In Superior Crude Gathering, Inc. v. Zurich American Insurance Company No. 13-13-00235-CV, the Corpus Christ Court of Appeals affirmed summary judgment for Zurich that its Trucker’s Coverage did not cover a crude oil leak from an aboveground storage tank.

On February 9, 2010, Superior Crude trucks unloaded oil into Tank 13 at its Ingleside, Texas terminal.   Superior Crude reported crude oil leaking from that aboveground storage tank (the Event, oil spill, or oil release) that day. Superior Crude notified Zurich of the oil release and requested insurance coverage. Under the Policy, Zurich provided Superior Crude with the both Commercial General Liability (CGL) Coverage and (2) Truckers Coverage.  Zurich denied Superior Crude’s claim for coverage under both forms of insurance.  Superior did not challenge the denial of the CGL coverage; but did challenge Zurich’s denial under the Truckers Coverage.

In the trial court, Zurich moved for traditional motion for summary judgment and argued that Superior Crude was not entitled to coverage because the oil release did not result from the “ownership, maintenance or use” of a covered auto under the insuring agreement and that, in this case, there was “no nexus to a covered vehicle at all.” In response to Zurich’s position that the insuring agreement provision applied, Superior Crude asserted that “loading and unloading” were incorporated into the definition of “use” for purposes of coverage under the Policy. After considering both motions for summary judgment and reviewing the pleadings and papers on file, the trial court granted Zurich’s summary judgment motion and denied Superior Crude’s motion. The trial court further declared that “the Zurich Policy at issue does not provide coverage for claims related to the crude oil release that occurred on or about February 9, 2010.” Superior Crude appealed from the trial court’s final judgment.

The following issue was presented to the appellate court by Superior Crude:

In light of the fact that the Event arose out of or resulted from—and during—the unloading of oil from Superior’s insured oil tanker trucks, did the trial court err in ruling that the Zurich Policy did not provide coverage for claims related to the Event; notwithstanding the existence of a ‘Pollution Liability-Broadened Coverage for Covered Autos—Business Auto,

The Court first determined that it was the Truckers Coverage insuring agreement that controls the determination of coverage. The insuring agreement provided that Zurich would pay “all sums an ‘insured’ legally must pay as a ‘covered pollution cost or expense’ to which this insurance applies, caused by an ‘accident’ and resulting from the ownership, maintenance or use of covered ‘autos.’” Specific to this provision Superior Crude set out that “the question is simply whether or not the leak arose out of or resulted from the unloading of the oil into Tank 13. This question addressed the “use” of covered tankers.

The Court found that the Texas Supreme Court has consistently held that the “use” language found in an insuring agreement requires a causal relation between the covered auto and the injury or damage. The Court further found that the summary judgment evidence established that the cause of the oil release was subsidence in the soil below Tank 13 that led to a crack in the tank floor. After examining the causal-relationship factors under Mid-Century Ins. Co. of Tex. v. Lindsey, 997 S.W.2d 153, 156–64 (Tex. 1999), the Court concluded there was no causal connection between the tanker trucks and the oil spill. Because of this, the injury was not covered under the Policy’s Truckers Coverage insuring agreement. Summary Judgment for Zurich was affirmed.

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