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

                                                                            FILED
                                                                         February 12, 2009
                                       No. 08-20289
                                                                      Charles R. Fulbruge III
                                                                              Clerk


THE LUBRIZOL CORPORATION,

                                                  Plaintiff-Appellee,
v.

THE GRAY INSURANCE COMPANY,

                                                  Defendant-Appellant.




                   Appeal from the United States District Court
                        for the Southern District of Texas
                                 No. 4:07-CV-3301



Before SMITH, BARKSDALE, and PRADO, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*


       In a dispute between Lubrizol Corporation (“Lubrizol”) and Gray Insur-
ance Company (“Gray”) over interpretation of a contract, the district court found
the contractual language unambiguous and granted summary judgment for Lu-
brizol. We affirm.


       *
         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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
                                 No. 08-20289

                                       I.
      Lubrizol contracted with Pat Tank, Inc. (“Pat Tank”), for Pat Tank’s ser-
vices in repairing a storage tank. Among the documents signed to consummate
the arrangement is an “Access Agreement,” which contains two clauses that are
the subject of this dispute. The first is an indemnity clause, capped at $2 mil-
lion, in which Pat Tank promises to indemnify Lubrizol for any injuries Pat
Tank intentionally or negligently causes its employees. The second is a separate
insurance clause that obligates Pat Tank to purchase a comprehensive general
liability (“CGL”) insurance policy and add Lubrizol as an additional insured.
      Two of Pat Tank’s employees were injured on the job and sued Lubrizol.
That suit, Ashworth v. Lubrizol, No. 1:06-CV-00494-MAC, is proceeding in the
Eastern District of Texas and is not currently before us. The issue here is which
party will pay for the expense of the Ashworth litigation. Because the Ashworth
plaintiffs do not allege that Pat Tank caused their injuries, Lubrizol cannot use
the Access Agreement’s indemnity clause to force Pat Tank to pay. Instead, Lu-
brizol invokes the insurance clause and claims that Pat Tank’s CGL provider
should cover the Ashworth expenses.
      To fulfill its obligations under the Access Agreement, Pat Tank purchased
a CGL policy from Gray. The policy can extend to cover “additional insured” par-
ties, but only where required by a written agreement. Gray does not believe that
the Access Agreement requires it to cover Lubrizol in the Ashworth case and so
refuses to pay for the litigation. Lubrizol responded by suing.
      The two parties disagree on the interpretation of the insurance clause.
Gray reads the insurance requirement as covering only Pat Tank’s indemnity ob-
ligations, so it will not pay for the Ashworth litigation, because Pat Tank does


                                       2
                                  No. 08-20289

not have any indemnity obligations there. Lubrizol reads the insurance clause
as requiring all-inclusive coverage, not limited to indemnification.
      In its order granting summary judgment, the district court (accurately) cri-
ticized the Access Agreement for being “a model of bureaucratic opacity” but not-
ed that “[b]ad form . . . is not necessarily ambiguity . . . .” After parsing the
relevant language, it determined that Lubrizol’s interpretation of the contract
is unambiguously the correct one. Accordingly, it ordered Gray to pay Lubrizol’s
legal expenses in the Ashworth litigation. Gray now appeals.


                                        II.
      “A grant of summary judgment is reviewed de novo. The interpretation of
a contract is a question of law, subject to de novo review.” Quorum Health Res.
v. Maverick County Hosp. Dist., 

, 458 (5th Cir. 2002) (internal cita-
tions omitted). The parties agree that Texas substantive law controls. See In-
stone Travel Tech Marine & Offshore v. Int’l Shipping Partners, Inc., 

, 427 (5th Cir. 2003).
      We first consider whether the district court correctly found that the con-
tract language unambiguously supports Lubrizol’s interpretation. “If a written
contract is so worded that it can be given a definite or certain legal meaning,
then it is not ambiguous. . . . If, however, the language of a policy or contract is
subject to two or more reasonable interpretations, it is ambiguous.” Nat’l Union
Fire Ins. Co. v. CBI Indus., Inc., 

, 520 (Tex. 1995) (internal cita-
tions omitted).
      The relevant language of the insurance clause states:




                                         3
                                  No. 08-20289

      INSURANCE. [Pat Tank] shall maintain insurance policies . . . in
      amounts of at least $1,000,000 . . . for each of the following insur-
      ance coverages . . . :

      a)  Worker’s Compensation (statutory)
      b)  Employer’s Liability
      c)  Comprehensive General Liability . . .
      d)  Automobile Liability
      e)  Include Lubrizol as additional insured on c) and d) above
              ...
      [Pat Tank], . . . to the extent necessary to provide coverage under
      [its] insurance for the liabilities assumed by [it] under the indemni-
      ty provisions of this Agreement, shall designate Lubrizol as an addi-
      tional insured on Comprehensive Contractor’s General Liability In-
      surance . . . .

Standing alone, the first half of the clause, which lists the policies Pat Tank is
required to purchase, is unambiguous: Pat Tank must obtain several different
types of insurance in the amount of $1 million and must add Lubrizol as an addi-
tional insured on the CGL and automobile liability coverage. The final para-
graph introduces the potential ambiguity. Lubrizol interprets it as adding to
Pat Tank’s insurance obligations; Gray interprets it as clarifying the insurance
requirement already described in line (e).
      Under Lubrizol’s reading, line (e) stands alone and obligates Pat Tank to
acquire at least $1 million of CGL insurance and add Lubrizol as an additional
insured. The final paragraph imposes the further requirement that if, to have
insurance coverage for its indemnity obligation, Pat Tank chooses to purchase
more than the minimum $1 million of CGL insurance, it must then add Lubrizol
as an additional insured on the extra CGL insurance to the extent of Pat Tank’s
indemnity obligations (which are capped at $2 million). If the contract is read
that way, Lubrizol would be an additional insured for all purposes up to $1 mil-

                                        4
                                   No. 08-20289

lion of coverage and an additional insured, for only indemnity purposes, from $1
million to $2 million dollars. Accordingly, Gray would be required to insure Lu-
brizol for up to $1 million in the Ashworth litigation.
      Under Gray’s reading, line (e) still obligates Pat Tank to acquire at least
$1 million of CGL insurance, but the final paragraph clarifies that Lubrizol
needs to be added as an additional insured only “to the extent necessary to pro-
vide coverage . . . under the indemnity provision . . . .” If the contract is read
that way, Lubrizol is an additional insured for only indemnity purposes up to a
maximum of $2 million, and Gray would not have to pay for any expenses in the
Ashworth litigation.
      We disagree with the two reasons the district court gave for rejecting
Gray’s interpretation. First, the court stated that Gray’s interpretation “would
simply erase line (c).” That is incorrect. If line (c) were struck from the contract,
Pat Tank would no longer be obligated to obtain any CGL insurance. It would
still need to include Lubrizol as an additional insured on whatever policy it pur-
chased, but it could choose to buy less than $1 million of coverage.
      Second, the district court reasoned that Gray’s interpretation creates an
internal inconsistency in the contract:
      Line (e) requires Tank to name Lubrizol as an additional insured
      not only for (c) general liability but also for (d) automobile liability.
      Gray’s argument reads the single short line (e) to oblige Tank to
      name Lubrizol as an insured for automotive liability without re-
      striction, but imports a different paragraph to limit the obligation
      to name it as an insured for general liability. Line (e) is not inter-
      nally inconsistent.

The alleged inconsistency, however, is mere awkwardness and, standing alone,




                                          5
                                         No. 08-20289

does not compel the conclusion that Gray’s interpretation is unreasonable.1
       We nonetheless agree that the contract is unambiguous. Gray’s interpre-
tation is in error, because it reads the final paragraph as referencing or clari-
fying line (e). The last paragraph does not contain such language; its only cross-
reference is to the indemnity provision; it is otherwise written as a stand-alone
obligation, completely divorced from the prior discussion of CGL insurance.2
       Further, “[i]n construing a contract, we strive to give meaning to each pro-
vision.” Lenape Res. Corp. v. Tenn. Gas Pipeline Co., 

, 574 (Tex.
1996). Under Gray’s interpretation, the reference to CGL insurance in line (e)
would serve no independent function and could be completely struck without
changing the contract’s meaning.3 Only under Lubrizol’s interpretation do both
line (e) and the final paragraph serve a role.4 Accordingly, we agree with the


       1
         The inconsistency would not be troublesome if the final paragraph were explicitly
written to modify line (e), reading, for example, “Under line (e) above, Pat Tank need only add
Lubrizol as an additional insured on the CGL insurance to the extent necessary to provide
coverage under the indemnity provisions of this contract.”
       2
         The language in the insurance clause addressing proof-of-insurance is a useful compar-
ison. The first sentence requires Pat Tank to “furnish to Lubrizol certificates confirming” that
it has purchased the listed insurance policies. The penultimate paragraph elaborates on that
requirement, stating that “[t]he certificates furnished to Lubrizol must set forth the amount
of coverage” and other details of the policy. The use of the definite article “the” and the passive
voice “furnished” make plain that the certificates being discussed are the ones the contract has
already obligated Pat Tank to provide. There are no similar linguistic cues in the paragraph
addressing CGL insurance.
       3
           Line (e) would then read, “Include Lubrizol as additional insured on (d) above.”
       4
        The district court appears implicitly to endorse an argument to the contrary: “Gray
says that it makes no sense [to] create a general insurance requirement with line (e), and then
separately describe what would be a lesser included coverage obligation. It may be right.”

       That argument is incorrect, because the coverage obligation created by the final para-
                                                                               (continued...)

                                                6
                                        No. 08-20289

district courtSSalbeit for different reasons5SSthat the contract is unambiguous.


                                              III.
       Gray argues that Texas law forecloses Lubrizol’s interpretation. It cites
various cases that establish a two-factor test for interpreting “additional in-
sured” provisions, see, e.g., Emery Air Freight Corp. v. Gen. Transp. Sys., Inc.,

(Tex. App.SSHouston [14th Dist.] 1996, no pet.), and contends
that Lubrizol’s interpretation should be rejected as a matter of law. Reliance on
those precedents, however, is misplaced.
       The intersection of indemnity and insurance provisions was addressed in
Fireman’s Fund Ins. Co. v. Commercial Standard Ins. Co., 

(Tex.
1973). There, the issue was whether an indemnity provision required a contrac-
tor to indemnify even the owner’s negligent acts. The court held that a provision
requiring the contractor to obtain “Liability Insurance for the protection of the
Owner” “should not be considered as any evidence of intent to broaden the con-
tractual indemnity obligation.” 

823. Importantly, the holding is that
a broadly worded insurance provision could not be used as evidence that an in-
demnity provision covered the owner’s own negligence:

       4
         (...continued)
graph extends beyond the obligation created by line (e). Line (e) creates a general insurance
requirement only up to $1 million; the final paragraph creates an indemnity-only requirement
for coverage exceeding $1 million (up to a maximum of $2 million). Thus, the obligation cre-
ated by the final paragraph is not a “lesser included” obligation of the one created by line (e).
       5
         “It is an elementary proposition, and the supporting cases too numerous to cite, that
this court may affirm the district court’s judgment on any grounds supported by the record.”
United States ex rel. Farmer v. City of Houston, 

, 338 n.8 (5th Cir. 2008) (citation,
brackets, ellipses, and internal quotation marks omitted) (quoted in United States v. Dunigan,
No. 07-10922, 

, at *14 n.12 (5th Cir. Jan. 20, 2009)), cert. denied,

(2008).

                                               7
                                  No. 08-20289

      [Fireman’s Fund] held that [the Owner] was not entitled to indemni-
      fication because the contract did not specify that the indemnity
      agreement extended to [the Owner’s] negligence. However, it was
      never contended . . . that [the Owner] was an additional insured un-
      der [the contractor]’s liability policy and was therefore entitled to
      coverage on that basis, a fact that distinguishes Fireman’s Fund
      from this case.

Evanston Ins. Co. v. ATOFINA Petrochem., Inc., 

, 669 (Tex. 2008)
(footnote omitted, emphasis added).
      The court also distinguished Fireman’s Fund in Getty Oil Co. v. Ins. Co. of
N. Am., 

, 804-05 (Tex. 1992). The contractual language at issue
was similar to the language in Fireman’s Fund; it said that “[a]ll insurance
coverages carried by Seller, whether or not required hereby, shall extend to and
protect Purchaser . . . .” 

Unlike the owner in Fireman’s Fund, how-
ever, the owner in Getty argued that it was covered under the insurance provi-
sion. The parties in Getty, like those in the present dispute, disagreed about
whether the insurance covered all claims or was restricted to the contractor’s in-
demnity. The court concluded that the former interpretation was correct, noting
that the contract was different from the one in Fireman’s Fund in that (1) the in-
demnity section contained its own insurance provision, and (2) the general “addi-
tional insured” provision specified that it applied “whether or not required [by
the other provisions of the contract].” 

(brackets in original).
      In Emery Air Freight Corp. v. Gen. Transp. Sys., Inc., 

(Tex.
App.SSHouston [14th Dist.] 1996, no pet.), the court attempted to reduce the con-
tractual features noted in Getty to a binding two-factor test. The contract said
that the “Contractor shall obtain and maintain its own expense insurance in
such forms and minimum amounts as set forth below naming [the Owner] as an

                                        8
                                         No. 08-20289

additional insured. . . .” 

The court held that coverage extended only
as far as the indemnity provision, because “[u]nlike Getty Oil, the indemnity
clause has no internal insurance provision, and the insurance provision does not
require coverage ‘whether or not required’ by other clauses.”6 

test, however, was rejected in Evanston. There, the court
found a direct contractual provision that “ATOFINA shall be named as addition-
al insured in each of [contractor’s] policies” sufficient to create a general addi-
tional insured obligation (rather than one for indemnity only). 

(inter-
nal quotation marks omitted). To reach that conclusion, the court looked only
to the contractual language and did not apply the two-factor Emery test. The
court also explicitly “disapprove[d] the view that this kind of additional insured
requirement fails to establish a separate and independent obligation for insuring
liability;” it cited Emery as a disapproved decision. 

& n.50.
       Gray relies on Emery and similar decisions as justification for rejecting
Lubrizol’s interpretation. As Gray correctly notes, both of the Emery factors
weigh against Lubrizol’s reading: The agreement’s indemnity section does not


       6
         Opinions following Emery took a similarly mechanical approach. For example, in
ALCOA v. Hydrochem Indus. Servs., Inc., 

(Tex. App.SSCorpus Christi 2005,
pet. denied), the court considered a contractual obligation that stated, “Buyer . . . shall be
named as additional insured in all of the foregoing insurance policies . . . .” The entirety of the
court’s analysis is as follows:

           This provision does not specify that it applies “whether or not required” by
       other clauses in the contract. Further, the indemnity agreement does not con-
       tain a separate, internal additional-insured provision. We conclude the absence
       of these elements shows the ALCOA-Hydrochem additional-insured provision
       was not intended to stand alone as a distinct obligation, but was intended only
       to assure the performance of the indemnification agreement.

                                                9
                                  No. 08-20289

contain any internal references to insurance, and the additional insured provi-
sion does not contain the magic words “whether or not required by other pro-
visions of the contract.”
      Gray tries to avoid the impact of Evanston by arguing that it differs with
Emery only “to the extent that Emery had indicated that an additional insured
provision must expressly reference negligence before it can be invoked by an ad-
ditional insured for coverage for its own negligence.” Gray claims that “Emery’s
guidance as to differentiation between a stand alone additional insured provision
and an additional insured provision designed to support an indemnity agreement
remain [sic] undisturbed Texas law.”
      That is a misreading of Emery. Significantly, the insurance provision in
Evanston is nearly indistinguishable from the one in Emery. In both cases, the
contractual language obligated the owner merely to add the contractor as an ad-
ditional insured, yet Evanston reached the opposite conclusion on interpretation
and explicitly disapproved of Emery.
      Thus, although the need for the insurance clause to be distinct from the
indemnity agreement remains “undisturbed Texas law,” Emery’s mechanical
two-factor test is no longer viable. Instead, a direct statement that the owner
should be an additional insured under the contractor’s insurance policies suffic-
es, which is precisely what line (e) provides.
      We therefore AFFIRM.




                                       10