Full opinion text
MEMORANDUM AND ORDER KEITH P. ELLISON, District Judge. Before the Court are the Motions for Summary Judgment of Third-Party Defendants Liberty Mutual Fire Insurance Company (“Liberty Mutual”) (Docket Entry (“Doc.”) No. 64) and Underwriters of Lloyd’s, London (“Lloyd’s”) (Doc. No. 66), and all objections, responses and replies thereto (respectively, Doc. Nos. 74, 76, 84 & 85; Doc. Nos. 76, 81, 87, 88 & 90). Also before the Court are the Partial Motions for Summary Judgment of Third-Party Plaintiff Union Pacific Railroad Company (“UP”) (Doc. Nos. 67 & 69) and Intervenor Metropolitan Transit Authority (“Metro”) (Doc. No. 65), and all objections, responses and replies thereto (respectively, Doc. Nos. 71, 77, 89 & 91; Doc. Nos. 70, 78, 86). After reviewing the Motions, all related filings, and the relevant law, the Court finds, for the reasons discussed below, that Liberty Mutual’s Motion for Summary Judgment should be granted in part and denied in part, that Lloyd’s Motion for Summary Judgment should be denied, that UP’s Motions for Partial Summary Judgment of UP should be granted in part and denied in part, and that Metro’s Motion for Partial Summary Judgment should be granted in part and denied in part. I. FACTUAL BACKGROUND A. Metro’s Light Rail Project In 2001, Metro began construction of a light rail transportation system in Houston, Texas. The initial phase of the light rail project included the construction of a 7.5 mile light rail system with 16 stations, downtown street improvements, a Transit Administration building, Park and Ride lots, a test track, a rail operations building, and the design, manufacture, assembly, testing and acceptance of 18 light rail vehicles (“LRVs”). Metro obtained seven major contracts for the construction of the light rail system. One of Metro’s contracts for construction was with Siemens Transportation Systems (“Siemens”), the Vehicle and Systems Contractor. Metro’s contract with Siemens was on a “ready to go” turnkey basis, which meant that Siemens was responsible for virtually all aspects of the light rail project related to the vehicles and systems, including the track, the LRVs, fare collection, catenary, substations, signaling, and communications. In particular, the “ready to go” contract made Siemens responsible for the installation of the 18 LRVs, which each required separate testing before Metro would take final acceptance for their use in its light rail transportation system. This testing, or “burning-in” process, also referred to as commissioning, necessitated Siemens’ use of a suitable test track. Siemens was also required to provide Metro employees with operator training and to supervise the LRVs. B.Metro’s Lease Agreement with Union Pacific In order to facilitate the installation or testing by Siemens of Metro’s new fleet of LRVs, Metro entered into negotiations with Union Pacific (“UP”) for a five year lease agreement to construct, maintain, and operate a test track on UP’s land. Because the premises Metro sought to lease for its light rail project were located in close proximity to a railroad right-of-way owned by UP, on which it operated two active rail lines, there was an increased risk that accidents might arise from Siemens’ use of the property. Due to the increased risk, Metro and UP agreed to incorporate two important requirements into the lease agreement to protect UP. First, pursuant to the terms of the lease agreement, Metro was required to purchase specified insurance to protect UP from the increased risk. The agreement provides: [Metro] shall, at its sole costs and expense, procure and maintain during the life of this Agreement the following insurance coverage: A. Commercial General Liability insurance. This insurance shall contain broad form contractual liability with a single limit of at least $5,000,000 each occurrence or claim and an aggregate limit of at least $10,000,000. Coverage must be purchased on a post 1998 ISO or equivalent form. B. Railroad Protective Liability insurance naming only [UP] as the insured with a combined single limit of $2,000,000 per occurrence with a $6,000,000 aggregate C. Workers Compensation and Employers Liability insurance ... D. Umbrella or Excess Policies In the event [Metro] utilizes Umbrella or excess policies, these policies shall “follow form” and afford no less coverage than the primary policy. (Doc. No. 55, Ex. A-4 at Bates 1590-91.) Metro separately agreed to release and indemnify UP for losses as follows: [Metro], to the extent it may lawfully do so, waives and releases any and all claims against [UP] for, and agrees to indemnify, defend and hold harmless [UP], its affiliates, and its and their officers, agents and employees (“Indemnified Parties”) from and against, any loss, damage (including without limitation, punitive or consequential damages), injury, liability, claim, demand, cost or expense (including, without limitation, attorneys’ fees and court costs), fine or penalty (collectively, “Loss”) incurred by any person (including, without limitation, [UP], [Metro], or any employee of [UP] or [Metro]) and arising from or related to (i) any use of the Premises by [Metro] or any invitee or licensee or [Metro], (ii) any act or omission of [Metro], its officers, agents, employees, licensees or invitees, or (iii) any breach of this Lease by [Metro]. (Id. at Bates 1587.) The agreement limited the indemnity to situations where UP was not solely negligent. (Id.) C.The Insurance Policies To secure insurance coverage for the light rail transportation system, Metro retained the services of Willis of Texas, an insurance broker. With the assistance of Willis of Texas, Metro purchased a Railroad Protective Liability policy (“RPL”), a Wrap-Up policy, and an Umbrella or Excess policy. First, with regard to the RPL, in exchange for Metro’s payment of a $29,760 advance premium, which was based on a contract cost of $30,000,000, Liberty Mutual issued RPL policy number TE2-691-004173-031. The RPL listed “Union Pacific Railroad Company” as the Named Insured and “Metropolitan Transit Authority of Harris County” as the “Designated Contractor.” (Doc. No. 64, Ex. A.) The policy provided liability limits in the amount of $2,000,000 per occurrence, or an aggregate limit of $4,000,000. The effective dates of coverage under the RPL were from March 14, 2001 to September 14, 2004. (Id.) Liberty Mutual also issued Wrap-Up policy number RG2-691-004173-011, in which “Metropolitan Transit Authority of Harris County” was listed as the Named Insured. (Doc. No. 64, Ex. B.) The Wrap-Up policy, consisting of three layers, included an Owner Controlled Consolidated Insurance Program (“OCCIP”), a General Amendatory Endorsement (“GAE”), and a Commercial General Liability Insurance (“CGL”) policy. (Id.) The policy provided a limit of liability for personal injury and property damage to $2,000,000 per occurrence, a general aggregate limit (other than Products-Completed Operations) of $4,000,000, and a Products-Completed Operations Aggregate Limit of $4,000,000. (Id.) The effective dates for coverage under this policy were from March 14, 2001 to September 14, 2001. In addition, Lloyd’s issued Commercial Umbrella or Excess policy number 576/ UF72727000, with effective dates of coverage from March 14, 2001 to September 14, 2004. (Doc. No. 65, Ex. B.) The “Schedule” listed “the Assured” as “The Metropolitan Transit Authority of Harris County, Texas (Metro) and others, all as more fully set forth in the attached Policy Wording.” The Declarations listed the “Named Insured” as “THE METROPOLITAN TRANSIT AUTHORITY OF HARRIS COUNTY, TEXAS (METRO), Contractors, Subcontractors of any tier and Consultants and Sub-Consultants of any tier, for whom any afore-mentioned Insureds have agreed by contract to furnish the insurance coverage provided under this policy per the project.” (Id.) As set forth in the Declarations page, the Umbrella policy provided limits of $50,000,000 per occurrence, $50,000,000 General Aggregate (in accordance with Section III, Limits of Insurance), and $50,000,000 Products-Completed Operations Aggregate for the period (otherwise in accordance with Section III, Limits of Insurance). The Declarations page also provided that there was a $25,000 “Self Insured Retention (inclusive of Defense Costs).” (Id.) D. The Accident, Subsequent Claims & Settlements On January 23, 2004, Christopher McGinnis, a UP worker, was operating one of UP’s Hyrail vehicles. He was traveling to a work site on the railroad tracks. As he waited behind another Hyrail vehicle that had already crossed the LRV test track and had maneuvered onto the rail road tracks, another UP employee manually lifted the crossing arm so that McGinnis could also cross the test track and maneuver his Hyrail vehicle onto the railroad tracks. McGinnis was not aware that a LRV was approaching the crossing. The LVR, unable to stop, collided with McGinnis’s Hyrail vehicle. The collision seriously injured McGinnis. Several individuals on the LRV also sustained injuries. Following the collision, the individuals on the LRV who were injured brought suit against UP and McGinnis, and McGinnis filed the instant suit against UP. UP placed Liberty Mutual on notice of the loss, tendered both the claims and suits brought against it to Liberty Mutual under the RPL policy, and demanded a defense and indemnity. In addition, pursuant to the contractual indemnification obligation in the Lease Agreement, UP tendered the claims and suits brought against it to Metro. Metro, in turn, tendered UP’s demands for contractual indemnity to Liberty Mutual and demanded a defense and indemnity under the CGL policy. Liberty Mutual denied UP’s demand for defense and indemnity under the RPL policy. Liberty Mutual also denied Metro’s demand for coverage. UP and Metro made similar demands for defense and indemnity to Lloyd’s under the Umbrella policy, but their demands were denied. After conducting an investigation of the accident, UP decided to settle the claims brought by the individuals on the train, as well as the lawsuit brought by McGinnis. UP alleges that it paid close to six million dollars to settle all the bodily injury and property damages claims arising out of the accident. II. PROCEDURAL BACKGROUND Plaintiff Christopher McGinnis filed his Complaint against UP on January 19, 2007. McGinnis settled his claims UP on March 23, 2007. On March 29, 2007, before the case was officially closed, UP filed its Third-Party Complaint against Liberty Mutual and Lloyd’s for the following: (1) breach of contract under the RPL and the Umbrella policy; (2) declaratory judgment; (3) violations of Sections 541.060, 541.061, 541.151, and 542.051 of the Texas Insurance Code; (4) fraud; and (5) in the alternative, reformation of the policies based on mutual mistake, and relief based on waiver and estoppel. (Doc. Nos. 9 & 46.) Metro successfully intervened in the action on April 5, 2007. (Doc. Nos. 13 & 14.) Metro’s Complaint, and Amended Complaint in Intervention, allege the same causes of action brought by UP. (Doc. No. 47.) Meanwhile, on April 5, 2007, Liberty Mutual and Lloyd’s filed a lawsuit based on the same policies and events in the 133rd Judicial District Court of Harris County, Texas, effecting service on April 10, 2007. Discovery in the state case was conducted for use in either court. Thereafter on January 30, 2008, UP filed an Amended Third-Party Complaint (Doc. No. 46) and Metro filed an Amended Intervenor Complaint (Doc. No. 47.) Amended Answers were then filed by Third-Party Defendants Liberty Mutual and Lloyd’s. Each of the parties then filed Motions for Summary Judgment. On June 16, 2008, Liberty Mutual and Lloyd’s filed their respective Motions for Summary Judgment with each maintaining that, for various reasons, no coverage exists under the Railroad Protection Liability policy (“RPL”), the Wrap-Up policy, or the Umbrella policy. Also on June 16, 2008, Metro filed its Motion for Partial Summary Judgment (Doc. No. 65) and, on June 19, 2008, UP filed Motions for Partial Summary Judgment with regard to the RPL and the Umbrella policy. (Doc. Nos. 67 & 69.) The parties have filed their respective responses and replies and, thus, this case is ripe for adjudication. III. SUMMARY JUDGMENT STANDARD Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). A fact is “material” if its resolution in favor of one party might affect the outcome of the suit under governing law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also United States v. Arron, 954 F.2d 249, 251 (5th Cir.1992). “An issue is genuine if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party.” Cooper Tire & Rubber Co. v. Farese, 423 F.3d 446, 454 (5th Cir.2005). Under Rule 56(c), the moving party bears the initial burden of informing the court of the basis for its belief that there is an absence of a genuine issue for trial and of identifying those portions of the record that demonstrate such an absence. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); see also, Burge v. Parish of St. Tammany, 187 F.3d 452, 464 (5th Cir.1999). Where the moving party meets its initial burden under Rule 56(c), the burden then shifts to the nonmovant to show a genuine issue of material fact exists that precludes summary judgment. “[T]he nonmoving party must come forward ‘with specific facts showing that there is a genuine issue for trial.’ ” Matsushita, 475 U.S. at 586-87, 106 S.Ct. 1348 (quoting Fed. R. Civ. P. 56(e)) (emphasis in original); see also, Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). To sustain the burden, the nonmoving party must produce evidence admissible at trial. See Anderson, 477 U.S. at 242, 106 S.Ct. 2505; see also, Thomas v. Price, 975 F.2d 231, 235 (5th Cir.1992) (“To avoid summary judgment, the nonmoving party must adduce evidence which creates a fact issue.”). At the summary judgment stage, the court views the facts in a light most favorable to the nonmoving party and draws all reasonable inferences in favor of the nonmovant, but only when “there is a ‘genuine’ dispute as to those facts.” Scott v. Harris, 550 U.S. 372, 127 S.Ct. 1769, 1776, 167 L.Ed.2d 686 (2007); see also Goodson v. City of Corpus Christi 202 F.3d 730, 735 (5th Cir.2000) (“[T]he nonmoving party may not rest on the mere allegations or denial of its pleadings, but must respond by setting forth specific facts indicating a genuine issue for trial.”). “[A] nonmovant cannot overcome summary judgment with conclusory allegations and unsubstantiated assertions.” Mace v. City of Palestine, 333 F.3d 621, 624 n. 7 (5th Cir.2003); see also Johnston v. City of Houston, Tex., 14 F.3d 1056, 1060 (5th Cir.1994) (“only evidence-not argument, not facts in the complaint-will satisfy the burden.”). Nor can the nonmovant overcome summary judgment by showing “some metaphysical doubt as to the material facts” in an attempt to create a genuine dispute. Matsushita, 475 U.S. at 584-86, 106 S.Ct. 1348. IV. ANALYSIS Texas rules of contract interpretation apply in this diversity case. Canutillo Indep. Sch. Dist. v. National Union Fire Ins. Co., 99 F.3d 695, 700 (5th Cir.1996). The interpretation of insurance contracts is governed by the same rules that apply to contracts generally. Id. They must be interpreted to effectuate the intent of the parties at the time the contracts were formed. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex.1998); Glover v. Nat’l Ins. Underwriters, 545 S.W.2d 755, 761 (Tex.1977). When the words of a policy are unambiguous, they are to be given their plain, ordinary, and generally accepted meaning, unless the policy clearly indicates that the contractual terms have been used in a different of technical sense. Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938 (Tex.1984). When the language of a policy is susceptible to more than one construction, however, it should be construed strictly against the insurer and liberally in favor of the insured. Barnett v. Aetna Life Ins. Co., 723 S.W.2d 663, 666 (Tex.1987); see also, Nat’l Union Fire Ins. Co. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex.1991) (holding that any ambiguities in a policy are construed against the drafter). Where the question of interpretation involves an exception or limitation on the insurer’s liability under the policy, an even more stringent construction is required. Barnett, 723 S.W.2d at 666. V. RAILROAD PROTECTIVE LIABILITY ACT A. Liberty Mutual and UP’s Cross Motions for Summary Judgment Liberty Mutual and UP have filed cross motions for Summary Judgment regarding the RPL policy. Liberty Mutual contends that there is no coverage for UP under the RPL for the following reasons: (1) the bodily injury and property damage were not related to or in connection with the “work” described in the policy; and (2) any coverage would be excluded based on the “completed work” exclusion, the non-insured’s contractual liability exclusion, and the sole proximate cause exclusion. (Doc. No. 64.) UP responds that the bodily injury and property damage fall were covered, and that Liberty Mutual failed to establish the application of its policy exclusions. (Doc. No. 74.) UP seeks declaratory relief under the RPL policy based on the following grounds: (1) that the policy provides coverage for bodily injury or property damage arising out of acts or omissions at the test track and related to work or operations performed by Metro or its subcontractors; (2) that liability is established, as a matter of law, by the settlement of the underlying claims; (3) that Liberty Mutual breached its duty to defend UP; (4) that the “completed work” exclusion does not apply; and (5) that Liberty Mutual breached its duty to pay for property damage to UP’s Hyrail vehicle. (Doc. No. 67.) UP also contends that it is entitled to recover attorney fees from Liberty Mutual. (Id.) B. Coverage for Bodily Injury and Property Damage Liberty Mutual contends that, under the RPL policy, the covered work, as described in the Declarations, was clearly and unambiguously limited to laying the test track, and the accident occurred after the test track was completed. Conversely, UP maintains that the covered work, as described in the Declarations, was not limited to (or intended to be limited to) the construction of the test track, but also included the testing or commissioning of the LRV on the test track. The Court starts with the policy language. As contained in “Section I — Coverages,” the RPL provides: ... [Liberty Mutual] will pay those sums that the insured becomes legally obligated to pay as damages because of “bodily injury” or “property damage” ... [arising] out of acts or omissions at the “job location” which are related to or are in connection with the “work” described in the Declarations. (Doc. No. 64, Ex. A; Doc. No. 65, Ex. A-6.) There is no dispute that UP is the named insured under the policy. (Doc. No. 64, Ex. A.) Nor can there be any dispute that UP was “legally obligated to pay” damages because of “bodily injury” or “property damage.” Lennar Corp. v. Great Am. Ins. Co., 200 S.W.3d 651, 680 (Tex.App.-Houston [14th Dist.] 2006, pet. denied) (interpreting “legally obligated to pay” to mean an obligation imposed by law, such as an obligation to pay pursuant to a judgment, settlement, contract or statute); Comsys Info. Tech. Serv., Inc. v. Twin City Fire Ins. Co., 130 S.W.3d 181, 189 n. 3 (Tex.App.-Houston [14th Dist.] 2003, pet. denied) (recognizing a judgment is not the only manner by which an insured can become legally obligated to pay because a legal obligation can also arise out of a contract, such as a settlement); Texas Prop. & Cas. Ins. Guar. Ass’n v. Boy Scouts of Am., 947 S.W.2d 682, 691 (Tex.App.-Austin 1997, no writ). The policy defines “job location” as follows: “the job location designated in the Declarations including any area directly related to the ‘work’ designated in the Declarations. ‘Job location’ includes the ways next to it.” (Doc No. 64, Ex. A, Section V — Definitions.) The Declarations page designates “Houston, Texas” as the “job location.” (Id.) The bodily injury or property damage arose out of acts or omissions at the job location, which was Houston, Texas. The dispute between the parties is over the policy provision which requires that the acts or omissions at the “job location” must be related to or connected with the “work” as described in the Declarations. “Related to or connected with” is not defined in the policy. Texas courts have broadly construed the phrase “arising] out of [or] ... related to or ... in connection with.” Utica Nat’l Ins. Co. v. American Indem. Co., 141 S.W.3d 198, 203 (Tex.2004) (“ ‘arise out of means that there is simply a ‘causal connection or relation,’ which is interpreted to mean that there is but for causation, though not necessarily direct or proximate causation”); Scottsdale Ins. Co. v. Texas Sec. Concepts & Investigation, 173 F.3d 941, 943 (5th Cir.1999) (phrase “arising out of’ means that “a claim need only bear an incidental relationship to the described conduct[.]”); Fontenot v. Mesa Petroleum Co., 791 F.2d 1207, 1214 (5th Cir.1986) (language “arising in connection herewith” contained in indemnity agreement unambiguously encompasses all activities reasonably incident to or anticipated by principal activity of contract). The policy defines “work” to mean “work or operations performed by the ‘contractor’ including materials, parts or equipment furnished in connection with the work or operations.” “Operations,” while not defined in the policy, ordinarily means “the operating of or putting and maintaining in action of something (as a machine or an industry).” Webster’s Third New International Dictionary 1581 (1993). The cornerstone of the parties’ dispute centers on the meaning and scope of the “work” described in the Declarations. In particular, Item 6 of the Declarations page, which is titled the “Designation of the Job Site and Description of Work,” provides the following: Two mile test track built 25 feet from existing track. Metro will be laying track across an existing bridge that runs over Union Pacific tracks (no bridge construction). (Doc. No. 64, Ex. A.) Liberty Mutual contends that “[t]he above designation unambiguously limits the scope of the ‘work’ to the laying of a two-mile test track” and since the accident occurred after the test track was completed, there is no coverage. UP counters that Liberty Mutual’s position is flawed for several reasons. First, UP contends that Liberty Mutual only reaches this interpretation by reading the first and second sentences together and, thus, arguing that the work described in the Declarations only consisted only of laying the “[t]wo mile test track” that was “25 feet from existing track.” UP maintains that Liberty Mutual has improperly merged the two sentences together because each sentence actually refers to a separate job site. In support of its argument, UP offers evidence, in the form of the RPL Policy Questionnaire, which it states clarifies that the two sentences, in fact, refer to two separate areas or job sites where an exposure point existed. Second, UP argues that, once clarified, Item 6 is ambiguous because it can reasonably be read as describing the job site (i.e., the two-mile test tract which was built 25 feet from an existing track) as opposed to providing a description of the work to be done at this location. 1. Whether an Ambiguity Exists Determining whether an ambiguity exists in a contract is a question of law which a court decides in light of the surrounding circumstances. R & P Enterprises v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex.1980). “A court may conclude that a contract is ambiguous even in the absence of such pleading by either party.” Sage Street Assoc. v. Northdale Construction Co., 863 S.W.2d 438, 445 (Tex.1993); see also, Texas v. American Tobacco Co., 463 F.3d 399, 407 n. 14 (5th Cir.2006). A contract is not ambiguous if it can be given a definite or certain meaning as a matter of law. Nat’l Union Fire Ins. Co. v. CBI Industries, Inc., 907 S.W.2d 517, 520 (Tex.1995). An ambiguity will exist if the contract language is “uncertain and doubtful or it is reasonably susceptible to more than one meaning.” Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). An ambiguity does not arise based merely on conflicting interpretations of the contract language. Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 134 (Tex.1994). Parole evidence is also not admissible to render a contract ambiguous. Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 732 (Tex.1981). An ambiguity may be patent (ie., evident on the face of the contract), or latent (i.e., apparent when a contract is applied to the subject matter with which the contract deals). CBI Indus., Inc., 907 S.W.2d at 520 (a latent ambiguity exists when the contract appears to convey a sensible meaning on its face, but it cannot be carried out without further clarification). When a latent ambiguity arises, the focus shifts to the facts and circumstances under which the agreement was made (CenterPoint Energy Houston Elec., L.L.P. v. Old TJC Co., 177 S.W.3d 425, 431 (Tex.App.-Houston [1st Dist.] 2005, pet. denied)), and parol evidence is admissible for the purpose of ascertaining the true intention of the parties as expressed in the agreement. CBI Indus., Inc., 907 S.W.2d at 520; see also, Balandran v. Safeco Ins. Co. of America, 972 S.W.2d 738, 741 (Tex.1998) (court examined surrounding circumstances); Bache Halsey Stuart Shields, Incorp. v. Alamo Savings Assoc. of Texas, 611 S.W.2d 706, 708 (Tex.Civ.App.-San Antonio 1980, no writ) (quoting Murphy v. Dilworth, 137 Tex. 32, 151 S.W.2d 1004, 1005 (1941) (“[W]here a question concerning the interpretation of a contract arises, a court will ‘take the wording of the instrument, consider the same in light of the surrounding circumstances and apply the pertinent rules of construction thereto and thus settle the meaning of the contract.’ ”)). “This does not mean, however, that the parties may prove the making of an agreement different from that expressed in the written contract, nor that the unambiguous language used in the contract may be violated or the legal effect thereof changed.” Murphy, 151 S.W.2d at 1005. Instead, “[i]t can do no more than explain the doubtful relations of the instrument consistently with the relations of the parties, the subject matter of the contract, and the other incidents thereof.” Id. at 1006. In the instant case, in an attempt to show the surrounding circumstances from which a latent ambiguity emerged, UP asks the Court to consider the RPL Policy Questionnaire. While Liberty Mutual objects to the introduction of the RPL Application on the ground that consideration of the extrinsic evidence it is improper, the Court OVERRULES the objection as the evidence is permissible to show the circumstances surrounding the contract. As urged by UP, the RPL Policy Questionnaire clarifies the circumstances surrounding the policy. The responses to the RPL Policy Questionnaire were provided to Liberty Mutual by Willis of Texas. (Doc. No. 67, Ex. 4.) The responses to the questionnaire provided that the total estimated cost of the job was $30 million with an estimated $4.5 to $4.7 million of the total amount attributed to the cost of the work within 50 feet of the railroad tracks. (Id.) In response to a question regarding the “duration of the work within 50 feet of tracks,” Willis of Texas responded that “[b]ecause LRV testing will be done assume testing will occur on tracks within 25 feet of existing track for the term.” (Id.) Further, when asked about the “Location/Description of Project plus work directly affecting railroad operations,” Willis of Texas responded that “[t]here will be a two mile test track built 25 feet from existing track. Metro will by laying track across an existing bridge that runs over Union Pacific tracks (no bridge construction).” (Id.) However, Willis of Texas further qualified that “[t]wo exposure points exist. The rail yard where the light rail vehicles (LRVs) are being assembled and tested and railroad overpass. The overpass is an existing bridge.” (Id.) In light of the surrounding circumstances of the contract, the two sentence description contained in Item 6 referred to two different sites. Given this clarification, as urged by UP, the Court agrees that an ambiguity exists because an alternate, but just as reasonable, interpretation of Item 6 is that the first sentence (“Two mile test track built 25 feet from existing track”) merely describes the location where work would be done, but not the action to be taken at that location. 2. The Effect of the Ambiguity Generally, Texas law provides that, when an insurance contract is susceptible to more than one reasonable interpretation, a court must resolve the uncertainty by adopting the construction that most favors the insured. Barnett, 723 S.W.2d at 666. This rule is derived from the more general rule that ambiguous contracts are construed against the drafter. Balandran, 972 S.W.2d at 741 n. 1; TempleEastex, Inc. v. Addison Bank, 672 S.W.2d 793, 798 (Tex.1984). However, in the present case, the Court’s concern is that the description of the work found in Item 6 of the Declarations was derived, almost verbatim, from the RPL application that Willis of Texas completed and provided to Liberty Mutual, and, given the incorporated language, it is far from clear what the parties actually intended. Therefore, the Court cannot automatically find coverage based on ambiguity in the insurance agreement. Because the Court finds that this coverage dispute cannot be resolved based on available rules of contract interpretation, the court must resort to parole evidence to determine whether the contracting parties intended the RPL to provide coverage for building the test track, as well as for the use of the track to commission the LRVs. While it is true that the parties have offered parole evidence regarding their intent, the scope of the light rail project, the carrier’s classification of the policy, the amount of the premium paid in relation to the project, and the purported post-accident conduct by Liberty Mutual in extending the policy for testing, genuine issues of material fact exist which preclude this Court from deciding this issue as a matter of law. Instead, the Court reserves for the trier of fact the disputed issue concerning the scope of the work as set forth in the Item 6 of the Declarations. Accordingly, on the issue of coverage under the RPL policy, Liberty Mutual’s Motion for Summary Judgment and UP’s Motion for Partial Summary Judgment on this issue of coverage under the RPL policy are both denied. C. Coverage for UP’s Property Damage UP also seeks a declaration that it is entitled to coverage for the damage to its property. (Doc. No. 67 at 21.) Liberty Mutual responds that the policy’s liability coverage will not extend to cover damage to UP’s own property. (Doc. No. 71 at 17.) UP clarifies that it is not making a claim under Coverage A (Liability), but is instead making a claim under Coverage B (first-party property damage coverage). (Doc. No. 91 at 19.) Coverage B provides: We will pay for “physical damage to property” to which this insurance applies. The “physical damage to property” must occur during the policy period. The “physical damage to property” must arise out of acts or omissions at the “job location” which are related to or in connection with the “work” described in the Declarations. The property must be owned by or leased or entrusted to you under a lease or trust agreement. (Doc. No. 64, Ex. A.) The policy defines “physical damage to property” as “direct and accidental loss of or damage to rolling stock and them contents, mechanical construction equipment or motive power equipment, railroad tracks, roadbeds, catenaries, signals, bridges or buildings.” (Id.) Liberty Mutual does not dispute that the damage to UP’s signal clearly falls within the definition of “physical damage to property.” Liberty Mutual disputes whether the Hyrail vehicles involved in the accident fall within the definition of “physical damage to property” because they are not “mechanical construction equipment or motive power equipment.” (Doc. No. 71 at 17.) The policy does not define “mechanical construction equipment” or “motive power equipment” and, as such, the terms should be given their plain, ordinary meaning. (Doc. No. 91 at 19.) UP urges that the “undisputed evidence is that the two [Hyrail] vehicles involved in the Accident were ‘mechanical [track] construction equipment’ and/or ‘motive power equipment’ in the ordinary sense of those words.” (Id.) The Court agrees with UP; however, this does not resolve the dispute. Similar to the coverage provision discussed above, Coverage B still requires that the “physical damage to property must arise out of acts or omissions at the ‘job location’ which are related to or in connection with the ‘work’ described in the Declarations.” (Doc. No. 64, Ex. A.) For the same reasons previously discussed, the Court reserves for the trier of fact the disputed issue concerning the scope of the work as set forth in the Item 6 of the Declarations. Accordingly, UP’s Motion for Partial Summary Judgment as to the RPL’s coverage for property damage is denied. D. The Completed Work Exclusion Liberty Mutual and UP have also filed cross-motions on whether the RPL excludes coverage for bodily injury or property damage that occurs after the work is completed. In particular, the Completed Work Exclusion in the policy provides: The “work” will be deemed completed at the earliest of the following times: (1) When all the “work” called for in the “contractor’s” contract has been completed. (2) When all the “work” to be done at the “job location” has been completed. (3) When that part of the “work” done at the “job location” has been put to its intended use by you, the governmental authority or other contracting party. “Contractor” is defined under the policy to mean “the contractor designated in the Declarations and includes all subcontractors working directly or indirectly for that ‘contractor’ but does not include you.” Metropolitan Transit Authority of Houston is listed on the Declarations page as the “Designated Contractor.” In addition, the policy defines “work” to mean “work or operations performed by the ‘contractor,’ including materials, parts or equipment furnished in connection with the work or operations.” There is no real dispute that the test track at this job location was laid or that the testing of the light rail trains was in progress. Instead, once again, the dispute centers on the meaning and scope of “work” as defined in the policy and as harmonized with the “work” described in the Declarations. {See Doc. No. 91 at 18.) Liberty contends that the completed work exclusion was triggered because the earliest of the times delineated was when Metro completed laying the test track 25 feet from the UP track, and the test track was put to its intended use by the contracting party, whereas UP counters that the “work” did not just consist of laying the track, but also included the testing or commissioning of each of the light rail trains. Once again, for the same reasons previously discussed, the Court reserves for the trier of fact the disputed issue concerning the scope of the work as set forth in the Item 6 of the Declarations. Accordingly, both Liberty Mutual’s Motion for Summary Judgment and UP’s Motion for Partial Summary Judgment on this point must be denied. E. The Non-Insured Contract Liability Exclusion Liberty Mutual maintains that coverage does not extend to UP under the RPL due to the non-insured contract liability exclusion. (Doc. No. 64 at 11-12.) The policy excludes coverage “for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement.” (Doc. No. 64, Ex. A.) For the purposes of the exclusion, Union Pacific did not assume the liability in a contract or agreement; rather, it was Metro who assumed the liability, and Metro is not an insured as defined under the policy. Thus, this exclusion is inapplicable and Liberty Mutual’s Motion for Summary Judgment on this point is denied. F. Sole Proximate Cause of Loss Exclusion Liberty Mutual claims that “Union Pacific is solely to blame for the accident” and, therefore, coverage is precluded based on the policy’s sole proximate cause of loss exclusion. (Doc. No. 64 at 12.) The RPL policy contains an exclusion for “Acts or Omissions of Insured.” The exclusion provides: “Bodily injury” or “property damage”, the sole proximate cause of which is an act or omission of any insured other than acts or omissions of any of “your designated employees”. This exclusion does not apply to injury or damage sustained at the “job location” by any of “your designated employees” or employee of the “contractor”, or by any employee of the governmental authority or any other contracting party (other than you) specified in the Declarations. (Doc. No. 54, Ex. A at 2.) UP counters that Liberty Mutual has not established, as a matter of law, that UP was “the sole proximate cause” of this accident. UP initially maintains that this exclusion is limited to UP or its corporate executives and does not apply to any alleged negligence on the part of either UP worker Christopher McGinnis or the other UP worker involved in the accident. For purposes of this exclusion, the policy defines “insured” as: “(1) ‘you’ (the named insured shown in the declarations or [UP]); (2) your ‘executive officers’ and directors, but only with respect to their duties as your officers and directors; (3) your stockholders; and (4) any railroad operating over your tracks.” (Id., Ex. A at 3.) Notably, as urged by UP, the policy’s definition of “insured” does not include all UP employees. Under Texas law, exclusions in an insurance policy must be construed narrowly. Barnett, 723 S.W.2d at 666; Glover, 545 S.W.2d at 761. Had Liberty Mutual wanted to exclude coverage when the sole proximate cause of the loss was caused by either UP or any of UP’s employees, it could have explicitly done so, and the failure to include UP’s employees within the explicit definition of “insured” suggests that this particular policy exclusion should be construed against Liberty Mutual. Barnett, 723 S.W.2d at 665. Notwithstanding this fact, summary judgment is inappropriate because, as conceded by the parties (See Doc. No. 74 at 16-20; Doc. No. 84 at 9 n. 11), the determination of whether UP’s acts or omissions were the sole proximate cause of the collision is normally a question of fact. See generally, Texas Pacific Indem. Co. v. Bldg. Material Distrib. Inc., 508 S.W.2d 488, 489 (Tex.Civ.App.-Waco 1974, writ ref'd n.r.e.) (sole proximate cause was defined for a jury to mean “the only proximate cause [and] [i]f there is more than one proximate cause of an event, then no single proximate cause can be the sole proximate cause.”). Furthermore, as urged by UP, this exclusion does not apply to bodily injury or property damage sustained by employees of the “contractor,” or by any employee of the governmental authority, or any other contracting party specified in the declarations. “Contractor” is defined to include the contractor designated in the Declarations, which is Metro, and “all subcontractors working directly for that ‘contractor’ [Metro].” (Doc. No. 64, Ex. A. at p. 6 of 7.) Thus, with regard to the injury or damage sustained by either Metro employees or employees of its subcontractors, the exception to the exclusion applies. Thus, this exclusion would not preclude coverage for the $465,702.05 UP paid to settle injury or damage claims brought by either Metro employees or its subcontractors. (Doc. No. 74 at 17.) Accordingly, based on the reasons stated, Liberty Mutual’s Motion for Summary Judgment based on the sole proximate cause of loss exclusion is denied. G. Fraud, Mutual Mistake And Estoppel Liberty Mutual seeks dismissal of UP and Metro’s claims of fraud, mutual mistake and estoppel as it relates to the RPL policy. (Doc. No. 64 at 21-24.) These issues, however, are inextricably linked to the determination regarding the scope of work to which the RPL policy applied. The Court, having reserved the disputed issue concerning the scope of the work to a trier of fact, defers these issues as well. Liberty Mutual’s Motion for Summary Judgment on the ground that UP and Metro’s claims for fraud, mutual mistake, and estoppel with regard to the RPL is denied. H. UP’s Insurance Code Claims Liberty Mutual seeks dismissal of UP’s claims which allege violations of various insurance provisions. Liberty Mutual contends that where there is no coverage, there can be no violation. Liberty Mutual also asserts that UP’s claims under the insurance code are barred by limitations. (Doc. No. 64 at 20.) The Court concludes that the determination of these issues is best deferred pending the resolution of the coverage issues. Liberty Mutual’s Motion for Summary Judgment on this ground is, therefore, denied without prejudice to reconsideration if appropriate. I. Attorney’s Fees UP seeks to recover attorney fees for the prosecution and defense of this suit pursuant to Sections 37.009 and 38.001 of the Texas Civil Practice and Remedies Code. (Doc. No. 67 at 22.) Liberty Mutual argues that UP is not entitled to recover attorney’s fees under Section 38.001 because it has not prevailed. (Doc. No. 71 at 24.) Liberty Mutual also argues, relying on Utica Lloyd’s of Texas v. Mitchell, 138 F.3d 208, 209 (5th Cir.1998), that UP is not entitled to attorney’s fees under Section 37.009. (Doc. No. 71 at 24.) Section 38.001 of the Texas Civil Practice & Remedies Code, in relevant part, provides that “[a] person may recover reasonable attorney’s fees from an individual or corporation, in addition to the amount of a valid claim and costs, if the claim is for: ... an oral or written contract.” Tex. Crv. Prac. & ReM.Code § 38.001. In order to recover attorney’s fees pursuant to Section 38.001, a party must be a prevailing party and recover actual damages on its claim. See Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex.1997) (“To recover attorney’s fees under Section 38.001, a party must (1) prevail on a cause of action for which attorney’s fees are recoverable, and (2) recover [actual] damages.”); see also, Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 201 (Tex.2004) (per curiam) (noting that even though the claimant had a valid claim, it “was not entitled to recover attorney’s fees because it was not awarded damages on its breach of contract claim”). In this ease, it is premature to consider UP’s entitlement, if any, to attorney’s fees under Section 38.001. See Solis, 951 S.W.2d at 390. Section 37.009 of the Texas Civil Practice & Remedies Code provides that in any proceeding under the Texas Uniform Declaratory Judgments Act (“DJA”), “the court may award costs and reasonable and necessary attorney’s fees as are equitable and just.” Tex. Civ. Prac. & Rem.Code § 37.009. However, as urged by Liberty Mutual, the Fifth Circuit’s holding in Utica forecloses UP’s request for attorney’s fees under Section 37.009. Utica Lloyd’s of Texas v. Mitchell, 138 F.3d 208, 209 (5th Cir.1998) (holding that “a party may not rely on the Texas DJA to authorize attorney’s fees in a diversity case because the statute is not substantive law.”); see also, Camacho v. Texas Workforce Comm’n, 445 F.3d 407, 409-410 (5th Cir.) (reaffirming validity of Utica), cert. denied, 549 U.S. 826, 127 S.Ct. 349, 166 L.Ed.2d 44 (2006). UP’s Motion for Partial Summary Judgment seeking attorney’s fees under Section 37.009 is denied with prejudice, but its request for attorney’s fees under Section 38.001 is denied, without prejudice, as premature. VI. WRAP UP POLICY A. Liberty Mutual’s Motion for Summary Judgment 1. Whether UP is an Insured Liberty Mutual maintains that UP is not an insured under the Wrap Up policy. UP responds by requesting the Court to defer any determination of whether it is an insured under this policy until after addressing the RPL policy. In particular, UP argues that if no coverage is afforded under the RPL, then it may qualify as an insured under the GAE. However, considering UP’s response to Liberty Mutual’s Motion, the Court sees no compelling reason to defer this determination. Metro procured a Wrap-Up policy for the Light Rail Project. As explained by Liberty Mutual, the Wrap Up policy consists of “a three-layered pyramid” of coverage with the base layer being the Commercial General Liability (“CGL”) policy, which was modified by a General Amendatory Endorsement (“GAE”), and then further modified by the Owner Controlled Consolidated Insurance Program Amendment of Coverage (“OCCIP” Amendments). (Doc. No. 64 at 12-13, Ex. B.) The OCCIP Amendment provides that the insureds protected by the Wrap Up policy include the First Named Insured (Metro), the Additional Named Insureds set forth in the Schedule of the OCCIP Amendment, and any Additional Named Insureds identified in the underlying CGL or GAE. (Doc. No. 64, Ex. B at Bates “Metro 1484”.) The “ADDITIONAL NAMED INSURED SCHEDULE” provides: All subcontractors of any tier, as their interests may appear, for whom the First Named Insured has agreed by contract to provide general liability coverage under the owner controlled insurance program, excluding vendors, suppliers, off-site fabricators, material dealers and others who merely make deliveries to or from the Project Site(s). (Doc. No. 64, Ex. B at Bates “Metro 1485”.) UP is not a subcontractor of Metro. Thus, UP is not an additional insured under the provisions of the OCCIP policy. UP also does not qualify as the Named Insured or as an additional insured under the definitions contained in the CGL policy. (Doc. No. 64, Ex. B at Bates “Metro 1465; 1509; 1519-20”.) Finally, the GAE policy contains a “Blanket Additional Insured” Amendment that provides: SECTION II — WHO IS AN INSURED is amended to include as an insured any person, organization, state or other political subdivision, trustee or estate for whom you have agreed in writing to provide liability coverage. But: The insurance provided by this amendment: 1. Applies only to “personal injury” or “property damage” arising out of (a) “your work” or (b) premises or other property owned by or rented to you; 2. Applies only to coverage and limits of insurance required by the written agreement, but in no event exceeds either the scope of coverage or the limits of insurance provided in this policy; and 3. Does not apply to any person, organization, state or other political subdivision, trustee or estate for whom you have procured separate liability insurance while such insurance is in effect, regardless of whether the scope of coverage or limits of insurance of this policy exceed those of such other insurance or whether such other insurance is valid and collectible. (Doc. No. 64, Ex. B at Bates “Metro 1479”.) In the present case, while it is true that Metro was required by the Lease Agreement to provide coverage for UP, there is no dispute that Metro procured separate liability insurance for UP in the form of the RPL. Nor is there any dispute that the RPL policy was in effect on the date of the incident. The Court, therefore, grants Liberty Mutual’s Motion for Summary Judgment on the ground that UP is not an insured under the Wrap-Up policy. YII. METRO’S CLAIM FOR DECLARATORY RELIEF Liberty Mutual and Lloyd’s assert that Metro should not be permitted to proceed with its Complaint in Intervention seeking declaratory relief because no justiciable controversy exists between the parties-namely, Metro and UP. The federal Declaratory Judgment Act providés, in part, the following: In a case of actual controversy within its jurisdiction, ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. 28 U.S.C. § 2201. The purpose of the Act “is to settle ‘actual controversies’ before they ripen into violations of law or a breach of contractual duty.” Hardware Mut. Cas. Co. v. Schantz, 178 F.2d 779, 780 (5th Cir.1949). A district court has discretion in deciding whether to entertain a declaratory judgment action. St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 590 (5th Cir.1994). In making this determination, the court must consider (1) whether the declaratory action is justiciable; (2) whether the court has authority to grant declaratory relief; and (3) whether to exercise its discretion to decide or dismiss the action. Orix Credit Alliance, Inc. v. Wolfe, 212 F.3d 891, 895 (5th Cir.2000). The law provides that for an action to be justiciable, an “actual controversy” must exist between the parties. Wolfe, 212 F.3d at 895. In other words, to be justiciable, the action “must be such that it can presently be litigated and decided and not hypothetical, conjectural, conditional or based on the possibility of a factual situation that may never develop.” AXA Re Prop. & Cas. Ins. Co. v. Day, 162 Fed.Appx. 316, 319 (5th Cir.2006) (quoting Brown & Root, Inc. v. Big Rock Corp., 383 F.2d 662, 665 (5th Cir.1967)); see generally, 10B Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice And Procedure § 2757 (2008). In the present case, Liberty Mutual and Lloyds contend that no substantial controversy exists between the parties for several reasons. First, they contend that Metro “has never been sued by the McGinness [sic] Plaintiffs or any other person injured in the Accident,” and “[a]t this point in time, more than four years after the Accident, it is clear that no meritorious bodily injury claims will ever be made against METRO.” (Doc. No. 64 at 18.) This argument is not persuasive. Even if the injured parties’ suits against Metro were barred by the statutory limitation period for torts, any such bar would not preclude UP from pursuing Metro on its contractual indemnity claim. See Houston Lighting & Power Co. v. Eller Outdoor Advertising Co. of Texas, 635 S.W.2d 133, 134-35 (Tex.App.-Houston [1st Dist.] 1982, writ ref'd n.r.e). Second, Liberty Mutual and Lloyd’s argue that, despite the contractual indemnity agreement, Metro “has never paid a dime to Union Pacific as a result of the Accident,” and “[w]hatever demands, if any, Union Pacific may have made to METRO, the demands were never reduced to a final judgment and are not the subject of any pending litigation.” (Doc. No. 64 at 18.) Metro counters that the carrier’s argument “completely ignores the fact that the critical inquiry is whether METRO has a justiciable controversy,” not with UP, but with the insurance carriers. (Doc. No. 76 at 3.) Metro maintains that a controversy exists between itself and the insurance carriers regarding the obligations under the insurance contract and, thus, it is entitled to seek a declaration of its rights against the carriers. (Id.) The Court agrees. See Tex. Civ. Prac. & Rem.Code Ann. § 37.004(a) (Vernon Supp.2007) (authorizing a person interested under a written contract to seek declaratory relief); American States Ins. Co. v. Bailey, 133 F.3d 363, 368 (5th Cir.1998) (recognizing that even where a tort action has not proceeded to judgment, a dispute concerning an insurer’s duty to defend or indemnify its insured for losses sustained by a third party presents an actual controversy within the meaning of the federal Declaratory Judgment Act); Farmers Texas County Mut. Ins. Co. v. Griffin, 955 S.W.2d 81, 84 (Tex.1997) (recognizing the necessity of a declaratory judgment action to determine the party’s obligation to defend or indemnify even before either a judgment is rendered or a settlement reached); see generally, Collier v. Allstate County Mut. Ins. Co., 64 S.W.3d 54, 62 (Tex.App.-Fort Worth 2001, no pet.) (recognizing duty to indemnify arises after claim has been adjudicated by judgment, settlement or contract to be legally responsible to pay damages). Third, Liberty Mutual and Lloyd’s contend that Metro’s contractual indemnity obligation to UP is “wholly illusory” and, thus, unenforceable, for the following reasons: (1) the indemnity obligation does not satisfy the basic conspicuous test required of indemnity agreements in Texas; (2) a condition precedent to indemnity by Metro is the lack of sole negligence on the part of UP; (3) Metro is not legally liable for any claims stemming from the accident because it enjoys sovereign immunity; and (4) Metro’s indemnity agreement with UP is void because it violates Article XI, § 7 of the Texas Constitution, which forbids a governmental entity from creating a debt. (Doc. No. 64 at 19; Doc. No. 66 at 5-10.) The Court will address each argument in turn. A. Whether Validity Of Indemnity Agreement & The Express Negligence Rule Precludes Metro From Bringing This Action Under Texas law, release or indemnity agreements are valid and enforceable. However, because such provisions involve an extraordinary shifting of risk, Texas requires compliance with fair notice requirements. See Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508-09 (Tex.1993). The fair notice requirement is two-fold: (1) the party seeking to enforce a release provision must comply with the express negligence doctrine, and (2) the provision must be conspicuous. Id. Under the express negligence rule, “a party’s intent to be released from [or indemnified for] all liability caused by its own future negligence must be expressed in unambiguous terms within the four corners of the contract.” Arthur’s Garage, Inc. v. Racal-Chubb Sec. Sys., Inc., 997 S.W.2d 803, 814 (Tex.App.Dallas 1999, no pet.) (citing Ethyl Corp. v. Daniel Const. Co., 725 S.W.2d 705, 708 (Tex.1987)); see also, Storage & Processors, Inc. v. Reyes, 134 S.W.3d 190, 192 (Tex.2004). The conspicuousness rule provides that the releasing language must be conspicuously written so that a reasonable person against whom it is to operate should notice it. Reyes, 134 S.W.3d at 192; Dresser, 853 S.W.2d at 508 n. 2; Cate v. Dover Corp., 790 S.W.2d 559, 561 (Tex. 1990) (party who, prior to entering into contract, has actual knowledge of its terms cannot escape enforcement of those terms on the ground that the terms are inconspicuous); Coastal Transp. Co. v. Crown Cent. Petroleum Corp., 20 S.W.3d 119, 126 (Tex.App.-Houston [14th Dist.] 2000, pet. denied) (holding indemnity agreement read by indemnitor conspicuous and rejecting indemnitor’s argument that indemnitee must show that indemnitor actually noticed the indemnity language when reading the agreement). The language “any negligence” contained in the Lease Agreement (Doc. No. 65, Ex. A-4, at Bates 1587) expressly identifies Metro’s intent to release UP from liability for UP’s negligence (see Reyes, 134 S.W.3d at 192); thus, the provision satisfies the express negligence doctrine. See Atlantic Richfield Co. v. Petroleum Pers., Inc., 768 S.W.2d 724, 726 (Tex.1989) (although not differentiating between degrees of negligence, a contractual indemnity provision that included “any negligent act of ARCO” was sufficient to satisfy the express negligence doctrine). Turning to the conspicuousness rule, Metro concedes that it had actual knowledge of the release provision in the agreement which renders compliance with the fair notice requirement irrelevant. See Reyes, 134 S.W.3d at 192 (conspicuousness rule satisfied where party has actual knowledge). The indemnity provision contained in the Lease Agreement is valid and enforceable under Texas law. B. Whether Condition Precedent In Indemnity Agreement Precludes Metro From Brining This Action Liberty Mutual and Lloyd’s next argue that no substantial controversy exists between Metro and UP because Metro’s contractual obligation to indemnify UP is contingent on a determination that UP is not solely negligent. (Doc. No. 64 at 19.) This argument is not persuasive. See generally, 10B Charles A. Wright, et al., Federal Practice And Procedure § 2757 at 476 (2008) (recognizing that “[i]t is clear that in some instances a declaratory judgment is proper even though there are future contingencies that will determine whether a controversy ever actually becomes real”). Further, at issue is Metro’s contract with its insurance carrier, not with UP. C. Whether Sovereign Immunity Precludes Metro from Bringing This Action Liberty Mutual and Lloyd’s claims that no substantial controversy exists because Metro enjoys sovereign immunity and, thus, will never be legally liable for any damages. (Doc. No. 64 at 19; Doc. No. 66 at 6-9.) Metro counters that it lawfully purchased insurance to cover UP’s potential liability stemming from and as a condition of the Lease Agreement, a fact known to the carriers, and, in the alternative, any immunity Metro may enjoy does not shield the insurance carriers or excuse their performance under the insurance contract. (Doc. No. 76 at 12-20; Doc. No. 86 at 4-8.) In Texas, sovereign or governmental immunity deprives a trial court of subject matter jurisdiction for lawsuits in which the state or certain governmental units have been sued unless the entity consents to suit. Texas Dep’t of Transp. v. Jones, 8 S.W.3d 636, 638 (Tex.1999); Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 405 (Tex.1997), superseded by statute on other grounds as stated in General Serv. Com’n v. Little-Tex Insulation Co., Inc., 39 S.W.3d 591, 593 (Tex.2001); Duhart v. State, 610 S.W.2d 740, 741 (Tex.1980); Hosner v. DeYoung, 1 Tex. 764, 769 (1847). Governmental immunity includes two distinct principles, immunity from suit and immunity from liability. Jones, 8 S.W.3d at 638; Fed. Sign, 951 S.W.2d at 405. Immunity from liability is an affirmative defense, while immunity from suit deprives a court of subject matter jurisdiction. Jones, 8 S.W.3d at 638; Fed. Sign, 951 S.W.2d at 405. It is true that a governmental entity does not waive immunity from suit simply by contracting with a private party. Little-Tex, 39 S.W.3d at 594. Nevertheless, “legislative control over waiving immunity from suit does not mean that the State can freely breach contracts with private parties, or that the State can use sovereign immunity as a shield to avoid paying for benefits the State accepts under a contract.” Rather, when a governmental entity contracts with a private party, it waives -immunity from liability. Id.; Tooke v. City of Mexia, 197 S.W.3d 325, 344-45 (Tex.2006); Ben Bolt-Palito Blanco Consol. Indep. School Dist. v. Political Subdivisions Prop./Casualty Joint Self-Insurance Fund, 212 S.W.3d 320, 327 (Tex.2006); Catalina Development Inc. v. County of El Paso, 121 S.W.3d 704, 705 (Tex.2003). In the present case, the insurance carriers contend that even if Metro had waived immunity from liability by entering into the lease agreement with UP, its immunity from suit has not been waived and, as such, the carriers are shielded from indemnity. In support of their position, the carriers rely on cases that hold that, unless waived, a governmental entity, like Metro, is immune from suit. Notably, however, the carriers point to no authority that extends the immunity of a governmental entity to its insurance carriers. Instead, as urged by Metro, analogous case law supports the opposite conelusionnamely, that Metro’s immunity will not shiel