MEMORANDUM AND ORDER

NANCY F. ATLAS, District Judge.

In this insurance dispute, Plaintiff Federal Insurance Company ("Federal") and Defendant Northfield Insurance Company ("Northfield") have filed cross-motions for summary judgment.1 See Northfield Insurance Company's Motion for Summary Judgment [Doc. # 27] ("Northfield's Motion"); Plaintiff's Motion for Partial Summary Judgment and Memorandum of Law [Doc. # 28] ("Federal's Motion"). The parties have filed responses and replies for each summary judgment motion. See Docs. # 29, # 31, # 33, and # 34. The motions are ripe for decision. Having considered the parties' submissions, all matters of record, and applicable legal authorities, the Court concludes that both Northfield's Motion should be granted in part, that Federal's Motion should be denied, and that judgment should be entered in favor of Northfield.

I. BACKGROUND

This suit is brought by one insurance company, Federal, against another, Northfield, regarding the duty to defend their common insured, Bryan C. Wagner, in a suit brought in Harris County, Texas, by ExxonMobil Corporation ("ExxonMobil") (the "Texas Suit"). In the Texas Suit, ExxonMobil alleges that Wagner and three other defendants (the "Wagner Group")2 are contractually required to defend and indemnify ExxonMobil against claims asserted in three other lawsuits filed in Louisiana state courts (collectively, the "Louisiana Lawsuits"). Federal currently is defending Wagner against the claims in the Texas Suit, subject to a full and complete reservation of rights. Northfield has refused a defense to Wagner in the Texas Suit. In the case at bar, Federal seeks a declaratory judgment that Northfield is required to defend Wagner in the Texas Suit and to reimburse a portion of the fees and expenses incurred by Federal in defending Wagner.

In the Texas Suit, ExxonMobil brings a breach of contract claim and seeks declaration of its rights under an Assignment, Bill of Sale, and Quitclaim ("Assignment") executed in 1994 between ExxonMobil and the Wagner Group.3 ExxonMobil seeks defense and indemnity by the Wagner Group regarding all claims asserted against ExxonMobil in the Louisiana Lawsuits, as well as assumption by Wagner of all ExxonMobil's obligations regarding the properties involved in the Louisiana Lawsuits. The Petition states that the Louisiana Lawsuits, filed in 2006 and 2007, allege environmental damage arising from oil and gas operations, including damage from abandoned open wells and to ground water and aquifers.

ExxonMobil alleges in its Petition that, under the Assignment, the Wagner Group agreed to release, defend, and indemnify ExxonMobil against all liabilities connected to the subject property.4 This indemnity expressly included claims by third parties for property damage, including damages connected to or arising from plugging and abandoning wells, removal or modification of pipelines or other facilities, or restoration of the surface.5 The ExxonMobil Petition alleges that the Wagner Group is obligated under the Assignment to indemnify and hold ExxonMobil harmless against claims for environmental damage, including "claims arising from ExxonMobil's alleged negligence, strict liability, and any obligation to comply with environmental statutes." Petition, at 5, ¶ 11. See id. at 7, ¶ 15. ExxonMobil cites to Article 21 of the Assignment, in which the Wagner Group agreed to "ACCEPT ALL RESPONSIBILITY AND LIABILITY FOR THE ENVIRONMENTAL CONDITION OF THE ASSIGNED PROPERTY," including costs to "CLEANUP OR REMEDIATE" in accordance with applicable law, and agreed to indemnify, defend, and hold harmless ExxonMobil "FROM ANY AND ALL CLAIMS, CAUSES OF ACTION, . . . LOSSES, AND LIABILITIES WHATSOEVER IN CONNECTION WITH THE ENVIRONMENTAL CONDITION OF THE ASSIGNED PROPERTY OR OTHER PROPERTY AFFECTED THEREBY . . .". Id. at 4-5, ¶ 11 (quoting Assignment).6

Wagner had insurance policies with both Federal and Northfield. Federal (as well as Pacific Indemnity, the original Plaintiff in this suit) issued policies covering Wagner Oil Company over a seven year period, from 2003 through 2010. See Letter dated March 16, 2011, from Chubb Group of Insurance Companies to Wagner (Exhibit C-1 to Northfield's Motion) ("Reservation of Rights Letter"). Northfield issued to Wagner Oil Company a general liability policy effective for one year, from January 31, 1999 through January 31, 2000. See Commercial General Liability Policy No. NN100227 (Exhibit A to Northfield's Motion) ("Policy" or "Northfield Policy").7 It is this latter insurance contract that is in issue.

Federal, which currently is defending Wagner in the Texas Suit, here seeks a declaratory judgment against Northfield that Northfield also has a duty under the Policy to defend Wagner against ExxonMobil's claims in the Texas Suit. The parties have cross-moved for summary judgment.

II. SUMMARY JUDGMENT STANDARD

Rule 56 of the Federal Rules of Civil Procedure mandates the entry of summary judgment who fails to make a sufficient showing of the existence of an element essential to the party's case, and on which that party will bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); see also Baton Rouge Oil and Chem. Workers Union v. ExxonMobil Corp., 289 F.3d 373, 375 (5th Cir. 2002). Summary judgment "should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a); Celotex, 477 U.S. at 322-23; Weaver v. CCA Indus., Inc., 529 F.3d 335, 339 (5th Cir. 2008).

For summary judgment, the initial burden falls on the movant to identify areas essential to the non-movant's claim in which there is an "absence of a genuine issue of material fact." Lincoln Gen. Ins. Co. v. Reyna, 401 F.3d 347, 349 (5th Cir. 2005). The moving party, however, need not negate the elements of the non-movant's case. See Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005). The moving party may meet its burden by pointing out "`the absence of evidence supporting the nonmoving party's case.'" Duffy v. Leading Edge Prods., Inc., 44 F.3d 308, 312 (5th Cir. 1995) (quoting Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 913 (5th Cir. 1992)).

If the moving party meets its initial burden, the non-movant must go beyond the pleadings and designate specific facts showing that there is a genuine issue of material fact for trial. Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001) (internal citation omitted). "An issue is material if its resolution could affect the outcome of the action. A dispute as to a material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." DIRECTV Inc. v. Robson, 420 F.3d 532, 536 (5th Cir. 2006) (internal citations omitted).

In deciding whether a genuine and material fact issue has been created, the court reviews the facts and inferences to be drawn from them in the light most favorable to the nonmoving party. Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co., 336 F.3d 410, 412 (5th Cir. 2003). A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the non-movant. Tamez v. Manthey, 589 F.3d 764, 769 (5th Cir. 2009) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The non-movant's burden is not met by mere reliance on the allegations or denials in the non-movant's pleadings. See Diamond Offshore Co. v. A&B Builders, Inc., 302 F.3d 531, 545 n.13 (5th Cir. 2002), overruled in part on other grounds by Grand Isle Shipyard, Inc. v. Seacor Marine, LLC, 589 F.3d 778 (5th Cir. 2009). Likewise, "conclusory allegations" or "unsubstantiated assertions" do not meet the non-movant's burden. Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 399 (5th Cir. 2008). Instead, the nonmoving party must present specific facts which show "the existence of a genuine issue concerning every essential component of its case." Am. Eagle Airlines, Inc. v. Air Line Pilots Ass'n, Int'l, 343 F.3d 401, 405 (5th Cir. 2003) (citation and internal quotation marks omitted). In the absence of any proof, the court will not assume that the non-movant could or would prove the necessary facts. Little, 37 F.3d at 1075 (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990)).

The Court may make no credibility determinations or weigh any evidence. See Chaney v. Dreyfus Serv. Corp., 595 F.3d 219, 229 (5th Cir. 2010) (citing Reaves Brokerage Co., 336 F.3d at 412-413). The Court is not required to accept the nonmovant's conclusory allegations, speculation, and unsubstantiated assertions which are either entirely unsupported, or supported by a mere scintilla of evidence. Id. (citing Reaves Brokerage, 336 F.3d at 413).

Affidavits cannot preclude summary judgment unless they contain competent and otherwise admissible evidence. See FED. R. CIV. P. 56(c)(4) ("An affidavit or declaration used to support or oppose a motion must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated"); Love v. Nat'l Med. Enters., 230 F.3d 765, 776 (5th Cir. 2000); Hunter-Reed v. City of Houston, 244 F.Supp.2d 733, 745 (S.D. Tex. 2003). A party's self-serving and unsupported statement in an affidavit will not defeat summary judgment where the evidence in the record is to the contrary. See In re Hinsely, 201 F.3d 638, 643 (5th Cir. 2000).

Finally, although the Court may consider all materials in the record when deciding a summary judgment motion, "the court need consider only the cited materials." FED. R. CIV. P. 56(c)(3). "When evidence exists in the summary judgment record but the nonmovant fails even to refer to it in the response to the motion for summary judgment, that evidence is not properly before the district court. Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment." Malacara v. Garber, 353 F.3d 393, 405 (5th Cir. 2003) (internal citations and quotation marks omitted).

III. ANALYSIS

The Court first addresses whether the Northfield Policy's main coverage provision triggers Northfield's duty to defend Wagner in the Texas Suit. The Court has some doubt about whether the Policy's Insuring Agreement, which covers damages "because of . . . `property damage,'" is broad enough to trigger Northfield's duty to defend Wagner, given that ExxonMobil's claims against Wagner in the Texas Suit are for breach of the Assignment and declaratory judgment. This issue, however, is unbriefed by the parties and is not dispositive of the case at bar. To the extent the Policy covers the Texas Suit at all, the Policy's Pollution Endorsement relieves Northfield of any duty to defend Wagner in that Suit. Moreover, the UREC Buyback does not operate to restore coverage to Wagner in this instance. The Court need not and does not address the Contractual Liability Exclusion.

A. Texas Law Regarding Interpretation of Insurance Contracts

As a preliminary matter, the parties agree that Texas law applies to this dispute. See TEX. INS. CODE art 21.42.8 They further agree that Federal, as the Plaintiff, has the initial burden to show coverage under the Policy, while Northfield has the burden to show that an exclusion applies. To the extent relevant, Federal would have the burden to establish application of any exceptions to the exclusions. See Trinity Universal Ins. Co. v. Employers Mut. Cas. Co., 592 F.3d 687, 691-92 (5th Cir. 2010); Harken Exploration Co. v. Sphere Drake Ins. PLC, 261 F.3d 466, 471 (5th Cir. 2001).

Under Texas law, insurance contracts are interpreted according to general rules of contract interpretation and construction, and a court's primary concern is to ascertain the parties' true intent as expressed in the written instrument. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). See One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258, 271 (5th Cir. 2011). When there is doubt regarding the duty to defend, such doubt is resolved in favor of the insured. Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523, 528 (5th Cir. 2004) (citing Texas law).

When analyzing an insurer's duty to defend, Texas courts strictly follow the "eight corners rule." GuideOne Elite Ins. Co. v. Fielder Road Baptist Church, 197 S.W.3d 305 (Tex. 2006). See ACE Am. Ins. Co. v. Freeport Welding & Fabricating, Inc., 699 F.3d 832, 840 (5th Cir. 2012); Gilbane Bldg. Co. v. Admiral Ins. Co., 664 F.3d 589, 596 (5th Cir. 2011). As stated by the Texas Supreme Court:

GuideOne, 197 S.W.3d at 308 (internal citations omitted). See Gilbane, 664 F.3d at 596 (citing Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co., 279 S.W.3d 650, 654 (Tex. 2009)). The Texas Supreme Court has never expressly recognized an exception to the eight corners rule. See ACE, 699 F.3d at 840.9 An insurer owes its insured a duty to defend when the pleadings allege facts that potentially state at least one cause of action within the policy's coverage. Northfield Ins., 363 F.3d at 528 (applying Texas law). See PPI Tech. Servs., L.P. v. Liberty Mut. Ins. Co., 515 F. App'x 310, 313 (5th Cir. 2013).

B. Scope of Northfield's Insuring Agreement

Federal argues that Northfield owes a duty to defend and indemnify Wagner under the Northfield Policy, which was effective in 1999-2000. The Court examines the "eight corners" of ExxonMobil's Petition in the Texas Suit and of the Northfield Policy issued to Wagner. Federal has the burden to show that at least one of the claims against Wagner in the Texas Suit is covered under the Northfield Policy. See Trinity Universal, 592 F.3d at 691-92.

ExxonMobil's Petition seeks a declaratory judgment and asserts a breach of contract claim. ExxonMobil alleges that, based on the Assignment, Wagner is obligated to defend and indemnify ExxonMobil against liability in the Louisiana Lawsuits, which allege environmental damage to the property subject to the parties' Assignment. Petition, at 3, ¶ 10. Under the Policy, Northfield insured Wagner for the following:

Policy § I(1)(a), at NF 000005 ("Insuring Agreement").10 The Policy's Insuring Agreement then provides some limitations:

Id. § I(1)(b).

Federal argues that, applying the eight corners rule, ExxonMobil's claims against Wagner in the Texas Suit fall under the Policy's Insuring Agreement because ExxonMobil seeks to recover for "property damage," the damage was caused by an "occurrence" (in particular, "continuous or repeated exposure to harmful conditions"), and the damage occurred during the Policy's period of 1999-2000. Northfield argues that no duty to defend has arisen because Federal cannot show that any "property damage" occurred during the 1999-2000 Policy period. For this argument, Northfield apparently relies on the fact that ExxonMobil ceased operations on the relevant property in 1994. Both parties appear to assume that, if Federal could show that some "property damage" to the assigned property occurred in the 1999-2000 Policy period, then Northfield would have a duty to defend Wagner in the Texas Suit.

ExxonMobil fundamentally seeks damages for Wagner's breach of contract (the Assignment), declarations about the scope of the Assignment in relation to the properties in dispute in Louisiana, and Wagner's assumption of ExxonMobil's obligations regarding those properties. ExxonMobil does not allege damages directly from Wagner for "property damage." Nevertheless, Northfield does not argue that the Insuring Agreement fails to cover ExxonMobil's claims against Wagner on this basis. Presumably, this is because ExxonMobil's Petition, read at a general level, alleges that Wagner should be held liable for all damages ExxonMobil suffers "because of" "property damage" claimed in the Louisiana Lawsuits.11 At this level of generality, the language of the Insuring Agreement can be construed to cover these claims against Wagner. See generally Parfait v. Jahncke Serv., Inc., 484 F.2d 296, 306 (5th Cir. 1973) (phrase "because of" in similar insurance policy is broad enough to cover both direct liability and indirect liability via indemnity).

In addition, because the Northfield Policy covered Wagner during the 1999-2000 Policy period only, the "property damage" for which the Louisiana plaintiffs seek recovery could all be outside the Policy's coverage period. ExxonMobil's Petition does not directly address the issue of when the damage allegedly occurred. However, the Court questions Northfield's argument that the Policy's Insuring Agreement does not apply simply because ExxonMobil ceased operations on the relevant property in 1994. An insurer owes a duty to defend to its insured when the pleadings allege facts that potentially state at least one cause of action within the policy's coverage. See Northfield Ins., 363 F.3d at 528 (applying Texas law); PPI Tech. Servs., L.P., 515 F. App'x at 313. And, the Court must resolve all doubt regarding the duty to defend in favor of the insured. See Northfield Ins., 363 F.3d at 528. The Court cannot say that the occurrence giving rise to the property damage for which ExxonMobil seeks indemnity (and Wagner seeks defense) did not occur, at least in part, within the Policy period.12

The Court therefore deems Federal to have met its burden to establish that ExxonMobil's claims against Wagner in the Texas Suit are within the Policy's Insuring Agreement. The issue ultimately is not dispositive of the dispute before the parties because, even if Northfield has a duty to defend Wagner under the Policy's Insuring Agreement, the Pollution Endorsement excludes coverage, for reasons explained hereafter.

C. Pollution Endorsement

Assuming that the Policy's coverage for "property damage" requires Northfield to defend Wagner against the breach of contract and declaratory judgment claims in the Texas Suit, the Policy's Pollution Endorsement relieves Northfield of its duty to defend Wagner. The Pollution Endorsement for the Northfield Policy excludes coverage for the following:

Policy, at NF 00032.13 Northfield has the burden to show that this exclusion applies. See Harken, 261 F.3d at 471. Northfield has cleared this hurdle.

ExxonMobil seeks indemnity in the Petition solely for damages arising from the three Louisiana Lawsuits. The Petition states:

Petition, at 3, ¶ 10. There are no allegations in the Texas Suit that the Louisiana Lawsuits seek other damages.14 The language of the Pollution Endorsement is broad and clearly excludes coverage for damages arising from the "environmental damage" and "restoration and remediation" alleged in ExxonMobil's Petition. In particular, the Pollution Endorsement excludes coverage for damage to, loss of, or loss of use of property "or any other form of liability or damages to which [Wagner] may be subject" if the damage or loss "aris[es] out of" harm from pollutants "at any time at any location by whomsoever caused." Policy, at NF000032 (emphasis added). The contractual liability ExxonMobil claims against Wagner is a form of "liability or damages" and that liability "arises out of" harm from pollutants. The Court must give the phrase "arising out of" a broad interpretation. Scottsdale Ins. Co. v. Texas Sec. Concepts & Investigation, 173 F.3d 941, 943 (5th Cir. 1999) ("When an exclusion precludes coverage for injuries `arising out of' described conduct, the exclusion is given a broad, general, and comprehensive interpretation. Indeed, a claim need only bear an incidental relationship to the described conduct for the exclusion to apply."). See Sport Supply Grp., Inc. v. Columbia Cas. Co., 335 F.3d 453, 458 (5th Cir. 2003); Archie v. Acceptance Indem. Ins. Co., 507 F. App'x 451, 454 (5th Cir. 2013).

Under the Pollution Endorsement, Northfield is relieved of any obligation to defend Wagner against ExxonMobil's demand in the Texas Suit seeking Wagner's defense, indemnification, and assumption of duties in the Louisiana Lawsuits.15

D. UREC Buyback

Federal argues that, even if the Pollution Endorsement bars coverage to Wagner, coverage is restored by the Policy's Underground Resources & Equipment ("UREC") Buyback, which supersedes the Pollution Endorsement in certain circumstances. The Buyback states:

Policy, at NF 00028 (emphasis in original).16

Federal argues that the Louisiana Lawsuits clearly allege "property damage" by ExxonMobil and its "assigns," which include Wagner, and that these allegations in the Louisiana pleadings state a claim potentially "arising out of" Wagner's "operations" and thus within the UREC Buyback. The Court is unpersuaded. By its plain language, this Buyback does not apply to ExxonMobil's claims against Wagner in the Texas Suit. The Buyback only provides coverage for certain property damage "arising out of operations performed by you [the insured, Wagner Oil Group]." Policy, at NF 000028. ExxonMobil's Petition makes no allegations about operations by Wagner.17 Moreover, ExxonMobil is not an "assign" of Wagner. Rather, ExxonMobil seeks indemnity from Wagner based on the ExxonMobil's contractual assignment of duties to Wagner.

Because there is no allegation in the Texas Suit that Wagner or others on Wagner's behalf performed the operations in issue, the UREC Buyback does not trigger Northfield's duty to defend in the Texas Suit.

E. Contractual Liability Exclusion

The parties argue extensively about the Contractual Liability Exclusion. The Court need not address this exclusion given the holding above that the Pollution Endorsement relieves Northfield of any duty to defend Wagner in the Texas Suit. Assuming arguendo that Federal could prevail on its argument that the Contractual Liability Exclusion does not apply, or alternatively that Federal could prevail on its argument that the Exclusion's "insured contract" exception operates to restore coverage to Wagner under the Policy, neither issue would be dispositive, because the Pollution Endorsement still would apply to bar coverage.

IV. CONCLUSION

For the foregoing reasons, it is hereby

ORDERED that Northfield Insurance Company's Motion for Summary Judgment [Doc. # 27] is GRANTED in part and DENIED in part. It is further

ORDERED that Federal's Motion for Partial Summary Judgment and Memorandum of Law [Doc. # 28] is DENIED. It is further

ORDERED that judgment is entered in favor of Northfield. Northfield does not have a duty to defend Wagner in ExxonMobil Corp. v. Trade Exploration Corp. et al., No. 2009-60726, pending in the 189th Judicial District Court of Harris County, Texas.

A separate final judgment will issue.