Dallas Fort Worth Insurance Lawyer Blog

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.

Aledo insurance attorneys will have clients who have commercial and business related insurance. When an occasion arises wherein it is necessary to make a claim, it is a sad time when they find out the policy does not cover all they believed it covered. It is important to sit down with your agent and make sure what the policy covers and what you want it to cover. Keeping in mind the discussion with the insurance agent helps if all or part of a claim is denied. Relating to an attorney the substance of those conversations, reading the policy, and knowing the facts of the situation allows the insurance attorney to suggest an appropriate course of action. This is illustrated somewhat in a 1998, Dallas Court of Appeals case styled, Fidelity and Casualty Company of New York v. Thompson, et al. Here is some of the relevant information from the case.
Thompson was a licensed, practicing optometrist who also owned and operated an optical clinic. A fire destroyed all of the property. Thompson was insured by Fidelity and made a claim demanding payment of the entire $250,000 policy proceeds. Fidelity paid Thompson $205,342.92 for losses to his medical equipment, office furniture and fixtures, and other “improvements and betterments.” Fidelity denied coverage for the value of Thompson’s optical clinic inventory which included, eyeglass frames, corrective lenses, contact lenses and other items held for sale. Thompson filed a declaratory judgment action seeking a declaration that the policy he purchased from Fidelity afforded coverage for inventory of his optical business. Both Thompson and Fidelity filed motions for summary judgment. The trial court granted Thompson’s motion and denied Fidelity’s. Fidelity filed this appeal.
This Dallas Court of Appeals held that the judgment in favor of Thompson was improper and reversed and rendered in favor of Fidelity. This case involved an optometrist’s professional liability policy. Optometry is the “art of occupation consisting of the examination of the eye for defects or faults of refraction and the prescription of correctional lenses and exercises.” An optometrist prescribes eyewear while an optician dispenses or sells the eyewear. Looking to the definitions of optometrists in Webster’s International Dictionary and the definition of supplies in Black’s Law Dictionary, this Appellate Court found that none of these definitions carries the meaning that supplies usual to the practice of optometry include inventory or prescriptive eyewear held for sale. The policy does not cover items held as inventory for the purpose of sale. Thompson’s medical profession as an optometrist is not, by definition, involved in the sale of frames, contact lenses, or other eyewear.

Most Garland insurance lawyers will be able to tell you that the majority of insurance policies do not cover claims that are the result of an intentional act. But just because an act is intentional does not mean that acts of others that may have facilitated the intentional act are excluded from coverage. This is explained in a 1998, Houston Court of Appeals [14th Dist.] case styled, Williamson v. Vanguard Underwriters Insurance Company. Here is some of the relevant information from that case.

Vanguard Insurance Company had issued a homeowners insurance policy to Mr. and Mrs. Wilson. The Wilsons’ son was involved in a plot to rob Mathew Vickers, and during the robbery, Kimberly Williamson was killed. Kimberly’s parents brought a wrongful death suit against Mr. and Mrs. Wilson alleging that they were negligent in their supervision of their son, Michael Wilson. The Wilsons settled the case, and they then sought to be indemnified under the homeowner policy issued by Vanguard. Vanguard filed a declaratory judgement claiming that the “intentional injury” exclusion in the policy barred coverage. The exclusion stated that the insurance did not apply to:

a. bodily injury or property damage which is caused intentionally by or at the direction of the insured.