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Click here for the full text of this decision FACTS:ATOFINA Petrochemicals Inc. contracted with Triple S Industrial Corp. to perform maintenance and construction work at ATOFINA’s Port Arthur refinery. The service contract contained an indemnity provision and a requirement that Triple S carry certain minimum levels of liability insurance coverage. Triple S agreed to indemnify ATOFINA from all personal injuries and property losses sustained during the performance of the contract, “except to the extent that any such loss is attributable to the concurrent or sole negligence, misconduct, or strict liability of [ATOFINA].” Triple S also agreed to carry at least $500,000 of primary comprehensive general liability (CGL) insurance, “[i]ncluding coverage for contractual liability insuring the indemnity agreement,” and an excess (or “umbrella”) liability policy “following form for [the CGL policy]” of at least $500,000. Finally, the contract required Triple S to furnish certificates of insurance to ATOFINA evidencing the required insurance coverages and showing ATOFINA as an additional insured on the policies. Triple S complied with its contract obligations by purchasing a $1 million CGL policy from Admiral Insurance Co. and a $9 million commercial umbrella policy from Evanston Insurance Co. and by furnishing the required certificates of insurance. Matthew Todd Jones, a Triple S employee working at the ATOFINA facility pursuant to his employer’s contract with ATOFINA, drowned after he fell through the corroded roof of a storage tank filled with fuel oil. Jones’ survivors sued Triple S and ATOFINA for wrongful death. Admiral tendered its $1 million policy limits. ATOFINA then demanded coverage from Evanston as an additional insured under the umbrella policy. Evanston denied the claim. ATOFINA brought Evanston into the case as a third-party defendant for a declaration of coverage. ATOFINA then severed its suit against Evanston from the remainder of the Jones litigation. Both ATOFINA and Evanston moved for partial summary judgment in the severed action. While the motions were pending, the Jones case was settled for $6.75 million. ATOFINA seeks to recover from Evanston the $5.75 million not covered by Admiral. The trial court granted summary judgment in favor of Evanston. The 9th Court of Appeals reversed the judgment, holding that the Evanston policy covered ATOFINA, and remanded the case to the trial court for determination of statutory penalties and attorneys’ fees. HOLDING:Affirmed in part, reversed and rendered in part. In its service contract with Triple S, the court noted, ATOFINA disclaimed any right of indemnity for losses “attributable to [its] concurrent or sole negligence.” Under the terms of the service contract, ATOFINA is not entitled to be indemnified by Triple S if the Jones loss was occasioned in any way by ATOFINA’s negligence. But ATOFINA, the court stated, did not seek indemnity from Triple S; it claimed instead that it was entitled to indemnification from Evanston by virtue of its status as an additional insured on the umbrella policy Evanston issued to Triple S. Under �III.B.6 of the Evanston policy, the court stated, the Jones injury “respect[ed] [] operations performed by [Triple S]” because Triple S employed Jones, who was performing the operation at the time and place of the injury. Although the pleadings in the underlying suit did not indicate whether or not Jones was performing a Triple S operation at the precise time of the accident, Jones was present at ATOFINA’s facility for purposes of Triple S’s operations when the accident occurred. As a result, the court found that even if ATOFINA’s negligence alone caused Jones’ injury, �III.B.6 of the Evanston policy provides direct insurance coverage to ATOFINA. Evanston and ATOFINA then looked to �III.B.5 of the policy to support their respective positions regarding the scope of coverage under the Evanston policy. ATOFINA claimed that �III.B.5 provides an independent basis for coverage, while Evanston argued that �III.B.5 did not apply. Looking to the underlying policy, which specifically excluded coverage for ATOFINA’s sole negligence, the court concluded that coverage under �III.B.5 is limited and excludes losses caused by ATOFINA’s sole negligence. The court was unable to determine on the basis of the available record whether the Jones accident was the product of ATOFINA’s sole negligence. Thus, without a determination of liability, the court found it “impossible to say whether ATOFINA’s responsibility for the accident, if any, excluded it from coverage under section III.B.5 of the Evanston policy.” Next, the court stated that “[b]ecause ATOFINA is entitled to coverage under more than one who-is-an-insured clause in paragraph III.B, it is not unreasonable to conclude that the policy should be read to provide the broader measure of coverage available under the applicable clauses.” The court therefore held that the Evanston policy provides the broader scope of coverage that does not exclude liabilities arising out of ATOFINA’s sole negligence. Next, the court examined Evanston’s obligation to pay $5.75 million of the $6.75 million settlement. Evanston argued that its evidence proves the amount was unreasonable as a matter of law, entitling Evanston to summary judgment. The court, however, held that Evanston’s denial of coverage barred it from challenging the reasonableness of ATOFINA’s settlement. As a result, the court found that Evanston was bound to pay the $5.75 million that remained of the settlement. Thus, the court concluded that the umbrella policy provided coverage for liabilities arising from the additional insured’s sole negligence and that the settlement agreement bound the insurer to the amount recited therein. Finally, the court sought to determine whether Texas Insurance Code Art. 21.55, the prompt-payment of claims statute, authorized the imposition of penalties and attorneys’ fees for the insurer’s failure to pay the claim timely. The court held that it did not, thus reversing the 9th Court of appeals’ judgment regarding damages and attorneys’ fees under Art. 21.55 and rendering judgment that the additional insured was not entitled to recovery of such damages and fees. OPINION:Green, J., delivered the opinion of the court, in which Jefferson, C.J., and O’Neill, Wainwright, Brister, Medina and Willett, JJ., joined, and in which Hecht and Johnson, JJ., joined as to Parts I, II.A -II.D, and II.F. CONCURRENCE/DISSENT:Hecht, J., filed an opinion concurring in part and dissenting in part, in which Johnson, J., joined. “I agree with the Court that Evanston’s commercial liability umbrella policy covered the Jones claim, and that Evanston must reimburse ATOFINA the settlement amount if it was reasonable. I do not agree that Evanston, which had no duty to defend ATOFINA, is estopped to challenge the reasonableness of the settlement simply because it denied coverage and refused to participate in negotiations with the claimants. I would remand the reasonableness issue to the trial court to resolve the parties’ factual dispute.”

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