Evanston Insurance Company v. Gene by Gene, Ltd., — F.Supp.3d —- (2016)
2016 WL 102294
United States District Court,
S.D. Texas, Houston Division.
Evanston Insurance Company, Plaintiff,
v.
Gene by Gene, Ltd., Defendant.
Civil Action No. H–14–1842
|
Signed January 6, 2016

ORDER
DAVID HITTNER, United States District Judge
*1 Pending before the Court is Defendant Gene by Gene
Ltd.’s Motion for Summary Judgment (Document No. 21).
Having considered the motion, submissions, and applicable
law, the Court determines the motion should be granted.
I. BACKGROUND
This is an insurance coverage dispute. Defendant Gene
by Gene Ltd. (“Gene by Gene”) owns and operates
www.familytreedna.com, a genetic genealogy website. Users
of the website are offered the opportunity to test their
genetic information. Once users receive their DNA test
results they can analyze their genetic information to
learn more about their ancestry and connect with other
users whose results match in varying degrees. 1 Plaintiff
Evanston Insurance Company (“Evanston”) is Gene by
Gene’s insurer. Evanston issued four policies to Gene
by Gene: Policy Numbers SM–892198 and SM–898899
(“Professional Liability policies”), 2 and Policy Numbers
SM895587 and XS–800378 (“Excess Liability policies”) 3
(collectively, “Policies”). The Professional Liability policies
are duty to defend policies.
1 See Family Tree DNA, https://www.familytreedna.com
(last visited January 1, 2016).
2 Defendant Gene by Gene Ltd.’s Motion for
Summary Judgment, Document No. 21, Exhibit
A (Professional Liability Policy No. SM–892198)
[hereinafter Professional Liability Policy No. SM–
892198]; Defendant Gene by Gene Ltd.’s Motion
for Summary Judgment, Document No. 21, Exhibit
C (Professional Liability Policy No. SM–898899)
[hereinafter Professional Liability Policy No. SM–
898899].
3 Defendant Gene by Gene Ltd.’s Motion for Summary
Judgment, Document No. 21, Exhibits B (Excess
Liability Policy No. SM–8955870) [hereinafter Excess
Liability Policy No. SM–8955870]; Defendant Gene by
Gene Ltd.’s Motion for Summary Judgment, Document
No. 21, Exhibit D (Excess Liability Policy No. XS–
800378) [hereinafter Excess Liability Policy No. XS–
800378].
On May 15, 2014, Gene by Gene was sued by named plaintiff
Michael Cole (“Cole”), on behalf of himself and others,
in Cause Number 1:14–cv–004–SLG, styled Michael Cole,
individually and on behalf of all others similarly situated
v. Gene by Gene, Ltd. a Texas limited liability company d/
b/a Family Tree DNA, in the United States District Court
for the District of Alaska (the “Underlying Lawsuit”). 4
Cole alleges Gene by Gene improperly published his DNA
test results on its website without his consent. Cole claims
this practice violated Alaska’s Genetic Privacy Act, Alaska
Statute § 18.13.010 (“Genetic Privacy Act”), which prohibits
the disclosure of a person’s DNA analysis without written and
informed consent. When Gene by Gene demanded coverage
and a defense of the Underlying Lawsuit from Evanston,
Evanston refused based on an exclusion in the Policies titled
“Electronic Data and Distribution of Material in Violation of
Statutes” (“Exclusion”).
4 Defendant Gene by Gene Ltd.’s Motion for Summary
Judgment, Document No. 21, Exhibit E (Class Action
Complaint and Demand for Jury Trial) [hereinafter
Underlying Suit Complaint].
*2 On July 2, 2014, Evanston filed the present declaratory
judgment action, seeking a declaration from the Court that it
does not have to defend and/or indemnify Gene by Gene from
and against any claims or judgments in, or resulting from,
the Underlying Lawsuit. On August 29, 2014, Gene by Gene
answered and asserted its own counterclaims, requesting a
Evanston Insurance Company v. Gene by Gene, Ltd., — F.Supp.3d —- (2016)
© 2016 Thomson Reuters. No claim to original U.S. Government Works. 2
declaration from the Court that Evanston is required to defend
and indemnify Gene by Gene and claiming that Evanston
breached its contract and violated Chapter 542 of the Texas
Insurance Code. On August 28, 2015, Gene by Gene moved
for summary judgment.
II. STANDARD OF REVIEW
Summary judgment is proper when “there is no genuine
dispute as to any material fact and the movant is entitled to
a judgment as a matter of law.” FED.R.CIV.P. 56(a). The
court must view the evidence in a light most favorable to the
nonmovant. Coleman v. Hous. Indep. Sch. Dist., 113 F.3d
528, 533 (5th Cir.1997). Initially, the movant bears the burden
of presenting the basis for the motion and the elements of the
causes of action upon which the nonmovant will be unable
to establish a genuine issue of material fact. Celotex Corp.
v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d
265 (1986). The burden then shifts to the nonmovant to come
forward with specific facts showing there is a genuine issue
for trial. See FED.R.CIV.P. 56(c); Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586–87, 106 S.Ct.
1348, 89 L.Ed.2d 538 (1986). “A dispute about a material
fact is ‘genuine’ if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.” Bodenheimer
v. PPG Indus., Inc., 5 F.3d 955, 956 (5th Cir.1993) (citation
omitted).
But the nonmoving party’s bare allegations, standing alone,
are insufficient to create a material issue of fact and defeat a
motion for summary judgment. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d
202 (1986). Moreover, conclusory allegations unsupported
by specific facts will not prevent an award of summary
judgment; the plaintiff cannot rest on his allegations to get
to a jury without any significant probative evidence tending
to support the complaint. Nat’l Ass’n of Gov’t Emps. v.
City Pub. Serv. Bd. of San Antonio, 40 F.3d 698, 713 (5th
Cir.1994). If a reasonable jury could not return a verdict for
the nonmoving party, then summary judgment is appropriate.
Liberty Lobby, Inc., 477 U.S. at 248, 106 S.Ct. 2505.
The nonmovant’s burden cannot be satisfied by conclusory
allegations, unsubstantiated assertions, or “only a scintilla of
evidence.” Turner v. Baylor Richardson Med. Ctr., 476 F.3d
337, 343 (5th Cir.2007) (quoting Little v. Liquid Air Corp.,
37 F.3d 1069, 1075 (5th Cir.1994)). Furthermore, it is not the
function of the court to search the record on the nonmovant’s
behalf for evidence which may raise a fact issue. Topalian v.
Ehrman, 954 F.2d 1125, 1137 n. 30 (5th Cir.1992). Therefore,
“[a]lthough we consider the evidence and all reasonable
inferences to be drawn therefrom in the light most favorable
to the nonmovant, the nonmoving party may not rest on the
mere allegations or denials of its pleadings, but must respond
by setting forth specific facts indicating a genuine issue for
trial.” Goodson v. City of Corpus Christi, 202 F.3d 730, 735
(5th Cir.2000) (quoting Rushing v. Kansas City S. R.R. Co.,
185 F.3d 496, 505 (5th Cir.1999)).
III. LAW & ANALYSIS
Gene by Gene contends the claim in the Underlying
Lawsuit falls under its Advertising Injury and Personal Injury
coverage because it is for an injury that arises out of the
written publication of material that violates a person’s right of
privacy. Evanston contends the claim is excluded from that
coverage because it is brought pursuant to a statute that falls
under Section C of the Exclusion, which precludes coverage
for “any other statute, law, rule, ordinance, or regulation that
prohibits or limits the sending, transmitting, communication
or distribution of information or other material.” 5
5 Professional Liability Policy No. SM–892198, supra
note 2 at 14.
*3 The parties agree Texas law governs the rules of
insurance policy interpretation in this case. Test Masters
Educ. Servs., Inc. v. State Farm Lloyds, 791 F.3d 561, 564
(5th Cir.2015). To determine whether an insurer has a duty
to defend an insured from an underlying lawsuit, Texas
courts apply the “eight comers rule.” Id. “ ‘Under that rule,
courts look to the facts alleged within the four comers of the
[underlying] pleadings, measure them against the language
within the four comers of the insurance policy, and determine
if the facts alleged present a matter that could potentially
be covered by the insurance policy.’ ” Id. (quoting Ewing
Constr. Co. v. Amerisure Ins. Co., Inc., 420 S.W.3d 30, 33
(Tex.2014)). Courts must focus on the factual allegations
in the underlying pleadings rather than any asserted legal
theories or conclusions. Id. (citing Ewing, 420 S.W.3d at
33). Courts must “resolve ‘all doubts regarding the duty to
defend … in the insured’s favor.’ ” Id. (quoting Ewing, 420
S.W.3d at 33). If the underlying complaint “ ‘potentially
includes a covered claim, the insurer must defend the entire
suit.’ ” Id. (emphasis in original) (quoting Zurich Am. Ins. Co.
v. Nokia, Inc., 268 S.W.3d 487, 491 (Tex.2008)). The insured
has an initial burden to establish coverage under the terms
Evanston Insurance Company v. Gene by Gene, Ltd., — F.Supp.3d —- (2016)
© 2016 Thomson Reuters. No claim to original U.S. Government Works. 3
of the policy. Gilbert Texas Const., L.P. v. Underwriters
at Lloyd’s London, 327 S.W.3d 118, 124 (Tex.2010). Once
coverage is established, the insurer has the burden to show an
exclusion applies. Id.
“If only one party’s construction [of an insurance policy’s
language] is reasonable, the policy is unambiguous.” RSUI
Indemnity Co. v. The Lynd Co., 466 S.W.3d 113, 118
(Tex.2015). However, if both parties have reasonable
interpretations of the language, the policy is ambiguous.
Id. In that case, courts “must resolve the uncertainty by
adopting the construction that most favors the insured …
even if the construction urged by the insurer appears to be
more reasonable or a more accurate reflection of the parties’
intent.” Id. (emphasis added). A construction that renders
any portion of a policy illusory or “meaningless, useless, or
inexplicable” cannot be adopted by the court. Evanston Ins.
Co. v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660, 669
n. 27 (Tex.2008).
A. Coverage under the Policies
According to the complaint in the Underlying Lawsuit,
the sole claim asserted in the case is pursuant to Alaska’s
Genetic Privacy Act. That claim is based on the factual
allegations that Gene by Gene “made the results of [the
customers’] DNA analyses publicly available on its own
websites. [Gene by Gene] also disclosed Plaintiffs sensitive
information to third-party ancestry company RootsWeb.” 6
In addition, Gene by Gene “never obtained Plaintiff’s or the
Class’s informed written consent required by [the Genetic
Privacy Act] to make the results of their DNA analyses public
or to disclose sensitive information to third-parties, including
ancestry company RootsWeb … By making the results of their
DNA analyses publicly available and otherwise disclosing
the same to any third-parties as described herein, [Gene by
Gene] violated Plaintiff’s and the Class’s statutorily-protected
rights to privacy in their genetic information as set forth in
the Genetic Privacy Act … as well as their common law rights
to privacy.” 7
6 Underlying Suit Complaint, supra note 4 at 13.
7 Underlying Suit Complaint, supra note 4 at 13–14.
The Professional Liability policies provide coverage for
“Personal Injury and Advertising Injury Liability.” 8 Under
the Professional Liability policies, “Advertising injury”
means “injury … arising out of oral or written publication
of material that libels or slanders a person or organization
or a person’s or organization’s products, goods or operations
or other defamatory or disparaging material, occurring in the
course of the Named Insured’s Advertisement.” 9 “Personal
injury” is defined to include “oral or written publication
of material that violates a person’s right of privacy.” 10
Comparing the factual allegations within the four corners of
the Underlying Lawsuit and the four comers of the Policies,
the claim in the Underlying Suit falls within the definition of
Personal Injury because it includes the publication of material
—the DNA analysis—that allegedly violates a person’s right
to privacy.
8 Professional Liability Policy No. SM–892198, supra
note 2 at 2; Professional Liability Policy No. SM–
898899, supra note 2 at 2.
9 Professional Liability Policy No. SM–892198, supra
note 2 at 27; Professional Liability Policy No. SM–
898899, supra note 2 at 45.
10 Professional Liability Policy No. SM–892198, supra
note 2 at 30; Professional Liability Policy No. SM–
898899, supra note 2 at 45.
*4 The Professional Liability policies define “damages”
as “the monetary portion of any judgment, award or
settlement.” 11 Damages do not include “punitive or
exemplary damages … taxes, criminal or civil fines, or
attorney’s fees or penalties imposed by law … sanctions …
or the return of or restitution of fees, profits or charges for
services rendered.” 12 Fines, penalties, and taxes are “limited
to payments made to the government” and do not include
statutory damages that make up the monetary portion of a
judgment. Flagship Credit Corp. v. Indian Harbor Ins. Co.,
481 Fed.Appx. 907, 912 (5th Cir.2012). The relief requested
in the underlying lawsuit includes “an award of actual and
statutory damages of $5,000.” 13 This request falls under the
Policies’ definition of damages. Accordingly, the Court finds
Gene by Gene, as the insured, has met its burden to establish
coverage under the terms of the policy.
11 Professional Liability Policy No. SM–892198, supra
note 2 at 19; Professional Liability Policy No. SM–
898899, supra note 2 at 15–16.
12 Professional Liability Policy No. SM–892198, supra
note 2 at 19.
13 Underlying Suit Complaint, supra note 4 at 15.
Evanston Insurance Company v. Gene by Gene, Ltd., — F.Supp.3d —- (2016)
© 2016 Thomson Reuters. No claim to original U.S. Government Works. 4
B. Applicability of Exclusion
The Exclusion at issue in this case, included in all four
policies, precludes coverage for a claim based upon or arising
out of any violation of:
(a) the Telephone Consumer Protection Act of 1991
(TCPA) and amendments thereto or any similar or
related federal or state statute, law, rule, ordinance or
regulation;
(b) the CAN–SPAM Act of 2003 and amendments thereto
or any similar or related federal or state statute, law, rule,
ordinance, or regulation; or
(c) any other statute, law, rule, ordinance, or regulation
that prohibits or limits the sending, transmitting,
communication or distribution of information or other
material. 14
Evanston contends the claim in the Underlying Lawsuit falls
under the plain language of Section C of the Exclusion
because it is brought pursuant to a statute—the Genetic
Privacy Act—that prohibits the transmitting, communication
or distribution of information or other material—namely,
the public disclosure of a person’s DNA analysis on Gene
by Gene’s website and to other third-parties like RootsWeb.
Gene by Gene contends this construction of Section C is too
broad and is unreasonable in light the rest of the Exclusion
and the entire policy.
14 Professional Liability Policy No. SM–892198, supra
note 2 at 14; Excess Liability Policy No. SM–8955870,
supra note 3 at 5; Professional Liability Policy No. SM–
898899, supra note 2 at 7; Excess Liability Policy No.
XS–800378, supra note 3 at 12.
Specifically, Gene by Gene contends the canon of
construction of ejusdem generis should apply to Section
C. According to that canon, “Where general words follow
specific words in a statutory enumeration, the general words
are [usually] construed to embrace only objects similar
in nature to those objects enumerated by the preceding
specific words.” Yates v. United States, –––U.S. ––––, 135
S.Ct. 1074, 1086, 191 L.Ed.2d 64 (2015) (alteration in
original). The Telephone Consumer Protection Act (“TCPA”)
referenced in Section A of the Exclusion generally regulates
the use of unsolicited telephone calls and fax transmissions
to consumers. 15 Similarly, the CAN–SPAM Act of 2003
(“CAN–SPAM”) referenced in Section B of the Exclusion
generally regulates the use of unsolicited, fraudulent, abusive,
and deceptive emails to consumers. 16 Accordingly, Gene by
Gene contends Section C also refers generally to other forms
of unsolicited communication to consumers “that intrude[ ]
into one’s seclusion.” 17
15 See 47 U.S.C. § 227; Mims v. Arrow Fin. Servs., LLC,
–––U.S. ––––, 132 S.Ct. 740, 745, 181 L.Ed.2d 881
(2012).
16 See 15 U.S.C. §§ 7703, 7704; White Buffalo Ventures,
LLC v. Univ. of Tex. at Austin, 420 F.3d 366, 371 (5th
Cir.2005).
17 Defendant Gene by Gene Ltd.’s Motion for Summary
Judgment, Document No. 21 at 10.
*5 In response, Evanston contends Gene by Gene’s reliance
on ejusdem generis is misplaced because the “intent”
of each statute is different. 18 For example, the TCPA
regulates “unsolicited, automated” telephone calls and fax
transmissions, while the CAN–SPAM Act regulates “false or
misleading unsolicited e-mail.” 19 However, while the two
statutes regulate different forms of communication, the intent
—to protect consumers from unsolicited communication that
invades their seclusion—is the same. In addition, Gene by
Gene’s construction does not render the “or any similar
or related” portions of Sections A and B redundant. It is
reasonable to construe that language as meaning any similar
or related statutes or laws that govern communication over
the phone or fax machine (Section A) or email (Section B),
while Section C covers other, similarly unsolicited forms of
communication that may be regulated by statute, law, rule,
ordinance, or regulation. Accordingly, the Court finds Gene
by Gene’s construction of the Exclusion reasonable. 20
18 Evanston Insurance Company’s Response to Gene
by Gene, Ltd.’s Motion for Summary Judgment and
Memorandum in Support Thereof Document No. 25 at
13.
19 Evanston Insurance Company’s Response to Gene
by Gene, Ltd.’s Motion for Summary Judgment and
Memorandum in Support Thereof, Document No. 25 at
13.
20 In its motion for summary judgment, Gene by Gene
contends Texas Department of Insurance (“TDI”) orders
support its construction of the Exclusion, citing to,
inter alia, approved forms for exclusions concerning the
TCPA and CAN–SPAM Act. Defendant Gene by Gene
Ltd.’s Motion for Summary Judgment, Document No. 21
Evanston Insurance Company v. Gene by Gene, Ltd., — F.Supp.3d —- (2016)
© 2016 Thomson Reuters. No claim to original U.S. Government Works. 5
at 12–19. In response, Evanston contends the evidence
Gene by Gene cites are not actually final “orders” of the
TDI, but are “correspondence and certificates from the
TDI which show certain endorsements were filed with
that administrative agency for the purpose of obtaining
use approval.” Evanston Insurance Company’s Response
to Gene by Gene, Ltd.’s Motion for Summary Judgment
and Memorandum in Support Thereof Document No. 25
at 14. Because the Court is able to determine that the
Exclusion is at the very least ambiguous and that Gene
by Gene’s construction of it is reasonable without relying
on the TDI evidence, the Court need not address whether
the TDI documents are in fact final “orders.”
In addition, Gene by Gene contends Evanston’s construction
is unreasonable because it would render illusory the
Advertising Injury coverage, which includes claims arising
out of the written publication of material that libels or slanders
a person, and the Personal Injury coverage, which includes
claims arising out of the written publication of material that
violates a person’s right to privacy. In response, Evanston
contends
the policies would still apply to the
many more traditional defamation and
advertising injuries so long as there
is [no] statute, law, rule, ordinance
or regulation that applied to the
type of information being published.
Thus, common law claims for [libel],
slander, invasion of privacy and other
forms of defamation would still be
covered under the advertising injury
provisions of the policies as long as
there is no statute prohibiting the act
complained about.” 21
However, as Gene by Gene points out, common law claims,
while not codified in a statute, are still based on “law” and
thus may still be excluded under Evanston’s construction. 22
In addition, Gene by Gene points to states such as Texas
where the “traditional defamation” injuries, like libel and
false disparagement of goods, services, or business are in fact
regulated by statute. 23 In that case, Evanston’s construction
would render a policy that explicitly includes coverage
for libel illusory. However, even if the Court also found
Evanston’s construction reasonable, the Exclusion would be
ambiguous and the Court would still be required to apply
the alternative reasonable construction propagated by the
insured, Gene by Gene.
21 Evanston Insurance Company’s Response to Gene
by Gene, Ltd.’s Motion for Summary Judgment and
Memorandum in Support Thereof, Document No. 25 at
15 (emphasis added).
22 See COMMON LAW, Black’s Law Dictionary (10th
ed.2014) (defining “common law” as “the body of law
derived from judicial decisions, rather than from statutes
or constitutions”).
23 See TEX. CIV. PRAC. & REM. CODE § 73.001, et
seq (elements of libel); TEX. BUS. & COM. CODE §
17.46(b)(8) (Texas Deceptive Trade Practices Act).
*6 Applying the claim in the Underlying Suit to the
Exclusion as construed by Gene by Gene, the Court finds
the claim does not fall under the Exclusion. The Genetic
Privacy Act does not concern unsolicited communication to
consumers, but instead regulates the disclosure of a person’s
DNA analysis. The facts upon which the claim is based
deal solely with Gene by Gene’s alleged improper disclosure
of DNA test results on its public website and to thirdparties.
The facts alleged in the complaint do not address
the type of unsolicited seclusion invasion contemplated by
the Exclusion. Accordingly, the Underlying Lawsuit is not
excluded from Gene by Gene’s policy coverage. Because
Gene by Gene has met its burden to establish that the claim
in the Underlying Lawsuit is covered by the Policies and
Evanston did not establish that the claim is excluded, the
Court finds Evanston has a duty to defend and indemnify
Gene by Gene in the Underlying Lawsuit.
C. Counterclaims
Gene by Gene alleges Evanston breached its contract when
it refused to defend and indemnify Gene by Gene pursuant
to the Policies. The Court has already determined Evanston
had a duty to defend and indemnify Gene by Gene under the
Policies. 24 Therefore, Evanston breached its contract when it
refused coverage. Accordingly, summary judgment is granted
as to Gene by Gene’s breach of contract counterclaim.
24 See also Professional Liability Policy No. SM–892198,
supra note 2 at 1; Professional Liability Policy No. SM–
898899, supra note 2 at 1.
Gene by Gene alleges Evanston violated Chapter 542 of the
Texas Insurance Code when it delayed in paying Gene by
Gene’s defense costs. That chapter “may be applied when an
insurer wrongfully refuses to promptly pay a defense benefit
owed to the insured.” Lamar Homes, Inc. v. Mid–Continent
Cas. Co., 242 S.W.3d 1, 20 (Tex.2007). See also Trammell
Evanston Insurance Company v. Gene by Gene, Ltd., — F.Supp.3d —- (2016)
© 2016 Thomson Reuters. No claim to original U.S. Government Works. 6
Crow Residential Co. v. Va. Sur. Co., Inc., 643 F.Supp.2d
844, 859 (N.D.Tex.2008) (Fitzwater, J.) (holding an insurer
is liable under the statute when “it wrongfully rejects its
defense obligation.”). An insurer is liable under the statute if
it wrongfully delays payment for more than 60 days. TEX.
INS. CODE § 542.058. The Court has already determined
Evanston had a duty to defend under the Policies. 25 Evanston
delayed more than 60 days to pay Gene by Gene’s defense.
Accordingly, Evanston is liable under Chapter 542 of the
Texas Insurance Code and thus summary judgment is granted
as to Gene by Gene’s counterclaim.
25 See also Professional Liability Policy No. SM–892198,
supra note 2 at 1; Professional Liability Policy No. SM–
898899, supra note 2 at 1.
IV. CONCLUSION
Based on the foregoing, the Court hereby
ORDERS that Defendant Gene by Gene Ltd.’s Motion for
Summary Judgment (Document No. 21) is GRANTED. The
Court further
ORDERS that Defendant Gene by Gene must file its brief
and documentation regarding the calculation of its damages,
attorneys’ fees, and prejudgment interest by January 27,
2016. The Court further
ORDERS that Plaintiff Evanston must submit its response to
Defendant Gene by Gene’s brief and calculation by February
17, 2016.
All Citations
— F.Supp.3d —-, 2016 WL 102294

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas civil litigation attorneys in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

Likens v. Hartford Life and Acc. Ins. Co., — F.Supp.2d —- (2011)

United States District Court,
S.D. Texas,
Houston Division.
Cheryl LIKENS, Plaintiff,
v.
HARTFORD LIFE AND ACCIDENT
INSURANCE COMPANY, Defendant.
Civil Action No. H–10–155. June 29, 2011.

Opinion
MEMORANDUM OPINION AND ORDER
GRAY H. MILLER, District Judge.
*1 This is a removal action wherein plaintiff seeks payment
of accidental death benefits under a policy of insurance.
Before the court are the parties’ cross-motions for summary
judgment. Dkts. 10, 11. After consideration of the motions,
responses, replies, exhibits, and the applicable law, plaintiff’s
motion (Dkt.10) is DENIED and defendant’s motion (Dkt.11)
is GRANTED.
BACKGROUND
Wesley Wood Vincent (“Vincent”) fell at his home on the
evening of February 23, 2008, and suffered injuries to his
cervical spine. Dkt. 1–1 at 10. He died as a result of that
injury on February 27, 2008. Id. The discharge summary from
the hospital listed his cause of death as “anoxic brain injury
secondary to cardiopulmonary arrest.” Id.
Vincent had a group life insurance policy with defendant
Hartford Life and Accident Insurance Company (“Hartford”),
obtained through Vincent’s employer, which provided a
benefit for “accidental” death. Dkt. 10–1 at 10. Plaintiff
Cheryl Likens is the listed beneficiary on the policy, and
she sought payment of the benefits. Id. Hartford denied the
claim due to Vincent’s intoxication at the time of his injury.
Dkt. 13–3 at 1–3. More specifically, Hartford relied upon
provisions of the Policy requiring that the injury must arise
from an accident “independently of all other causes,” and that
the policy excludes injuries “sustained as a result of being
legally intoxicated from the use of alcohol.” Dkt. 13–3 at
1–2. In Hartford’s view, Vincent’s death was “as a result of
being legally intoxicated from the use of alcohol,” Vincent
therefore “did not suffer bodily injury independent of all other
causes,” and no benefits were due. Id. at 2–3. Plaintiff sued in
state court to recover under the policy, and Hartford removed
the matter to this court on January 18, 2010, on the basis of
diversity of citizenship.
RELEVANT FACTS
1. The insurance policy.
The insurance policy in this case is a Group Benefits policy
issued by Hartford (“Policy”). Dkt. 10 at 12–29. The Policy,
which the parties agree was issued in August, 2004, provides
for an accidental death and dismemberment benefit for an
injury leading to death in the maximum amount of $300,000.
Dkt. 12 at 5–9. 1 An “injury” is defined as “bodily injury
resulting directly from accident and independently of all other
causes which occurs while [Vincent] is covered under the
Policy. Loss resulting from: a) sickness or disease …; or
b) medical or surgical treatment of a sickness or disease;
is not considered as resulting from injury.” Id. at 5. The
“Exclusions” section of the Policy provides in relevant part
as follows:
1 Plaintiff asserts that application of other applicable
Policy provisions results in a death benefit of $263,500
for Vincent. Dkt. 10 at 30. Hartford asserts that the death
benefit available for a covered injury is $250,000. Dkt.
11 at 3. Resolution of this dispute is not necessary to the
court’s ruling on the pending motions.
The Policy does not cover any loss resulting from … 8.
Injury sustained as a result of being legally intoxicated
from the use of alcohol. (For residents of Minnesota,
Exclusion 8 is deleted and is replaced by the following:
8. Injury sustained while operating a motor vehicle while
legally intoxicated from the use of alcohol.)
*2 Id. at 6.
2. Circumstances of Vincent’s death.
Likens v. Hartford Life and Acc. Ins. Co., — F.Supp.2d —- (2011)
© 2011 Thomson Reuters. No claim to original U.S. Government Works. 2
Vincent drank alcohol at a local bar on February 22, 2008,
and he arrived back home at approximately 11:30 p.m. Dkt.
12 at 14. An EMS report contains the following description
of events:
[F]amily state that [Vincent] went out drinking tonight and
that he was brought home by the bartender around 11 or
11:30. [Vincent’s] wife states that [he] was very intoxicated
and keep [sic] falling down, she states that she tried to help
him, but he told her that he was fine and that he was going
to sit out on the porch … her granddaughter came home and
found [Vincent] between the bbq pit and the hedge … she
moved him onto his back … [and] realized that he was not
breathing….
Dkt. 12 at 19. A hospital report confirms that plaintiff reported
an initial fall by Vincent, and that she also reported that
Vincent was unable to make it from the yard into the house.
Dkt. 12 at 26. A sheriff’s report for that same incident states
that it was Vincent’s daughter, Kayla Hutson, who later found
him on the ground, but she reported she was “not alarmed
[be]cause this was a regular occurrence.” Dkt. 12 at 32.
Vincent was transported to the hospital, and his serum blood
alcohol content shortly after the incident was reported as
being .328 mg/dl. Id. at 16. He never regained consciousness,
and his life support was removed on February 27, 2008. Dkt.
12 at 37. The cause of death was reported as “anoxic brain
injury secondary to cardiopulmonary arrest.” Id.
A Certificate of Death dated March 17, 2008, lists the
“immediate cause” of his death as “complications following
blunt trauma with fracture of cervical spine,” and the “manner
of death” is listed as “accident.” Dkt. 10 at 32. Also listed
under “significant conditions contributing to death but not
resulting in the underlying cause” is “chronic ethanolism.” Id .
ANALYSIS
I. Summary Judgment
A timely motion for summary judgment shall be granted “if
the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter
of law.” FED.R.CIV.P. 56(c); see also Carrizales v. State
Farm Lloyds, 518 F.3d 343, 345 (5th Cir.2008). Upon a
defendant’s motion for summary judgment, the plaintiff “must
set forth specific facts showing that there is a genuine issue
for trial. If he does not so respond, summary judgment, if
appropriate, shall be entered against him.” FED.R.CIV.P.
56(e). Ultimately, “[w]here the record taken as a whole could
not lead a rational trier of fact to find for the nonmoving
party, there is no ‘genuine issue for trial.’ “ Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct.
1348 (1986). An issue is “material” if its resolution could
affect the outcome of the action. Burrell v. Dr. Pepper/Seven
Up Bottling Group, Inc., 482 F.3d 408, 411 (5th Cir.2007).
“[A]nd a fact is genuinely in dispute only if a reasonable jury
could return a verdict for the non-moving party.” Fordoche,
Inc. v. Texaco, Inc., 463 F.3d 388, 392 (5th Cir.2006).
*3 The moving party bears the initial burden of informing
the court of all evidence demonstrating the absence of a
genuine issue of material fact. Celotex Corp. v. Catrett, 477
U.S. 317, 323, 106 S.Ct. 2548 (1986). Only when the moving
party has discharged this initial burden does the burden shift
to the non-moving party to demonstrate that there is a genuine
issue of material fact. Id. at 322. If the moving party fails
to meet this burden, then it is not entitled to a summary
judgment, and no defense to the motion is required. Id.
“For any matter on which the non-movant would bear the
burden of proof at trial …, the movant may merely point to the
absence of evidence and thereby shift to the non-movant the
burden of demonstrating by competent summary judgment
proof that there is an issue of material fact warranting trial.”
Transamerica Ins. Co. v. Avenell, 66 F.3d 715, 718–19
(5th Cir.1995); see also Celotex, 477 U.S. at 323–25. To
prevent summary judgment, “the non-moving party must
come forward with ‘specific facts showing that there is a
genuine issue for trial.’ “ Matsushita Elec. Indus. Co., 475
U.S. at 587 (quoting FED.R.CIV.P. 56(e)).
When considering a motion for summary judgment, the court
must view the evidence in the light most favorable to the
non-movant and draw all justifiable inferences in favor of
the nonmovant. Envtl. Conservation Org. v. City of Dallas,
Tex., 529 F.3d 519, 524 (5th Cir.2008). The court must review
all of the evidence in the record, but make no credibility
determinations or weigh any evidence; disregard all evidence
favorable to the moving party that the jury is not required
to believe; and give credence to the evidence favoring the
non-moving party as well as to the evidence supporting
the moving party that is uncontradicted and unimpeached.
Moore v. Willis Ind. Sch. Dist., 233 F.3d 871, 874 (5th
Cir.2000). However, the non-movant cannot avoid summary
judgment simply by presenting “conclusory allegations and
denials, speculation, improbable inferences, unsubstantiated
Likens v. Hartford Life and Acc. Ins. Co., — F.Supp.2d —- (2011)
© 2011 Thomson Reuters. No claim to original U.S. Government Works. 3
assertions, and legalistic argumentation.” See TIG Ins. Co. v.
Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir.2002);
see also Little v. Liquid Air Corp., 37 F.3d 1069, 1075
(5th Cir.1994) (en banc). By the same token, the moving
party will not meet its burden of proof based on conclusory
“bald assertions of ultimate facts.” Gossett v. Du–Ra–Kel
Corp., 569 F.2d 869, 872 (5th Cir.1978); see also Galindo v.
Precision Amer. Corp., 754 F.2d 1212, 1221 (5th Cir.1985).
II. Contract Interpretation
“Texas courts interpret insurance policies according to the
rules of contract construction.” de Laurentis v. U.S. Auto.
Ass’n, 162 S.W.3d 714, 721 (Tex.App.-Houston [14th Dist.]
2005, pet. denied). The primary objective of the court is
to ascertain the parties’ intent, as expressed in the written
instrument. See Forbau v. Aetna Life Ins. Co., 876 S.W.2d
132, 133 (Tex.1994). “[T]he parties’ intent is governed by
what they said, not by what they intended to say but did
not.” Nautilus Ins. Co. v. Country Oaks Apartments, Ltd., 566
F.3d 452, 455 (5th Cir.2009) (quoting Fiess v. State Farm
Lloyds, 202 S.W.3d 744, 746 (Tex.2006)) (internal quotation
omitted).
*4 If an insurance policy is worded so that it can be
given a definite meaning or certain legal meaning, then
the policy is not ambiguous and is construed by the court
as a matter of law. Am. Mfrs. Mut. Ins. Co. v. Schaefer,
124 S.W.3d 154, 157 (Tex.2003). An ambiguity exists
where a policy is susceptible to more than one meaning.
Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). Courts
interpreting contractual provisions give terms their plain,
ordinary, and generally accepted meanings, unless otherwise
defined by the parties. “ ‘Both the insured and the insurer
are likely to take conflicting views of coverage, but neither
conflicting expectations nor disputation is sufficient to create
an ambiguity.’ “ Nat’l Union Fire Ins. Co. of Pittsburgh, PA
v. U.S. Liquids, Inc., 271 F.Supp.2d 926, 932 (S.D.Tex.2003)
(quoting Forbau, 876 S.W.2d at 134). “[I]f, and only if,
the court finds an ambiguity in the contract provisions,
particularly in exclusionary clauses, the court should construe
the policy strictly against the insurer.” Nat’l Union Fire Ins.
Co. of Pittsburgh, PA, 271 F.Supp.2d at 932; see also Waffle
House, Inc. v. Travelers Indem. Co. of Ill., 114 S.W.3d
601, 607 (Tex.App.-Ft. Worth 2003, pet. denied) (cautioning
that exclusionary provisions “must be clearly expressed and
must not be ambiguously worded”). And, “if the insured’s
construction of an exclusionary provision is reasonable, it
must be adopted, even if the insurer’s construction is more
reasonable.” Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 271
F.Supp.2d at 931.
Under Texas law, an insured has the burden of establishing
coverage under the terms of an insurance policy. Gilbert Tex.
Constr., L.P. v. Underwriters at Lloyd’s London, 327 S.W.3d
118, 124 (Tex.2010). If the insured proves coverage, then to
avoid liability the insurer must prove that the loss is within an
exclusion. Id. If the insurer proves that an exclusion applies,
the burden shifts back to the insured to show that an exception
to the exclusion brings the claim back within coverage. Id.
III. Application
In this case, no reasonable jury could find facts that would
avoid the intoxication exclusion of the Policy. 2 The facts of
this case clearly establish that Vincent’s intoxication on the
night he fell in his front yard is the proximate cause of his
death, and this prevents plaintiff from recovering under the
Policy.
2 The court will not, therefore, address Hartford’s
argument that plaintiff failed to establish that Vincent’s
death was caused by an accident independent of other
causes.
“The Policy does not cover any loss resulting from … [i]njury
sustained as a result of being legally intoxicated from the use
of alcohol.” Dkt. 12 at 6. Hartford’s evidence conclusively
establishes that the injuries Vincent sustained on February
23, 2008, and which led to his death, were caused by his
extreme intoxication. Plaintiff asserts that the autopsy report
on Vincent’s body discounts alcohol consumption as a cause
of his death. Plaintiff’s argument is premised upon a form
where “chronic ethanolism” is listed in box pre-labeled for
“significant conditions contributing to death but not resulting
in the underlying cause.” Dkt. 10 at 32. A review of the
more complete report of the findings, however, reveals that
the medical examiner made no finding that intoxication did
not cause the injuries. Dkt. 13–1 at 2–9. In fact, the medical
examiner’s notes reflect that the “blunt force trauma” occurred
because “[d]ecedent fell at home while intoxicated and hit his
head on a barbecue pit.” Id. at 9. Thus, the medical examiner
did not make any finding that would permit a jury to conclude
that intoxication did not cause Vincent’s injuries. Indeed, such
a finding is compelled by the record evidence.
*5 The sole question remaining, then, is one of interpretation
of the exclusion at issue. More specifically, what is meant by
the term “legally intoxicated” as used in the Policy? Plaintiff
asserts that this language is ambiguous and, accordingly,
Likens v. Hartford Life and Acc. Ins. Co., — F.Supp.2d —- (2011)
© 2011 Thomson Reuters. No claim to original U.S. Government Works. 4
presents her own proposed definition. There is no challenge to
whether Vincent met the legal definition in terms of the level
of his intoxication. Indeed, the record reflects that Vincent
was approaching the level of blood alcohol content that is
considered medically “toxic.” Dkt. 12 at 16. Rather, plaintiff
points to Hartford’s reliance in its briefing on the definition
of legal intoxication from the Texas Penal Code, and asserts
that “legal intoxication” therefore necessarily requires that
Vincent be not only intoxicated, but intoxicated in a legally
relevant fashion. Dkt. 10 at 9. More specifically, the exclusion
would only apply in plaintiff’s view if Vincent were driving,
or otherwise “operating a motor vehicle, motorboat or vessel”
in violation of Texas law. Id.
Hartford responds that there is no indication in the Policy that
intoxication must involve a violation of Texas law, or that
operation of a motor vehicle is required for such a finding.
Indeed, Hartford is correct. In fact, the exclusion at issue is
immediately followed in the Policy by an alternate version
of the exclusion applicable only in Minnesota and which
specifically limits the exclusion to injuries sustained while
“operating a motor vehicle while legally intoxicated from the
use of alcohol.” Dkt. 12 at 6. Thus, there is no support for
plaintiff’s argument in the language of the Policy itself.
For purposes of Texas law, “intoxicated” is defined as:
(A) not having the normal use of mental or physical
faculties by reason of the introduction of alcohol,
a controlled substance, a drug, a dangerous drug, a
combination of two or more of those substances, or any
other substance into the body; or
(B) having an alcohol concentration of 0.08 or more.
V.T.C.A., Penal Code § 49.01 (emphasis added). While
Hartford relies upon this definition, drawn from the Texas
Penal Code, for purposes of establishing a definition
of “legal intoxication” in the Policy exclusion, Hartford
points out that Texas law also provides for similar
definitions of “intoxicated” for determining issues in workers’
compensation cases, Tex. Labor Code § 401.103, and for
determining when a customer may no longer be served
alcoholic beverages. Tex. Admin. Code § 50.2. This broad
application of the definition of “intoxicated” in Texas law
distinguishes cases such as MacDonald v. Unicare Life
& Health Ins. Co., No. 3:07–0345, 2008 WL 169142
(S.D.W.Va. Jan. 18, 2008) and cases cited therein where the
state law referenced in, or applicable to, a policy exclusion
required an adjudication or a finding that the intoxication
was actually in violation state law. Here, Texas defines
“intoxicated” in more than just a criminal context, and the
court finds no basis to read into the Policy such an additional
provision.
*6 Not every difference in interpretation of an insurance
policy amounts to an ambiguity. Kelley–Coppedge, Inc. v.
Highlands Ins. Co., 980 S.W.2d 462, 465 (Tex.1998). Here,
the court does not perceive an ambiguity in the Policy as
written. The exclusion applies if Vincent’s death was caused
by his being “legally intoxicated,” i.e., being “intoxicated”
as that term is defined in Texas law. Texas law provides a
uniform definition of “intoxicated” that Vincent easily met at
the time he fell and struck his head.
And, in any event, even if some ambiguity existed in
the exclusionary language, an insured’s construction of the
exclusion will only be adopted if it is reasonable. Nat’l Union
Fire Ins. Co. of Pittsburgh, PA, 271 F.Supp.2d at 931. In
this case, there is simply no basis for reading into the Policy
exclusion an additional requirement that Vincent not only be
impaired as described in Texas law, but that he also have been
committing a crime.
Finally, plaintiff argues in the alternative that it is improper to
utilize a definition of intoxication drawn specifically from the
Texas Penal Code unless there was an express adoption of that
standard in the Policy. This is a potential ambiguity, however,
that does not benefit plaintiff. A contractual clause that is
ambiguous as applied to certain facts may be unambiguous as
applied to others. State Farm Fire and Cas. Co. v. Vaughan,
968 S.W.2d 931, 934 (Tex.1998). Vincent met any definition
of “intoxicated” during the relevant time frame. Choosing one
that differs slightly from the one found in the Texas Penal
Code would not avail plaintiff in this case.
CONCLUSION
After consideration of the motions, responses, replies,
exhibits, and the applicable law, plaintiff’s motion for
summary judgment (Dkt .10) is DENIED, and defendant’s
motion for summary judgment (Dkt.11) is GRANTED.

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas insurance defense and contract law attorneys in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

Court of Appeals of Texas,Houston (1st Dist.).

MEMC ELECTRONIC MATERIALS, INC., and MEMC Pasadena, Inc., Appellants

v.

ALBEMARLE CORPORATION, Lexington Insurance Co., and Travelers Property Casualty Group, Appellees.

No. 01-05-00420-CV.

Feb. 15, 2007.

Justices TAFT, ALCALA, and HANKS.

OPINION

ELSA ALCALA, Justice.

Appellants, MEMC Electronic Materials and MEMC Pasadena (collectively MEMC), appeal the trial court’s order that granted a motion for partial summary judgment urged by appellees, Albemarle Corporation and its insurers, Lexington Insurance and Travelers Property Casualty Group, and that denied MEMC’s cross-motion for partial summary judgment.FN1 After Albemarle indemnified Ethyl Corporation for claims paid by Ethyl to three people who were injured in a fire at a manufacturing plant, Albemarle sought indemnification from MEMC for Albemarle’s payment to Ethyl. MEMC refused to indemnify Albemarle, contending that the Asset Purchase Agreement between MEMC and Albemarle does not require the indemnification. In a single issue on appeal that challenges the trial court’s rendition of summary judgment in favor of Albemarle, MEMC asserts three reasons that the trial court should have rendered judgment in its favor. First, MEMC contends that Albemarle’s right to obtain indemnification from MEMC under the Asset Purchase Agreement was not triggered by the claims against Ethyl because every claim for which Ethyl was held liable arose out of Ethyl’s design and operation of the plant prior to the closing date of the Asset Purchase Agreement. Second, MEMC asserts that the Ethyl Indemnity Agreement was not an obligation that it assumed under the terms of the Asset Purchase Agreement. Third, MEMC states that Albemarle’s claim for indemnity is unenforceable under Texas and Virginia law. Albemarle replies by asserting that its indemnification of Ethyl was required under Virginia law, that the indemnification provision of the Asset Purchase Agreement is not modified by any other part of the agreement, and that the indemnification’s before-and-after nature provides for the indemnification that it seeks here.FN2

FN1. The trial court granted the parties’ Joint Motion to Sever and Abate the damages portion of the case, rendering the grant of partial summary judgment a final, appealable judgment.

FN2. Both parties filed post-submission supplemental briefs with this Court. We allow this supplementation in accordance with Rule 38 .7 of the Texas Rules of Appellate Procedure. See Tex.R.App. P. 38.7 (“A brief may be amended or supplemented whenever justice requires, on whatever reasonable terms the court may prescribe.”)

Considering the entire agreement and all individual provisions in the context of the whole instrument, we conclude that the Asset Purchase Agreement does not obligate MEMC to indemnify Albemarle for its payment to Ethyl for Ethyl’s liability for injuries caused by a fire at the plant. We do not reach the issue of whether the laws of Texas and Virginia make the indemnity agreement unenforceable as matter of law. We reverse and render judgment in favor of MEMC.

Background

Ethyl designed and built a polysilicon manufacturing plant located in Pasadena, Texas. In 1994, Ethyl created Albemarle as a separate company and transferred various of its businesses, including the plant, to Albemarle’s ownership and control. The transfer was under a “Reorganization and Distribution Agreement.” Ethyl and Albemarle also entered into an “Indemnification Agreement,” under which Albemarle agreed to “indemnify, defend and hold harmless Ethyl … from and against any and all Indemnifiable Losses of the Ethyl Indemnitees arising out of or due to the failure or alleged failure of Albemarle or any of its Affiliates to pay, perform, or otherwise discharge in due course any of the Albemarle Liabilities.” The agreements between Ethyl and Albemarle are governed by the laws of the state of Virginia.

In 1995, Albemarle sold the plant to MEMC pursuant to an “Asset Purchase Agreement” that is governed by Texas law. The closing date for the agreement was July 31, 1995. Under a separate agreement, MEMC and Albemarle agreed that Albemarle would continue to operate the plant.

The Asset Purchase Agreement describes the transfer of the plant and other assets and liabilities in Sections 3.3 and 3.4. Some assets and liabilities were specifically excluded from the transfer, and only certain liabilities were assumed by MEMC. Section 3.4(b) specifies that MEMC “shall not assume any other Liabilities of Seller whatsoever” except “those Liabilities specifically assumed” in Section 3.4(a). Section 3.4(a) does not mention the agreement between Ethyl and Albemarle, nor was that agreement a contract that was assumed by MEMC in the accompanying Schedule 3.4(a)(i). The agreement further specified that MEMC did not assume any liability that results or arises from the operation of the plant prior to the closing date.

Albemarle made certain representations and warranties to MEMC. Under Section 4.16, labeled “Contracts and Commitments,” Albemarle represented that, except as set forth in Schedule 4.16, it was “not a party to” and the transferred assets “are not bound by” and the Assumed Obligations “shall not include, any written or oral, formal or informal … agreements between or among Seller and any Affiliate of Seller ….“ Schedule 4.16 did not mention the indemnity agreement between Ethyl and Albemarle.

The Asset Purchase Agreement between Albemarle and MEMC included an indemnity provision. Generally speaking, depending on whether the damages arose out of the operation of the plant “prior to the closing date” or “on or after the closing date,” MEMC would indemnify Albemarle for the damages, or Albemarle would indemnify MEMC for the damages. In Section 7.3, Albemarle agreed to indemnify MEMC from and against all damages incurred by MEMC directly or indirectly by reason of or resulting from liabilities, obligations or claims, with respect to the plant arising out of operations of the plant prior to the Closing Date. Similarly, Section 7.4 provided that MEMC would indemnify Albemarle from and against all damages asserted against, resulting to, imposed upon or incurred by Albemarle, directly or indirectly by reason of or resulting from liabilities, obligations or claims with respect to the plant arising out of the operations of the plant on or after the Closing Date.

In 1996, three Albemarle employees were injured when a fire broke out at the plant. The employees, collectively referred to as the the Damewood plaintiffs, filed a lawsuit against a number of parties, including Ethyl and MEMC.FN3 Albemarle, which carried worker’s compensation coverage, was not subject to suit. MEMC settled with the Damewood plaintiffs. Of the parties relevant to the present case, only Ethyl went to trial in the underlying litigation. Pursuant to the agreement between Ethyl and Albemarle, Albemarle defended Ethyl in the Damewood litigation. At the close of the trial, Ethyl was the only remaining defendant, and a jury rendered a verdict in excess of six-and-a-half million dollars against Ethyl. Ethyl appealed, and while the appeal was pending, it settled with the Damewood plaintiffs for approximately five million dollars. Ethyl sought indemnification from Albemarle under the terms of their agreement. Albemarle indemnified Ethyl for its losses, which is the amount that Albemarle now seeks from MEMC in this lawsuit.

FN3. Larry Damewood, Gary Woodard, and Roy Moss v. Ethyl Corporation, Cause No. 96-38521, in the 189th District Court of Harris County, Texas.

MEMC filed for summary judgment, which was denied. Albemarle then filed a motion for partial summary judgment on the issue of whether MEMC was obligated to indemnify Albemarle, and MEMC re-urged its motion as a cross-motion for partial summary judgment. The trial court ruled in Albemarle’s favor. The trial court severed the summary judgment order and abated the question of damages so the parties could bring the present appeal.

Standard of Review

When reviewing cross-motions for summary judgment, we consider both motions and render the judgment that the trial court should have entered. Coastal Liquids Transp., L.P. v. Harris County Appraisal Dist., 46 S.W.3d 880, 884 (Tex.2001). Further, in a contract action where, as here, neither party contends that a contract is ambiguous, a court should construe the contract as a matter of law, and, on appeal, the court’s ruling is subject to de novo review. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex.2003) (citing Coker v. Coker, 650 S.W.2d 391, 394 (Tex.1983)) (applying rule to arbitration agreement); C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 780 (Tex.App.-Houston [1st Dist.] 2004, no pet.) (interpreting asset purchase agreement); Tesoro Petroleum Corp. v. Nabors Drilling USA, Inc., 106 S.W.3d 118, 125 (Tex.App.-Houston [1st Dist.] 2002, pet. denied) (interpreting indemnity agreement); Webb v. Lawson-Avila Constr., Inc., 911 S.W.2d 457, 459-60 (Tex.App.-San Antonio 1995, writ dism’d w.o.j.).

“An indemnity agreement is a promise to safeguard or hold the indemnitee harmless against either existing and/or future loss liability.” Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex.1993). Indemnity provisions are to be strictly construed, pursuant to the usual principles of contract interpretation, in order to give effect to the parties’ intent as expressed in the agreement. See Ideal Lease Serv., Inc. v. Amoco Prod. Co., 662 S.W.2d 951, 953 (Tex.1984). In construing a written contract, the court’s primary concern is to ascertain the true intent of the parties as expressed in the instrument. J.M. Davidson, Inc., 128 S.W.3d at 229; see C.M. Asfahl Agency, 135 S.W.3d at 780. Accordingly, the court must examine and consider the entire writing in an effort to harmonize and give effect to all provisions so that none is rendered meaningless. J.M. Davidson, Inc., 128 S.W.3d at 229. The court may not consider any single provision, taken in isolation, as controlling, but must consider all provisions in the context of the entire instrument. Id.

Obligations Assumed by MEMC Under the Agreement

MEMC contends that, in its Asset Purchase Agreement with Albemarle, it did not assume an obligation for the indemnity agreement between Ethyl and Albermarle. MEMC contends that Sections 3.4, 4.16 and 3.3(b) exclude the agreement between Albemarle and Ethyl from the agreement between Albemarle and MEMC. Albemarle does not dispute that the agreement between Ethyl and Albemarle is never mentioned specifically in the agreement between Albemarle and MEMC. Albemarle, however, asserts that it is entitled to indemnification from MEMC under Section 7.4, the section of the agreement that pertains to indemnification.

1. MEMC Does Not Assume Obligation for Ethyl-Albemarle Agreement

MEMC points to Section 3.4 of the Asset Purchase Agreement to show that it did not assume any obligation for the indemnity agreement between Ethyl and Albermarle. As noted above, Albemarle does not dispute that Section 3.4 does not mention the agreement between Ethyl and Albemarle.

1. Section 3.4(a)

The Asset Purchase Agreement describes the transferred business and transferred assets. Section 3.4(a) specifically describes “Assumed Obligations.” These are obligations, assumed by MEMC, of liabilities that belong to Albemarle. The only obligations that are assumed by MEMC are those that are listed in Schedule 3.4(a)(i), the “Assumed Contracts[.]” FN4 The agreement between Ethyl and Albemarle was not listed in Schedule 3.4(a)(i) as a contract that was assumed by MEMC. Moreover, the agreement between Albemarle and MEMC specifically provided that MEMC would “assume no liabilities relating to the Assumed Contracts which result or arise from operation of the Transferred Business or the Transferred Assets prior to the Closing Date.” MEMC thus correctly points out that Section 3.4(a) provides that MEMC is assuming an obligation for only the liabilities of Albemarle that “are listed in Schedule 3.4(a)(i) [,]” and that the agreement between Ethyl and Albermarle is not listed in that Schedule. We agree with MEMC’s representation that under Section 3.4(a), it has not assumed liability for the agreement between Ethyl and Albemarle.

FN4. The Asset Purchase Agreement states,

Section 3.4 Assumptions by MEMC Pasadena

(a) Liabilities Being Assumed. Except as otherwise expressly provided herein and subject to the terms and conditions of the Agreement, simultaneously with the sale, transfer, conveyance and assignment to MEMC Pasadena of the Transferred Assets, MEMC Pasadena shall assume and agree and undertake in writing to pay, perform, and discharge as and when due … the following Liabilities of Seller (collectively, “Assumed Obligations” ):

(i) those Liabilities of Seller under all contracts, leases, subleases, commitments, supply contracts, agreements and orders relating primarily to the operation of the Transferred Business or the Transferred Assets, but in all such cases only to the extent the same are listed in Schedule 3.4(a)(i) attached hereto (the “Assumed Contracts” ) provided, however, that MEMC Pasadena shall assume no liabilities relating to the Assumed Contracts which result or arise from operation of the Transferred Business or the Transferred Assets prior to the Closing Date ….

2. Section 3.4(b)

The Asset Purchase Agreement specifies under Section 3.4(b) that liabilities of Albermarle are not being assumed by MEMC. The only exception is that MEMC is assuming liability for items listed in Schedule 3.4(a)(i), which is the schedule included within 3.4(a). Section 3.4(b) states that MEMC “shall not assume any other Liabilities” of Albemarle, unless the liability is “specifically assumed in writing” under Section 3.4(a). The agreement between Albemarle and Ethyl is not listed in Schedule 3.4(a)(i) and is therefore excluded from the obligations assumed by MEMC. MEMC thus accurately represents that under Section 3.4(b), it has not assumed liability for the agreement between Ethyl and Albemarle.FN5

FN5. Section 3.4(b) of the Asset Purchase Agreement states,

(b) Liabilities Not Being Assumed. Except for those Liabilities specifically assumed in writing by MEMC Pasadena pursuant to Section 3.4(a) hereof, MEMC Pasadena shall not assume any other Liabilities of Seller whatsoever such as (by way of example and without limitation of the scope of the preceding portion of this sentence), the following (collectively, “Excluded Obligations” ).

(i) any Liabilities of Seller (other than Assumed Obligations) of any nature whatsoever (regardless of whether the existence of such Liability (A) is or was at any time known or unknown to MEMC Pasadena, MEMC or Seller or (B) constitutes or does not constitute a breach of any representation or warranty of Seller to MEMC or MEMC Pasadena) to the extent arising or incurred or which arose or were incurred on or before the Closing, or which are based on (1) events occurring on or before the Closing, or (2) the operation of the Transferred Business on or before the Closing, notwithstanding that the date on which the claim, demand or Liability arose is after the Closing …

In summary, Sections 3.4(a) and (b) provide that MEMC is not assuming obligation for liabilities of Albemarle that are not specifically set forth in Schedule 3.4(a). The agreement between Ethyl and Albemarle is not mentioned in Schedule 3.4(a). We conclude that Section 3.4 of the agreement does not provide for MEMC to assume obligation for the indemnity agreement between Ethyl and Albermarle. Our task, however, is not merely to examine a single provision of the agreement, but to look at all the provisions in the context of the entire instrument in an effort to harmonize and give effect to all provisions so that none is rendered meaningless. See J.M. Davidson, Inc., 128 S.W.3d at 229.

1. Albemarle Did Not Disclose Ethyl-Albermarle Agreement

MEMC contends that the failure of Albemarle to disclose the existence of the indemnity agreement between Ethyl and Albemarle shows that there was never any obligation by MEMC for that agreement. Albemarle makes representations and warranties to MEMC in the Asset Purchase Agreement. Under Section 4.16(a)(x) of the Asset Purchase Agreement, Albemarle represents that it is not “a party to” and is “not bound by” any “agreements between or among” Albemarle and any “Affiliate.” The indemnification agreement between Ethyl and Albemarle showed that Albemarle was Ethyl’s “wholly-owned subsidiary[,]” which meets the definition of affiliate in the agreement between Albemarle and MEMC.FN6 Further, Section 4.16(xiii) includes Albemarle’s representation that it is not “a party to” and is “not bound by … any other agreement, contract, commitment, arrangement or instrument that relate[s] to or may affect the plant.” FN7 The only exception to these provisions concerns agreements listed in schedules accompanying the Asset Purchase Agreement. As noted above, the indemnity agreement between Ethyl and Albemarle was never disclosed in any schedule, nor was it ever mentioned in the Asset Purchase Agreement. We conclude that Section 4.16 called for Albemarle to disclose contract and commitments that “relate to or may affect” the plant, but Albemarle did not disclose its indemnity agreement with Ethyl. We also conclude that Albemarle failed to disclose in Section 4.16 the indemnity agreement it had with its affiliate, Ethyl. Albemarle’s failure to disclose its indemnity agreement with Ethyl suggests that MEMC was not aware of that agreement and did not obligate itself to cover any liability imposed under that agreement. We conclude that terms of Section 4.16 support MEMC’s position that it is not obligated for the indemnity agreement between Albemarle and Ethyl.

FN6. “Affiliate” is defined in the agreement as “in the case of an entity, any person who or which, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, any specified Person (the term “control” for these purposes means the ability, whether by ownership of shares or other equity interest, by contract or otherwise, to elect a majority of the directors of a corporation … or have the power to remove and then select, a majority of those Persons exercising governing authority over an entity).”

FN7. The Asset Purchase Agreement states,

Section 4.16 Contracts and Commitments

(a) Except as set forth in Schedule 4.16 or in other Schedules to this Agreement hereof, to Seller’s knowledge, Seller is not, with respect to the Transferred Business or the Transferred Assets, a party to, and the Transferred Assets and the Transferred Business are not bound by, and the Assumed Obligations shall not include, any written or oral, formal or informal …

[the section lists a number of possible contractual obligations]

(x) agreements between or among Seller and any Affiliate of Seller;

…

(xiii)any other agreement, contract, commitment, arrangement or instrument that relate to or may affect the Transferred Business, except for the Assumed Contracts.

In view of Sections 3.4 and 4.16 of the Asset Purchase Agreement, we conclude that those sections suggest that MEMC was not obligated to indemnify Albemarle for the payment that it made to Ethyl.FN8

FN8. We disagree with MEMC that Section 3.3(b) supports its position that it is not obligated to Albemarle here, because we conclude that the section is inapplicable. Section 3.3(b) states that Albemarle continues to have responsibility for certain assets, including “(v) all indemnification rights against and indemnification agreements with other parties arising out of the Transferred Business or the Transferred Assets prior to the Closing Date.” The indemnity agreement between Ethyl and Albemarle is not an asset of Albemarle’s, but is rather a liability, and that Section, therefore, does not aid in our analysis of the issues here.

The Indemnification Portion of the Agreement

Albemarle contends that the indemnification terms specified by Section 7.4 of the agreement require MEMC to indemnify Albemarle, and that under the rules of contract construction, we must favor an interpretation that affords some consequence to each part of the instrument so that none of its provisions will be rendered meaningless. Albemarle contends Section 7.4(a) requires MEMC to indemnify it for its obligation to Ethyl so long as that obligation FN9 (1) is with respect to the transferred business,FN10 and (2) arose out of the operation of the transferred business, (3) on or after the closing date.

FN9. MEMC does not challenge Albemarle’s assertion that it met the term “Liabilities, Obligations or Claims” because the lawsuit arising out of the January 1996 fire would qualify as an obligation, claim, or liability. The Asset Purchase Agreement defines Liabilities as: “any and all debts, claims, liabilities and obligations of any kind, regardless of whether disclosure thereof would be required to be made in accordance with [Generally Accepted Accounting Principles], whether accrued or fixed, absolute or contingent or determined or determinable.”

FN10. Albemarle contends that it is undisputed that the Damewood plaintiffs were injured while performing polysilicon manufacturing operations for the Pasadena business, and thus the injuries were “with respect to the Transferred Business.” The agreement between Albemarle and MEMC defines “Transferred Business” as “all of the business of Seller related to the manufacture of granular polysilicon, silane, sodium aluminum fluoride, and sodium ethyl silicate at the manufacturing facilities of Seller located in Pasadena, Texas, but specifically excluding Seller’s sodium aluminum hydride business[.]”

MEMC’s challenge on appeal focuses on the term “arising out of the operations of the Transferred Business … on or after the Closing Date.” MEMC contends that the undisputed evidence shows that Albemarle’s payment to Ethyl was due to the agreement between them, which occurred prior to the Closing Date of the Asset Purchase Agreement between Albemarle and Ethyl, and that the payment did not arise out of the operations of the plant on or after the Closing Date. In short, the tort claims by the Damewood plaintiffs are not the legal basis for Albemarle’s indemnity claim here. MEMC also asserts that the undisputed summary judgment record indicates that every claim for which Ethyl was held liable arose out of Ethyl’s design and operation of the plant prior to the closing date of the Asset Purchase Agreement.

Albemarle responds that we should rely on the specific indemnity provision in Section 7.4(a) of the Asset Purchase Agreement, despite the fact that the Asset Purchase Agreement fails to mention the indemnity agreement between Ethyl and Albemarle. Albemarle contends that “Resolution of the meaning of the term ‘arising out of’ is, perhaps, the central and controlling issue presented to this Court.” Albemarle asserts that it is asking this Court to give “arising out of” the “normal inclusive” reading that “reasonable mutual indemnitors would have accorded the phrase.”

Under Section 7.4(a) of the Asset Purchase Agreement, MEMC must indemnify Albemarle for all damages asserted against, resulting to, imposed upon or incurred by Albemarle directly or indirectly by reason of or resulting from liabilities, obligations or claims with respect to the plant arising out of the operations of the plant on or after the Closing Date.FN11 The Damewood plaintiffs were injured after the Closing Date of the Asset Purchase Agreement and there is no dispute that those injuries arose out of the operations of the plant. The damages at issue here, however, consist of the payment made by Albemarle to Ethyl pursuant to their indemnity agreement, which was an agreement in existence before the Closing Date of the Asset Purchase Agreement. We conclude that the payment made to indemnify Ethyl was not a liability, obligation or claim arising out of the operations of the plant, but rather a payment that arose out of the prior contractual relationship between Albemarle and Ethyl.

FN11. Section 7.4 of the Asset Purchase Agreement provides that MEMC will indemnify Albemarle under certain circumstances. The agreement states,

Section 7.4 MEMC’s and MEMC Pasadena’s Agreement to Indemnify. Subject to the terms and conditions of this Article 7, MEMC and MEMC Pasadena jointly and severally agree to indemnify, defend and hold harmless Seller from and against all Damages asserted against, resulting to, imposed upon or incurred by Seller, directly or indirectly (collectively, “Seller Claims” ), by reason of or resulting from:

(a) without prejudice to any obligations of Seller under the Operating Agreement or the Utilities and Services Agreement, liabilities, obligations or claims with respect to the Transferred Business or the Transferred Assets (whether absolute, accrued, contingent or otherwise) arising out of the operations of the Transferred Business or the Transferred Assets (including the Facility and the Facility Site) on or after the Closing Date;

(b) liabilities with respect to the Assumed Obligations and the Assumed Contracts;

(c) a breach of any representation, warranty or agreement of MEMC or MEMC Pasadena contained in or made pursuant to this Agreement ….

We disagree with the assertion by Albemarle that we will render Section 7.4(a) meaningless if we interpret the Asset Purchase Agreement to deny recovery here. The Asset Purchase Agreement plainly provides for MEMC to indemnify for damages arising out of the operations of the plant on or after the Closing Date. That indemnity agreement remains in place for any liabilities, obligations or claims that arise out of the operations of the plant on or after the closing date. Our holding merely denies recovery for any Albemarle liabilities, obligations or claims that arise out of unidentified, contractual obligations in existence prior to the Closing Date that were not specifically mentioned by the Asset Purchase Agreement with MEMC.FN12

FN12. In its most recent supplemental brief, Albemarle contends that the language in Section 7.4. which states that the section is “[s]ubject to the terms and conditions of this Article 7 ” requires us to read Section 7.4 independently of Articles 3 and 4. To the contrary, we note that the term “subject to the terms and conditions” appears throughout the agreement, and nowhere requires any section to be read in isolation. We also note that Section 7.1 expressly incorporates all other agreements between the parties into Article 7:

All representations, warranties and agreements made by any party to this Agreement or pursuant hereto shall be true, complete, and correct as of the date hereof and at and as of the Closing Date as though such representations, warranties, covenants and agreements were made at and as of the closing date.

Viewing the indemnity provision in context with the agreement as a whole, our conclusion is consistent with the other sections of the agreement. As we noted above, Section 3.4 of the agreement does not provide for MEMC to assume an obligation for the indemnity agreement between Albemarle and Ethyl. Additionally, Albemarle’s failure to disclose the agreement under Section 4.16, suggests that MEMC was not aware of the agreement. We further noted that Section 4.16(a)(x) suggests that MEMC is not obligated to Albemarle for its payment to Ethyl because it is a “wholly-owned subsidiary” of Ethyl, which would qualify as an “Affiliate of Seller” under the Asset Purchase Agreement.

Albemarle refers us to decisions that interpret “arising out of” language to require only a causal nexus between the action and the result. For its broad interpretation, Albemarle calls this court’s attention to a number of cases construing insurance contracts. See Mid-Century Ins. Co. of Tex. v. Lindsey, 997 S.W .2d 153, 156 (Tex.1999); Utica Nat’l Ins. Co. v. Am. Indem. Co., 141 S.W.3d 198, 203 (Tex.2004); McCarthy Bros. Co. v. Cont’l Lloyds Ins. Co., 7 S.W.3d 725, 730 (Tex.App.-Austin 1999, no pet.); Gen. Agents Ins. Co. v. Arredondo, 52. S.W.3d 762, 767 (Tex.App.-San Antonio 2001, pet. denied); Sport Supply Group, Inc. v. Columbia Cas. Co., 335 F.3d 453, 458 (5th Cir.2003). In interpreting an insurance policy, when that policy “is subject to more than one reasonable interpretation, we must adopt the construction most favorable to the insured when we resolve the uncertainty.” State Farm Fire & Cas. Co. v. Vaughan, 968 S.W.2d 931, 933 (Tex.1998). Albemarle presents no authority that requires us to interpret the terms of contractual indemnity in a commercial setting-terms which neither party contends are subject to multiple reasonable interpretations-to favor the indemnitee.

MEMC relies on an unpublished decision from this Court in Union Tex. Petroleum Energy Corp. v. Kelly Operating Co., No. 01-96-00346-CV, 1997 WL 476322 (Tex.App.-Houston [1st Dist.] Aug. 21, 1997, no pet.) (not designated for publication). In August 1990, four men were injured by a well and sued Union Texas for negligent dredging of an oil well extension canal that occurred in 1975. Id. at *1. Kelly refused to indemnify Union Texas under their May 1990 agreement that provided that Kelly would discharge all obligations arising out of the purchased property with respect to all occurrences on or after the Effective Date of the agreement. Id. This Court held that the agreement that provided for indemnity after May 1990 did not apply because the negligent conduct-the 1975 dredging of the oil well-occurred prior to the effective date of the agreement. Id. at *3. Here, similarly, the liability, obligation or claim arises from the contractual relationship between Albemarle and Ethyl, which occurred before the Closing Date of the Asset Purchase Agreement. See id.

Examining the entire writing in order to give effect to the intent of the parties as expressed in the agreement, and in order to render no clause meaningless, we conclude that the Asset Purchase Agreement does not obligate MEMC to indemnify Albemarle for the payment to Ethyl under the agreement between Albemarle and Ethyl. The trial court therefore erred by granting partial summary judgment for Albmarle, and also erred by failing to grant partial summary judgment in favor of MEMC.

Conclusion

We reverse and render judgment for MEMC.

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