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Insurance Law No. 09-02-072-CV, 4/10/2003. Click here for the full text of this decision FACTS: A Triple S Industrial Corp. employee was working at the FINA Oil and Chemical Co. (now ATOFINA Petrochemicals Inc.) Port Arthur refinery when he drowned in a tank filled with fuel oil. His relatives sued ATOFINA. Admiral Insurance Co., the general liability carrier under the contract between ATOFINA and Triple S, tendered its policy limits of $1 million. ATOFINA also claimed insurance coverage as an additional insured under a commercial umbrella liability policy issued to Triple S by Evanston Insurance Co. (the “excess insurance policy”). Evanston denied ATOFINA’s claim. ATOFINA settled the wrongful death litigation for $6.75 million, and has sued Evanston to recover $5.75 million from the excess insurance policy. The trial court granted summary judgment in favor of Evanston and denied a motion for summary judgment filed by ATOFINA. ATOFINA appeals, asking this court to hold Evanston liable for the cost of the settlement of the wrongful death litigation. HOLDING: Remanded for entry of judgment in favor of ATOFINA. The court first notes Evanston’s argument that the death did not occur “with respect to operations performed” by Triple S, and that ATOFINA therefore is not an insured because of the second clause of the quoted definition. The court rejects this argument. The death occurred while the Triple S employee was performing work for Triple S on a project for ATOFINA, and so occurred “with respect to operations performed by” Triple S. Highland Park Shopping Village v. Trinity Universal Ins. Co., 36 S.W.3d 916 (Tex. App. – allas 2001, no pet.). The court concludes the insurance purchasing requirement clause in the Triple S/ATOFINA contract was not merely in support of the indemnity provision, but rather required Triple S to provide insurance for ATOFINA to the extent Triple S had insurance coverage; the indemnity insurance requirement was in addition to, not exclusive of, other coverage under the excess policy. Because ATOFINA required by contract that Triple S name ATOFINA as an additional insured on Triple S’s comprehensive liability and excess liability policies, and because Evanston’s policy defines an insured as including a person or organization for whom Triple S agreed to provide insurance, ATOFINA is an insured under the Evanston policy, and the scope of the policy is not limited by the indemnity agreement in the Triple S / ATOFINA contract. Evanston also contends summary judgment was proper because 1. the amount of the settlement in the relatives’ suit against ATOFINA was greater than the case would have been worth at trial; and 2. the settlement included punitive damages, for which Evanston is not liable under the policy. Evanston declined coverage and refused to defend ATOFINA in the wrongful death litigation. Generally, when an insurer denies a defense to its insured and the insured has a verdict rendered against it or enters into a settlement agreement, the insurer may not contest the liability of the insured or the amount of the verdict or settlement. Western Alliance Ins. Co. v. Northern Ins. Co. of New York, 176 F.3d 825 (5th Cir. 1999). The court holds the insurer may not contest the amount of the settlement under these circumstances, absent fraud or other illegality not asserted here. The insurer may, however, argue preserved defenses to coverage, i.e. that punitive damages are not covered by the policy. Evanston argues public policy would be offended by insurance coverage protecting a wrongdoer from an obligation to pay punitive damages. Hartford Cas. Ins. Co. v. Powell, 19 F.Supp.2d 678 (N.D. Tex. 1998)(citing Texas cases). The settlement agreements here, however, specifically exclude settlement of the punitive damage claims. OPINION: Per curiam; McKeithen, C.J., Burgess and Gaultney, JJ.

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