     Case: 11-50686     Document: 00511764419         Page: 1     Date Filed: 02/22/2012




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

                                                                            FILED
                                                                         February 22, 2012

                                     No. 11-50686                          Lyle W. Cayce
                                   Summary Calendar                             Clerk



RAYMUNDO SALCEDO,

                                                  Plaintiff - Appellant
v.

EVANSTON INSURANCE COMPANY,

                                                  Defendant - Appellee


                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 3:10-CV-363


Before GARZA, SOUTHWICK, and HAYNES, Circuit Judges.
PER CURIAM:*
        This appeal arises from the district court’s grant of summary judgment in
favor of Defendant-Appellee Evanston Insurance Company (“Evanston”) based
upon a conclusion that Evanston owed no coverage under its commercial general
liability (“CGL”) insurance policy issued to Villegas & Sons, Incorporated
(“Villegas”). Plaintiff-Appellant Raymundo Salcedo (“Salcedo”), the injured
claimant, argues on appeal that the district court erred by construing the “auto”



       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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exclusion to preclude coverage for the judgment he obtained in state court
against Villegas. For the reasons set forth below, we AFFIRM.
                           I. Facts & Procedural History
       Salcedo is a judgment creditor of Villegas pursuant to a final judgment
entered by the 448th District Court of El Paso County, Texas, for $1.1 million
plus interest. Evanston denied coverage in the state court proceeding based on
the “auto” exclusion in its CGL policy.
       The injury took place at Villegas’s asphalt plant, which it had loaned to
another company, Southwestern Growth (“Southwestern”). On the day of the
accident, Southwestern was using the premises to upload a shipment of oil and
employed Salcedo to assist with the transfer.
       In the underlying case that ensued, Salcedo alleged that he was injured
when a hose attached from the plant’s asphalt reservoir to an oil truck ruptured
while he was uploading oil from the truck to the reservoir, causing him to be
burned by the hot oil.
       It is undisputed that the general insuring language of the CGL policy at
issue would cover this situation. The parties’ sole dispute centers on the
language of Exclusion g (as amended by endorsement). Specifically, the policy
excludes bodily injury: “arising out of, caused by, or contributed to by the
ownership, non-ownership, maintenance, use, or entrustment to others of any
aircraft, ‘auto,’ or watercraft.         Use includes operations and ‘loading and
unloading.’”1 The parties stipulated that the oil truck in question is an “auto,”
as defined by the policy. It is also essentially undisputed that Salcedo was
“unloading” the truck at the time of the accident.


       1
         This exclusion was articulated in the policy’s “Combination General Endorsement,”
which modified particular sections of the original policy. The Endorsement replaced the
general auto exclusion, which excluded, inter alia, “‘Bodily injury’ or ‘property damage’ arising
out of the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto’ or
watercraft owned or operated by or rented or loaned to any insured. Use includes operation
and ‘loading or unloading.’” (emphasis added). Among other changes, the italicized language
about ownership/operation was deleted.

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                               II. Standard of Review
       “We review a district court’s grant of summary judgment de novo, applying
the same standards as the district court.” Noble Energy Inc. v. Bituminous Cas.
Co., 529 F.3d 642, 645 (5th Cir. 2008). As such, summary judgment is proper
when “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). “Where 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, 586 (1986). “Doubts are to be resolved
in favor of the nonmoving party, and any reasonable inferences are to be drawn
in favor of that party.” Gowesky v. Singing River Hosp. Sys., 321 F.3d 503, 507
(5th Cir. 2003) (citation omitted).
       Under Texas law, in determining whether an insurance company has a
duty to indemnify, the insured has the initial burden of establishing coverage
under the terms of the policy. See 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 the loss is within an
exclusion.” Id. (citing Ulico Cas. Co. v. Allied Pilots Ass’n, 262 S.W.3d 773, 782
(Tex. 2008)). To do so, the insurer must show an intent to “exclude coverage . . .
in clear and unambiguous language.” Nat’l Union Fire Ins. Co. v. Hudson
Energy Co., 811 S.W.2d 552, 555 (Tex. 1991). “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.” Gilbert, 327
S.W.3d at 124 (citations omitted).2




       2
        Salcedo does not argue on appeal that any exception to the auto exclusion applies and
thus any argument he made to that effect at the district court is waived. See, e.g., Ackerson
v. Bean Dredging LLC, 589 F.3d 196, 208 (5th Cir. 2009) (citation omitted).

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                                    III. Discussion
       Insurance policies are generally controlled by the rules of construction and
interpretation applicable to contracts so as to ascertain the parties’ intent. See
Gilbert, 327 S.W.3d at 126; Nat’l Union Fire Ins. Co. v. CBI Indus., 907 S.W.2d
517, 520 (Tex. 1995). When interpreting ambiguous language, the “court must
adopt the construction of an exclusionary clause urged by the insured as long as
that construction is not unreasonable, even if the construction urged by the
insurer appears to be more reasonable or a more accurate reflection of the
parties’ intent.” Hudson, 811 S.W.2d at 555 (ciations omitted).                 However, a
court will not rewrite the policy to align with the insured’s interpretation if the
policy language is clear. See Gilbert, 327 S.W.3d at 126.
       Despite the fact that an amendatory endorsement deleted any requirement
that the insured own or operate the auto, see supra note 1, Salcedo argues that
the insured, Villegas, must have been the one doing the unloading or, at least,
causing it to be done in order for the auto exclusion to apply. As the district
court highlighted, the relevant terms of the policy are not ambiguous—they
simply state that injuries arising from the use of an any auto, including loading
and unloading, are excluded from coverage. See Vanguard Ins. Co. v. Plains
Helicopter, Inc., 529 S.W.2d 277, 279 (Tex. Civ. App.—Amarillo, 1975, writ ref’d
n.r.e.) (citation omitted) (“[W]hen parties to an insurance contract use language
which has been held by the courts to have a certain meaning, they intend to give
that meaning to the language.”).3 The policy does not require that the insured

       3
         The treatise, COUCH ON INSURANCE (“COUCH”), provides instructive guidance, and has
been utilized extensively by the Texas Supreme Court in framing Texas law on this issue. See
Mid-Century Ins. Co. v. Lindsey, 997 S.W.2d 153, 156-61 (Tex. 1999); see also Emp’rs Mut. Cas.
Co. v. Bonilla, 613 F.3d 512, 516 (5th Cir. 2010) (noting the Texas Supreme Court’s reliance
on COUCH). COUCH states that “[w]hile words should be given their ordinary meaning, they
must be construed in accordance with established rules of law even though the insured may
not be familiar with their legal meaning. The judicial construction placed upon particular
words or phrases made prior to the issuance of a policy employing them will be presumed to
have been the construction intended by the parties; otherwise the language of the policy
should have been modified to make the contrary intent clear.” 2 COUCH ON INSURANCE § 22:40
(3d ed. 2009).

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do anything with the auto for the exclusion to apply. The policy language thus
must be accorded its plain meaning. See Canutillo Indep. Sch. Dist. v. Nat’l
Union Fire Ins. Co., 99 F.3d 695, 701 (5th Cir. 1996) (“These special rules
favoring the insured . . . are applicable only when there is an ambiguity in the
policy.”); DeWitt Cnty. Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999).
As for the argument that Texas law itself restricts policy exclusions to acts of the
insured, the Texas Supreme Court, in Travelers Insurance Co. v. Employers
Casualty Co., rejected a similar contention that a connection must be made
between the accident and the legal control of the goods being unloaded. 380
S.W.2d 610, 613-14 (Tex. 1964); see also Travelers Indem. Co. v. Citgo Petroleum
Corp., 166 F.3d 761, 770 (5th Cir. 1999). Salcedo’s “identity” argument is
unavailing.
       We thus move to the question of whether Salcedo’s injury “arose out of the
use” of an auto. Under Texas law, “[f]or liability to ‘arise out of’ the use of a
motor vehicle, a causal connection or relation must exist between the accident
or injury and the use of the motor vehicle.” Lindsey, 997 S.W.2d at 156 (citation
omitted). This causal connection is “interpreted to mean that there is but for
causation, though not necessarily direct or proximate causation.” Lincoln Gen.
Ins. Co. v. Aisha’s Learning Ctr. (“ALC”), 468 F.3d 857, 859-60 (5th Cir. 2006)
(quoting Utica Nat’l Ins. Co. v. Am. Indem. Co., 141 S.W.3d 198, 203 (Tex. 2004)).
In turn, “use” means “to put or bring into action or service; to employ for or apply
to a given purpose.” Id. (citing LeLeaux v. Hamshire-Fannett Indep. Sch. Dist.,
835 S.W.2d 49, 51 (Tex. 1992)). The Texas Supreme Court in Lindsey set out
several factors to determine whether an injury arises out of the use of a vehicle
for the purposes of auto liability insurance coverage:4


       4
          Texas law illustrates that “arising out of the use of an auto” language is interpreted
uniformly between the exclusion section of a CGL policy and the coverage section of an auto
liability policy. Compare Lindsey, 997 S.W.2d at 157 (auto policy) with Mid-Continent Cas.
Co. v. Global Enercom Mgmt., 323 S.W.3d 151, 152-56 (Tex. 2010) (per curiam) (relying on
Lindsey to construe the language in an exclusion section of a CGL policy).

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       (1) the accident must have arisen out of the inherent nature of the
       automobile, as such, (2) the accident must have arisen within the
       natural territorial limits of an automobile, and the actual use must
       not have terminated, (3) the automobile must not merely contribute
       to cause the condition which produces the injury, but must itself
       produce the injury.

997 S.W.2d at 157 (noting that these factors are not necessarily determinative,
but should be used as a conceptual framework to analyze the exclusion at issue);
see also ALC, 468 F.3d at 859-60 (noting that the Lindsey test is interpreted
broadly and holding that a CGL policy’s auto exclusion applied when a child was
left in a daycare van during extreme heat).
       Applying the Lindsey framework to the facts here, we find that the district
court was correct in concluding that Salcedo’s injury arose from the
use—including loading and unloading—of the oil truck.                       First, his injury
occurred while the oil truck was being used as it was inherently
intended—uploading oil. Though it was no longer moving, its inherent purpose
included activities that involved the truck at a stop, see ALC, 468 F.3d at 860,
and there was nothing “unexpected or unnatural” about the use of the oil truck
in this way, Lindsey, 997 S.W.2d at 158.
       Second, the accident occurred within the truck’s natural territorial limits,
before the actual use terminated.                Indeed, the use—uploading oil—was
undoubtedly still in progress because the movement of hot oil and rupture of the
hose was the instigating factor in causing Salcedo’s injury.5


       5
           Though Texas law clearly supports the “complete operation” rule, rather than the
“coming to rest” doctrine, see, e.g., Commercial Standard Ins. Co. v. Am. Gen. Ins. Co., 455
S.W.2d 714, 716 (Tex. 1970), the distinction between these two tests for when loading and
unloading is still in progress is immaterial to the facts of this case. To be sure, the “complete
operation” rule provides a broader construction to the activities that are considered “using”
the auto as it considers loading and unloading to encompass not only the “immediate
transference of the goods to or from the vehicle, but the ‘complete operation’ of transporting
the goods between the vehicle and the place from or to which they are being delivered.” See,
e.g., id. (citations omitted). But here, Salcedo was injured while the hot oil was in transit from
the truck to the reservoir. Even under the narrower construction posited by the “coming to
rest” doctrine, the oil to be transferred undoubtedly encompassed the immediate situs of the

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       Third, the oil truck produced the injury in question, rather than merely
contributing to it. See Lindsey, 997 S.W.2d at 157. As discussed, Texas requires
only “but for” causation. See, e.g., ALC, 468 F.3d at 859-60.6 Salcedo was
injured because he was uploading oil into the asphalt reservoir when the pump
switch broke and the hose ruptured. The truck was not just the situs of the
injury, but a producing cause.7 The Texas Supreme Court’s analysis in Global
Enercom, 323 S.W.3d at 156, is directly on point. The court rebutted the
respondent’s argument that a defective rope, not the vehicle itself, caused the
injuries. Id. Highlighting the broad standard for causation in these cases, the
court reasoned that
       the workers could not have been raised on the rope through the
       pulley system without the use of [the vehicle]. This is not the case
       where the negligent actor could be standing still and accomplish the
       same result. The accident did not merely happen because the rope
       broke; the accident did not merely happen in or near the truck; the
       workers could not have accomplished the same result without the
       truck; and one of the expected purposes of this particular truck was
       to perform towing and lifting activities.

Id. (citations and punctuation omitted). Similarly, Salcedo could not have been
injured in this way without the use of the oil truck; the accident did not merely



injury and was still in transit when the accident occurred, thus clearly invoking the “loading
and unloading” clause under either standard. See 8A COUCH § 121:31 (“When the loading is
being done by pipeline, it is immaterial to distinguish between the coming to rest and the
complete operation doctrines, as the harm is sustained while the loading is actually taking
place.”). This does not alter our task here: to determine whether Salcedo’s injury arose out of
the use of an auto. Therefore, we must continue Lindsey’s three factor analysis.
       6
       While more direct causation may be mandated by the policy as written, see Global
Enercom, 323 S.W.3d at 156, no such differentiating language exists in this policy.
       7
         Where a vehicle is the mere situs of the injury, indistinct from any other situs, it is
not being “used” within the meaning of an auto exclusion. For instance, in LeLeaux, the Texas
Supreme Court held that an accident did not stem from the use of a vehicle when a bus used
for transporting students to a band competition was the mere situs of the injury. 835 S.W.2d
at 52. Rather than being used for its intended purpose of transporting students, a student was
injured after returning to the empty bus and the “manner in which school district employees
loaded and unloaded students had nothing to do with [the student’s] injury.” Id.

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happen near the truck; and the expected purpose of the oil truck was to perform
the activity that led to Salcedo’s injury. Simply stated, but for the use of the oil
truck in its expected and intended state of uploading oil, Salcedo would not have
been injured.8 Thus, the auto exclusion applies.
                                   IV. CONCLUSION
       For the foregoing reasons, we AFFIRM the district court’s grant of
summary judgment in favor of Appellee Evanston.




       8
         Our conclusion is consistent with the holdings of other courts that have considered
the issue in similar circumstances, where the defective condition was not located on the vehicle
itself. See, e.g., Am. Home Assurance Co. v. First Specialty Ins. Corp., 894 N.E.2d 1167, 1170-
72 (Mass. App. Ct. 2008) (finding an auto exclusion in a CGL policy applied where the plaintiff
was injured while loading oil at a terminal negligently maintained by the terminal owner);
Chenango Gas Co. v. Allstate Ins. Co., 240 N.Y.S.2d 194, 196-97 (N.Y. Sup. Ct. 1963) (finding
an auto policy covered the insured where the plaintiff was injured as a result of a defective
switch on the premises, not on the vehicle).

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