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           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                          United States Court of Appeals
                                                                                   Fifth Circuit

                                                                                 FILED
                                      No. 18-50108                         March 22, 2019
                                                                            Lyle W. Cayce
WORD OF LIFE CHURCH OF EL PASO; TOM BROWN,                                       Clerk


              Plaintiffs - Appellants

v.

STATE FARM LLOYDS,

              Defendant - Appellee




                   Appeal from the United States District Court
                        for the Western District of Texas
                              USDC No. 3:17-CV-49


Before JONES, HAYNES, and OLDHAM, Circuit Judges.
PER CURIAM:*
       This is an insurance coverage dispute. Appellants Word of Life Church
of El Paso and Tom Brown appeal the district court’s grant of summary
judgment in favor of appellee State Farm Lloyds. For the reasons set forth
below, as to the issues raised in this appeal, we REVERSE and REMAND. The
remainder of the district court’s judgment stands.


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                        No. 18-50108
                                   I.    Background
      Appellant Tom Brown 1 is the president, chairman of the board of
directors, and pastor of Appellant Word of Life Church of El Paso (“WOL
Church” or the “Church”).
A. The Insurance Policy
      The Church maintained an insurance policy (the “Policy”) with Appellee
State Farm Lloyds (“State Farm”). Among other things, the Policy contains a
“duty to defend” clause giving State Farm “the right and duty to defend any
claim or suit seeking damages payable under this policy even though the
allegations of the suit may be groundless, false or fraudulent.”
      The Policy also includes a Directors, Officers, and Trustees Liability
Provision (the “D&O Provision”). The D&O Provision states:
               [State Farm] will pay those sums that the insured
               becomes legally obligated to pay as damages because
               of “wrongful acts” committed by an insured 2 solely in
               the conduct of their management responsibilities for
               the church.
The D&O Provision defines “wrongful acts” as “any negligent acts, errors,
omissions, or breach of duty directly related to the operations of your church.”
Finally, as relevant here, the D&O Provision has a “criminal acts” exclusion,
which states that D&O coverage “does not apply to . . . any dishonest,
fraudulent, criminal or malicious act, including fines and penalties resulting
from these acts.”




      1 Brown also uses the entity name “Tom Brown Ministries” or “TBM.” Tom Brown
Ministries maintains a website with information about the Church, along with information
about Brown’s books, speaking schedule, and other matters.
      2   It is undisputed that Brown qualifies as an insured under the Policy.
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                                 No. 18-50108
B. The Recall Campaign
      Brown chaired a specific-purpose political committee called El Pasoans
for Traditional Family Values (“EPTFV”), which was created to support a
measure on the November 10, 2010 election ballot. Brown and EPTFV led an
effort to pass Ordinance No. 017546, called the “Traditional Family Values
Ordinance,” which provided that “the city of El Paso endorses traditional
family values by making health benefits available only to city employees and
their legal spouse and dependent children.”
      Voters approved the Traditional Family Values Ordinance. But the El
Paso City Council subsequently amended the Ordinance to restore benefits to
individuals who would have lost their benefits. Mayor John F. Cook (“Cook”)
cast the tie-breaking vote in favor of amending the ordinance.
      Brown and EPTFV then began circulating recall petitions seeking a
recall election to remove Cook and two other elected representatives from
office. Brown announced the recall campaign from the Church pulpit. The
state court of appeals later found that: (1) Brown used the WOL Church/TBM
website to recruit volunteers to circulate recall petitions; (2) the website
provided an electronic form through which people could register to circulate
recall petitions; (3) the website added a list of locations, including WOL
Church, where recall petitions could be found; and (4) the website included a
link for the recall of the mayor and representatives. See Cook v. Tom Brown
Ministries, 

, 602–03 (Tex. App.—El Paso 2012, pet. denied).
But the site also listed a disclaimer stating, “This internet site is owned by
Tom Brown and not the Church. Tom Brown in his official capacity as pastor
of Word of Life Church neither encourages or [sic] discourages the recall of the
Mayor and Representatives.” Brown also wrote in a statement on the Church
website that the purpose of the recall was “to help restore the rights of the
voters.”
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                                       No. 18-50108
C. The State Lawsuit
       Cook sued WOL Church in state court for violating Texas Election Code
§§ 253.094(b) and 253.031(b) 3 in circulating and submitting the recall petitions
and raising and spending money for the recall effort.                  Section 253.094(b)
regulates corporate political contributions in the context of a recall election.
See TEX. ELEC. CODE ANN. § 253.094(b). Section 253.031(b) regulates political
committees’ political expenditures and acceptance of political contributions
when the committee lacks a campaign treasurer. See 

The
trial court issued a temporary restraining order (“TRO”) enjoining any further
circulation of recall petitions. Brown intervened, seeking to dissolve the TRO.
The trial court then dissolved portions of the TRO and denied Cook’s request
for injunctive relief.
       Cook appealed. The El Paso Court of Appeals reversed the trial court’s
order denying injunctive relief.           In so doing, the court of appeals found
violations of Texas Election Code §§ 253.094(b) and 253.031(b). See 

.       The court of appeals concluded that “WOL Church made
campaign contributions from its own property in connection with a measure-
only recall election without properly making the contributions to a measure-
only committee” in violation of Texas Election Code § 253.096. 

. It further concluded that “WOL Church, a corporation, made a
political contribution in connection with a recall election, including the
circulation and submission of petitions to call an election, and failed to make




       3 Cook also argued that Brown and WOL Church violated Election Code §§ 253.003
and 253.005 in connection with their violations of § 253.031. Section 253.003 prohibits
“knowingly mak[ing] a political contribution in violation of” Chapter 253 or “knowingly
accept[ing] a political contribution the person knows to have been made in violation of this
chapter.” TEX. ELEC. CODE ANN. § 253.003. Section 253.005 forbids “knowingly mak[ing] or
authoriz[ing] a political expenditure wholly or partly from a political contribution the person
knows to have been made in violation of this chapter.” 

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                                  No. 18-50108
such contribution to a political committee” in violation of Texas Election Code
§§ 253.096 and 253.094(b). 

.
      The court of appeals ordered the El Paso City Clerk to decertify the recall
petition and rescind the scheduled recall election. WOL Church appealed to
the Texas Supreme Court, but the Court denied WOL Church’s petition for
review.
      The state trial court then entered an order granting Cook’s motion for
partial summary judgment and finding Brown and WOL Church liable to Cook
for violations of the Texas Election Code. Before the case could proceed to trial,
WOL Church and Brown entered into an agreed judgment with Cook stating
that they were liable to him for $475,000 in damages.
D. The Coverage Dispute
      Before the state court of appeals issued its decision, WOL Church
submitted its first claim to State Farm for defense and indemnification in the
Cook lawsuit. But after the court of appeals issued its decision, WOL Church
and Brown informed State Farm that because the court had awarded no fees,
they were not making a claim at that time.
      Nearly a year later, WOL Church and Brown submitted their second
claim for defense and indemnification to State Farm. State Farm informed
them that it did not have a duty to defend or indemnify them based on the
allegations in Cook’s third amended petition. Over three years after State
Farm’s refusal, WOL Church and Brown asked State Farm to reconsider its
coverage decision based on Cook’s fourth amended petition.           State Farm
refused, claiming that Cook’s fourth amended petition was nearly identical to
his third amended petition, so its reasoning for denying coverage still applied.
      WOL Church then made demand on State Farm for $475,000 plus
interest based on the agreed judgment in the Cook lawsuit, along with an
additional $450,000 plus interest for attorney’s fees. State Farm responded
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                                       No. 18-50108
that no basis existed to reimburse or indemnify Brown and WOL Church
because the Policy did not cover their claim.
E. The Federal Suit
       Brown and WOL Church sued State Farm for breach of contract, unjust
enrichment, and bad faith insurance dealing. State Farm removed the case to
federal court on diversity grounds. It then moved for summary judgment.
       The district court granted State Farm’s summary judgment motion,
concluding in relevant part that State Farm had no duty to defend or indemnify
Brown under the D&O Provision because Brown’s actions were not “directly
related to the operations” of WOL Church. In so doing, the district court
expressly held that there was a fact question as to whether the Election Code
errors were unintentional on Brown’s part, but concluded that there was no
factual dispute as to whether they were “directly related” to the Church’s
operations. Brown and WOL Church appealed the adverse ruling under the
D&O Provision. 4

                            II.    Standard of Review
       We review a district court’s grant of summary judgment de novo. Green
v. Life Ins. Co. of N. Am., 

, 329 (5th Cir. 2014). The movant is
entitled to summary judgment where “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” 

R. CIV. P. 56(a)). A genuine issue of fact exists “if the evidence is
such that a reasonable jury could return a verdict for the non-moving party.”
Anderson v. Liberty Lobby, Inc., 

, 248 (1986).




       4They did not appeal the adverse summary judgment on the “advertising injury”
claims and the extra-contractual claims, so we do not reach those issues. The district court’s
judgment as to those matters stands.
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                                    No. 18-50108
      An insurance policy is a contract, and it is interpreted using Texas’s
normal rules of contract construction. See State Farm Lloyds v. Page, 

, 527 (Tex. 2010). Our “goal is to determine the contracting parties’
intent through the policy’s written language.” 

are not defined
in a policy are given their generally accepted or commonly understood
meaning.” Lamar Homes, Inc. v. Mid-Continent Cas. Co., 

, 8 (Tex.
2007).     If a term is ambiguous, we adopt the interpretation that favors
coverage. See Nat’l Union Fire Ins. Co. of Pittsburgh v. Hudson Energy Co.,

, 555 (Tex. 1991).

                             III.    Discussion
A. State Farm Had a Duty to Defend.
      1.      “Eight Corners” Analysis
      An insurer has a duty to defend whenever the policy potentially covers
at least one claim in the underlying litigation. See GuideOne Elite Ins. Co. v.
Fielder Rd. Baptist Church, 

, 310 (Tex. 2006) (“A plaintiff’s
factual allegations that potentially support a covered claim [are] all that is
needed to invoke the insurer’s duty to defend.”). We analyze the duty to defend
under the “eight corners” rule: “courts look to the facts alleged within the four
corners of the pleadings, measure them against the language within the four
corners of the insurance policy, and determine if the facts alleged present a
matter that could potentially be covered by the insurance policy.” Ewing
Const. Co., Inc. v. Amerisure Ins. Co., 

, 33 (Tex. 2014). We “focus
on the factual allegations that show the origin of the damages rather than on
the legal theories alleged.” Nat’l Union Fire Ins. Co. v. Merchs. Fast Motor
Lines, Inc., 

, 141 (Tex. 1997).         Any doubt about whether
“allegations . . . state a cause of action within the coverage” is “resolved in the
insured’s favor.” 

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                                      No. 18-50108
       The D&O Provision covers “those sums that the insured becomes legally
obligated to pay as damages because of ‘wrongful acts’” the insured commits.
It defines “wrongful acts” as “any negligent acts, errors, omissions, or breach
of duty directly related to the operations of your church.” The D&O Provision
does not define “operations.” Relying on Webster’s Third New International
Dictionary, the district court interpreted the term to mean “the whole process
of planning for and operating a business or other organized unit.”
       The district court concluded that State Farm did not have a duty to
defend Brown because his alleged actions in leading the recall campaign were
not “directly related to the operations of” WOL Church. 5 We disagree. Cook
alleged that Brown was liable for violating Election Code provisions that
govern corporations, not individuals, based on his status as a director of WOL
Church. Cook essentially claimed that Brown caused the Church to violate the
Election Code. He thus alleged that Brown’s activities were directly related to
the Church’s operations. Looking only to Cook’s operative petition and the
D&O Provision, see 

, we conclude that Cook’s
allegations triggered State Farm’s duty to defend.
       The district court held that Brown’s actions were not directly related to
Church “operations” under the D&O Provision.                 Pastor Brown swore his
actions in this case “were in furtherance of a ministry of the Church.” Word of
Life Church of El Paso v. State Farm Lloyds, No. 17-cv-00049, 

,
at *7 (W.D. Tex. Jan. 4, 2018). But the district court concluded that because


       5 At oral argument, State Farm also argued that the incidents in question were not
committed “solely in the conduct of [Brown’s] management responsibilities for the church” as
required by the Policy. In his brief, Brown argued that he acted in a management capacity,
and State Farm cited nothing to the contrary. Indeed, State Farm did not raise any separate
argument about “management” in its summary judgment motion below or in its brief to this
court, and the district court did not mention it, so we decline to address it. See City of
Alexandria v. Brown, 

, 350 (5th Cir. 2014) (“Summary judgment may be affirmed
on any basis raised below and supported by the record.” (emphasis added)).
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                                     No. 18-50108
Brown acted “to help restore the rights of the voters” and because political
activities like the recall campaign were not “typical of the operations of a
religious organization.”      But the D&O Provision gives no indication that
Church “operations” do not encompass voting rights work or other activities
outside the realm of traditional church ministries. This case turns on whether
the church’s conduct was covered by its insurance policy. And that policy
covered actions related to “the operations of your church,” not a typical church.
The District Court’s perception of what is “typical” is not binding on the Word
of Life (“your”) church in fulfilling its own mission. We thus decline to adopt
the district court’s interpretation of the term.
      2.     Criminal Acts Exclusion
      However, State Farm also argues that the D&O Provision’s criminal acts
exclusion bars coverage, thus negating its duty to defend. The district court
did not reach this issue. We now conclude as a matter of law that the exclusion
did not bar State Farm’s duty to defend.
      Under the eight corners rule, State Farm had a duty to defend “if the
facts alleged present[ed] a matter that could potentially be covered by the
insurance policy.” 

(emphasis added). Here, Cook
alleged facts supporting potential noncriminal violations of the Election Code.
State Farm thus had a duty to defend.
      Among other things, Cook alleged that EPTFV was “not a valid political
committee under Texas or other law to support or promote any recall election
effort in 2011.” He asserted that Brown and WOL Church thus “illegally
operated a political committee . . . in violation of the Texas Election Code.” 6


      6  Cook also asserted that WOL Church was liable under Texas Election Code § 253.094
and “any other applicable provisions of the Texas Election Code.” Cook sought damages,
which are available based only on a “knowing” violation of the Texas Election Code. But he
also pursued injunctive and declaratory relief, which are available to remedy Election Code
violations even without a culpable mental state. See TEX. ELEC. CODE ANN. § 273.081 (“A
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Such allegations presented a potential violation of Texas Election Code
§ 253.096, which states that “[a] corporation . . . may make campaign
contributions from its own property in connection with an election on a
measure only to a political committee for supporting or opposing measures
exclusively.” TEX. ELEC. CODE ANN. § 253.096. Section 253.096 does not
specify that a violation of that provision is a criminal offense. Cook thus
alleged possible noncriminal conduct that the Policy at least potentially
covered, so State Farm had a duty to defend. See 

.
B. Genuine Fact Issues Exist As to Whether State Farm Had a Duty to
   Indemnify.
       1.     “Operations of Your Church”
       The duty to indemnify and the duty to defend “enjoy a degree of
independence from each other.” D.R. Horton-Tex., Ltd. v. Markel Int’l Ins. Co.,

, 743–44 (Tex. 2009).               Thus, prevailing on one does not
guarantee prevailing on the other. 

duty to defend, the duty to
indemnify turns on the “facts actually established” in the underlying litigation.

. Courts thus consider evidence in determining
whether a duty to indemnify exists. See Burlington N. & Santa Fe Ry. Co. v.
Nat’l Union Fire Ins. Co. of Pittsburgh, 

, 219 (Tex. 2011); D.R.

. In this context, “the insured carries the
burden to establish the insurer’s duty to indemnify by presenting facts
sufficient to demonstrate coverage.” Nat’l Union Fire Ins. Co. of Pittsburgh v.
Puget Plastics Corp., 

, 401 (5th Cir. 2008).



person who is being harmed . . . by a violation . . . of this code is entitled to appropriate
injunctive relief to prevent the violation from continuing . . . .”); see also 

(regulating corporate political contributions without specifying a required mental state or
creating a criminal offense for a violation of the statute).
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                                       No. 18-50108
       Here, the district court concluded that State Farm had no duty to
indemnify Brown. It noted that “Brown’s only evidence . . . that the recall
election was a ministry of the Church are his own self-serving statements” in
an affidavit he filed. It further noted that Brown’s disclaimer on the Church
website and the fact that the recall petition at WOL Church was available off
church property “undermined” Brown’s argument.                         The district court
determined that Brown “offered no competent summary judgment [evidence]
that corroborates his self-serving testimony.” It concluded that no reasonable
jury could find that Brown’s actions in the recall campaign were “directly
related to the operations” of the Church.
       We disagree. “A party’s own testimony is often ‘self-serving,’ but we do
not exclude it as incompetent for that reason alone. Instead, an affidavit based
on personal knowledge and containing factual assertions suffices to create a
fact issue, even if the affidavit is arguably self-serving.” C.R. Pittman Const.
Co. v. Nat’l Fire Ins. Co. of Hartford, 453 F. App’x 439, 443 (5th Cir. 2011). 7
Here, Brown’s affidavit set forth material facts 8 regarding whether his actions
were directly related to the Church’s operations.                    As discussed above,
“typicality” is not the question, what “your church’s” operations are constitutes
the question. Cf. Hosanna-Tabor Evangelical Lutheran Church & Sch. v.
EEOC, 

, 197 (2012) (Thomas, J., concurring) (Addressing
employment liability and stating: “[I]t is a significant burden on a religious
organization to require it, on pain of substantial liability, to predict which of


       7“An unpublished opinion issued after January 1, 1996 is not controlling precedent,
but may be persuasive authority.” Ballard v. Burton, 

, 401 & n.7 (5th Cir. 2006).
       8  For example, Brown stated: “Through my leadership, as a church, we became
involved in the recall effort as a ministry because we believed that these public officials were
creating government policy that we believed harmed the church . . . .” He further asserted
that “[b]y advertising the recall effort on the church’s website, I was not only communicating
this effort as a ministry of our church, through my leadership, as a church we were also
seeking additional supporters for our church.”
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                                       No. 18-50108
its activities a secular court will consider religious. The line is hardly a bright
one, and an organization might understandably be concerned that a judge
would not understand its religious tenets and sense of mission.”) (quoting Corp.
of Presiding Bishop of Church of Jesus Christ of Latter-Day Saints v. Amos,

, 336 (1987). That Brown’s affidavit contradicted his previous
disclaimer on the Church website is similarly unavailing. Brown’s previous
unsworn disclaimer does not nullify his sworn affidavit. Additionally, the
rulings against the Church in the Cook litigation were based upon Brown’s
conduct, suggesting that they were, indeed, “related to the operations of” the
Church. As a result, a genuine issue of material fact exists regarding whether
Brown’s actions were “directly related to the operations of” WOL Church and
thus subject to indemnity by State Farm.
       2. Criminal Acts Exclusion
       State Farm also argues that the criminal acts exclusion bars its duty to
indemnify. Unlike the general coverage question, State Farm has the burden
of proof of an exclusion. Lincoln Gen. Ins. Co. v. Reyna, 

, 350 (5th
Cir. 2005). Thus, it cannot rely on any failures of proof by Brown to prevail on
a summary judgment: it must prove that there are no genuine issues of
material fact and that it is entitled to prevail as a matter of law. See id.; see
also FED. R. CIV. P. 56(a).
       The state court of appeals found that WOL Church violated Texas
Election Code §§ 253.094(b) and 253.096. 

. It also
concluded that “violations of Section 253.031(b) . . . have occurred.” 

9



       9  Section 253.031(b) prohibits a political committee from “knowingly accept[ing]
political contributions totaling more than $500 or mak[ing] or authoriz[ing] political
expenditures totaling more than $500 at a time when a campaign treasurer appointment for
the committee is not in effect.” TEX. ELEC. CODE ANN. § 253.031(b). The provision does not
clarify whether “knowingly” refers to simple knowledge of the act itself or knowledge that the
act violates the Election Code. See 

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                                   No. 18-50108
However, the district court concluded that a genuine issue of fact existed as to
whether Brown’s violations were unintentional. Criminality of these election
offenses is based on “knowingly” committing the acts. See, e.g., TEX. ELEC.
CODE ANN. §§ 253.003, 253.031. The district court did not address this issue,
but we conclude that State Farm did not prove as a matter of law that the acts
in question were “criminal acts.” We thus remand to the district court for
consideration of this issue in the first instance.

                             IV.    Conclusion
      For the foregoing reasons, we REVERSE the district court’s grant of
summary judgment in State Farm’s favor on the D&O duty to defend and
indemnify issues and REMAND the case for further proceedings consistent
with this opinion. We otherwise leave intact the district court’s judgment.




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                                   No. 18-50108
ANDREW S. OLDHAM, Circuit Judge, joined by EDITH H. JONES, Circuit
Judge, concurring:

      Pastor Brown swore his actions in this case “were in furtherance of a
ministry of the Church.” Word of Life Church of El Paso v. State Farm Lloyds,
No. 17-cv-00049, 

, at *7 (W.D. Tex. Jan. 4, 2018). The district
court disregarded that testimony. It did so because, in its view, “political
campaigning” is not “an activity typical of the operations of a religious
organization.” 

n.37. Perhaps that’s right. Perhaps that’s wrong.
Either way, it’s not the role of a federal judge to tell a church whether its
activities are “typical.” Our job is to decide cases.
      This case turns on whether the church’s conduct was covered by its
insurance policy. And that policy covered actions related to “the operations of
your church,” not a typical church. Thus, there was no need for the district
court to impose “a significant burden on” the church by making “substantial
liability” turn on “which of its activities a secular court will consider religious.”
Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 

,
197 (2012) (Thomas, J., concurring) (quoting Corp. of Presiding Bishop of
Church of Jesus Christ of Latter-Day Saints v. Amos, 

, 336 (1987)).
      The Court’s opinion stops short of explaining why these principles
matter to the remand in this case.         Civil judges, who may or may “not
understand [a church’s] religious tenets and sense of mission,” must be ever
mindful of the First Amendment in cases like this one. 

(Thomas, J. concurring). That caution is particularly important
where the church’s activities might strike some as “atypical.”




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