Allegations in the underlying complaint proved crucial in analyzing coverage for an additional insured under Texas' eight-corners rule. See The Burlington N. and Santa Fe R. R. Co. v. National Union Fire Ins. Co. of Pittsburgh, Pa., No. 08-06-00022CV, 2009 Tex. App. LEXIS 9347 (Tex. Ct. App. Dec. 9, 2009).
The railroad entered a three-year contract with SSI Mobley for vegetation control along the railroad's right-of-ways. Pursuant to the contract, SSI Mobley purchased a CGL policy with National Union. The policy named the railroad as an additional insured for incidents occurring within fifty feet of a railroad track.
The railroad was sued when two people were killed in a collision between their automobile and a train. The decedents' families alleged the collision was caused by the railroad's failure to properly maintain the vegetation at the crossing. When National Union refused coverage, the railroad sued. The trial court granted summary judgment to National Union.
On appeal, the court first considered whether the railroad was an additional insured. The additional insured endorsement precluded coverage for the railroad's own negligence. Therefore, the railroad was an additional insured if the underlying plaintiffs sought recovery based on SSI Mobley's negligence. The court applied the eight corners rule, comparing the policy provisions to the allegations in the underlying complaint. The decedents' families alleged that SSI Mobley did not carry out its chemical weed control with reasonable care. This negligence resulted in the overgrowth of vegetation which obstructed the view of the crossing and led to the collision. The fact that the underlying complaint also alleged the railroad was at fault did not alter National Union's duty to defend the entire suit.
Nevertheless, coverage was barred based on the products-completed operations hazard exclusion. Because SSI Mobley had completed its work at the site before the collision, the exclusion precluded coverage.
