Emcasco Insurance Co v. Amer Intl Specialty

United States Court of Appeals
Fifth Circuit
F I L E D
January 27, 2006
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 04-11345
_______________
EMCASCO INSURANCE COMPANY,
Plaintiff-Appellant,
VERSUS
AMERICAN INTERNATIONAL SPECIALTY LINES INSURANCE COMPANY,
Defendant-Appellee.
_________________________
Appeal from the United States District Court
for the Northern District of Texas
______________________________
Before GARWOOD, SMITH, and DEMOSS,
Circuit Judges.
JERRY E. SMITH, Circuit Judge:
EMCASCO Insurance Company (“EM-
CASCO”) filed a subrogation suit against
American International Specialty Lines Insur-
ance Company (“AISLIC”) to recover under
AISLIC’s commercial general liability policy
for monies EMCASCO paid in defense and
settlement of an underlying suit against the
two insurers’ mutual insured. After limited
discovery, both parties moved for summary
judgment. The district court granted AISLIC’s
motion, denied EMCASCO’s, and dismissed
the subrogation suit with prejudice. Finding the
need for further proceedings, we vacate and
remand.
I.
A.
In February 2001, Jaime Langston was driv-
ing down a paved, public country road with her
young son when she skidded on a patch of slick
mud, clay, and/or sand. The car swerved off

-- 1 of 10 --

2
the road, striking a tree. Langston suffered
serious injuries, and her son died at the scene.
B.
In April 2002, the Langstons sued Wil-
son-Riley, Inc. (“Wilson-Riley”),1 the operator
of a sand pit located immediately adjacent to
the accident site, in state court on the premise
that Wilson-Riley, as part of its operation at
the sand pit, hauled sand from the pit in trucks
that it owned and operated. The original com-
plaint alleged that because of heavy rains pre-
ceding the accident, Wilson-Riley’s trucks
tracked mud onto the roadway when exiting a
driveway leading away from the sand pit and
that the mud on the road was the producing
cause of the accident.
Wilson-Riley and SLS had two different
insurance policies covering their activities at
the sand pit. Specifically, EMCASCO issued
a commercial auto liability policy to Wil-
son-Riley and SLS, and AISLIC issued both
companies a commercial general liability policy
(the “CGL policy”). EMCASCO’s commer-
cial auto liability policy provides, in relevant
part:
SECTION IISSLIABILITY COVERAGE
A. COVERAGE
We will pay all sums an insured legally
must pay as damages because of bodily in-
jury or property damage to which this in-
surance applies, caused by an accident and
resulting from the ownership, maintenance
or use of a covered auto.
AISLIC’s CGL policy, meanwhile, provides
coverage as follows:
1. Insuring Agreement
a. We will pay those sums that the insured
becomes legally obligated to pay as damages
because of bodily injury or property damage
to which this Coverage applies. We will
have the right and duty to defend any suit
seeking those damages. However, we will
have no duty to defend the insured against
any suit seeking damages for bodily injury or
property damage to which this Coverage
does not apply. We may, at our discretion,
investigate any occurrence and settle any
claim or suit that may result.
AISLIC’s policy also contains the following
exclusion:
2. Exclusions
This insurance does not apply to:
. . .
g. Aircraft, Auto or Watercraft
Bodily injury or property damage arising out
of the ownership, maintenance, use or en-
trustment 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.
About seven weeks after the accident but a
year before the Langstons sued, EMCASCO
hired defense counsel Mike Winchester to de-
fend Wilson-Riley. In doing so, EMCASCO
asserted its reservation of rights in defending
the suit. In April 2002, AISLIC hired its own
defense counsel, Chad Parker, to represent Wil-
son-Riley’s interests in the Langston suit.
1 The Langstons amended their petition in July
2002, adding SLS Management Corporation
(“SLS”), the owner of the property where the sand
pit was located, as a defendant.

-- 2 of 10 --

3
AISLIC also issued Wilson-Riley a reservation
of rights letter in which AISLIC advised that,
in its view, the existence of the auto exclusion
provision in the CGL policy precluded
coverage in the Langstons’ suit. Specifically,
AISLIC stated:
While the plaintiff’s pleadings are ambigu-
ous, we expect that it will come out during
the course of this litigation that the only in-
volvement of Wilson-Riley, Inc., was the
fact that its “autos,” as defined by the poli-
cy, were going into and out of the sand
pit/premises in question for some weeks
proceeding [sic] the accident, and liability
for this would fall squarely under the above
exclusion . . . . It appears that there will be
no coverage for the damages claimed by the
plaintiff by virtue of the above policy
provisions.
After hiring Parker, AISLIC agreed, in Jan-
uary 2003, to settle the Langstons’ claims
against SLS for $200,000. After the settle-
ment, counsel for EMCASCO and Wilson-Ril-
ey’s personal counsel notified AISLIC that
they believed the claims the Langstons had
remaining against Wilson-Riley still invoked
AISLIC’s coverage.
It is at this point that the parties disagree as
to the extent of the work performed by Parker
in AISLIC’s defense of Wilson-Riley. EM-
CASCO maintains that, after the SLS settle-
ment, Parker never reappeared in the suit in
Wilson-Riley’s defense. Meanwhile, AISLIC
argues that at the time it secured the settle-
ment between the Langstons and SLS, the dis-
covery and pleading deadlines relating to Wil-
son-Riley had passed under the terms of the
docket control order. AISLIC acknowledges
that Parker did little or no work on behalf of
Wilson-Riley after that time but insists that
there was little substantive work to be done
aside from actually trying the case.
EMCASCO thereafter demanded that AIS-
LIC share equally in the cost of settling the case
on Wilson-Riley’s behalf. AISLIC refused,
citing the Langstons’ pleadings, the evidence it
assumed would be introduced at trial, and
statements made by the Langstons’ counsel as
eliminating any liability that AISLIC might be
exposed to under its CGL policy.
In effect, AISLIC maintained that Wil-
son-Riley only faced liability stemming from
EMCASCO’s auto liability policy. The last
version of the Fourth Amended Complaint,
however, circulated after SLS settled, alleges
that the unpaved exit that Wilson-Riley created
from the sandpit to the public road “caused a
washing of mud onto the road during rainy
weather” and that the “exit drive was not paved
until after the accident.” It also includes a sep-
arate claim for negligence per se because the
defendant “obstructed the road adjacent to its
worksite, which is a violation of Section 42.03
of the Texas Penal Code.”
AISLIC did offer to contribute $20,000 to a
potential settlement in Wilson-Riley’s defense.
EMCASCO refused the offer because AISLIC
conditioned the money on the agreement that
the parties would not later attempt to re-allo-
cate Wilson-Riley’s settlement costs. EMCAS-
CO advised AISLIC that it would settle the
claims against Wilson-Riley without AISLIC’s
participation. EMCASCO then obtained a re-
lease of all claims against Wilson-Riley by set-
tling with the Langstons for $350,000.
EMCASCO sued AISLIC for subrogation,
seeking to recover all or part of the $350,000 it
had paid the Langstons in settlement. After
limited discovery, EMCASCO and AISLIC si-
multaneously filed cross-motions for summary
judgment.

-- 3 of 10 --

4
The district court granted AISLIC’s mo-
tion, finding that the Langstons’ damages were
covered by EMCASCO’s auto liability policy
and were explicitly excluded by AISLIC’s
CGL policy. It held that the washing of the
mud from the unpaved roadway could not
have been a “separate” and “independent”
cause of the accident, which would have in-
dicated that AISLIC’s policy also covered the
accident. The court determined that the
mud/clay tracked onto the public road by Wil-
son-Riley “necessarily involved the use of mo-
tor vehicles, triggering coverage under its auto
policy with EMCASCO.” EMCASCO ap-
peals.
II.
A.
We review a summary judgment de novo,
applying the same standard as did the district
court. Tango Transp. v. Healthcare Fin.
Servs. LLC, 322 F.3d 888, 890 (5th Cir.
2003). Summary judgment is appropriate if
there is no genuine issue of material fact and
the moving party is entitled to judgment as a
matter of law. FED. R. CIV. P. 56(c). We view
the evidence in a light most favorable to the
non-movant. Coleman v. Houston Indep. Sch.
Dist., 113 F.3d 528, 533 (5th Cir. 1997). To
avoid summary judgment, the non-movant
must go beyond the pleadings and come for-
ward with specific facts indicating a genuine
issue for trial. Celotex Corp. v. Catrett, 477
U.S. 317, 324 (1986). A genuine issue of ma-
terial fact exists when the evidence is such that
a reasonable jury could return a verdict for the
non-movant. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). Summary
judgment is appropriate, however, if the
non-movant “fails to make a showing sufficient
to establish the existence of an element
essential to that party’s case.” Celotex, 477
U.S. at 322-23.
B.
EMCASCO maintains the district court
erred in interpreting the auto exclusion clause in
AISLIC’s CGL policy, which precludes cov-
erage for damages arising out of the “own-
ership, maintenance, use or entrustment” of any
auto owned or operated by the insured, to
eliminate AISLIC’s liability for monies recov-
ered in the Langstons’ suit. EMCASCO argues
that the recovered damages did not arise out of
the use of a vehicle; it claims the clause is sus-
ceptible to more than one reasonable interpre-
tation and thus, under Texas law, should be
construed to provide coverage for any “not un-
reasonable” construction. EMCASCO insists
that the district court erred by not addressing
the coverage issue against the backdrop formed
by Texas law regarding the construction of in-
surance contracts.
AISLIC, meanwhile, argues that, for three
reasons, this court should not defer to the “not
unreasonable” construction of the relevant cov-
erage provisions. First, it contends the policies
at issue contain no ambiguity that would im-
plicate the method of contract construction fa-
voring the insured. Second, it insists that EM-
CASCO’s proposed reading of the policies does
not favor the insured, Wilson-Riley, because
EMCASCO’s interpretation merely shifts the
coverage for the underlying settlement from
EMCASCO to AISLIC, yielding no benefit to
Wilson-Riley. Finally, AISLIC maintains that
EMCASCO’s interpretation of the policies is
unreasonable because it is inconsistent with
Texas law and relies on caselaw that is inappo-
site to the facts.
Under Texas law, whether an insurer has a
duty to defend is governed by the “eight cor-
ners rule” whereby the allegations in the peti-
tion filed against the insured are compared
against the insurance policy. King v. Dallas
Fire Ins. Co., 85 S.W.3d 185, 187 (Tex. 2002).

-- 4 of 10 --

5
In reviewing the underlying petition, we focus
on the factual allegations that show the origin
of damages rather than on the legal theories al-
leged. Nat’l Union Fire Ins. Co. v. Merchs.
Fast Motor Lines, 939 S.W.2d 139, 141 (Tex.
1997) (per curiam). Any ambiguity in the cov-
erage language should be read in favor of the
insured. Trinity Universal Ins. Co. v. Cowan,
945 S.W.2d 819, 825 (Tex. 1997). Important-
ly, in a subrogation case such as this, Texas
law recognizes the right of one insurer to seek
payment from a second insurer under the
doctrine of equitable subrogation.2
To recover damages, the plaintiff must
show a causal relationship between the injury
and the use of the auto. Nat’l Union, 939
S.W.2d at 142. In National Union, the court
found that the facts alleged in the pleadings did
not suggest even a remote causal relationship
between the truck’s operation and the plain-
tiff’s injury and concluded that the insurer’s
auto liability coverage was not triggered:
“The only facts alleged . . . are that Hart was
operating a Merchants truck when he negli-
gently discharged a firearm injuring Gonzalez.
Given their most liberal interpretation, these
allegations do not suggest that Gonzalez’s in-
jury resulted from the use of the truck.” Id. at
141-42.
The Langstons’ third amended petition
states that “[a]s to Defendant Wilson-Riley,
Inc., it is specifically alleged that the bodily in-
jury, wrongful death, and property damage
was caused by an accident resulting from the
ownership, maintenance and use [of] the trucks
hauling sand from the worksite in question.”
This language suggests that based on the
pleadings alone, it cannot be said that a causal
relationship was not alleged between the use of
the trucks and the injury. Therefore, unlike the
auto insurer in National Union, EMCASCO is
not entitled, based on the pleadings alone, to a
determination that there was no coverage.
Rather, the pleadings show that EMCASCO
had a duty to defend.
The duties to defend and to indemnify are
distinct and separate, however. See Farmers
Tex. Co. Mut. Ins. Co. v. Griffin, 955 S.W.2d
81, 82 (Tex. 1997). An insurer may initially
have a duty to defend but, eventually, no duty
to indemnify. Id. Therefore, we must determine
whether there is a duty to indemnify.
In deciding whether such a duty to indemnify
exists, Texas courts use the “complete op-
eration” theory, Travelers Ins. Co. v. Employ-
ers Cas. Co., 380 S.W.2d 610, 612 (Tex.
1964), under which “the provision for use cov-
erage extends to foreseeable consequences of
what was done in connection with the use of
the car, . . . so long as the act or thing done by
the insured’s employee which causes the acci-
dent arises out of the use of the insured’s car,”
Red Ball Motor Freight v. Employers Mut.
Liab. Ins. Co., 189 F.2d 374, 377 (5th Cir.
1951). Further, “‘[a]rising out of’ are words of
much broader significance than ‘caused by.’
They are ordinarily understood to mean ‘orig-
inating from’ ‘having its origin in,’ ‘growing
out of’ or ‘flowing from,’ or in short, ‘incident
to, or having connection with,’ the use of the
car.” Id. at 378.
In Red Ball, we held that the act of the driv-
er of a tractor in not closing the fueling valve,
which proximately caused an explosion, was an
act that arose out of the use of the truck
2 Gen’l Star Indem. Co. v. Vesta Fire Ins. Co.,
173 F.3d 946, 949 (5th Cir. 1999) (citation omit-
ted) (defining equitable subrogation as “the legal
fiction through which a person or entity, the subro-
gee, is substituted, or subrogated, to the rights and
remedies of another by virtue of having fulfilled an
obligation for which the other was responsible”).

-- 5 of 10 --

6
because it was incident to, and having a con-
nection with, the use of the truck. Id. In do-
ing so, we emphasized that “fueling a truck for
the journey was just as much a ‘use’ of it as
making the journey would be.” Id. In sum,
the “complete operation” test has two distinct
inquiries: (1) whether the insured’s act was an
act incident to, and having a connection with,
the use of the truck3 and (2) whether that act
proximately caused plaintiff’s injury.4
With respect to the first inquiry, Texas
courts have read business auto policies to cov-
er loading and unloading of the covered vehi-
cle even if that is not specifically mentioned in
the text of the policy.5 Further, loading and
unloading has been interpreted to cover acts
incident to making a commercial delivery; this
includes “the entire process involved in the
movement of the articles from the place where
insured’s employees find the articles which are
to be moved by truck, to the place where the
employees of insured turn them over to the
party to whom they are to make delivery.” Am.
Employers’ Ins. Co. v. Brock, 215 S.W.2d 370
(Tex. Civ. App. 1948, writ ref’d n.r.e.); Trav-
elers, 380 S.W.2d at 612.
Under this expansive view of what consti-
tutes an auto “use,” an insurer was liable for in-
juries sustained by a pedestrian who fell into an
open sidewalk elevator shaft when employees in
charge of the insured truck left the shaft doors
open while obtaining cross bars to guard the
shaft, notwithstanding that nothing had been
loaded onto or unloaded from the truck at the
time of the fall. Am. Employers’, 215 S.W.2d
at 370. Therefore, for insurance coverage to
exist, the vehicle itself need not be in “oper-
ation” or “in motion” or an “active participant”
in the plaintiff’s injuries:
[The auto insurer] also relies on the rule that
there must be a causal relation or connection
between the accident or injury and the own-
ership, maintenance or use of the vehicle.
This does not mean that the accident must
be caused by negligent operation of the ve-
hicle or some defect therein. When a vehicle
is being unloaded it is being used to the
same extent as if it were being driven, and
the person doing the unloading is entitled to
the same protection as the owner or op-
erator.
Travelers, 380 S.W.2d at 614.
It appears that Texas courts have never de-
cided whether mud, clay, sand, or other debris
tracked by a truck’s tires or fallen from its car-
go is incident to its use. We conclude, from the
broad interpretation Texas courts have given to
what is incident to the use of an automobile,
that such debris is indeed incident to the use of
the vehicle. Debris falling from a car’s cargo is
incident to the transportation of that cargo: It
3 Red Ball, 189 F.2d at 377 (noting that cov-
erage extends “so long as the act or thing done by
the insured’s employee which causes the accident
arises out of the use of the insured’s car”); id. at
378 (“That this act of the driver of the tractor, in
not closing the valve, was an act incident to, and
having a connection with, the ownership, main-
tenance, or use of the truck, we think may not be
questioned.”).
4 Id. at 377 (emphasis added) (stating that “the
provision for use coverage extends to foreseeable
consequences of what was done in connection with
the use of the car”); id. at 378 (“That the cause of
the escape of the gasoline, which in unbroken
sequence proximately caused the explosion was the
negligent act of the driver of the truck in failing
properly to close the valve after he had finished
fueling his truck from the tank, was not disputed”).
5 Panhandle Steel Prods. Co. v. Fidelity Union
Cas. Co., 23 S.W.2d 799 (Tex. Civ. App. 1929,
no writ).

-- 6 of 10 --

7
is inherent in the transportation of cargo that
some of it may spill or fall unto the road.6
Similarly, the tracking of debris by the tires is
incident to the operation of a vehicle on
unpaved roads: It is inherent in driving on
unpaved roads that some sand, mud, or clay
may attach to the tires.7
Further, because the plaintiff’s injuries need
not be caused by the negligent operation of the
vehicle, but instead by an act incident to its use,
it is not necessary that the plaintiff’s injuries
occur at the time of or immediately after the
tracking of debris on the highway.8 We thus re-
ject EMCASCO’s contention that the “causal
standard mandated by the phrase ‘arising out
of,’ however broad, appears at least to require
the contemporaneous use of the insured’s vehi-
cle.”9 The accident need not be contempor-
aneous with the use of the vehicle so long as it
is a foreseeable consequence of an act inciden-
tal to the use of the vehicle, such as the tracking
of debris.
This takes us to the second test for deter-
mining whether a duty to indemnify exists:
whether the tracking of mud onto the highway
was the proximate cause of the injuries. The
reasoning for this inquiry is plain: If the fact-
finder determines that the insured’s act in con-
nection with the use of the vehicle did not prox-
imately cause the injuries, the insured is not
liable, and the insurer has no duty to
indemnify.10
6 Naturally, not every act in connection with a
vehicle is “use.” For instance, a drive-by shooting
from a vehicle is not an act incident to its “use.”
See, e.g., Collier v. Employers Nat'l Ins. Co., 861
S.W.2d 286, 289-90 (Tex. App.–Houston [14th
Dist.] 1993, writ denied) (holding that a drive-by
shooting does not involve the use of a motor vehicle
“simply because an automobile provided the site
for a criminal assault or provided transportation to
the location of a criminal act”).
This is because “[t]he use required is of the ve-
hicle qua vehicle, rather than simply as an article
of property.” Mid-Century Ins. Co. v. Lindsey, 997
S.W.2d 153 (Tex. 1999). Unlike the unloading,
which is a use of the vehicle qua vehicle (because
it is necessary to the delivery/transportation of
goods), a drive-by shooting is not “incident” to the
use of the vehicle because transportation of people
or goods does not necessarily involve a shooting.
7 See also Jackson v. Daley, 739 So.2d 1031,
1041 (Miss. 1999) (holding that injuries resulted
from the ownership, maintenance, or use of an au-
tomobile because plaintiff was injured after collid-
ing with a pile of dirt dumped on the side of a road
by one of the insured’s dump trucks, notwithstand-
ing subsequent failure to clean up the dirt); Mer-
chants Co. v. Hartford Accident & Indem. Co.,
188 So. 571, 571 (Miss. 1939) (holding that injur-
ies arose out of the ownership, maintenance or use
of automobile where motorist’s car struck poles
that another driver had left lying in the roadway
after using them to extricate his truck from a road-
side ditch hours earlier).
8 EMCASCO argues that the language of the
insurance contracts at issue is ambiguous and thus
maintains we should construe any such ambiguity in
the contract to favor coverage. Because we see no
ambiguity, we decline to apply the “not un-
reasonable” contract interpretation urged by
EMCASCO.
9 For that reason, Lindsey, 997 S.W.2d 153,
does not support the arguments advanced by EM-
CASCO. That is, even if the Appleman-Couch test
were to apply, it would not dictate the result EM-
CASCO urges, namely that the use of the vehicle
has to be contemporary with the injury.
10 An act incident to the use of a vehicle need not
always be the proximate cause of the injury. For
instance, if a defendant left debris on a road but
(continued...)

-- 7 of 10 --

8
In this regard, the operation or driving of
the vehicle need not be the proximate cause of
the injuries.11 This observation merely restates
the notion we discussed earlier, i.e., that a
vehicle need not be in active operation (such
as in a collision) for insurance coverage to
exist. Rather, as this court has interpreted
Texas law in Red Ball, 189 F.3d at 378, only
the act incident to, or in connection with, the
use of the vehicle must be the proximate cause
of the injuries.
Although it was foreseeable that debris left
on the road could cause an accident, we do not
know whether the accident would not have oc-
curred without the tracking of the debris.12
The washing of mud and sand off the unpaved
road leading to the public, paved road could
have independently produced the accident: The
amount of mud accumulated from the rain
could have been sufficient to cause the accident
even if no mud had been tracked by the trucks.
Further, the washing of mud off the unpaved
roadway would be a separate cause of the ac-
cident. That is, the washing of mud off the
unpaved roadway is not derivative of the act of
tracking mud by trucks; it could have occurred
regardless of the presence of the trucks.13
AISLIC’s policy covers the allegations with
respect to the washing of the mud by the rain,
which are allegations unrelated to the use of the
trucks, and covers the separate claim for negli-
gence per se based on the obstruction of “the
road adjacent to [Wilson-Riley’s] worksite,
which is a violation of Section 42.03 of the
Texas Penal Code.”14 Although AISLIC’s
10(...continued)
accompanied it with sufficient warning signs, and
a plaintiff, driving drunk and without required
corrective lenses, ignored the signs, it cannot be
said that the debris on the highway proximately
caused the injury if the law regarded such negligent
conduct sufficiently unforeseeable and superseding
so as to interrupt the chain of causation.
11 Cf. Panhandle Steel, 23 S.W.2d at 802:
The act of unloading the automobile was not an
act separate and independent of the use of the
truck, but was a step incident to the use and
necessary to accomplish the purpose thereof.
And, since it followed in a natural and continual
sequence from the use, it would seem to follow
logically that the act of unloading would not
preclude a holding that the use of the truck was
the proximate cause of the injury, if, indeed,
such a holding be necessary to support a
recovery by the plaintiff against the defendant.
(Emphasis added.)
12 Cf. id. (“The proximate cause of an event
must be understood to be that which, in a natural
(continued...)
12(...continued)
and continual sequence, unbroken by any new, in-
dependent cause, produces that event, and without
which that event would not have occurred.”) (em-
phasis added).
13 AISLIC argues that EMCASCO has waived
the argument that AISLIC’s policy applied despite
the exclusion because of separate and independent
causation. EMCASCO raised that issue in the dis-
trict court, however, and argues on appeal that AIS-
LIC’s policy covers the claim. Thus, the argument
was preserved, albeit weakly.
14 In paragraph 36 of its first original amended
answer, AISLIC admitted that if the facts alleged in
the last version of the complaint were proved,
AISLIC’s policy could have provided coverage:
“Recognizing that this [Third Version of the Fourth
Amended Complaint] might theoretically invoke its
coverage (which would actually occur only if
plaintiff offered proof of facts which she had
(continued...)

-- 8 of 10 --

9
CGL policy excluding coverage and EMCAS-
CO’s auto policy providing coverage are near-
ly identical,15 the polices are mutually exclusive
only with respect to which policy covers the
tracking of mud by the tires, which is the only
issue with respect to the use of an auto.
The non-excluded event, the washing of
mud from the unpaved roadway, however, is
covered by the general liability policy, because
it could have independently caused the injur-
ies. When two separate eventsSSone that is
excluded and one that is covered by the gen-
eral liability policySSmay independently have
caused the accident, Texas law mandates that
the general liability policy also provide cover-
age despite the exclusion.16
We question the district court’s assertion
that the washing of the mud off the unpaved
roadway could not have been a “separate” and
“independent” cause of the accident, but rather
a “classic example of concurrent causation”
because mud and clay are “by their very nature
fungible,” rendering it “impossible to distin-
guish” the part of the debris that was tracked by
the trucks or that was washed off the road. In
fact, precisely because it is “impossible to dis-
tinguish,” once the mud merges, the part of the
mud tracked by the tires from that washed by
the rain, the proper inquiry is whether the
amount of mud washed by the rain could have
been sufficiently large to cause an accident by
itself.17
There is at least a genuine issue of material
fact as to this question. The district court ac-
knowledged that some mud and clay “could
have been washed by the rain.” This mud from
the rain could have independently caused the
accident. Therefore, summary judgment for
AISLIC was improper. On remand, the court
should determine whether there is sufficient evi-
dence to declare as a matter of law that the
heavy rain in the several hours before the ac-
cident could have produced sufficient mud that
would have independently caused the accident,
or whether that issue should be sent to a
factfinder.
C.
We are mindful that the district court has not
addressed AISLIC’s contention that it does not
have a duty to reimburse EMCASCO because
it did not agree to the settlement. The court
must confront this issue on remand if it finds
that the washing of mud from the unpaved
roadway could have independently caused the
14(...continued)
previously denied), AISLIC agreed to participate in
negotiations to obtain a release for [Wilson-
Riley].” Paragraph 35 explained that the Lang-
stons included, in this last version of the complaint,
allegations of washing of mud onto the roadway
during rainy weather, despite having removed such
allegations from prior versions of the amended
complaint after SLS had settled.
15 In such instances, coverage is usually not
read to implicate both policies; they are mutually
exclusive. See Travelers Indem. Co. v. Citgo Pe-
troleum Corp., 166 F.3d 761 (5th Cir. 1999).
16 See Utica Nations Ins. Co. v. Am. Indem.
Co., 141 S.W.3d 198, 204 (Tex. 2004), and cases
cited therein.
17 This inquiry is basically the same as that for
determining joint and several liability in cases where
two fungible causes merge. For instance, where two
independent fires combine to destroy a piece of
property, if either fire could have destroyed the
property by itself, there is joint and several liability.
See, e.g., Anderson v. Minneapolis, St. Paul &
Sault Ste. Marie Ry., 179 N.W. 45 (Minn. 1920),
overruled in part on other grounds by Borsheim v.
Great N. R.R., 183 N.W. 519 (Minn. 1921).

-- 9 of 10 --

10
accident. See Liberty Mutual Ins. Co. v.
Mid-Continent Ins. Co., 405 F.3d 296 (5th
Cir.), modified, 407 F.3d 683 (5th Cir. 2005).
The judgment is VACATED, and this mat-
ter is REMANDED for further proceedings.

-- 10 of 10 --