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Affirmed and Majority and Dissenting Opinions filed
February 14, 2008.

In The

Fourteenth Court
of Appeals

_______________

NO. 14-06-00662-CV

_______________

GENERAL STAR INDEMNITY CO.,
Appellant

V.

GULF COAST MARINE ASSOCIATES,
INC., Appellee

On Appeal from the 152nd District Court

Harris County, Texas

Trial Court Cause No.
2003-06535A

M A J O R
I T Y   O P I N I O N

In this dispute regarding
an insurer=s duty to indemnify, we must
determine whether the insurer, General Star Indemnity Co. (AGeneral Star@), owed its insured, Gulf Coast
Marine Associates, Inc. (AGulf Coast@), a duty to defend in a suit
involving a drill moving operation.  In three issues, General Star
contends the trial court erred in determining that it owed Gulf Coast a
duty to defend because the insurance policy clearly and unambiguously
excluded the damages alleged in the underlying petition.  Because we
conclude General Star owed Gulf Coast a duty to defend, we
affirm.

I.
Factual and Procedural Background

The underlying lawsuit arose
from a rig moving operation off the coast of Texas in the Gulf of Mexico
in mid-February 2001.  As a result of the operation, the plaintiff
and non-operating working interest owner in an offshore oil well, Juniper
Energy, L.P. (AJuniper@), sued, among others, Gulf
Coast.  As is relevant here, in its petition, Juniper alleged that
Gulf Coast=s negligence in mobilizing a
Ajack-up drilling
rig@ to the offshore well caused
Juniper damages.  In addition, Juniper, as a third party beneficiary
to Gulf Coast=s insurance policy provided by
General Star, also sued General Star.[1]
Because General Star refused to defend Gulf Coast, Gulf Coast filed a
cross-complaint against General Star, its insurance agent, and its
insurance broker to recover,  inter alia,  its defense
costs.  The trial court severed Gulf Coast=s claims into the instant suit.

General Star and Gulf Coast
filed competing motions for summary judgment regarding the duty to
defend.  General Star asserted that Juniper=s petition failed to allege
facts within the scope of coverage; thus, it had no duty to defend.
Gulf Coast responded that because Juniper alleged facts that were
potentially within the scope of coverage, General Star owed it a duty to
defend and bore the burden to establish that any potential damages were
excluded from coverage.  On February 13, 2006, the trial court denied
General Star=s summary judgment motion and
granted Gulf Coast=s motion for partial summary
judgment.  This partial summary judgment was incorporated into the
trial court=s final judgment rendered on
June 20, 2006, disposing of all parties and claims in this severed cause
of action.  General Star timely filed this
appeal.

II.
Issues Presented

In its first issue, General
Star contends the trial court erred in finding a duty to defend because
the factual allegations in Juniper=s petition fell within a clear
and unambiguous exclusion to the policy coverage.  In its second
issue, General Star asserts the trial court erred in denying its summary
judgment motion and granting Gulf Coast=s motion for partial summary
judgment.  Finally, in its third issue, General Star argues that the
trial court erred by failing to exclude an expert affidavit provided by
Gulf Coast, which described certain terms used in Juniper=s petition.

III.
Analysis

A.
Standard of Review

We review the trial
court=s grant of summary judgment de
novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d
211, 215 (Tex. 2003).  De novo review is also appropriately applied
to determine whether an insurance carrier owes its insured a duty to
defend under an insurance policy.  See Transp.
Int=l Pool, Inc. v.
Cont=l Ins. Co., 166 S.W.3d 781, 784 (Tex.
App.CFort Worth 2005, no pet.);
cf. Huffhines v. State Farm Lloyds, 167 S.W.3d 493, 496 (Tex.
App.CHouston [14th Dist.] 2005, no
pet.).  Insurance policies are controlled by rules of interpretation
and construction applicable to contracts generally.  CU
Lloyd=s of Tex. v.
Hatfield, 126
S.W.3d 679, 682 (Tex. App.CHouston [14th Dist.] 2004, pet.
denied).  AIn determining the scope of
coverage, we examine the policy as a whole to ascertain the true intent of
the parties.@  Utica
Nat=l Ins. Co. of Tex. v. Am.
Indem. Co.,
141 S.W.3d 198, 202 (Tex. 2004).  But we strictly construe exceptions
or limitations on liability against the insurer and in favor of the
insured.  See, e.g., Nat=l Union Fire Ins. Co. of
Pittsburgh, Pa. v. Hudson Energy Co., Inc., 811 S.W.2d 552, 555 (Tex.
1991).

An insurer=s duty to defend its insured is
determined by the Aeight corners@ rule, which requires that we
compare the allegations in the petition filed against the insured with the
coverage afforded by the insurance policy.  King v. Dallas Fire
Ins. Co., 85 S.W.3d 185, 187 (Tex. 2002); D.R.
HortonBTex. Ltd. v. Markel
Int=l Ins. Co.,
Ltd., No.
14-06-00486-CV, 2006 WL 3040756, at *2 (Tex. App.CHouston [14th Dist.] Oct. 26,
2006, pet. filed) (mem. op. on reh=g).  A
plaintiff=s factual allegations that
potentially support a covered claim are all that is needed to invoke the
insurer=s duty to defend, whereas the
facts actually established in the underlying suit control the duty to
indemnify.[2]
GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d
305, 308 (Tex. 2006).  If a petition does not allege facts within the
scope of coverage, an insurer is not legally required to defend a suit
against its insured.  Nat=l Union Fire Ins. Co. of
Pittsburgh, Pa. v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex.
1997) (per curiam); D.R. HortonBTex. Ltd., 2006 WL 3040756, at *2.
On the other hand, an Ainsurer is obligated to defend
a suit if the facts alleged in the pleadings would give rise to any claim
within the coverage of the policy.@  Utica
Nat=l Ins. Co. of
Tex., 141
S.W.3d at 201.  AWhen applying the eight corners
rule, we give the allegations in the petition a liberal
interpretation.@  Merchs. Fast Motor
Lines, Inc., 939 S.W.2d at 141.  If the petition does not state
facts sufficient to bring the case clearly within or outside the
insured=s coverage, the insurer is
obligated to defend if potentially there is a claim under the
complaint within the coverage of the insured=s policy.  See id.;
Huffhines, 167 S.W.3d at 497.

In reviewing the pleadings in
light of the insurance policy=s provisions, we focus on the
petition=s factual allegations showing
the origin of the damages and not on the legal theories alleged.
Merchs. Fast Motor Lines, Inc., 939 S.W.2d at 141; D.R.
HortonBTex. Ltd., 2006 WL 3040756, at *2.
We resolve any doubt regarding the duty to defend in favor of the
insured.  King, 85 S.W.3d at 187; Merchs. Fast Motor Lines,
Inc., 939 S.W.2d at 141.  We will not, however, read facts into
the petition, nor will we look outside of the petition or imagine factual
scenarios that might trigger coverage.  Merchs. Fast Motor Lines,
Inc., 939 S.W.2d at 142.  If an insurer has a duty to defend its
insured against any portion of the underlying suit, then the insurer is
required to defend the entire suit.  Stumph v. Dallas Fire Ins.
Co., 34 S.W.3d 722, 728 (Tex. App.CAustin 2000, no pet.); see
also D.R. HortonBTex. Ltd., 2006 WL 3040756, at *2.
In determining General Star=s issues, we first consider the
facts alleged in the underlying claim.

B.
The Underlying Petition

According to
Juniper=s petition in the underlying
suit, Gulf Coast, among others, was responsible for a botched rig moving
operation in the Gulf of Mexico.  In its petition, Juniper asserted
that, on or about February 18, 2001, Gulf Coast was hired by
Juniper=s drilling contractor to move a
Ajack-up drilling
rig@ to a well off the Gulf of
Mexico.  While Gulf Coast was moving the rig,

the mat of the jack[-]up rig contacted the well
stub or net protector.  The impact bent the well below the water
bottom to such a degree that remedial operations were required, including
installation of a caisson on the well.  Remediation and restoration
expenses totaled approximately US $935,886.45.

. . .

During the rig moving operation, the mat finger of
the rig passed over the net guard protecting the well. . . .

In this pleading, Juniper
maintained that during the operation, Gulf Coast grounded the jack-up
rig.  Juniper further asserted that a decision was made to
investigate the well site with divers, who

found that the well was approximately 130' south
of the rig, the net guard [was] 30' south and 60' west of the rig.
The divers confirmed the well stub appeared to be leaning plus or minus
5E to the southwest, which was later confirmed to be
the damage [sic] to the well. . . .

Juniper=s claims in the underlying suit
were premised on these facts.  Specifically, Juniper sought damages
for its claims including, but not limited to:  (a) restoration
expenses totaling approximately $935,886.45; (b) profit and production
losses; (c) pre- and post-judgment interest; (d) taxable court costs and
expenses; (e) attorneys= fees; and (f) A[a]ll such other and further
relief to which [it] may be justly entitled.@

As a preliminary matter,
General Star contends that the only damages alleged in Juniper=s petition relate to the well
and the rig, both of which fall under the policy=s definition of Aunderground resources and
equipment hazard,@ and are explicitly excluded
from coverage.[3]
Gulf Coast, on the other hand, argues that, construing the allegations in
Juniper=s petition liberally, some of
the damages sought include damage to the net protector or stub as opposed
to the actual well.  We agree.

The eight corners rule does not
require us to ignore those inferences logically flowing from the facts
alleged in a petition.  See Allstate Ins. Co. v. Hallman, 159
S.W.3d 640, 645 (Tex. 2005) (inferring a profit motive from the
insured=s leasing of her property for
limestone mining even though the pleadings made no reference to any
pecuniary interest).  An inference is a fact or proposition drawn
from an admitted or otherwise proven fact.[4]
Marshall Field Stores, Inc. v. Gardiner, 859 S.W.2d 391, 400
(Tex. App.CHouston [14th Dist.] 1993, writ
dism=d w.o.j.) (op. on
reh=g). It is a logical consequence
flowing from a fact.  Id.  In other words, we may draw
inferences from the petition that may lead to a finding of coverage.
See Gomez v. Allstate Tex. Lloyds Ins. Co., C S.W.3d C, 2007 WL 3203112, at *5 (Tex.
App.CFort Worth Nov. 1, 2007, no
pet. h.) (concluding that reasonable inferences drawn from the facts
alleged in the underlying petition triggered an insurer=s duty to defend).

Here, Juniper=s petition included allegations
that the jack-up rig Acontacted the well stub or net
protector.@  Additionally, Juniper
alleged that the net guard or net protector had been moved A30' south and 60' west of the
rig.@  Finally, Juniper stated
that ADivers confirmed that the well
stub was leaning . . . .@  Construing
Juniper=s petition liberally in favor
of the insured, a reasonable inference may be drawn that the well stub or
net protector was damaged by the impact of the jack-up rig.
See id.; see also Merchs. Fast Motor Lines, Inc., 939
S.W.2d at 141.  In fact, General Star drew a similar inference from
Juniper=s pleadings in drafting the
factual background section of its motion for summary judgment, stating:
ADivers were then allegedly sent
below the surface of the water where they confirmed damage to the well and
well stub.@  (emphasis added).
We therefore conclude that some portion of the damages Juniper sought
could have included damage to the net protector or well stub.[5]  We
thus turn to General Star=s argument that a stub and net
protector fall within the definition of Aunderground resources and
equipment hazard@ excluded from the
policy=s coverage.

C.
Gulf Coast=s Policy

Gulf Coast=s Oil and Gas General Liability
policy states that General Star will provide a defense in any suit seeking
damages because of Abodily injury@ or Aproperty damage@ caused by an Aoccurrence@ taking place in the coverage
area during the coverage term.  In attempting to establish it had no
duty to defend, General Star relied primarily on the policy=s explicit exclusion of
Aunderground resources and
equipment hazard.@  The policy defines
Aunderground resources and
equipment hazard@ as Aproperty damage@ to:

A.        Oil,
gas, water or other mineral substances which have not been reduced to
physical possession above the surface of the earth or above the surface of
any body of water;

B.        Any
well, hole, formation, strata or area in or through which exploration for
or production of any substance is carried on;

C.        Any
casing, pipe, bit, tool, pump or other drilling or well servicing
machinery or equipment located beneath the surface of the earth in any
such well or hole or beneath the surface of any body of water.

General Star contends that the
policy exclusion at issue is broad enough to encompass any damage to the
stub or net protector because Aif the stub is not part of the
well, it is part of the drilling equipment because it marks the place for
the well to be drilled@ and the net protector simply
protects the stub and the well from damage from fishing nets.  Gulf
Coast asserts that damage to either the stub or net protector is not
explicitly excluded from coverage because these items do not clearly fall
within the definition of Aunderground resources and
equipment hazards.@  We consider these
arguments next.

D.
Comparison of the Policy and the Petition

Pursuant to the eight-corners
rule, we compare the factual allegations of Juniper=s petition with the language of
the Gulf Coast policy to determine if the facts alleged by Juniper give
rise to any claim within the coverage of the policy.  See Utica
Nat=l Ins. Co. of
Tex., 141
S.W.3d at 201.   To resolve this issue, we must consider whether
damage to the Astub@ or Anet protector@ falls within the policy
exclusion for underground resources and equipment hazard.  But
neither Juniper=s petition nor Gulf
Coast=s policy explain what a
Astub@ or Anet protector@ is; these terms are not
included in the policy=s definition of Aunderground resources and
equipment hazard@ or otherwise defined by the
policy.  This obscurity brings us to General Star=s third issue, in which it
complains that the trial court erred in failing to exclude the expert
affidavit provided by Gulf Coast.

1.
Well Stub and Net Protector

Generally, as with any
contract, extrinsic evidence may be admissible to give the words of an
insurance policy a meaning consistent with that to which they are
reasonably susceptible, i.e., to interpret contractual
terms.  Nat=l Union Fire Ins. Co. of
Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517,
520B21 (Tex. 1995) (per
curiam).  Here, General Star correctly points out that Gulf
Coast=s expert affidavit defines
terms that relate to Juniper=s pleadings, rather than to the
policy=s construction.[6]
Gulf Coast has identified no authority providing that such extrinsic
evidence is appropriate to give the words of a third-party petition a
meaning consistent with that to which they are reasonably
susceptible.  We therefore conclude that the expert=s definition of Awell stub@ and Anet protector@ provided by Gulf
Coast=s affidavit is not pertinent to
a determination of General Star=s duty to defend under the
eight-corners rule.  But summary judgment in favor of Gulf Coast was
nevertheless appropriate if the factual allegations in Juniper=s petition triggered General
Star=s duty to defend.[7]

Based on the allegations in
Juniper=s pleadings, we conclude that a
Astub@ and Anet protector@ mark and protect the location
of a well.  For example, the angle at which the stub was leaning was
reflected in the damage caused to the well; based on these facts, we may
infer that a stub is some sort of object projecting out of a well, used to
mark or identify the well or the well=s location.[8]  A
net protector or guard, based on the allegations in Juniper=s petition,[9] is an
object that protects either the well or the well stub.  We next
determine whether damage to the well stub or net protector is excluded
from the policy.

2.
The Underground Resources and Equipment Hazard Exclusion

Gulf Coast asserts that the
underground resources and hazard exclusion applies only to:  (a) a
well itself (under provision B, supra) or (b) any drilling or
well-servicing equipment or machinery (under provision C,
supra).  Gulf Coast contends that because neither a well stub
nor net protector fits into these categories, damage to either of these
items is not outside the scope of coverage.  General Star does not
dispute Gulf Coast=s construction of the clause,
but insists that these two items are part of the well itself or drilling
or well servicing equipment:  AThe stub displays the location
of the well.  The net protector protects the stub and the well to
which it is attached from damage and obliteration.@  According to General
Star, because these items are necessary to locating and re-drilling a
capped well, they are Aobviously machinery and
equipment used in oil drilling and oil well servicing.  They are
excluded.@

But whether an object
projecting from or protecting a well is part of the well itself is
unclear.  Likewise, whether either of these objects is drilling or
well servicing equipment is equally unclear.  Instead, as noted
above, these items appear to be location and protection devices for an oil
well.  Although such devices undoubtedly serve a vital function in
the oil industry, we cannot say on this record that they fall into the
category of well servicing or drilling equipment.[10]

In sum, we must strictly
construe the exclusionary clause against General Star and in favor of Gulf
Coast.[11]
See Hudson Energy Co., Inc., 811 S.W.2d at 555.  Furthermore,
any doubts regarding the duty to defend must be resolved in favor of Gulf
Coast.  See King, 85 S.W.3d at 187; Merchs. Fast Motor
Lines, Inc., 939 S.W.2d at 141.  Resolving any doubts in favor of
the duty to defend and strictly construing this exclusionary clause
against General Star, we conclude that the facts alleged in
Juniper=s petition indicate a
potential claim for damages to the well stub or net protector,
which falls within the coverage of Gulf Coast=s policy.  See Merchs.
Fast Motor Lines, Inc., 939 S.W.2d at 141; Huffhines, 167
S.W.3d at 497.  We therefore conclude that General Star owed Gulf
Coast a duty to defend, and we overrule General Star=s first and second
issues.

IV.
Conclusion

We hold that the underlying
petition alleged facts from which damage to the Awell stub@ and Anet protector@ may be logically
inferred.  Without regard to Gulf Coast=s expert affidavit, we
therefore determine that General Star had a duty to defend Gulf Coast in
the underlying dispute because these items are not clearly excluded from
the policy=s coverage.  Accordingly,
we overrule General Star=s issues and affirm the
judgment of the trial court.

/s/        Eva
M. Guzman

Justice

Judgment rendered and Majority
and Dissenting Opinions filed February 14, 2008.

Panel consists of Justices
Yates, Fowler, and Guzman. (Yates, J., dissenting).

[1]  According to its petition, Juniper sued
General Star under Louisiana=s Direct Action Statute.

[2]  Thus, the duty to defend is generally
broader than the duty to indemnify.  GuideOne Elite Ins. Co. v.
Fielder Rd. Baptist Church, 197 S.W.3d 305, 310 (Tex.
2006).

[3]  General Star also argues that the
statements in Juniper=s pleadings alleging that the rig Acontacted@ the well stub and net protector were simply
Aallegations . . . made by way of factual
background . . . not tied to a particular cause of action,@ citing C.O. Morgan Lincoln-Mercury, Inc. v.
Vigilant Ins. Co. as support for this proposition.  521 S.W.2d
318, 321 (Tex. Civ. App.CFort Worth 1975, no writ).  But this case is
readily distinguishable because the insurance policy at issue there
provided coverage for libel, slander, or defamation, and the underlying
petition involved a suit for conversion.  Id. at
320B21.  The Second Court of Appeals concluded
that the allegations in the underlying petition concerning Athreats and harsh words@ were simply facts leading up to the conversion,
and that the suit was not one for Alibel, slander, or defamation of
character.@ Id. at 321.  Here, to the contrary,
the underlying petition involves, inter alia, a claim for property
damage due to negligence.  Thus, the fact that the rig contacted the
well stub and net protector is not simply an Aallegation made by way of factual
background,@ but instead an allegation that describes the
nature and extent of the damages caused by Gulf Coast=s alleged negligence.

[4]  In determining an insurer=s duty to defend, we consider the facts alleged
without regard to the truth of those allegations.  Fielder Rd.
Baptist Church, 197 S.W.3d at 308.

[5]  Our dissenting colleague does not read
Juniper=s petition to factually allege a claim for
specific damage to the well stub.  But this review of the petition
does not comport with the general rules that allegations in a petition
must be liberally interpreted in favor of the insured, and any doubts as
to whether the insurer has a duty to defend must be resolved in the
insured=s favor.  See King, 85 S.W.3d at 186;
Merchs. Fast Motor Lines, Inc., 939 S.W.2d at 141.

[6]  Specifically, the affidavit provided by
Gulf Coast defines the terms Astub@ and Anet protector.@  Although General Star objected to this
affidavit, it did not obtain an explicit  ruling on this objection.
We do not presume that objections to summary judgment evidence were
overruled when a trial court grants a summary judgment.  Seidner
v. Citibank (S.D.) N.A., 201 S.W.3d 332, 335 n.2 (Tex.
App.CHouston [14th Dist.] 2006, pet.
denied).   But an objection to the substance of a summary
judgment affidavit, rather than a defect in the form, is not waived by
failure to obtain a ruling from the trial court on the objection.
See, e.g., Wedewitz v. Montgomery, 951 S.W.2d 464,
466 (Tex. 1997) (AConclusory statements by an expert are
insufficient to support or defeat summary judgment.@).  Here, General Star asserts that the
expert affidavit contained opinions and conclusory statements and was
therefore incompetent summary judgment evidence.  We need not
determine whether the expert affidavit proffered by Gulf Coast is
incompetent summary judgment evidence, however, because, as noted above,
this affidavit was not necessary to the trial court=s ruling on the parties= motions for summary judgment.

[7]  Thus, General Star=s third issue is not dispositive of this appeal,
and we do not reach  it.  See Tex. R. App. P. 44.1 (providing
that reversal of a  trial court=s judgment is only appropriate when the error
complained of probably caused the rendition of an improper judgment).

[8]  Juniper describes difficulty in locating
the well by sonar; from the context of the description of the rig moving
operation, it is apparent that the well stub demarked the location of the
well to which Gulf Coast was attempting to mobilize the jack-up rig.

[9]  Juniper refers to the Anet guard@ as an item Aprotecting the well.@

[10]  Likewise, a map of an oil field demarking
the location of an oil well would also serve a vital function in the oil
industry, but it stretches credulity to categorize a map as Awell drilling or servicing equipment.@

[11]  Moreover, we must adopt the construction of
an exclusionary clause urged by the insured so long as it is not
unreasonable.  See Utica Nat=l Ins. Co. of Tex., 141 S.W.3d at 202.  Gulf Coast=s interpretation C that, as is relevant here, the policy excludes
coverage only for damage to the well itself or for well drilling or
servicing equipment C is
reasonable.