                        COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                              FORT WORTH


                              NO. 2-08-502-CV


TRAVELERS LLOYDS INSURANCE                                   APPELLANT
COMPANY

                                       V.

DYNA TEN CORPORATION                                          APPELLEE

                                   ------------

          FROM THE 153RD DISTRICT COURT OF TARRANT COUNTY

                                   ------------

                        MEMORANDUM OPINION 1

                                   ------------

     Travelers Lloyds Insurance Company appeals from a summary judgment

in favor of Dyna Ten Corporation. We reverse and remand.

                                 Background

     The underlying facts are not in dispute.       See Tex. R. App. P.

38.2(a)(1)(B). On or about August 1, 2005, an HVAC condenser water line



     1
         … See Tex. R. App. P. 47.4.
ruptured on the fifth floor of “The Tower” condominium skyscraper in Fort

Worth. The ruptured water line resulted in water damage to multiple floors, the

elevator system, and the fire alarm system. Travelers contends the rupture of

this water line was caused by improper soldering of the high-pressure pipe and

joint at the time of the installation. Dyna Ten, a plumbing subcontractor on a

construction project at the Tower, installed the pipe. The general contractor for

the construction project was Turner Construction Company, and the project

was governed by a construction contract entered into between Turner as

“Contractor” and TLC Green Property Associates I, L.P. (“TLC”) as “Owner” of

the Tower.

      The contract between TLC and Turner contained the following waiver of

subrogation:

      13.7 Waiver of Subrogation

      Owner and Contractor waive all rights against each other, if any,
      for damages caused by fire or other causes of loss to the extent of
      actual recovery of any insurance proceeds under any property
      insurance applicable to the Project except such rights as they have
      to proceeds of such insurance held by Owner in good faith. This
      waiver applies regardless of whether or not the applicable insurance
      policies were purchased and/or effective before this Agreement
      was entered into or purchased pursuant to the terms of this
      Agreement. Owner requires that Contractor and its separate
      Contractors, and the subcontractors, sub-subcontractors, agents
      and employees of any of them, by appropriate agreements, written
      where legally required for validity, obtain similar waivers each in


                                       2
      favor of the Owner. The policies shall provide such waivers of
      subrogation by endorsement or otherwise. A waiver of subrogation
      shall be effective as to a person or entity even though that person
      or entity did not pay the Insurance premium directly or indirectly
      and whether or not the person or entity had an insurable interest in
      the property damaged.

      Travelers provided a commercial insurance policy composed of deluxe

property coverage, commercial general liability coverage, and employee benefits

liability coverage relating to the Tower. The policy lists the Tower as an insured

location, and it identifies TLC as a named insured. Travelers paid insurance

benefits to or on behalf of TLC in the sum of $119,922.09.

      Travelers then sued Dyna Ten, claiming that it was entitled as TLC’s

subrogee to recover damages against Dyna Ten. Dyna Ten filed a motion for

summary judgment on the affirmative defense of waiver, arguing that the

contract’s subrogation waiver, as well as a subrogation waiver in the policy,

precluded Travelers’s subrogation claim as a matter of law. The trial court

granted Dyna Ten’s motion; the trial court’s order does not indicate whether its

judgment is based on the contract, the policy, or both. Travelers filed this

appeal.

                              Standard of Review

      We review summary judgments de novo. Provident Life & Accident Ins.

Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003).              Under the standard


                                        3
applicable to a traditional motion for summary judgment, the motion should be

granted only when the movant establishes that there is no genuine issue as to

any material fact and that it is entitled to judgment as a matter of law. See

Tex. R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548

(Tex. 1985).

                                  Discussion

      An insurer’s right to subrogation derives from and is limited to the rights

of the insured. Trinity Universal Ins. Co. v. Bill Cox Constr., Inc., 75 S.W.3d

6, 8 (Tex. App.—San Antonio 2001, no pet.); see also TX. C.C., Inc. v.

Wilson/Barnes Gen. Contractors, Inc., 233 S.W.3d 562, 571 (Tex. App.—Dallas

2007, pet. denied) (holding insurer’s subrogation claim barred as a matter of

law when property owner waived subrogation “because [the insurer’s] rights

are limited to [the property owner’s] rights”); Nat’l Union Fire Ins. Co. v. John

Zink Co., 972 S.W.2d 839, 844 (Tex. App.—Corpus Christi 1998, pet. denied)

(“The subrogees stand in the shoes of the one whose rights they claim, and the

extent of the subrogees’ remedy and the measure of their rights are controlled

by those possessed by the subrogor.”). A release between the insured and the

offending party prior to the loss destroys the insurer’s rights by way of

subrogation.    Trinity Universal, 75 S.W.3d at 10.         The purpose of a



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waiver-of-subrogation provision in a construction contract “is to eliminate the

need for lawsuits by protecting all contracting parties from property loss under

the owner’s property insurance.” Walker Eng'g, Inc. v. Bracebridge Corp., 102

S.W.3d 837, 841 (Tex. App.—Dallas 2003, pet. denied).

      When reviewing a trial court’s interpretation of a contract, we give words

in the contract their plain meaning and examine the entire contract in an effort

to harmonize and give effect to all the provisions so that none will be rendered

meaningless. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157–59

(Tex. 2003); Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).               We

determine the parties’ intent from the instrument as a whole, considering each

provision not in isolation but with reference to the entire contract. Stine v.

Stewart, 80 S.W.3d 586, 589 (Tex. 2002); Coker, 650 S.W.2d at 393. We

will find the contract to be unambiguous and will construe it as a matter of law

if we can give it a certain or definite legal meaning or interpretation. Coker,

650 S.W.2d at 393; Ludwig v. Encore Med., L.P., 191 S.W.3d 285, 290 (Tex.

App.—Austin 2006, pet. denied).

1.    The construction contract’s waiver provision

      Dyna Ten first argues that the subrogation waiver in the contract between

TLC and Turner bars Travelers’s subrogation claim against Dyna Ten.         We



                                       5
disagree. The waiver provides that “Owner and Contractor waive all rights

against each other . . . for damages caused by fire or other causes of loss to

the extent of actual recovery of any insurance proceeds . . . .” [Emphasis

added.] Thus, TLC and Turner waived subrogation rights against each other;

but nothing in the quoted sentence suggests that TLC also waived subrogation

rights in favor of Turner’s subcontractors, including Dyna Ten.

      The only provision in the contract’s subrogation waiver that addresses

Turner’s subcontractors is this sentence: “Owner requires that Contractor and

its separate Contractors . . . , by appropriate agreements, written where legally

required for validity, obtain similar waivers each in favor of the Owner.” But

this provision requires Turner to obtain waivers in favor of TLC; it says nothing

about TLC waiving subrogation in favor of Turner’s subcontractors, including

Dyna Ten.

      For a contrasting example of a construction contract in which the owner

clearly waived subrogation against the contractor’s subcontractors, we look to

TX. C.C. The subrogation waiver in that case provided that “[t]he Owner and

Contractor waive all rights against (1) each other and any of their

subcontractors, sub-subcontractors, agents and employees, each of the other

. . . for damages caused by fire or other perils to the extent covered by property

insurance.” TX. C.C., 233 S.W.3d at 565 (emphasis added). The Dallas court


                                        6
of appeals held that the owner had waived its subrogation rights against both

the contractor and its subcontractors as a matter of law. Id. at 574.2

      Unlike the waiver provision in TX. C.C., TLC’s subrogation waiver in this

case does not explicitly extend to Turner’s subcontractors, and nothing in the

construction contract suggests that the parties intended such a waiver. We

therefore hold that the contract’s subrogation waiver does not bar Travelers’s

claims against Dyna Ten.    If and to the extent the trial court relied on the

contract’s subrogation waiver as the basis of summary judgment in Dyna Ten’s

favor, it erred.

2.    Subrogation waiver in the Travelers insurance policy

      Dyna Ten alternatively argues that a subrogation waiver in the insurance

policy Travelers issued to TLC bars Travelers’s claims against Dyna Ten.

Travelers argues that the waiver is an endorsement to an inapplicable

coverage—commercial general liability—and thus plays no role in this case.

      The Travelers policy provided for three separate insurance coverages:

Deluxe Property Coverage, Commercial General Liability Coverage, and

Employee Benefits Liability Coverage. Each coverage is independent, defines




      2
      … The crucial issue in TX. C.C. was whether the waiver extended to
losses occurring after construction was complete as well as during
construction. Id. at 564.

                                      7
its covered losses, and sets out its own exclusions, endorsements,

amendments, definitions, coverage limits, and coverage premiums.

      The subrogation waiver upon which Dyna Ten relies appears in an

endorsement to the commercial general liability coverage, as follows:

                           XTEND ENDORSEMENT

      This endorsement modifies insurance provided under the following:

            COMMERCIAL GENERAL LIABILITY COVERAGE PART

            ....

      PROVISIONS

            ....

      C.    BLANKET WAIVER OF SUBROGATION

            We waive any right of recovery we may have against any
            person or organization because of payments we make for
            injury or damage arising out of premises owned or occupied
            by or rented or loaned to you; ongoing operations performed
            by you or on your behalf, done under a contract with that
            person or organization; “your work”; or “your products.” We
            waive this right where you have agreed to do so as part of a
            written contract, executed by you prior to loss.

      In the commercial general liability coverage part, Travelers agreed to “pay

those sums [TLC] becomes legally obligated to pay as damages because of . . .

‘property damage’ to which this insurance applies.” The coverage excludes

“[p]roperty damage to . . . [p]roperty you [TLC] own, rent, or occupy, including


                                       8
any costs or expenses incurred by you . . . for repair, replacement,

enhancement, restoration or maintenance of such property for any reason.”

      By contrast, in the “deluxe” property coverage form, Travelers agreed to

“pay for direct physical loss or damage to Covered Property caused by or

resulting from a Covered Cause of Loss.”          “Covered Property” includes

“Buildings . . . described in the Declarations,” and the declarations specifically

describe the Tower.

      When interpreting an insurance policy with multiple coverages, each of

the coverages, along with its definitions and exclusions, must be read as

separate and distinct. M.J.R. Corp. v. Scottsdale Ins. Co., 803 S.W.2d 426,

430 (Tex. App.—Dallas 1991, no writ). Separate coverages comprise distinct,

contemporaneous contracts. Id.; see also TIG Ins. Co. v. San Antonio YMCA,

172 S.W.3d 652, 660 (Tex. App.—San Antonio 2005, no pet.).

      The subrogation waiver upon which Dyna Ten relies appears in the

“Xtend Endorsement,” which applies, by its express terms, solely to the

policy’s commercial general liability coverage. The commercial general liability

coverage applies to sums TLC was obligated to pay to third parties and

specifically excludes damages to property owned, rented, or occupied by TLC.

The “deluxe” property coverage, on the other hand, specifically covers property



                                        9
damage to the Tower. Thus, it appears that any payments made by Travelers

for damage caused by the HVAC water line leak would have been made under

the policy’s property coverage, not the commercial general liability coverage, 3

and the subrogation waiver in the “Xtend” endorsement does not apply.

      We hold that Dyna Ten failed to establish as a matter of law that the

“Xtend” endorsement’s subrogation waiver applies to the facts of this case.

Therefore, to the extent the trial court relied on the endorsement’s subrogation

waiver as the basis for summary judgment, it erred.

                                  Conclusion

      Because neither the construction contract’s subrogation waiver nor the

insurance policy’s subrogation waiver bar Travelers’s claims against Dyna Ten

as a matter of law, we hold that the trial court erred by granting summary




      3
        … The coverage under which Travelers made payments is not entirely
clear from the record. Travelers simply alleged in its original petition that it
made payments “to or for the benefit of Tower under its policy of property
insurance.” But the burden of proving that the payments were made under the
commercial general liability coverage, thus triggering the “Xtend”
endorsement’s subrogation waiver, falls to Dyna Ten as the party seeking
summary judgment, and Dyna Ten filed no summary judgment evidence to carry
its burden. See Tex. R. Civ. P. 166a(c). On appeal, Travelers asserts in its fact
statement—without reference to the record—that it paid benefits under the
“deluxe” property coverage, and Dyna Ten does not dispute that assertion in
its own brief. See Tex. R. App. P. 38.2(a)(1)(B).

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judgment. We sustain Travelers’s sole issue, reverse the trial court’s judgment,

and remand the case to the trial court for further proceedings.




                                           ANNE GARDNER
                                           JUSTICE

PANEL: CAYCE, C.J.; GARDNER and MCCOY, JJ.

DELIVERED: August 26, 2009




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