Liberty Mutual Insurance Co. v. Linn Energy, L.L.C, No. 13-20578 (5th Cir. 2014)
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Case: 13-20578 Document: 00512681397 Page: 1 Date Filed: 06/30/2014 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit No. 13-20578 LIBERTY MUTUAL INSURANCE COMPANY, FILED June 30, 2014 Lyle W. Cayce Clerk Plaintiff-Appellee v. LINN ENERGY, L.L.C.; LINN OPERATING, INCORPORATED, Defendants-Appellants Appeal from the United States District Court for the Southern District of Texas USDC No. 4:12-CV-1886 Before SMITH, WIENER and PRADO, Circuit Judges. PER CURIAM:* In this declaratory judgment action, the district court summarily determined that the commercial insurance policy Plaintiff-Appellee Liberty Mutual Insurance Company ( Liberty Mutual ) issued to DefendantsAppellants Linn Energy, L.L.C. and Linn Operating, Incorporated (together, Linn ) did not require Liberty Mutual to defend and indemnify Linn in an underlying lawsuit pending in Louisiana state court (the Louisiana lawsuit ). 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 R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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. * Case: 13-20578 Document: 00512681397 Page: 2 Date Filed: 06/30/2014 No. 13-20578 The complainants in the Louisiana lawsuit allege that Linn s pipeline leaked saltwater, brine, and other contaminants, polluting their property. On appeal, Linn challenges the district court s conclusion that no defense and indemnity are owed because a coverage-adding endorsement, the UREC, 1 does not supersede a coverage-excluding endorsement, the TPE. 2 According to Linn, the district court erred because its holding allows the TPE to nullify a portion of the supplemental coverage the UREC was specifically designed to add to the policy. Having reviewed the record on appeal, including the relevant policy language and the parties briefs, the applicable law, and the district court s summary judgment order, we disagree with Linn. We therefore affirm for essentially the same reasons given by the district court. Under Texas law, which the parties agree applies in this diversity action, two provisions of an insurance policy are irreconcilable only when they contradict to the point that one would completely negate or render superfluous the additional coverage provided by the other. 3 Reading the instant TPE to exclude the pollution-caused property damage alleged in the Louisiana lawsuit does not render the UREC wholly meaningless. This is because the UREC still The UREC, or Underground Resources and Equipment Coverage endorsement, extends coverage to include property damage to specific types of underground resources. 1 The TPE, or Total Pollution Exclusion endorsement, excludes coverage for property damage that would not have occurred in whole or in part but for the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time. 2 Mid-Continent Cas. Co. v. Bay Rock Operating Co., 614 F.3d 105, 115 (5th Cir. 2010); see also Primrose Operating Co. v. Nat l Am. Ins. Co., 382 F.3d 546, 559 (5th Cir. 2004) ( If we were to accept NAICO s argument here, the $2 million coverage limit would render the entire Saline Endorsement meaningless because essentially everything covered by the endorsement would necessarily be excluded by the Pollution Exclusion clause. ); W. Heritage Ins. Co. v. Magic Years Learning Ctrs. & Child Care, Inc., 45 F.3d 85, 89 (5th Cir. 1995) ( The physical/mental abuse endorsement would be meaningless with respect to claims of physical abuse if the assault and battery exclusion were applicable. The assault and battery exclusion is trumped by this special endorsement. ) 3 2 Case: 13-20578 Document: 00512681397 Page: 3 Date Filed: 06/30/2014 No. 13-20578 provides coverage for all non-pollution property damage, such as the depletion of a reservoir. We conclude that the policy is unambiguous in expressing an intention for this result. Indeed, the TPE is exactly what it purports to be: a total pollution exclusion. It does not, however, exclude the UREC s coverage of nonpollution damage. Consequently, the endorsements co-exist harmoniously. Both the Texas Supreme Court and this court have held that largely identical pollution exclusions are clear, unambiguous, and absolute. 4 Linn s proposed interpretation, which would allow the UREC to trump the TPE, would rob the latter of its meaning in contravention of the policy s plain language. Accordingly, the district court s judgment in favor of Liberty Mutual is AFFIRMED. See, e.g., Nat l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 52122 (Tex. 1995) ( On its face, the language of the policies is clear and not patently ambiguous. . . . Most courts which have examined the same or substantially similar absolute pollution exclusions have concluded that they are clear and unambiguous. This pollution exclusion is just what it purports to be absolute. (citation and internal quotation marks omitted)); Certain Underwriters at Lloyd s London v. C.A. Turner Constr. Co., Inc., 112 F.3d 184, 188 (5th Cir. 1997) ( This language is not ambiguous; a plain reading of the clause dictates the conclusion that all damage caused by pollution, contamination, or seepage is excluded from coverage. ). 4 3
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