Claim Denied – Policy Interpretation

Here is one for residents of Weatherford, Mineral Wells, Aledo, Azle, Springtown, Hudson Oaks, Willow Park, Brock, Millsap, Poolville, and other places in Parker County and Palo Pinto County. This case is unusual.
The Texas Court of Appeals, San Antonio, issued an opinion on May 11, 2011, in a case appealed from the 73rd Judicial District Court. The style of the case is, Dora Gulley v. State Farm Lloyds.
A little legal information first. This is an agreed interlocutory appeal pursuant to Texas Civil Practices & Remedies Code, Section 51.014(d). It is arising out of an insurance case where in both sides in the case filed motions for Summary Judgment asking the court to rule in their favor as a matter of law. The Judge denied both parties motions and allowed them to pursue an appeal pursuant to the above statute. So this case was essentially being given to the appeals court to make a decision / ruling.
Here is some factual background.
Gulley made a claim under her homeowners insurance policy for damage caused by foundation movement resulting from a below-slab leak. State Farm found the damage was covered under the Dwelling Foundation Endorsement to the policy which covered “settling, cracking, shrinking, bulging, or expansion of the foundation … caused by … leakage of water … within a plumbing … system:” Therefore, Gulley’s claim was subject to the endorsement’s 15% coverage limitation. Gulley accepted the payment, but later sued State Farm for breach of contract contending she was entitled to additional benefits under a different policy endorsement she had purchased, the Water Damage Endorsement which covered “deterioration … caused by the continuous or repeated … leakage of water … from a plumbing system.”
The parties in this case and the trial court agreed that the following was a “controlling question of law” on which there is “substantial ground for difference of opinion.” Here is the request made to the appeals court:
Whether damage to walls, floors, roofs or ceilings caused solely by foundation movement resulting from a below-slab plumbing leak is covered under either the Dwelling Foundation Endorsement (to Gulley’s Homeowners Policy) or the Policy’s Water Damage Endorsement.”
This court got into a discussion about the role of trial courts in the resolution of disputes between parties and the role of the appeals courts in the same matter. After more than a four page analysis of these roles and the intent of the legislature in drafting the rules that control the courts, this appeals court sent this case back to the trial court for the trial court to make a decision.
This appeals court essentially told the trial court to make its’ own decision on the matter and then if one side or the other disagreed with that decision then the side that disagreed could appeal the decision. Until that occurred, it was not the business of the appeals court to get involved.
The situation here was unusual. It was as if the trial court had decided that no matter how they decided, the other side was going to appeal. So the trial court punted on making a decision. Then the appeals court basically said, that is not the way things are done.
All this means that this case will come back around again. Remember that these are the types of cases that are made for an experienced Insurance Law Attorney. His advice is vital for knowing the best way to go forward.