Interpreting An Insurance Policy

Insurance And The 8 Corners Rule

July 20, 2014 | Mark S. Humphreys

Dallas insurance attorneys need to understand the 8 corners rule as it relates to insurance policies and lawsuits. A U.S. District Court, N.D. Texas, Fort Worth Division case helps understand this rule. The style of the case is, Acadia Insurance Company v. Jacob and Martin, Ltd. Here is some of the relevant information.

This is an insurance coverage dispute in which Plaintiffs seek a declaratory judgment as to their duties to defend and indemnify Defendants in an underlying state court action. Accordingly, the following facts are drawn from the live pleading in the underlying action. Plaintiffs issued general liability and umbrella policies to Jacob and Martin, Ltd. Jacob and Martin contracted with the city of Gordon, Texas, to design and install a new sewer system. Turner was the lead engineer on the project, and Lovelady was a project engineer. Martin is the general partner of Jacob and Martin.

The City of Gordon also contracted with Granbury Contracting & Utilities, Inc. to install sewer lines. While working on the project, Lovelady directed Eliseo Alberto Ramirez Rodriguez (“Ramirez”), an employee of Granbury, to open a manhole, climb inside it, and remove a plug from the sewer line. When Ramirez removed the plug, “toxic fumes were released and Ramirez died from asphyxia due to methane gas inhalation.” Ramirez’s parents filed suit against Jacob and Martin, Lovelady, Turner, and Martin under the Texas Wrongful Death and Survival statutes.

Snowmobile Exclusion In Insurance Policy?

July 12, 2014 | Mark S. Humphreys

Fort Worth insurance attorneys will tell you that you have to read the policy to understand how coverage applies. A good example of this is from the Houston Court of Appeals [1st Dist.]. The style of the case is Oleksy v. Farmers Insurance Exchange. Here is some of the relevant information.

Oleksy went snowmobiling in New York with his friend Paul Pochron and several other people. Pochron was seriously injured when his snowmobile collided with Oleksy’s. Pochron and his wife later sued Oleksy in Fort Bend County. Pochron alleged that Oleksy was a resident of Texas and that the snowmobile accident occurred in New York. The petition did not clearly identify the owner of the snowmobile used by Oleksy.

Oleksy filed a declaratory judgment action against Farmers Insurance, his homeowner’s insurance carrier, seeking a declaration that Farmers has a duty to defend and to indemnify him in the lawsuit filed by Pochron. Although his homeowner’s policy includes an exclusion for personal injuries arising from the use of motor vehicles, Oleksy based his claim for coverage on an exception to that exclusion. The relevant policy provisions are:

Surface Water Exclusion In Homeowners Insurance

July 3, 2014 | Mark S. Humphreys

Parker County insurance attorneys need to know the exclusions in homeowners policies and how courts interpret those exclusions. A 2007, Dallas Court of Appeals case is one worth reading. It is styled, Crocker v. American National General Insurance Co. Here is some of the relevant information.
The insureds had a homeowner’s insurance policy issued by American. The policy included a standard “surface water” exclusion. Because of improper design, the insureds’ raised patio collected water, which ran into the insured’s home. Armstrong, who represented an independent adjusting firm, was retained by one of the insurance companies to investigate the claim. After Armstrong’s report, coverage for the claim was denied under the “surface water” exclusion. The insureds’ brought suit against the insurance companies for breach of contract and for breach of common law and statutory duties of good faith, arguing that the “surface water” exclusion did not apply because the water was on the patio and never actually touched the surface of the ground. The insured’s also filed suit against Armstrong alleging negligence per se for violations of Texas Penal Code sections 22.02, 28.03, and 28.04; violations of Texas Insurance Code, Section 542.060; and for violations of the DTPA. Both carriers and Armstrong moved for summary judgment. The trial court granted summary judgment for all of the defendants, holding that the water which had fallen on the raised patio constituted “surface water” as a matter of law. Neither American nor Armstrong has addressed the “surface water” exclusion in their motion for summary judgment. The insureds’ appealed.
The Court of Appeals affirmed the trial court, holding that the plain meaning of the words “surface water” could reasonably include water that had collected on the surface of the insured’s patio, and thus, the “surface water” exclusion applied to the insureds’ claim. The court found that “surface water” is defined as water or natural precipitation diffused over the surface of the “ground” until it evaporates, is absorbed by the land, or reaches channels where water naturally flows. The court then found that to limit the term “ground” to dirt would exclude all man-made surfaces and, therefore, render the exclusion virtually meaningless in the multitude of man-made environments. The court also found that since the carriers’ had a valid exclusion they could not be liable for any bad faith claims. The court further found that the summary judgment was valid for both American and Armstrong, under the “surface water” exclusions even though they had not affirmatively pled the exclusion. The court further held that Armstrong as an independent adjuster, owed no duty to the insureds’ and, therefore, could not be liable for bad faith claims; and the insureds’ had not properly briefed the Penal Code claims against Armstrong.

Homeowners Policy And Mortgagee

June 21, 2014 | Mark S. Humphreys

Insurance attorneys in Fort Worth will deal with homeowners policies at some point. With that in mind, a 2014 opinion from the Houston Court of Appeals [14th Dist.] is important to read. The style of the case is, SWE Homes, LP v. Wellington Insurance Company. Here is some of the relevant information.

There is very little dispute regarding the facts in this case. Edgar Sadberry purchased a residential property with a mortgage from SWE. He bought a Texas Dwelling Policy from Wellington covering the property and naming SWE as the mortgagee. The effective dates of the policy ran from August 11, 2010 until August 11, 2011. The policy covered losses from various hazards including fire. It further contained a Mortgage Clause, which reads in pertinent part as follows:

19. Mortgage Clause . . . .

Furnished For Regular Use

June 17, 2014 | Mark S. Humphreys

Dallas lawyers who deal with uninsured motorist cases need to be knowledgeable of this case from the San Antonio Court of Appeals. It is a 1990, opinion and is styled, Briones v. State Farm. Here is the relevant information.

Briones appealed a take nothing summary judgment granted in his suit against State Farm seeking recovery on his family automobile insurance policy under the uninsured motorists clause, for bodily injuries suffered in a one vehicle automobile accident.

Briones claims the Trial Court erred in granting Defendant’s Motion for Summary Judgment because there is a genuine issue as to material facts regarding the one remaining issue to be litigated by the parties, namely whether the tractor-trailer in which Briones was a passenger at the time of his bodily injuries was furnished or available for his regular use.

Home Owners Policy Defininitions

June 14, 2014 | Mark S. Humphreys

Parker County insurance attorneys have to know how courts interpret definitions contained within policies. A recent Houston Court of Appeals [1st Dist.] case helps as it relates to the definition of “you” in a homeowners policy. The case is styled, Hodges v. Safeco. Here is some of the relevant information.

On August 17, 2009, Darrell Lee Hodges, Sr. was assaulted in his home. His son, Darrell Lee Hodges, Jr. [“DJ”], lived at the home with his father. DJ knew the assailants, knew they were looking for his father and that they posed a risk to his safety, but nonetheless failed to warn his father of the men’s presence outside the home and failed to call the police to have the men removed from the premises.

SAFECO had a homeowner’s condominium policy in place at the time of the offense. Mr. Hodges is the named policy holder and DJ is also covered because he lived at the condominium with his father. Mr. Hodges made a claim under the policy for insurance benefits to cover his injuries. SAFECO denied coverage, citing the “homeowner’s exclusion” in the policy, which precludes coverage for “bodily injury to [the named insured] or an insured.”

Covered Property

June 10, 2014 | Mark S. Humphreys

Grand Prairie insurance lawyers need to be able to discuss with a client how courts interpret insurance policies. The Houston Court of Appeals [14th Dist] issued an opinion in April 2014, that is worth reading. The style of the case is “ACGS Marine Insurance Company v. Spring Center, Inc.” Here is what the case tells us.

Spring Center owns a business park in the Houston area consisting of eleven buildings, all surrounded by a single fence. It leases space within its eleven buildings to various businesses, including those providing light manufacturing, storage, and light machine repair, among others. Spring Center also has a management office located on the property that is staffed during normal business hours.

A vacant building in the business park was broken into and “completely stripped of electrical wiring.” Major damage was done to the offices and exterior doors were broken. Spring Center timely notified ACGS of the damage and requested coverage under the Policy. During its investigation, ACGS learned from Spring Center’s representative that the building had been vacant for about four months prior to the loss. ACGS informed Spring Center in writing that it would not cover the damage based on the following Policy condition:

Forwarding Lawsuit Papers To The Insurance Company

May 27, 2014 | Mark S. Humphreys

Arlington insurance lawyers should advise their clients to forward any lawsuit papers they receive to their insurance company immediately upon receipt. A 1954, Amarillo Court of Appeals case illustrates this. The style of the case is, Klein v. Century Lloyds. Here is some of the relevant information from that case.

Howard Klein and daughter, Mary Genevieve Klein, were injured in an automobile collision with Charles Gunter, a 21-year old man employed as a rough-neck in the oil fields. Century Lloyds, is the insurer of Charles Gunter. The Kleins after obtaining a judgment against Charles Gunter in amount $10,799.51, sought a recovery of the same against Century as his insurer. The trial court disregarded the findings of the jury as detailed hereinafter and entered judgment for Century.

The record reveals that Gunter failed to notify Century, his insurer, in writing of the occurrence of the accident until approximately 31 days had elapsed thereafter. It is an undisputed fact and stipulated by the parties to this appeal that no copy of the citation served upon Gunter in Cause No. 1012 was ever forwarded to Century.

Injuries To An Insured

May 25, 2014 | Mark S. Humphreys

Benbrook attorneys handling insurance claims need to know about this case dealing with a home owners policy. It is a 2000, case from the Austin Court of Appeals styled Easter v. Providence Lloyds Ins. Co. Here is some relevant information.

Bonnie Easter was having a difficult time dealing with the emotional and behavioral problems her daughter M.D.E. was exhibiting, and in February 1995 she placed M.D.E. in the care of Joseph and Grace Bossette, licensed foster parents. M.D.E. was nine years old at the time. Easter intended the placement to be for no more than six months.

Soon after M.D.E.’s arrival in the Bossettes’ home, Joseph Bossette began sexually molesting her. After approximately five months, M.D.E. reported the abuse to Child Protective Services. She was removed from the Bossettes’ home and returned to her mother. In February 1996, Easter brought suit on M.D.E.’s behalf against Joseph Bossette for an intentional tort for committing the abuse, and against Grace Bossette for negligence for failing to stop or report the molestation. A default judgment was rendered against the Bossettes for $300,000. Easter then brought the present action against Providence Lloyds to enforce the judgment against the Bossettes’ homeowners’ insurance carrier.

Insurance Claims – Proving Damages

May 15, 2014 | Mark S. Humphreys

Lake Worth insurance lawyers need to know this case. It is a 1971 opinion issued by the Texas Supreme Court. It’s style is, Travelers Indemnity Co. v. McKillip. Here is the relevant information.

Troy L. McKillip and wife brought this action against the Travelers Indemnity Co. to recover for damages to their poultry house under the terms of a policy of insurance issued by that Company. After a trial to a jury, respondents were awarded a recovery for $7,450.

The insureds were the owners of a turkey farm in Eastland County, which included two sheet metal buildings and a wooden building used as conditioning houses for breeder turkeys. The one damaged building was of steel truss type construction, 408 feet long by 40 feet wide. The other two buildings, located some distance from the damaged building, were undamaged. The second building was essentially of the same construction as the damaged building and was some fifty feet shorter. The third building was of wooden construction.