The San Antonio Court of Appeals issued an opinion in a case wherein the facts were similar to what happens all across the State of Texas in auto cases. The opinion is styled, Infinity County Mutual Insurance Company v. Michael Tatsch.
This is a summary judgment opinion wherein the sole issue was whether the trial court erred in concluding the insurance policy exclusion for damage to a vehicle resulting from or caused by mechanical breakdown or failure did not apply to Tatsch’s claim.
The background facts should be read but in the essence is that Tatsch had a truck with a diesel engine that broke down immediately after he had refueled. There was some evidence of the break down being the result of water in the fuel and some evidence of a few other possible fuel issues.
Tatsch made a claim under his auto policy for engine repairs which totaled over $30,000.00.
Tatsch’s insurance company, Infinity denied the claim based on an exclusion in the policy and this lawsuit resulted. The relevant policy language reads:
EXCLUSIONS
READ THE FOLLOWING EXCLUSIONS CAREFULLY. COVERAGE WILL NOT BE AFFORDED UNDER THIS PART FOR ANY OF THE EXCLUSIONS LISTED BELOW.
We do not cover loss:
….
5. Resulting from or caused by any of the following, unless caused by other loss that is covered by this insurance policy:
a. Prior lossor damage;
b. Manufacturer’s defects;
c. Wear and tear;
d. Freezing;
e. Mechanical or electrical breakdown or failure; or
….
Under the exclusion in Part E of the policy, Infinity does not cover a loss “resulting from or caused by … mechanical or electrical breakdown or failure.” Having established that the word loss means the loss of or damage to Tatsch’s truck, the focus is on the plain meaning of the rest of the exclusionary language. In interpreting the exclusion, the Court remains mindful that exclusions in an insurance policy must be expressed clearly and without ambiguity.
In it’s opinion the Court held that the plain meaning of the phrase “mechanical or electrical breakdown or failure” was a machinery’s mechanism’s failure to function. Turning attention to the terms “resulting from” and “caused by,” it is noted that neither term is defined in the policy. Therefore, the Court begins with the plain meaning of these terms to determine if any ambiguity exists.
“Resulting from” means when “a situation or problem results from a particular event or activity, it is caused by it.” The word “caused” is the past tense of the verb “cause,” which means “ to serve as a cause or occasion of.” The word “by” is a proposition that means “during the course of.”
Under the policy’s plain language, the loss of or damage to Tatsch’s truck’s resulting from or caused by the engine’s failure to function is excluded from coverage.
Under the policy’s plain language, the exclusion is triggered if the loss or damage to the truck resulted from or was caused by mechanical breakdown or failure, even though another event might have caused the mechanical breakdown.
Tatsch’s loss resulted from a mechanical breakdown or failure of the engine even though that breakdown or failure may have been caused by fuel contamination or a dust-out engine condition or negligence of whoever placed a foreign substance in the fuel tank. Under the policy’s plain language, if the loss resulted from a mechanical breakdown or failure, the loss is excluded from coverage.
The Court ruled in favor of Infinity.