Articles Posted in Interpreting An Insurance Policy

Irving insurance lawyers will tell you that an insurance company’s duty to defend one of their insureds in a lawsuit depends on several factors. This is discussed in a 1997, Austin Court of Appeals opinion styled, State Farm v. White.

State Farm filed a suit for declaratory judgment that it owed no duty to defend its insureds.

Sean and Sandra Nash, sued numerous defendants, including White, on behalf of themselves and their minor children, for the sexual abuse of their children which occurred at the day care center operated by Daniel Keller and his wife, Francis Keller. The lawsuit papers allege that Daniel Keller physically and sexually abused the Nash children, as well as other children attending the day care center, while the children were in the center’s care and custody. Such abuse occurred on a regular basis throughout the Nash children’s attendance at the facility. The petition further alleges that the children were taken from the day care center’s premises to other nearby locations where Daniel Keller abused them and sometimes allowed others to witness or participate in the abuse.

Dallas insurance lawyers need to have some familiarity with pollution exclusions in insurance policies. A 1998, Texarkana Court of Appeals case is worth reading. The style of the case is, Allen v. St. Paul Fire & Marine Insurance Company. Here is some information from that case.

This appeal arises from a summary judgment rendered in favor of St. Paul in an insurance coverage dispute. The Allens sued St. Paul based on the judgment in a suit by the Allens against Tawakoni Water Utility Corp. The underlying suit alleged damages arising out of Tawakoni’s failure to provide “potable” water, “good quality” water, water “reasonably fit for family residential use,” or water “approved and/or certified by the appropriate State of Texas and federal authorities.” The Allens also alleged that the water received was of “unpalatable quality,” “unfit for human consumption and/or use,” and that the water was contaminated.

St. Paul, an insurer of Tawakoni, denied coverage and refused to provide a defense for Tawakoni. St. Paul based its denial of coverage on pollution exclusions. Following a bench trial, a judgment of $17,326,174 was rendered in favor of the Allens.

Parker County insurance lawyers will deal with clients who have Farm and Ranch insurance policies. Here is a case that deals with one of those policies. It is a 2014 case styled, Texas Farm Bureau Underwriters v. Terry Graham, and is out of the Texarkana Court of Appeals. Here is some of the relevant information.

Terry Graham shot and killed would-be burglar, Chambers, at Graham’s ranch house. In successfully defending the resulting wrongful death lawsuit by Chambers’ family members, Graham incurred $130,841.43 in defense costs, which Graham sought to recover from Texas Farm Bureau Underwriters (Underwriters), the issuer of Graham’s Texas Farm and Ranch Owner’s Insurance Policy. From competing motions for summary judgment, contesting the question of whether Underwriters had the duty to defend Graham in the Chambers lawsuit, the trial court awarded Graham judgment. Underwriters appealed. Because, under the terms of the policy, there was no duty to defend the Chambers lawsuit, this curt reversed the trial court’s judgment and render a take-nothing judgment in favor of Underwriters.

Underwriters filed a legal denial based on the governing “eight corners rule,” which provides that an insurer is entitled to rely solely on the factual allegations contained in the four corners of the complaint in conjunction with the four corners of the liability policy to determine whether it has a duty to defend. In its answer, Underwriters argued that the eight corners rule precluded recovery because (1) the Chambers family’s petition established that the incident was not a covered occurrence and (2) the policy expressly excluded coverage for bodily injury caused by an intentional act of the insured. Underwriters filed a traditional motion for summary judgment on its legal defense. In response, Graham filed a cross-motion for summary judgment, arguing (1) that Underwriters’ duty to defend was established by the jury’s finding of no wrongdoing on Graham’s part and (2) that the policy’s exclusion for intentional acts did not apply to the Chambers family’s allegations of negligence and gross negligence.

Irving insurance lawyers should be able discuss with clients how exclusions in an insurance policy effect coverage. A 1994, Fort Worth Court of Appeals case is worth knowing about on this issue. The style of the case is, Union Pacific Resources Co. v. Aetna Casualty & Surety Co. Here is relevant information from that case.

Over a three year period Union Pacific (UP) disposed of potentially polluting waste in an industrial landfill. Even though dumping of such waste was legal and an accepted form of disposal at the time the EPA subsequently sued UP and others to recover clean up costs at the landfill site. UP entered into a partial consent degree agreeing to participate in limiting pollution hazards at the landfill. UP alleged that it had received third-party claims regarding the landfill and anticipated further claims.

Aetna denied coverage on the basis that the depositing of the waste in the landfill violated the various policies’ pollution exclusion clauses. Some of the policies contained a “sudden and accidental” exclusion which excluded liability for property damage arising out of the discharge, disbursal, release, or escape of waste materials or other irritants, contaminants, or pollutants into or upon the land, the atmosphere, or any water, course, or body of water.

Arlington insurance attorneys will tell their clients they need to be aware of exclusions in insurance policies and how they are interpreted. Just reading the declarations page is not enough. The entire policy needs to be including the exclusions. A 1998, Texarkana Court of Appeals case serves as an example. The style of the case is, Allen V. St. Paul Fire & Marine Insurance Company. Here is some of the relevant information from that case.

This suit alleged damages arising out of Tawakoni Water System’s failure to provide “potable” water, “good quality” water, water “reasonably fit for family residential use,” or water “approved and/or certified by the appropriate State of Texas and federal authorities.” The Allens also alleged that the water received was of “unpalatable quality,” “unfit for human consumption and/or use,” and that the water was contaminated.

St. Paul denied coverage and refused to provide a defense for Tawakoni. St. Paul based its denial of coverage on pollution exclusions allegedly included in the five policies upon which the Allens sued. Following a bench trial, a judgment of $17,326,174 was rendered in favor of the Allens. Tawakoni then assigned to the Allens its claim against St. Paul for wrongful refusal to defend in return for a covenant not to execute.

Dallas insurance lawyers need to know how the Courts look at policy language when deciding how to rule on cases involving insurance. A 1997, Amarillo Court of Appeals case is a good one to read to help understand how the Courts interpret certain policies. The style of the Amarillo case is, Home State County Mutual Insurance Company v. Acceptance Insurance Company. Here is some of the relevant information.

Esquival was engaged to deliver rock and sand, called “base,” for a road construction project. Esquival had a commercial auto liability policy issued by Home State and a CGL policy issued by Acceptance. Pritchard, an employee of Jordan Paving, another subcontractor responsible for leveling and spreading the base, collided with a load of base which had previously been unloaded at the site by Esquival. Pritchard sued Esquival and Esquival brought a declaratory judgment action against Acceptance. Acceptance likewise sought a declaratory judgment that Home State’s auto policy provided coverage for Pritchard’s injuries. The trial court held that the auto policy provided coverage and granted Acceptance a summary judgment.

When this Amarillo Court of Appeals made its’ ruling it held that the judgment of the trial court be reversed and judgment be rendered in favor of Home State. The CGL policy, not the auto policy, provides coverage for Pritchard’s injuries. Texas courts have rejected the “coming to rest” rule to interpret the “loading and unloading” clause contained in the “used” provision of a standard auto liability policy. Instead, Texas courts have adopted the “completed operation” rule which holds that loading and unloading not only includes the immediate transport of goods to and from the vehicle, but the complete operation of transporting the cargo between the vehicle and the place to or from which the cargo is being delivered.

Read the policy. Understand what it says. The United States 5th Circuit issued a 1998 opinion that shows how courts will interpret policies. The style of the case is, Lubbock County Hospital District v. National Union Fire Insurance Company of Pittsburg. Here is some relevant information from the case.

Approximately 1,000 gallons of fuel escaped from the fueling system at University Medical Center’s helipad. UMC sued Rocky Mountain Helicopters, Inc., the operators, for the costs of clean up and monitoring. UMC recovered a judgment of nearly $500,000 against Rocky Mountain.

UMC brought suit against National Union seeking a declaration that the insurance policy it issued to Rocky Mountain covered damages for the fuel spill. National Union removed the case to Federal District Court on the basis of diversity. Both parties filed motions for summary judgment. The district court granted summary judgment in favor of UMC finding coverage under two endorsements to the policy.