Mesa Underwriters Specialty Insurance Company V West Dallas Investments Lp
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
MESA UNDERWRITERS SPECIALTY §
INSURANCE COMPANY, §
§
Plaintiff, §
§
v. § Civil Action No. 3:24-CV-332-N
§
WEST DALLAS INVESTMENTS, §
L.P., et al., §
§
Defendants. §
MEMORANDUM OPINION AND ORDER
This Order addresses Defendant West Dallas Investments, L.P.’s (“WDI”) motion
to alter or amend the judgment [25]. As an initial matter, the Court grants WDI’s motion
to the extent that it seeks vacatur and hereby vacates the Court’s Memorandum Opinion
and Order of April 22, 2025 [23] and the ensuing Final Judgment [24]. Then, on
reconsideration of Plaintiff Mesa Underwriters Specialty Insurance Company’s (“Mesa”)
motion for summary judgment [12], considering WDI’s supplemental summary judgment
response [22] and the second amended petition in the underlying case, the Court again finds
that Mesa has no duty to defend or indemnify the underlying state court action, and the
Court again grants Mesa’s motion for summary judgment and denies WDI’s motion to alter
or amend the judgment.
I. ORIGINS OF THE MOTION
This suit arises out of a dispute regarding Mesa’s duty to defend and duty to
indemnify Defendant West Dallas Investments, L.P. (“WDI”) in an underlying wrongful
death action. In the underlying suit, the plaintiff brought an action against WDI for the
wrongful death of her son, Alvarez. Second Am. Pet. ¶ 2, Def’s App. 023 [26]. The
petition alleges that several unknown, inebriated patrons at a rave on WDI property fired
gunshots into the air, creating “chaos and confusion” in the “darkened warehouse,” and a
bullet struck and killed Raul Alvarez. Id. ¶ 11. The plaintiff alleges that WDI had a duty
to provide adequate protection from a known dangerous condition, as the property is
regularly open to the public and promoted to hold raves where inebriation and weapons are
not uncommon. Id.¶¶ 12–18.
Prior to the incident, Mesa issued a commercial general liability insurance policy to
WDI that provides coverage for bodily injury and property damage. Pl.’s Br. 5 [13]. The
policy contains an Assault or Battery Exclusion, which provides, in pertinent part:
I. This insurance does not apply . . . for “bodily injury” . . . caused by,
arising out of, resulting from, or in any way related to an “assault” or
“battery” when that “assault” or “battery” is caused by, arising out of,
or results from, in whole or in part from:
. . .
b. The failure to provide a safe environment including but not limited
to the failure to provide adequate security, or to warn of the dangers
of the environment, or
. . .
d. Negligent, reckless or wanton conduct by you, your employees,
patrons or any person, or
. . .
Pl.’s App. 29 [14]. The exclusion further defines assault and battery:
A. “Assault” means any intentional act, or attempted act or threat to inflict
injury to another including any conduct that would reasonably place another
in apprehension of injury, including but not limited to physical injury . . . or
offensive contact . . .
B. “Battery” means the intentional or reckless use of force . . . resulting in
injury whether or not the actual injury inflicted is intended or expected. The
use of force includes, but is not limited to the use of a weapon.
Id. at 30.
Mesa filed this declaratory judgment action seeking a declaration that it owes no
duty to defend or indemnify WDI in the underlying state suit. Pl.’s Compl. ¶ 1 [1]. Mesa
argues that the action in the underlying suit can only be construed such that it is barred by
the insurance policy’s assault or battery exclusion. Pl.’s Br. 10–13.
II. LEGAL STANDARD
Legal Standard for Summary Judgment
Courts “shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). In
making this determination, courts must view all evidence and draw all reasonable
inferences in the light most favorable to the party opposing the motion. United States v.
Diebold, Inc., 369 U.S. 654, 655 (1962). The moving party bears the initial burden of
informing the court of the basis for its belief that there is no genuine issue for trial. Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986).
When a party bears the burden of proof on an issue, that party “must establish
beyond peradventure all of the essential elements of the claim or defense to warrant
judgment in his favor.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986)
(emphasis omitted). When the nonmovant bears the burden of proof, the movant may
demonstrate entitlement to judgment by either (1) submitting evidence that negates the
existence of an essential element of the nonmovant’s claim or affirmative defense or (2)
arguing that there is no evidence to support an essential element of the nonmovant’s claim
or affirmative defense. Celotex, 477 U.S. at 322–25.
Once the movant has made the required showing, the burden shifts to the nonmovant
to establish that there is a genuine issue of material fact such that a reasonable jury might
return a verdict in its favor. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 586–87 (1986). Factual controversies are resolved in favor of the nonmoving party
“only when an actual controversy exists, that is, when both parties have submitted evidence
of contradictory facts.” Olabisiomotosho v. City of Houston, 185 F.3d 521, 525 (5th Cir.
1999) (citing McCallum Highlands, Ltd. v. Washington Capital Dus, Inc., 66 F.3d 89, 92
(5th Cir. 1995)).
Legal Standard for an Insurer’s Duty to Defend
When determining whether an insurer has a duty to defend under Texas law, courts
follow the “eight-corners rule.” Zurich Am. Ins. Co. v. Nokia, Inc., 268 S.W.3d 487, 491
(Tex. 2008). “The eight-corners rule provides that when an insured is sued by a third party,
the liability insurer is to determine its duty to defend solely from terms of the policy and
the pleadings of the third-party claimant.” GuideOne Elite Ins. Co. v. Fielder Rd. Baptist
Church, 197 S.W.3d 305, 307 (Tex. 2006). “Resort to evidence outside the four corners
of these two documents is generally prohibited.” Id. “The duty to defend does not depend
upon the truth or falsity of the allegations.” Gore Designs Completions, Ltd. v. Hartford
Fire Ins. Co., 538 F.3d 365, 368 (5th Cir. 2008). An insurer’s duty to defend is usually
invoked with a plaintiff’s factual allegations that potentially support a covered claim. Id.
Courts are to construe allegations in the pleadings liberally and resolve all doubts in favor
of the insured. Nat’l Union Fire Ins. Co. v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d
139, 141 (Tex. 1997); see also Gore Designs, 538 F.2d at 369 (“When in doubt, defend.”).
The insured has the burden to establish coverage under the policy. JAW The Pointe,
L.L.C. v. Lexington Ins. Co., 460 S.W.3d 597, 603 (Tex. 2015). But if the insured
establishes coverage, then to avoid liability, the insurer has the burden to prove that the
loss falls within an exclusion under the policy. Id. When “the plaintiff’s petition makes
allegations which, if proved, would place the plaintiff’s claim within an exclusion from
coverage, there is no duty to defend.” Gore Design, 538 F.3d at 370 (internal quotations
and citations omitted). But the burden of proving that the exclusion applies rests with the
insurance company. TEX. INS. CODE § 554.002.
Legal Standard for an Insurer’s Duty to Indemnify
The duty to indemnify is based on the actual facts developed in the underlying suit,
rather than the factual allegations in the pleadings. Farmers Tex. Cty. Mut. Ins. Co. v.
Griffin, 955 S.W.2d 81, 84 (Tex. 1997). While “the duty to indemnify is generally not
ascertainable until after the insured has been held liable, it is justiciable prior to a finding
of liability when the same reasons negating the duty to defend also negate any duty to
indemnify.” Lincoln Gen. Ins. Co. v. Aisha’s Learning Ctr., 468 F.3d 857, 858–59 (5th
Cir. 2006).
III. THE COURT GRANTS MESA’S MOTION
The Court holds that Mesa has met its burden to establish that the alleged incident
falls under the policy’s assault or battery exclusion. The Court finds that Mesa does not
have a duty to defend or indemnify.
The Court Finds the Assault or Battery Exclusion Applies
The parties agree that the policy includes coverage for bodily injury, such as alleged
in the underlying suit, but disagree on whether the policy’s assault or battery exclusion
applies.
WDI argues that Mesa has not established that the facts alleged qualify as an assault
or battery under the policy. Def.’s Resp. Br. at 16 [19]. First WDI analyzes whether the
action alleged constitutes an “assault” under the policy. WDI argues that the definition of
“intentional act” in the policy’s definition of “assault” can be construed to require the
allegation to prove that the shooter intended not only to shoot the weapon but to cause the
injury. Id. at 17–19. However, because the policy is not limited to an assault, and because
the Court finds that the action alleged clearly constitutes a “battery” under the policy, the
Court need not determine whether this is a reasonable construction of the policy.
Next, WDI claims that the facts alleged do not constitute a “battery” under the
policy. The policy defines “battery” as “the intentional or reckless use of force . . . resulting
in injury whether or not the actual injury is intended or expected.” Pl.’s App. 30. WDI
first argues that it is a reasonable construction of “intentional” to require not only the
intention to use force but “that an actor intend to cause injury.” Def.’s Resp. Br. 19 n.3.
However, the policy includes specific language to exclude this as a reasonable
interpretation of the policy. See Pl.’s App. 30 (defining battery as an intentional or reckless
use of force “whether or not the actual injury is intended or expected.”). Such direct
language makes unreasonable WDI’s interpretation that battery requires the injury to be
intended or expected.
Firing weapons into the air at a crowded rave is a reckless use of force. Under Texas
law, a person’s conduct is reckless if he or she “consciously disregards a substantial and
unjustifiable risk” of the results of his or her actions where such risk “constitutes a gross
deviation from the standard of care that an ordinary person would exercise” under the same
circumstances. TEX. PEN. CODE ANN. § 6.03(c). Texas courts have found that shooting a
weapon into the air in a place where bystanders are nearby and likely to be injured is
sufficient to constitute reckless conduct. See, e.g., State v. Rodriguez, 339 S.W.3d 680,
683–84 (Tex. Crim. App. 2011) (listing “shooting a gun in the air in a residential district”
as an example of an action that would “entail a known and unjustifiable risk of harm or
injury to others . . . that the ordinary person . . . probably would not take”); Herrera v.
State, 2004 WL 2361921, at *2 (Tex. App. — Dallas 2004, pet. ref’d) (finding the
appellant’s “conduct was reckless when he “was intoxicated and repeatedly fired his gun
into the air in a residential area”). Therefore, the intoxicated men firing weapons in the air
at a crowded property during a rave were committing a battery under the assault and battery
exclusion.
WDI argues that Mesa has not met its burden to show “reckless use of force”
because the petition is unclear whether the bullet that struck Alvarez was from the persons
shooting bullets in a crowded venue or if he was hit by another “random bullet.” Def.’s
Resp. Br. 19–20. The Court finds no such lack of clarity in the petition.
WDI argues that the petition in the underlying suit makes “no allegation . . . from
which it can be ascertained whether [the plaintiff] asserts that her son was shot by persons
who were allegedly ‘firing weapons into the air’ . . . or by other ‘random bullets.’” Def.’s
Resp. Br. 18. This mischaracterizes the allegations in the underlying petition as different
allegations rather than as referring to the same alleged act. The underlying petition states
that:
Among the partygoers at the rave that night were several inebriated young
men with firearms. . . . [S]ome of these inebriated young men began firing
their weapons into the air. In the chaos and confusion, those in the crowd
began running out of the darkened warehouse. Tragically, Raul . . . [was]
struck by [one of the] stray bullets and . . . died as a result of his wounds.
Second Am. Pet. ¶ 11, Def.’s App. 026. The use of the term “stray bullets” refers to the
bullets fired by the “inebriated young men” and cannot be convincingly read to refer to
bullets from another source. Even so, the assault and battery exclusion extends to injuries
“caused by, arising out of, resulting from, or in any way related to an ‘assault’ or ‘battery.’”
Pl.’s App. 29. In its supplemental briefing, WDI argues that the petition “does not
summarily foreclose the possibility of Raul having been struck by a bullet accidentally
discharged during the ‘chaos and confusion’ by another of the several inebriated young
men.’” Def.’s Mot. Supp. Ex.1, at 3 [22]. Even if the Court accepts this possibility, the
theorized accidental discharge is premised upon the chaos and confusion created by the
intentional gunshots. Therefore, a gunshot discharged in the chaos caused by the shots
fired into the air would still be caused by, resulting from, and arising out of the battery of
the shots fired into the air. Thus, this alternative theory would still meet the standard to
show battery under the exclusion.
The Court finds that the allegations in the petition allege facts squarely within the
scope of the plain language of the assault or battery exclusion. Because the petition does
not allege facts that fall outside of the exclusion and within the scope of coverage, the Court
applies the eight corners rule and holds that Mesa has no duty to defend WDI in the
underlying suit.
The Court Determines that the Duty to Indemnify is Justiciable
Because the same reasons negating the duty to defend also negate any duty to
indemnify, the Court finds that the duty to indemnify is ascertainable at this stage and finds
that Mesa has no duty to indemnify WDI.
The Texas Supreme Court established in Griffin that, while the “duty to defend and
duty to indemnify are distinct and separate duties,” the duty to indemnify can be justiciable
prior to judgment where “the same reasons that negate the duty to defend” also negate the
possibility of indemnification because no “facts can be developed in the underlying tort
suit that can transform” the allegations into acts that are within the scope of coverage. 955
S.W.2d at 82, 84. The Fifth Circuit has cautioned that Griffin should be narrowly construed
to cases where no “conceivable set of facts” could give rise to coverage. Liberty Mut. Fire
Ins. Co. v. Copart of Conn., Inc., 75 F.4th 522, 537 (5th Cir. 2023). However, this case
more closely mirrors Griffin than Liberty. In Griffin, the court found that no set of facts
could “be developed in the underlying tort suit that can transform a drive-by shooting into
an ‘auto accident,’” which was the extent of coverage under the policy. 955 S.W.2d at 84.
In Liberty, the court found that there were foreseeable facts that could develop during the
litigation that would give rise to a duty to indemnify. 75 F.4th at 537.
Here, the underlying petition alleges negligence and premises liability under a
theory that because inebriated young men with firearms is a “well-known occurrence in
urban rave subculture” and “[r]aves . . . have been held at the [property] on numerous
occasions,” WDI knew or should have known of the risk. Second Am. Pet. ¶¶ 7, 11, 13,
Def.’s App. 025–26. If WDI is held liable in the underlying suit, it will be for bodily injury
arising out of WDI’s failure to provide a safe environment. As established above, the
bodily injury alleged — death from bullets shot into the air at a crowded rave — arose out
of assault or battery. The exclusion applies to “bodily injury . . . caused by, arising out of,
resulting from, or in any way related to an ‘assault’ or ‘battery.’” Pl.’s App. 29. “The
words ‘arising out of’ are not words of narrow and specific limitation, but are broad,
general, and comprehensive terms.” Canutillo Indep. Sch. Dist. v. Nat’l Union Fire Ins.
Co., 99 F.3d 695, 705 n.6 (5th Cir. 1996). The Texas Supreme Court has described “arising
out of” in the insurance context “as connoting ‘a causal connection or relation,’ concluding
but-for causation is sufficient, even without direct or proximate causation.” Pinto Tech.
Ventures, L.P. v. Sheldon, 526 S.W.3d 428, 437–38 (Tex. 2017). Because “arising under”
is construed broadly as but-for causation in this context, the Court finds there is no set of
facts that could develop in the underlying suit that would transform a shooting into
something other than an action arising out of assault or battery under the policy.
WDI argues that facts may develop to show either (1) “the person who shot Alvarez
acted negligently rather than intentionally or recklessly,” or (2) “that the alleged incident
occurred off of WDI’s premises.” Def.’s Resp. Br. 21–22. Because the Court has
addressed WDI’s “intentional” and “reckless” arguments above, the Court declines to
repeat the analysis of those terms here. However, the Court points to the language of the
exclusion to show that “assault or battery arising out of negligent, reckless or wanton
conduct by . . . patrons or any person” is explicitly covered by the exclusion. Pl.’s App.
29. Second, there is no indication in the policy that the exclusion is limited to action on
WDI’s premises. See id. Even if the underlying lawsuit develops facts to show that the
assault or battery occurred off WDI property, there is no set of facts under which WDI
would be held liable for such an incident that would fall outside of the exclusion in the
policy between Mesa and WDI.
CONCLUSION
Because Mesa has established that the incident alleged in the underlying lawsuit
falls squarely under the policy’s assault or battery exclusion, the Court finds that Mesa
does not have a duty to defend or indemnify. The Court thus again grants Mesa’s motion
for summary judgment and denies WDI’s motion to alter or amend the judgment. Then,
because Defendants’ counterclaims for declaratory judgment and breach of contract are
based on a duty to defend or indemnify, the Court also dismisses all counterclaims and
dismisses this case with prejudice.
Signed July 22, 2025.
David 4 C □□
Chief United States District Judgé
MEMORANDUM OPINION & ORDER — PAGE 12