In Re Clear Fork, Inc. v. the State of Texas

Opinion filed August 29, 2025

In The

Eleventh Court of Appeals
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No. 11-25-00136-CV
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IN RE CLEAR FORK, INC.

Original Mandamus Proceeding

MEMORANDUM OPINION
This mandamus action arises out of a dispute between Clear Fork, Inc., an
oil and gas operator, and Red Diamond Energy Services, Inc. (Red Diamond), an oil
and gas service provider.
In September 2021, Marcello Vasquez, an employee of Red Diamond, died
while providing oil field services to Clear Fork. After the family of Vasquez filed
suit in Ector County, Clear Fork filed a separate declaratory judgment action in
Taylor County against Red Diamond and Berkley National Insurance Company
(Berkley), Red Diamond’s liability insurance carrier, seeking to clarify the rights
and obligations of the parties under a Master Service Agreement (MSA) between
Clear Fork and Red Diamond. Berkley filed a motion to abate the declaratory
judgment action in Taylor County pending the outcome of the Ector County action.
The trial court abated the action as to both Berkley and Red Diamond, and Clear
Fork now seeks a writ of mandamus compelling the trial court to lift the abatement
insofar as it applies to Red Diamond.
We conclude that the trial court did not clearly abuse its discretion when it
abated the declaratory judgment lawsuit, and we deny Clear Fork’s petition for writ
of mandamus.
Factual and Procedural Background
In September 2020, Clear Fork and Red Diamond executed an MSA that
purported to “control and govern all work performed or to be performed by [Red
Diamond] for [Clear Fork]” under subsequent work orders, tickets, or other verbal
or written agreements. Among other things, the MSA included mutual indemnity
obligations. Those obligations required Red Diamond to “protect, defend,
indemnify, and save [Clear Fork] harmless from and against all Claims, ‘regardless
of negligence or fault’ of [Clear Fork] or [Red Diamond], arising in connection [with
the agreement]” and “in favor of any member of [Clear Fork] on account of bodily
injury, illness, or death.” The MSA further provided that the indemnity obligations
therein would “apply even though an insurer or other person or entity is required to
pay for any claim or make a contribution to such claim.”
In addition to its indemnity obligations, Red Diamond was required to carry a
commercial general liability policy with at least $1,000,000 coverage per incident.
The MSA also required Red Diamond to carry an excess policy with additional
coverage of $1,000,000. In both instances, the MSA required Red Diamond to name
Clear Fork as an additional insured on the policies.
In December 2020, Berkley issued a commercial general liability policy to
Red Diamond with policy limits of $1,000,000 per occurrence. At the same time,

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Berkley issued a commercial umbrella liability policy to Red Diamond with policy
limits of $20,000,000 per occurrence.
Thereafter, in June 2023, the family of Vasquez brought a lawsuit against Red
Diamond and Clear Fork arising out of his death at a workover rig in 2021. In their
lawsuit, the family alleges that Vasquez was killed when a braking mechanism on
the rig’s traveling block failed, resulting in an “uncontrollable descent of the
traveling block to the rig floor” and causing Vasquez to be “violently struck in the
head by the elevator bell.”
After the lawsuit was filed, Clear Fork’s liability insurer made a written
demand for indemnity on Berkley. Berkley then responded by tendering a defense
to Clear Fork under a reservation of rights, asserting that its excess coverage would
not be triggered until Clear Fork had exhausted the coverage that was available under
its own commercial general liability policy. Berkley further asserted that the
coverage available to Clear Fork under the excess policy was limited to $1,000,000
based on the parties’ MSA. Clear Fork then filed a separate lawsuit against Berkley
and Red Diamond, seeking declaratory relief against Berkley and alleging that Red
Diamond had breached its indemnity agreement, as well as its agreement to obtain
excess coverage, under the MSA.
The claims that Clear Fork has asserted in the declaratory judgment lawsuit
center on two issues. First, Clear Fork maintains that Berkley is incorrect in
asserting that all of Clear Fork’s primary liability policy limits must be exhausted
before Berkeley’s excess policy will apply. Second, Clear Fork maintains that, as a
result of the terms of the MSA, Berkley should extend a total of $9,000,000 in
coverage to Clear Fork.
Although there is a dispute over the extent and nature of Berkley’s coverage
under the umbrella policy, it appears to be undisputed that Berkley has defended,

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and will continue to defend, Clear Fork in the Vasquez lawsuit. Likewise, it appears
to be undisputed that Berkley has confirmed its obligation to indemnify Clear Fork
under the terms of Red Diamond’s commercial general liability policy. That is,
Berkley has effectively acknowledged that it will indemnify Clear Fork for the first
$1,000,000 of any judgment arising out of Clear Fork’s acts of ordinary negligence.1
Clear Fork’s petition is less clear regarding the exact nature of the relief that
is sought from Red Diamond. We note, however, that the liability (if any) of Red
Diamond is largely contingent on the outcome of the Vasquez lawsuit, as well as the
extent to which Berkley responds (or is made to respond) to the judgment.
Regardless, after Berkley and Red Diamond filed an answer to Clear Fork’s
lawsuit, Berkley immediately moved to abate on the grounds that its duty to pay
under the excess policy could not be adjudicated until the underlying lawsuit had
been resolved. See, e.g., Farmers Tex. Cnty. Mut. Ins. Co. v. Griffin, 955 S.W.2d
81, 84 (Tex. 1997) (noting that “[i]t may sometimes be necessary to defer resolution
of indemnity issues until the liability litigation is resolved”). Thereafter, on
March 26, 2024, the trial court signed an order abating the entire case, including
Clear Fork’s claims for indemnity against Red Diamond.
Approximately six months after the trial court rendered the order abating the
case, Clear Fork moved to lift the abatement of its claims against Red Diamond,
arguing, among other things, that resolution of Clear Fork’s claims against Red
Diamond was necessary so that the parties could evaluate settlement offers and
respond to settlement demands from the Vasquez family. On January 14, 2025, the
trial court signed an order denying Clear Fork’s motion to lift the abatement.

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Berkely has reserved the right to deny coverage for exemplary and/or punitive damages, as well
as acts of conscious indifference and intentional acts.
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Clear Fork filed its petition for writ of mandamus on May 9, 2025. In the
petition, Clear Fork requests that we issue an order requiring the trial court to
(1) vacate or rescind the order granting the motion to abate as to claims against Red
Diamond and (2) grant the motion to lift the abatement as to the claims against Red
Diamond.
Mandamus
Mandamus is an “extraordinary” remedy that is “available only in limited
circumstances.” Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig.
proceeding). A writ of mandamus will issue only if the trial court clearly abused its
discretion, and the relator has no adequate remedy on appeal. In re Prudential Ins.
Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004). With respect to the first
requirement, a trial court abuses its discretion if it reaches a decision so arbitrary and
unreasonable as to amount to a clear and prejudicial error of law. In re Cerberus
Cap. Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding) (per curiam).
In addition, because a trial court has no discretion in determining what the law is or
in applying it to the facts, a trial court abuses its discretion if it fails to correctly
analyze or apply the law. See Prudential, 148 S.W.3d at 135; see also In re J.B.
Hunt Transp., Inc., 492 S.W.3d 287, 294 (Tex. 2016) (orig. proceeding).
Laches
In their response to the petition for mandamus, Berkley and Red Diamond
argue that Clear Fork’s petition for mandamus is barred under the doctrine of laches.
Mandamus is not an equitable remedy. Rivercenter Assocs. v. Rivera, 858
S.W.2d 366, 367 (Tex. 1993). However, its issuance is largely controlled by
equitable principles. Id. “One such principle is that ‘[e]quity aids the diligent and
not those who slumber on their rights.’” Id. (quoting Callahan v. Giles, 155 S.W.2d
793, 795 (Tex. 1941); see also In re Rino-K&K Compression, Inc., 656 S.W.3d 153,

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161 (Tex. App.—Eastland 2022, orig. proceeding). As such, a party may waive its
right to mandamus relief where it “unduly or unreasonably delays filing a petition
for mandamus relief . . . unless the delay is justified.” In re Am. Airlines, Inc., 634
S.W.3d 38, 43 (Tex. 2021) (orig. proceeding). This waiver can be characterized as
an application of the equitable doctrine of laches. See, e.g., In re Laibe Corp., 307
S.W.3d 314, 318 (Tex. 2010). However, in addition to demonstrating unreasonable
delay, the party seeking to invoke the doctrine of laches must demonstrate its own
good faith, as well as a “detrimental change in position because of the delay.” Id.
(citing Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 80 (Tex.1989)); see also In re
Smith, No. 11-03-00409-CV, 2004 WL 308664, at *1 (Tex. App.—Eastland Feb. 19,
2004, orig. proceeding) (mem. op.).
Although they argue extensively that Clear Fork has unreasonably delayed in
bringing this mandamus action, Berkley and Red Diamond make no effort to
demonstrate that they have been prejudiced as a result of such delay. Accordingly,
we conclude that laches does not operate to bar Clear Fork’s petition for mandamus.
See In re Payne, 605 S.W.3d 240, 244 (Tex. App.—San Antonio 2020, orig.
proceeding) (Irrespective of the petitioner’s unreasonable delay in seeking
mandamus, the real party in interest failed to demonstrate a detrimental change of
position.); In re Wagner, 560 S.W.3d 309, 318 (Tex. App.—Houston [1st Dist.]
2017, orig. proceeding) (Laches was inapplicable in part because the real-parties-in-
interest failed to show a detrimental change in position.); In re Cypress Tex. Lloyds,
437 S.W.3d 1, 6 (Tex. App.—Corpus Christi–Edinburg 2011, orig. proceeding)
(“Although [the real party in interest] generally asserts that this delay has resulted in
a ‘detrimental’ change in her position and increased costs of litigation, she has
offered no specific evidence supporting or explaining this allegation.”).

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Abatement
In its first issue, Clear Fork argues that the trial court abused its discretion
when it abated Clear Fork’s claims for declaratory relief against Red Diamond.
“A court, in the exercise of its sound discretion, may abate an action for
reasons of comity, convenience and orderly procedure.” Dolenz v. Cont’l Nat. Bank
of Ft. Worth, 620 S.W.2d 572, 575 (Tex. 1981) (quoting Timon v. Dolan, 244 S.W.2d
985, 987 (Tex. App.—San Antonio 1951, no writ); see also Martin v. Cottonwood
Creek Constr., LLC, 560 S.W.3d 759, 764 (Tex. App.—Waco 2018, no pet.). In
exercising such discretion, the court may consider “the practical results to be
obtained, dictated by a consideration of the inherent interrelation of the subject
matter of the two suits.” Dolenz, 620 S.W.2d at 575 (quoting Timon, 244 S.W.2d at
987); see also City of Irving v. Dallas/Fort Worth Intern. Airport Bd., 894 S.W.2d
456, 463 (Tex. App.—Fort Worth 1995, writ denied).
In its mandamus petition, Clear Fork asserts that the trial court rendered its
order based on Berkley’s request to abate the case, and that “[t]he rationale for
abating disputes over an insurer’s duty-to-pay does not apply to resolving Red
Diamond’s contractual duties to Clear Fork.” Clear Fork further argues—as it did
to the trial court—that the trial court’s failure to move forward with the case creates
“[u]ncertainty over Red Diamond’s obligations” and that the “parties should know
beforehand whether Red Diamond obtained the required coverage.” While these are
appropriate factors for the trial court to take into consideration in ruling on the
motion to abate, they are not the only factors.
Clear Fork’s suit for declaratory judgment seeks a determination of Red
Diamond’s and Berkley’s duty to indemnify Clear Fork regarding the Vasquez
lawsuit. “The facts actually established in the underlying suit control the duty to
indemnify.” Pine Oak Builders, Inc. v. Great Am. Lloyds Ins. Co., 279 S.W.3d 650,

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656 (Tex. 2009) (quoting GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church,
197 S.W.3d 305, 310 (Tex. 2006)). “[T]he duty to indemnify is triggered . . . by
whether a plaintiff ultimately prevails on a claim covered by the policy.” Don’s
Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20, 31 n.41 (Tex. 2008); see
Trinity Universal Ins. Co. v. Cowan, 945 S.W.2d 819, 821 (Tex. 1997) (“The duty
to indemnify is triggered by the actual facts establishing liability in the underlying
suit.”).
With this principle in mind, the trial court could have recognized the
possibility that some or all of the disputes in the declaratory judgment lawsuit would
eventually become moot. For example, the finder of fact in the Vasquez lawsuit
might determine that Clear Fork was not liable. Likewise, even if the Vasquez
lawsuit resulted in a judgment against Clear Fork, it was possible that the trial court
would render a judgment against Clear Fork that is within the limits of Berkley’s
primary coverage. In either instance, the outcome of the Vasquez lawsuit would
likely narrow, if not eliminate, many of the issues that were then pending in the
declaratory judgment lawsuit, resulting in a substantial savings of time and
resources, for both the trial court and parties.
Furthermore, even if the judgment against Clear Fork in the Vasquez lawsuit
exceeds the limits of Berkley’s primary coverage, it is possible, based on the claims
that Clear Fork has asserted, that Berkley will ultimately be responsible for
satisfying the judgment in its entirety. In that event, the potential claims against Red
Diamond might be limited or eliminated.
We conclude that, based on the practical considerations that were before the
trial court, including the potential for outcomes in the Vasquez lawsuit that would
eliminate, or reduce the scope of, many of the issues involving Red Diamond, the
trial court could have reasonably concluded that the claims against Red Diamond

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should be abated for purposes of convenience of the parties and/or a more orderly
proceeding. See Dolenz, 620 S.W.2d at 575. As such, the trial court did not clearly
abuse its discretion in granting the motion to abate as to Red Diamond.
We overrule Clear Fork’s first issue. Furthermore, because we have
determined that the trial court did not clearly abuse its discretion, we need not (and
do not) address Red Diamond’s second issue, which asserts that Red Diamond has
no adequate remedy by appeal. TEX. R. APP. P. 47.1, 52.8(d); see Prudential, 148
S.W.3d at 135–36.
This Court’s Ruling
We deny Clear Fork’s petition for writ of mandamus.

JOHN M. BAILEY
CHIEF JUSTICE

August 29, 2025
Panel consists of: Bailey, C.J.,
Trotter, J., and Williams, J.

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