage thereunder. Jd. 721 see als Lopez v.

Canal Ins. Co., KC, 2015 WL 4094277 (W.D. Tex. July 7, same

Accordingly, ABC, MasTec, and Advanced Cellular are each separate and distinct insureds

underthe S Stone Policy.

ABC and MasTec Qualify as Additional Insureds Under the StarStone Policy

e United Specialty Policy, in relevant part, provides the following are included as

additional insureds to the policy: “Any person or organization for who performing

operations when you and such person or organization have agreed in writing in a contract or

agreement that such person or organization be added as an additional insured on your policy

only with respect to liability for ‘bodily injury .. caus , in whole or in part, by: your acts or

omissions; or the acts or omissions of those acting on your behalf.” See Exhibit C at

Here, t is undisputed that Advanced Cellular agreed in a written contract (i.e the MSA)

to provide ABC and its “ Cus mer” ( i.e. MasTec) with additional insured coverage. See

Exhibit B at he “bodily injury” sustained by Scott also occurred while Advanced Cellular

was performing its operations for ABC Scott was performing cell tower maintenance or repairs

on beh fhis employer, Advanced Cellular, who was subcontracted by ABC to perform such

maintenance or repairs.See xhibit , thScott Depos ition, at 93:5 93:7see alsoExhibit B

Finally Scott’s injuries ere caused, in whole or in part, by Advaced Cel ar’ acts or

omissions. For example, the evidence developed during the Scot Lawsuit found that Advanced

ellular had liab due, in part, to its negligent training See Exhibit H 186:22 187:8

187:12 87:3 and 187:12 The evide ce also tablishes that Advanced Cellular had

liability due, in part, to its decision to climb the tower without a safety climb and forgo installing

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a temporary safety cl See Exhibi 77:7 78:14 87:14 98:12 162:13 and 224:6

Thu e liab y of ABC or MasTec was caused, in whole or in part, by the acts or

omissions of Advanced Cellular and its employees, including Scott. See e.g. Gilbane Bldg. Co

v. Admiral Ins. Co., 664 F.3d 589 (Sth Cir. 2011) he Fifth Circuit Court of Appls, ap lyi

Texas law and evaluating the duty to defend, agreed with the district court that the ee onduct [of

the named insured’s employee] was a contributing proximate cause of his damages claimed in

the Underlying Lawsu and that [a] jury in th erlyin wsuit would have f [the

employee] or his employer, [the named insured], 1% or more responsible for causing the

occurrence and/or injuries at issue. Thus, under the terms of the policy, the district court

concluded that [the insurer] had ty to ndemnify [the additional insured]”); see also Am.

Empire Surplus Lines Ins. Co. v. Crum & Forster Specialty Ins. Co., 2006 WL 1854, at *7

(S.D. Tex. 2006) (“caused, in whole or in part” additional insured endorsement “reasonably can

be constru to co er situations where [named insured and additional insured] are found jointly

liable for their collaborative or jointly undertaken negligent conduct.”) Accordingly, ABC and

MasTec are additional insureds under the StarStone Policy

The Emplo’s Li bility Exclusion in the StarStone Policy and the United
pecialty Policy re Inconsistent

TheStarStone Pol icy’s insuring agreement states:

is Policy shall provide the Insured with Excess Liability Insurance coverage in
accordance with the sam arranies, terms conditions, exclusions and
limitations as are contained ... in the [United Specialty Policy], subject to the
premium, limits of liability, retention, policy period, warranties, exclusions
limitations and any other terms and conditions of is Po icy including any and
all endorsements attached hereto, consistent with or supplementary to he
[United Specialty Policy].

See Exhibit D (emphasis added). In other words, the StarStone Policy provides cess

coverage to the insureds C and MasTec) in accordance with the same terms, conditions,

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and exclusions as are contained in the United Specialty Policy unless inconsistent terms,

conditions, or exclusions are contained in the StarStone Policy.

Applying Texas rules of interpretation to this unambiguous provision, if the StarStone

Policy contains exclusions inconsistent with the United Specialty Policy, then the exclusion

contained in the StarStone Policy is controlling. See CBI Indus., Inc., 907 S.W.2d at 520; see

also C.A. Turner Constr. Co., Inc., 112 F.3d at 186 (“if an insurance contract is expressed in

unambiguous language, its terms will be given their plain meaning and it will be enforced as

written.”). In arguendo, even if this language was ambiguous, it would be construed strictly

against StarStone and liberally in favor of ABC and MasTec; therefore, the result would be the

ame. See Emscor Mfg., Inc. v. All. Ins. Group, 879 S.W.2d 894, 902 (Tex. App.—Houston [14th

Dist.] 1994, writ denied) (“Normally, in the insurance context, the language and terms of a

policy are chosen by the insurance company. Therefore, when the language chosen is ambiguous

or inconsistent, and susceptible to more than one reasonable construction, such policies should

be construed strictly against the insurer and liberally in favor of coverage for the insured.”)

(internal citations omitted).

The United Specialty Policy includes the following employer’s liability exclusion:

United Specialty Policy:

e. Employer’s Liability

“Bodily injury” to:

qd) An “employee” of the named insured arising out of and in the course of:

(a) Employment by the named insured; or

(b) Performing duties related to the conduct of the named
insured’s business; or

Q) The spouse, child, parent, brother or sister of that “employee” as a
consequence of Paragraph (1) above.

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT — PAGE 16

4855-0273-5892, v. 1
This exclusion applies:

qd) Whether the named insured may be liable as an employer or in any other
capacity; and

Q) To any obligation to share damages with or repay someone else who
must pay damages because of the injury.

ORK

See Exhibit C at 001356 (emphasis added).

In contrast, the StarStone Policy includes the following employer’s liability exclusion

EMPLOYER’S LIABILITY EXCLUSION

The Policy is amended as follows:

SECTION IV - EXCLUSIONS, is amended to include the following exclusion:

This Policy shall not apply to bodily injury to:

1 An employee of the insured arising out of and in the course of:

a. Employment by the insured; or

b. Performing duties related to the conduct of the insured’s
business; or

The spouse, child, parent, brother or sister of that employee as a
consequence of a. above.

This exclusion applies:

1 Whether the insured may be liable as an employer or in any other
capacity; and

To any obligation to share damages with or repay someone else who
must pay damages because of the injury.

This exclusion does not apply to liability assumed by the insured under a contract
or agreement.

ORK

See Exhibit D at 000981 (emphasis added).

Due to the precise language used in each exclusion, the StarStone Policy and the United

Specialty Policy contain inconsistent employers’ liability exclusions. Specifically, the United

PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT — PAGE 17

4855-0273-5892, v. 1
Specialty Policy excludes coverage for “‘bodily injury’ to an ‘employee’ of the named insured

arising out of and in the c se of employment by the named insured. See Exhibit C at

(emphasis added). In contrast, the StarStone Policy excludes coverage for “‘bodily injury’ to an

employee of the insured arising out of and in the contex f employment by the insured.” See

hib emphasis added). Texas courts interpret and apply these precise exclusions

differently. See e.g. miral Ins. Co. v. Trident NGL, Inc., 988 S.W.2d 451 (Tex. App

ouston [Ist Dist.] 1999, pet. denied see also Republic Vanguard Ins. Co. Mend .CVL
174, 2008 WL 1 at *8 (S.D. Tex. Mar. 31, (“While CGL policies often exclude

coverage for an employer in suits brought bythe employee , in suits brought by the employee of a

subcontracto , a contractor named as an additional sured has been found to have coverage

under Texas law where the subcontractor has none.” . Thus, the mployer’s bility lusions

in the StarStone Policy and the United Specialty Policy re nconsistent

The S arStone Policy’s Employer’s Liability Exclus on Does Not Apply to
Limitor Preclude Coverage for his Loss

Evaluating the scope of employer’s liability exclusions, Texas court and other

jurisdictions ve held that the terms “the named insured” and “the insured have different

eaning. See Admiral ns. Co., 988 S.W.2d 451 also Endurance Am. Specialty Ins. Co. v.

Century Sur. Co., 630 Fed.Appx. 6, 8 (2d Cir. 2015) This logic would apply if the Action Over

Exclusion clause used the language “the insured” rather than “the named insure re, like

the language “any insured,” the language “the named insured” evinces that the Action Over

Exclusion clause specifically exclu coverage for bodily injury to employees of the named

insured, Pinnacle. Hayden, in contrast, is not a named insured; rathe , it is an additional

insured. In Admira , an insurer invoked an employe liability exclusion as grods for

denying coverage to an additional insured for claims arising out of an injury to an employee of

LAINTIFFS OTION FOR UMM UDGMENT AGI

5892, v. 1
the named insured. Admiral Ins. Co., The exclusion at issue was

substantially similar to the exclusion in the StarStone Policy and precluded coverage for “bodily

injury to any employee of the Insured arising out of and in the course of his employment by the

Insured Id. at (emphasis adde . The Admiral court found that the exclusion did not bar

coverage to the additional insured because:

By its terms, the exclusion applies to the “insured,” not the “named insured.”
When, as here, a policy has a “severability of interest ” clause, each insured
against whom a claim is brought is treated as if it was the only insured under the
licy. [citations omitted]. Neither party disputed that [the underlying plaintiff]
was an employee of [the named insured]. If [the underlying plaint ff] had sued
[the named insured] for his injuries, [the named insured] would have been denied
overage under the exclusion. The exclusion did not apply to [the additional
insured], however, because [the additional insured] was not [the underlying
plaintif ’s] employer.

he employer’s liability exclusion in the StarStone Policy, like the exclusi in Admiral

precludes coverage for “‘bodily injury’ to an employee of the insured arising out of and in the

ontext of employment by the insured.” Exhibi at (emphasis added).

additional insureds, ABC and MasTec each qualify as “the insured.” It is undisputed that cott is

an employee of Advanced Cellular See xhibit , StarStone s Responses to ABC s Reests for

Admission, at Request for Admission No. 7 Therefore, Scott is not an employee of ABC or

asTec. As such re is no “bodily injury” to an employee of ABC or Mas arising out of

and in the context of employment by ABC or MasTec See Admiral Ins. Co., 988 S.W.2d at 4

fter applying the severability of interest provision, the court ruled that the employer’s liability

exclusion did not apply to an additional insure because the additional insured was not the

underlying plaintiffs employer ather, the named insured was the underlying plaintiffs

employer.) see also Am. Res. Ins. Co. v. W.G. Yates & Sons Con . Co. No. 4:09

HTW A, 2012 WL 1033521, at *20 (S.D. Miss. Mar. 27, 2012) (Applying Mississippi law

LAINTIFFS OTION FOR UMM UDGMENT AGE

5892, v. 1
and holding same); Archer Daniels Midland Co. v. Burlington Ins. Co. Grp., 785 F.Supp.

730 (N.D. Ill. 2011) Applying Illinois law and holding same Deters vy. USF Ins. Co., 797

N.W.2d 621 (Iowa Ct. App. 2011) Tri S Corp. v. W. World Ins. Co. 135 P.3d 82, 1 Haw.

e adopt the majority rule and hold that where an insurance policy contains a

severability interests clause, the phrase the insured in a policy exclusion must be read to

refer to the insured seeking coverage as opposed to the named insured or any insured.

Penske Truck Leasing Co. P ship v. Republic W. Ins. Co., 407 F.Supp.2d 741, 750 (E.D. N.C.

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Case Info

Judge

Argie D. Brame Track Judge’s New Case

Case No.

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Document Filed Date

March 11, 2022

Case Filing Date

April 08, 2020

County

Parties

A Better Communications Group, Inc. Plaintiff
Advanced Cellular Solutions, LLC Defendant
Ellen L. Van Meir Attorney for the Plaintiff
MasTec North America, Inc. Plaintiff
Melinda Bradley Attorney for the Defendant
StarStone National Insurance Company Defendant
Mariah Quiroz Attorneys for Plaintiffs
Tory Taylor Attorneys for Defendants
Andrew McKinney Attorneys for Defendants
Valarie Eissler Attorneys for Defendants
Conor McCall Attorneys for Plaintiffs
Allison Hooker Attorneys for Defendants
Jacob Karam Attorney
S. West Attorneys for Plaintiffs

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Motion,Ex Parte: A Better Communications Group, Inc. and MasTec North America, Inc. vs Advanced Cellular Solutions, LLC and StarStone National Insurance Company

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