     Case: 12-40189   Document: 00512067754     Page: 1   Date Filed: 11/29/2012




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                 Fifth Circuit

                                                                  FILED
                                                              November 29, 2012

                                 No. 12-40189                    Lyle W. Cayce
                                                                      Clerk

PPI TECHNOLOGY SERVICES, L.P.,

                                           Plaintiff–Appellant
v.

LIBERTY MUTUAL INSURANCE CO.

                                           Defendant–Appellee



                 Appeal from the United States District Court
                      for the Southern District of Texas


Before WIENER, CLEMENT, and PRADO, Circuit Judges.
EDWARD C. PRADO, Circuit Judge:
      Defendant–Appellee, Liberty Mutual Insurance Co., (“Liberty Mutual”),
insured Plaintiff–Appellant, PPI Technology Services, L.P., (“PPI”). PPI was
retained by several third parties to assist in planning well-drilling operations.
After a well was drilled in the wrong area, PPI was sued by the third parties.
PPI then sought defense and indemnification from its insurance company,
Liberty Mutual. When Liberty Mutual refused, PPI brought suit claiming
breach of contract, violation of the Texas Prompt Payment Statute, and breach
of the duty of good faith and fair dealing. On Cross Motions for Summary
Judgment, the district court found for Liberty Mutual, holding that it did not
have a duty to defend PPI against two underlying lawsuits. PPI appeals the
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                                  No. 12-40189

district court’s judgment, arguing that the district court erred in refusing to
consider some allegations in the underlying lawsuits as “factual allegations,” and
in its determination that, of the “factual allegations,” none alleged “property
damage” from an “occurrence” as required by PPI’s insurance policy with Liberty
Mutual. We AFFIRM the district court’s dismissal.
           I. FACTUAL AND PROCEDURAL BACKGROUND
A.    The Insurance Policy
      Liberty Mutual issued a commercial general liability policy to PPI (the
“Policy”). The Policy provided that Liberty Mutual would defend and indemnify
PPI for claims arising out of PPI’s exploration and production business
operations. The Policy provides “Bodily Injury and Property Damage Liability”
coverage (Coverage A) for “property damage” caused by an “occurrence.” The
Policy defines “property damage” as follows:
      a. Physical injury to tangible property, including all resulting loss
      of use of that property. All such loss of use shall be deemed to occur
      at the time of the physical injury that caused it; or

      b. Loss of use of tangible property that is not physically injured. All
      such loss of use shall be deemed to occur at the time of the
      “occurrence” that caused it.

      The Policy also provides coverage for “property damage” within the
“underground resources and equipment hazard” endorsement to the Policy. The
Policy defines the term “underground resources and equipment hazard” to
include:
      ‘Property damage’ to any of the following:
      a. Oil, gas, water or other mineral substances which have not been
      reduced to physical possession above the surface of the earth or
      above the surface of any body of water;

      b. Any well, hole, formation, strata or area in or through which
      exploration for or production of any substance is carried on;


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      c. Any casing, pipe, bit, tool, pump or other drilling or well servicing
      machinery or equipment located beneath the surface of the earth in
      any such well or hole or beneath the surface of any body of water.

B.    Underlying Lawsuit
      Royal Production Company, Inc. (“Royal”) is the lessor and operator of
three leases located in Lake Boudreaux, Louisiana. Royal retained PPI as the
representative of the working interest owners, including Blue Moon Exploration
Company, L.L.C. (“Blue Moon”). PPI was allegedly to assist in well-planning
and oversee the drilling of wells on the leases.
      Oil and gas operations were to be conducted on three mineral leases:
18891, 18892, and 18893. The well was supposed to be drilled on Lease 18891.
The well resulted in a dry hole, which was plugged and abandoned. It was later
determined that the well had been drilled on Lease 18892, instead of Lease
18891. Royal filed suit against PPI in the 347th District Court of Nueces County
in Cause No. 09-4086-H, Royal Production Company, Inc. v. PPI Technology
Services, L.P. Royal sought to compel arbitration regarding its claim that PPI’s
negligence caused the drilling rig to be towed to the wrong location, resulting in
a “dry hole” and “property damage.”
      The non-operator working interest owners filed suit against PPI in Cause
No. 158193, Blue Moon Exploration Company, L.L.C. et al. v. PPI Technology
Services, L.P. in the 32nd District Court of Terrebonne Parish, Louisiana. Their
petition sought damages for “PPI’s negligence and/or gross negligence in locating
and drilling an oil and gas well in an incorrect location.” Both the Royal and the
Blue Moon petitions were referred to arbitration and consolidated into Case No.
70 198 Y00701 09, Blue Moon Exploration Company, L.L.C. et al. v. Royal
Production Company, Inc. et al. We refer to the consolidated claims collectively
as the “underlying lawsuits.”



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C.    The Present Case
      PPI tendered the underlying lawsuits to Liberty Mutual for defense and
indemnification. Liberty Mutual denied that it owed PPI either. In a complaint
filed in Texas state court, and timely removed to federal district court, PPI
brought three claims against Liberty Mutual: (1) breach of insurance contract;
(2) breach of section 541.060 of the Texas Insurance Code; and (3) breach of the
duty of good faith and fair dealing.
      PPI filed a Motion for Partial Summary Judgment seeking a judicial
declaration that Liberty Mutual had a duty to defend PPI based upon the
allegations in the underlying lawsuits. Liberty Mutual responded by filing a
Motion for Summary Judgment, arguing it had no duty to defend or indemnify
PPI because the underlying lawsuits did not contain factual allegations of
“property damage” caused by an “occurrence” as required by the Policy, and that,
in the alternative, policy exclusions precluded coverage.
      The district court denied PPI’s Motion for Partial Summary Judgment and
granted Liberty Mutual’s Motion for Summary Judgment, dismissing all of PPI’s
claims against Liberty Mutual. First, the district court declined to consider the
allegations of “property damage,” concluding that they were legal, rather than
factual, allegations. The district court concluded that the “property damage”
allegations were legal in nature because they “concern the definition and
categorization of certain conduct and objects, rather than the ‘facts giving rise
to the alleged actionable conduct.’” PPI Tech. Servs., LP, v. Liberty Mut. Ins. Co.,
2012 WL 130380, at *11 (S.D. Tex. 2012) (citing Merchs. Fast, 939 S.W.2d at 141
(quoting Adamo, 853 S.W.2d at 676)).          “As mere legal assertions, these
statements do not qualify as ‘allegations’ for purpose of the eight-corners rule.”
Id. PPI timely appealed, invoking our jurisdiction pursuant to 28 U.S.C. § 1291.




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                         II. STANDARD OF REVIEW
       This Court reviews a grant of summary judgment de novo. Gore Design
Completions, Ltd. v. Hartford Fire Ins. Co., 538 F.3d 365, 368 (5th Cir. 2008).
Summary judgment is appropriate when the pleadings and the record show
“there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.”              Fed. R. Civ. P. 56(a); see Gore Design
Completions, Ltd., 538 F.3d at 368 (quoting Celotex v. Catrett, 477 U.S. 317, 322
(1986)). Because federal jurisdiction is based on diversity of citizenship, the
federal court looks to the substantive law of the forum state, here, Texas. See
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938); Tex. Indus., Inc. v. Factory
Mut. Ins. Co., 486 F.3d 844, 846 (5th Cir. 2007).
                                III. DISCUSSION
       On appeal, PPI challenges the district court’s determinations that the
underlying lawsuits did not include factual allegations of “property damage” and
that they did not allege an “occurrence” as required under the Policy. Because
no specific facts about the type or kind of harm were alleged, we affirm the
district court’s dismissal on the grounds that the underlying lawsuits did not
include factual allegations of “property damage.” Thus, we do not reach whether
the underlying lawsuits alleged an “occurrence.”
A.      Breach of Contract
       PPI argues, in its first count, that Liberty Mutual breached its contract by
neglecting its duties to defend and indemnify PPI against the underlying
lawsuits filed by Royal and Blue Mountain. We conclude that Liberty Mutual
has not breached its contract because it has no duty to defend.1 As discussed



       1
          We do not reach the issue of whether the underlying lawsuits allege “personal and
advertising injury” under Coverage B of the Policy, as PPI asserted originally. The district
court held that the allegations did not allege “personal and advertising injury,” and PPI states
in its briefs that it “does not challenge th[is] holding at this time.”

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below, the allegations in the underlying lawsuits are either purely economic, and
thus not covered, or are purely legal conclusions, rather than factual allegations
as required.
      1. Duty to Defend
      a. Standards for Duty to Defend
      Texas follows the eight-corners rule. Colony Ins. Co v. Peachtree Constr.,
Ltd., 647 F.3d 248, 253 (5th Cir. 2011) (citing Pine Oak Builders, Inc. v. Great
Am. Lloyds Ins. Co., 279 S.W.3d 650, 654 (Tex. 2009)). The insurance company’s
duty to defend the insured party is determined solely on the facts alleged in the
underlying lawsuit and the terms of the policy. Id. Under the eight-corners
rule, the duty to defend is not affected by facts ascertained before suit (except to
the extent they are alleged in the petition), developed during litigation, or by the
ultimate outcome of the suit. Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d
819, 829 (Tex. 1997) (quoting Heyden Newport Chem. Co., v. Southern Gen. Ins.
Co., 387 S.W.3d 22, 26 (Tex. 1965)). “Thus, the duty to defend arises only when
the facts alleged in the [underlying lawsuit], if taken as true, would potentially
state a cause of action falling within the terms of the policy.” Northfield Ins. Co.
v. Loving Home Care, Inc., 363 F.3d 523, 528 (5th Cir. 2004) (first emphasis
added).
      If there is a “doubt as to whether or not the allegations of a complaint
against the insured state a cause of action within the coverage of a liability
policy sufficient to compel the insurer to defend the action, such doubt will be
resolved in the insured’s favor.” Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v.
Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex. 1997) (citation
omitted). The insured bears the initial burden of showing that the claim against
it is potentially within the policy’s coverage. Sentry Ins. v. R.J. Weber Co., 2 F.3d
554, 556 (5th Cir. 1993). If the insurer relies on a policy exclusion to deny



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                                  No. 12-40189

coverage, the insurer has the burden of proving the exclusion applies. Federated
Mut. Ins. Co. v. Grapevine Excavation, Inc., 197 F.3d 720, 723 (5th Cir. 1999).
      The eight-corners rule requires courts to focus on the factual allegations
contained in the underlying suits. “If a petition does not allege facts within the
scope of coverage, an insurer is not legally required to defend a suit against its
insured.” Merchs. Fast, 939 S.W.2d at 141 (emphasis added). More specifically,
“the court must focus on the factual allegations that show the origin of the
damages rather than on the legal theories alleged.” Id. (emphasis added). The
court can neither “read facts into the pleadings” nor “imagine factual scenarios
which might trigger coverage.” Gore Design Completions, Ltd., v. Hartford Fire
Ins. Co., 538 F.3d 365, 369 (5th Cir. 2008) (citation omitted). “It is not the cause
of action alleged that determines coverage but the facts giving rise to the alleged
actionable conduct.” Merchs. Fast, 939 S.W.2d at 141 (quoting Adamo v. State
Farm Lloyd’s Co., 853 S.W.2d 673, 676 (Tex. App.—Houston [14th Dist.] 1993,
writ denied)); see also Farmers Tex. Cnty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81,
82 (Tex. 1997) (“A court must focus on the factual allegations rather than the
legal theories asserted in reviewing the underlying petition.”).
      b. Property Damage
      At issue is whether the underlying lawsuits against PPI raise factual
allegations that come within the coverage of the Policy. The parties dispute
whether the allegations in the underlying lawsuits include “property damage”
as covered under the Policy. The relevant allegations are as follows: Royal
contends that “PPI caused the drilling rig to be towed to [] and placed upon [] the
wrong location.” Subsequently, towing the rig to the wrong lease resulted in “the
well being drilled in the wrong location” and a “dry hole.” Drilling in the wrong
location caused Royal and the nonoperating working interest owners to “expend[]
in excess of $4,200,000.00 for the drilling of the Well in the wrong location.” The
Blue Moon Plaintiffs seek $737,752.40 in delay rentals to maintain the lease

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where the well was ultimately drilled. Additionally, Royal alleges that PPI
caused “property damage to Royal as an owner in the property where the well
was being drilled” including “physical injury to tangible property, including all
resulting loss of use of the property.” Finally, Royal alleges that PPI’s “acts and
omissions constitut[e] negligence and negligence per se.”
       As noted above, the Policy defines “property damage” to be: “(a) physical
injury to tangible property including the loss of use of that property . . . ; or (b)
loss of use of tangible property that is not physically injured.” The Policy does
not define the key phrases “physical injury,” “loss of use,” or “tangible property.”
Texas case law provides guidance on interpreting “tangible property.” In Lay v.
Aetna Insurance Co., 599 S.W.2d 684 (Tex. Civ. App.— Austin 1980, writ ref’d
n.r.e.), the court interpreted “tangible property” in the context of a policy whose
relevant provisions are almost identical to those of the case at bar.2 J.D. Lay
was employed by J. & J. Oil Venture to determine the proper location for, and
supervise the drilling of, an oil well on a lease owned by J. & J. Id. at 685. After
J. & J. had spent $40,000, it was discovered that, due to Lay’s error in reading
the surveyor’s stakes, the well was accidentally drilled on an adjoining tract not
leased to J. & J. Id. The adjoining tract owner permitted J. & J. to purchase an
assignment of the drilling rights on his property. Id. Thereafter, J. & J. brought
suit against Lay to recover its losses. Id. Lay delivered the lawsuit to his
liability insurer, Aetna, which refused to defend Lay on the grounds that the
incident was not an “occurrence” and the suit was not for the recovery of
“property damage” as defined by the policy. Id.



       2
         In the policy in Lay, property damage was defined as “(1) physical injury to or
destruction of tangible property which occurs during the policy period, including loss of use
thereof at any time resulting therefrom, or (2) loss of use of tangible property which has not
been physically injured or destroyed provided such loss of use is caused by an occurrence
during the policy period.” Lay, 599 S.W.2d at 685.

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      After judgment was entered against Lay at trial, he brought suit against
Aetna seeking indemnification. Id. The Lay court held that “‘tangible property’
is commonly understood to be property that is capable of being handled or
touched.” Id. at 686. The court further held that J. & J.’s purchase of the
assignment (to secure drilling rights to the adjoining tract) and the payment of
attorney and surveyor fees were not injury to “tangible property.” Id. Instead,
the purchase of the assignment “was an economic transaction involving the
exchange of money for the privilege of drilling and producing oil.” Id. The court
stated that because J. & J. alleged no cause of action for injury to “tangible
property” there was no “property damage,” so Aetna “had no duty to defend
appellant, and, in turn, [Lay] ha[d] no right to indemnification for the amount
of the judgment entered in favor of J. & J. in the previous suit.” Id. at 686–87.
      The district court relied on Lay for the proposition that a “claim for
damages from a misplaced well did not qualify as ‘property damage.’” PPI, 2012
WL 130389, at *14.      Applying Lay, the district court concluded that the
allegations in the underlying lawsuits that the Plaintiffs expended $4,200,000
in funds to drill the misplaced well and that the well’s misplacement required
a $737,752.40 delay rental are not allegations of “property damage” under the
Policy. Id.
      Setting aside those undisputedly economic damage allegations, the issue
is whether the underlying lawsuits’ allegations of “property damage” are factual
allegations that trigger Liberty Mutual’s duty to defend. PPI distinguishes Lay
by pointing out that, unlike the plaintiff in that case, who only alleged economic
damages (reimbursement for its purchase of the mineral assignment and
attorney and surveying fees), the underlying plaintiffs here specifically alleged
“property damage.” PPI also distinguishes Lay because it was not seeking a
declaration of Aetna’s duty to defend, but rather indemnification from liability
under a judgment. Id. PPI is thus arguing that aside from the two economic

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expenses alleged, the plaintiffs expressly alleged “property damage” by including
the term in their underlying lawsuits. PPI’s position is that the district court
erred in refusing to consider those allegations. We disagree.
      We do not consider mere use of the phrase “property damage” and parroted
Policy language as sufficient factual allegations. None of the assertions of
“property damage” in the underlying lawsuits are accompanied by facts
illustrating specific harm or damage to tangible property. For example, there
is no claim that the land was damaged, presumably because the well was drilled
in the lake. The district court did find, however, that one allegation in the
underlying lawsuits potentially alleged property damage—the statement that
Royal suffered “property damage throughout the lease where the well was
drilled.” PPI, 2012 WL 130389, at *9. The district court read that allegation to
mean that Royal was asserting that the land was harmed.3 Id. However, the
better reading is that Royal is simply stating that it owns the property in which
the drilling occurred, making this allegation as hollow as the other cursory
references to “property damage.” There is no additional factual allegation about
the manner of harm to the tangible property, for example, destruction from
penetration or scorching from a blowout or fire.
      A case where the court found that the alleged facts were sufficient to allege
a claim for “property damage” provides a comparison.              Camaley Energy
Company, Inc. (“Camaley”) was sued in Texas state court concerning a well they
were allegedly responsible for drilling and operating. Mid-Continent Cas. Co. v.
Camaley Energy Co., 364 F.Supp.2d 600, 602 (N.D. Tex. 2005). The underlying
lawsuit alleged that Camaley had failed to properly evaluate the location of the
well, and that this failure resulted in the lease line being crossed, thus
constructively evicting the plaintiffs from their land. Id. Mid-Continent had

      3
        The district court then held that any damage from the drilling would not be an
“occurrence” under of the Policy.

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issued Camaley a Commercial General Liability Policy, whose “property
damage” coverage is similar to that in the case at bar and includes both a
“physical injury” and a “loss of use” prong, as does the Policy at bar.4 Id. at
604–05.
       Camaley requested defense and indemnification from Mid-Continent. Id.
at 602.     Mid-Continent filed a Motion for Summary Judgment, seeking a
determination that it did not have a duty to defend or indemnify Camaley. Id.
Mid-Continent claimed, among other things, that the facts in the underlying
lawsuit did not allege claims for covered “property damage.” Id. at 603–04. Mid-
Continent argued, just as Liberty Mutual does, that “despite the [] Plaintiffs’ use
of the term ‘property damage’ in their petition, there are no factual allegations
to support claims for actual damage to or loss of tangible property.” Id. at 605.
The court ultimately held that the specific factual allegation of being
constructively evicted alleged “physical damage” through the “loss of use” prong.
Id. at 605–06.
       “Loss of use” is not seriously raised in this case. While the underlying
lawsuits here do contain the phrase “loss of use,” no specific use or loss thereof
is mentioned and PPI does not substantially raise “loss of use” in its briefs, so
injury to “tangible property” is its only available avenue. Compared to Camaley
above, the underlying plaintiffs likely could not allege “constructive eviction”
from any of the leases because delay rentals preserved the leases.
       More importantly, the Camaley court found that the underlying lawsuit,
despite its inclusion of the phrase “property damage,” “clearly does not allege
physical injury to tangible property.” Id. Just as in Camaley, where the



       4
         The policy in Camaley defined property damage as “physical injury to tangible
property, including all resulting loss of use of that property” or “[l]oss of tangible property that
is not physically injured.” Mid-Continent, 364 F. Supp. 2d at 604–05.


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underlying lawsuit’s mere allegation of “property damage” without factual
support insufficiently alleged injury to tangible property, the allegations of
“property damage” in the underlying lawsuits here are insufficient.
      PPI makes Liberty Mutual’s argument for it when it states in its reply
brief that “there could have been damage to the ‘well pad’” and “there could have
been other property (such as other well-related equipment) which was damaged.”
PPI itself is providing clear examples of what a factual allegation of “property
damage” would be. But those hypothetical harms are not alleged, and thus
cannot be considered. Ultimately, under Texas law, where “a cause of action’s
label does not determine whether an insurer has a duty to defend,” “property
damage” is more appropriately a label or legal theory and not a factual
allegation. See Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s London, 327
S.W.3d 118, 135 (Tex. 2010).
      Finally, as a policy matter, PPI’s position would permit plaintiffs to trigger
coverage in almost any case by making general assertions that copy the
language of the Policy statement. That consequence should be avoided.
      PPI, acknowledging that the allegations of “property damage” may be
conclusory, insists that they are nonetheless allegations that trigger coverage.
As support for this assertion, PPI offers several cases where the court found
sufficient factual allegations of “property damage” in the underlying complaint.
The cases PPI offers, however, contain specific factual allegations that
demonstrate to the court the type of harm the underlying plaintiffs suffered.
The “property damage” clause in the policy at issue in Admiral Insurance Co. v.
Little Big Inch Pipeline Co., 523 F.Supp.2d 524 (W.D. Tex. 2007) is the same as
the clause in the Policy at issue here. The Little Big Inch plaintiffs alleged that
damage to land from dug-up driveways, slabs, and foundation, and left-behind
debris caused a diminution in value to their property. Id. at 538. Despite PPI’s
reliance on Little Big Inch, the case is easily distinguished from the case at bar,

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and in fact, better supports Liberty Mutual’s position. Whereas the complaint
in Little Big Inch contained specific factual allegations about the type of harm
sustained—diminution in value to surrounding property due to dug-up gas lines,
driveways, slabs, and foundations, and abandoned debris—the underlying
lawsuits here make general allegations of “property damage” without specifying
what harm or damage the property has suffered.
      Finally, PPI objects that the district court did not construe the allegations
in PPI’s favor, as required. Where there is “doubt as to whether or not the
allegations of a complaint against the insured state a cause of action within the
coverage of a liability policy sufficient to compel the insurer to defend the action,
such doubt will be resolved in [the] insured’s favor.” Merchs. Fast, 939 S.W.2d
at 141 (quoting Heyden Newport Chem. Corp. v. S. Gen. Ins. Co., 387 S.W.2d 22,
26 (Tex. 1965)). PPI’s position is that the district court erred in not construing
what PPI considers the “property damage” allegations in its favor. This position
is incorrect. The Court is only to construe allegations favorably to the insured
where there is doubt as to whether the allegations come within the policy. Here,
the district court instead found that the legal assertions were not factual
allegations that had to be construed at all. Thus, because the allegations are
undoubtedly insufficient, there is nothing to construe in PPI’s favor.
      Because we hold that there was no factual allegation of property damage,
we do not reach the issue of whether any damage was caused by “an occurrence.”
Nor do we reach the Policy Exclusions.
      c. Underground Resources and Equipment Hazard
      By its terms, the “underground resources” coverage is a specific type of
“property damage.” By not alleging any “property damage” generally, the
underlying lawsuits fail to allege damage to “underground resources.”




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       2. Duty to Indemnify
       The duty-to-indemnify issue has become moot since the time of the district
court’s decision. After the district court’s decision, the arbitration panel ruled
that PPI had no liability to the underlying plaintiffs. Lake Boudreaux SL 18891
#1 Well Arbitration Proceeding, 7 (Jan. 23, 2012) (final award). Because there
was no award, there is nothing for Liberty Mutual to indemnify. Both parties
acknowledge that the duty-to-indemnify issue is now moot.
B.     Texas Insurance Code: Prompt Payment of Claims Act
       Because the district court ruled that Liberty Mutual had no duty to defend
PPI, and a duty to indemnify had not yet arisen, the district court concluded that
Liberty Mutual had not violated the Prompt Payment of Claims Act, Texas
Insurnace Code § 542.060. PPI, 2012 WL 130389, at *18. To prevail under the
Prompt Payment of Claims Act, the plaintiff must establish that there is a claim
under the insurance policy for which the insurer is liable. If the policy does not
provide coverage for the claims in the underlying lawsuits, the insurer is not
liable under the statute. See Progressive Cnty. Mut. Ins. Co. v. Boyd, 177 S.W.3d
919, 922 (Tex. 2005). Because we affirm the breach of contract claim’s dismissal,
we affirm the Texas Insurance Code claim’s dismissal as well.
C.     Breach of Duty of Good Faith and Fair Dealing
       The district court dismissed PPI’s action for breach of the duty of good
faith and fair dealing. The Texas Supreme Court has stated that there “can be
no claim for bad faith when an insurer has promptly denied a claim that is in
fact not covered.” Republic Ins. Co. v. Stoker, 903 S.W.2d 338, 341 (Tex. 1995).
Therefore, because we affirm the district court’s dismissal of the breach of
contract claim, we also affirm its dismissal of the breach of duty of good faith and
fair dealing claim.




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                                 No. 12-40189

                          IV. CONCLUSION
      For the foregoing reasons, we affirm the district court’s dismissal of PPI’s
breach of contract, breach of the Texas Insurance Code, and breach of the duty
of good faith and fair dealing claims.
      AFFIRMED.




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