Dallas Fort Worth Insurance Lawyer Blog

The above question could be asked by someone in Grand Prairie, Hurst, Euless, Bedford, Grapevine, Colleyville, Keller, Dallas, Fort Worth, or anywhere in Texas. So what is the answer? The answer is what all lawyers say in response to all questions put to them: It depends!
It depends on whether or not the insurance policy is ambiguous. If it is ambiguous, then it is open to more than one interpretation. Or if it is doubtful or uncertain, the court must find in favor of coverage.
Experienced Insurance Law Attorneys look at and rely on what courts have done in the past with similar cases when advising a client what may be the outcome to any particular set of facts in a case.
A Texas Supreme Court case decided in 1993, is a good case to look at for guidance in answering the question. The style of the case is, State Farm Fire & Casualty Company v. Joseph C. Reed, et al.
In this case, Frances Reed operated a registered family home for day care services at her home and was registered at the Texas Department of Human Resources as such. In 1987, an eighteen month old child drowned in a puddle of water that settled on a tarp covering a swimming pool at the Reed house. The child had climbed through a hole in the fence that separated a play area from the swimming pole.
The parents of the child sued Reed. Reed notified State Farm Fire & Casualty Company and sought coverage under their policy. State Farm denied coverage concluding that coverage was excluded under the Reed's policy because the death resulted from a business pursuit.
A Lets follows this again - In deciding the case the court found the phrase in the policy of insurance to be ambiguous because it could broadly exclude any loss associated with the activities of the for-profit day care, or it could be read narrowly to cover a loss that arose from an activity not ordinarily associated with the business.
Maintaining a fence, which had a hole in it, was not an activity normally incidental to the day care business. This court ruled there was an ambiguity, or uncertainty in the meaning of the insurance policy exclusion. Thus, the court ruled in favor of coverge.
There are cases after cases making it clear that ambiguities in insurance policies must be resolved by the courts in favor of finding coverage.

Someone in Dallas, Fort Worth, Grand Prairie, Arlington, Carrolton, Garland, Mesquite, De Soto,Duncanville, Burleson, Benbrook, or anywhere else in Texas may ask: How do I know what my insurance policy says?
Insurance companies spend lots of money paying lawyers to draft and write insurance policies that they issue to their insureds. And the insurance company knows what they are trying to write. The problem is, what they mean to write and what the insured person reads it to mean can often times be very different. So what happens?
What happens depends on whether or not the insurance policy is ambiguous.
Wikipedia defines ambiguity as a condition where information can be understood and interpreted in more than one way and is distinct from vagueness, which is a statement about the lack of precision contained or available in the information.
The context in which something is written can be important.
Speaking from a legal context: If an insurance policy is subject to more than one reasonable interpretation, it is ambiguous and the interpretation that most favors coverge for the insured will be adopted, as a matter of law. This was stated by the Texas Supreme Court in 1997, in the case styled, Grain Dealers Mutual Insurance Company v. McKee. This is still good law.
Here are rules that several courts have adopted for determining whether or not an insurance policy is ambiguous.
1. Whether a policy is ambiguous is a legal question to be decided by examining the entire contract in light of the circumstances present when the parties entered into the contract.
2. If a contract is worded so that it can be given a definite or certain legal meaning, then it is not amiguous.
3. An ambiguity does not arise merely because the parties offer different interpretations.
4. If after appling general rules of construction the policy is still subject to two or more reasonable interpretations, it is ambiguous.
5. When a policy is subject to more than one reasonable interpretation, the court must adopt the construction most favorable to the insured.
6. A court must adopt the construction urged by the insured, as long as that construction is not unreasonable.
7. The court must adopt the insured's reasonable interpretation, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties intent.
8. These rules are an outgrowth of the general principle that uncertain contractual language is construed against the drafter.
9. These rules are justified by the special relationship between the insurer and the insured arising from their unequal bargaining power.
As long ago as 1976, the Texas Supreme Court ruled in a case using some of the above guiding rules of interpretaion. The style of the case is Rotha Ramsay v. Maryland American General Insurance Company.
The issue for the court in the Ramsey case was, what does the term "commercial automobile" mean in the exclusionary clause of the policy issued by Maryland American General Insurance Company. The facts of what happened in this case were undisputed. Scott Ramsey was killed in an accident while driving a pickup truck owned by the United States Navy. He was an air-conditioning mechanic employed by the government. He had completed a job and was on the way back to his office to pick up a compressor to go to another job when the accident occurred. This pickup was used solely to transport employees, tools, and equipment.
The policy covering this pickup contained an exclusion clause which excluded commercial automobiles. The term "automobile" as used in the policy clearly included a pickup truck. It also had a $10,000 death benefit that was at issue.
The issue became; what does "commercial" mean? The term commercial is defined in dictionaries as "for profit" which the Ramsey attorney pointed out to the court. Maryland attorneys pointed out that the government was using the pickup in a "private" commercial way.
The court found both these interpretaions to be reasonable, so the policy was ambiguous and had to be construed in favor of coverage. This case serves as a good example for getting an experienced Insurance Law Attorney involved when an insurance contract can be read in more than one way. What the insured person needs to be aware of is that they may not know when a policy can be interpreted in more than one way and again illustrates why an attorney should be involved any time a claim is denied.

Someone living in Flower Mound, Haslet, Grand Prairie, Arlington, Mansfield, Crowley, Cedar Hill, Carrolton, Irving, or anywhere else in Texas may wonder what happens or who is suppose to pay the towing and storage charges resulting from an accident. This was the issue in a recent court case.
The Court of Appeals, Eastland, Texas, decided a case on June 3, 2010, where this was the issue. Or more specifically, the issue was more along the line; How much does the insurance company for the at fault driver have to pay for these charges? The opinion was authored by Justice, Rick Strange. The style of the case is, Underwriters at Lloyds of London v. Robert Harris, Individually and d/b/a Harris Garage.
In this case, Robert Harris (Harris) filed suit against Underwriters at Lloyds of London (Underwriters) seeking towing and storage charges and attorney's fees. The jury found in favor of Harris in all three causes of action and Underwriters appealed.
The basic facts are that a tractor-trailer owned by Kasse Transportation was involved in a motor vehicle accident. Law enforcement officials asked Harris to tow the vehicle from the accident scene, and he took it to his storage facility. Underwriters was Kasse's insurance company. Harris contacted Underwriters and demanded payment of $14,972.50 for towing and storage. Underwriters paid Kasse's towing limits of $6,000. Harris filed the lawsuit seeking to collect the balance.
This appeal was the result of Harris's victory in the trial court. This Eastland court reversed the juries finding on attorney's fees and the reasons for that will not be discussed here. However, the court upheld Harris's judgment on the other two causes damages. In doing this, the court looked at the Texas Occupation Code, Section 2303.001, which is where the Texas Vehicle Storage Facility Act is located.
This case was a challenge to the legislative intent in passing the Texas Vehicle Storage Facility Act (The Storage Act) into law. And it got into discussing the meaning of the word "or" in the statute.
Section 2303.156(b) provides:
"An insurance company that pays a claim of total loss on a vehicle in a vehicle storage facility is liable to the operator of the facility for any money owed to the operator in relation to delivery of the vehicle to or storage of the vehicle in the facility regardless of whether an amount accrued before the insurance company paid the claim."
Underwriter contended that, if the legislature had intended for carriers to be responsible for towing and storage charges, it would have written the statute conjunctively by using the word "and" rather than the disjunctive "or."
The court got into a discussion of how courts are to interpret statutes written by the legislative branch of government and the policy reasons for such interpretation. In doing so they said, "Assume that Harris towed the vehicle to a storage facility owned by Acme, Inc. and that Harris incurred only towing charges and Acme only storage charges. Underwriter's construction of Section 2303.156(b) would not prevent them from both recovering."
As the court further discussed, "Treating the "or" as a disjunctive conjunction provides an incentive for companies such as Harris's to provide necessary towing services, vehicle storage, or both; this construction is consistent with the statute's language that operators can recover "any amount owed" for towing or storage; and it produces a just and reasonable result by providing private companies a means of securing compensation for services that promote public safety. Underwriter's construction on the other hand, would provide a disincentive for no apparent purpose beyond limiting the carrier's exposure. Because we presume the legislature favored public interest over private interest, we cannot agree that the legislature intended Section 2303.156(b) to allow Harris either towing or storage compensation but not both."

How does someone living in Grand Prairie, Arlington, Mansfield, Fort Worth, Keller, Bedford, Hurst, Euless, Irving, De Soto, Duncanville, Burleson, Granbury, or anywhere else in Texas, know when an unlisted driver on an insurance policy is covered if an accident occurs? This is the third of three posts in a row on this subject. The following is what happened in a third case addressing this topic.
In 1989, the Texas Supreme Court, in the case, United States Fire Insurance Company v. United Service Automobile Association, discussed the issue of permissive driver coverage. This case involved a dispute between insurance companies over which had the duty to defend Anna Milliken, a passenger in an automobile, who allegedly caused an accident by grabbing the steering wheel of a moving vehicle. One policy was issued by United States Fire Insurance Company (Fire) and covered the automobile involved in the accident. The other was issued by United Service Automobile Association and insured the father of the passenger, Anna Milliken. The courts ruled that Fire had responsibility in this case.
The claim arose out of an accident that occurred when Anna was riding back with Douglas Martin from a church sponsored retreat. The car Douglas was driving was owned by his father and was covered by the Fire policy. Douglas testified that there was some swerving and horseplay prior to the accident. Anna testified that Douglas was zigzagging the wheel back and forth prior to the accident and that she grabbed the wheel on two occasions prior to the accident in an effort to play back with him. The first time Douglas did not object, and the second time was immediately prior to the accident. Anna testified that she and Douglas were "just kind of playing around."
The issue in this case was whether or not Anna was a permissive user of the automobile and thus covered under the policy of insurance.
First, the court considered whether Anna was a user of the automobile. The court conclude that at the time of the accident, it was undisputed that Anna was riding as a passenger in the automobile and this fact alone constitutes a "use" of the automobile. Thus, she was a user.
Next, the court looked to see if she was "operating" the automobile. They concluded that Anna was also "operating" the vehicle when she grabbed the steering wheel. By grabbing the wheel and exerting a force on it, she obtained control of the vehicle, even though for only an instant.
The final issue was whether or not Anna had permission to be operating the automobile. The issue on this point was not whether or not Douglas considered her to have permission. The focus by the court was whether or not Anna had a reasonable belief that she was entitled to grab the steering wheel when she did. In light of the testimony to facts in this case the court concluded that she did believe she had permission to act as she did and thus she became a covered driver under the policy of insurance.
These cases are fact specific and when someone finds themselves in a position having to argue this one way or the other, it is vital that an experienced Insurance Law Attorney be consulted.

If you are a business owner in Grand Prairie, Arlington, Mansfield, Hurst, Euless, Bedford, Keller, Colleyville, Plano, Fort Worth, Burleson, or anywhere else in Texas and one of your employees is involved in an accident in a company vehicle, will your insurance provide coverage for him? This is the second of three posts on this related subject. Read on to find out what happened in one case.
The Texas Supreme Court, in 1979, issued an opinion in the case, Betty Coronado v. Employers' National Insurance Company et al.
The issue before the court in this case was whether an employee who was driving a company owned vehicle on a purely personal mission after working hours was operating the vehicle with the permission of the company so as to be insured under the company's automobile liability policy. The jury said yes. The first appeal court said no and the Texas Supreme Court agreed with the decision of no.
The facts were as follows. On August 23, 1974, Fernando Sotelo was one of five operators for White Well Service and, as such, he was in charge of a crew of three other men. He was assigned a company truck for use in the performance of his duties. The company yard was located in Wickett which is a small town a few miles west of Monahans where Sotelo and his crew lived. Sotelo used the pickup to transport his crew to and from their homes to the company yard each day as well as from the company yard to the different well locations where their work was to be performed. On August 23, he and his crew left the company yard about 4 or 4:30 p.m. after completing their work for the day. Sotelo drove east on Highway 80 towards Monohans and the homes of all crew members. All of the crew lived on the east side of Monahans near the highway. He testified that just before they reached the intersection of Loop 464, which is on the western edge of Monahans, they decided to go to Wally's Bar and have a beer. They stayed there for three or four hours and then went to Rose Gardens, which is another bar located some distance west of Wally's Bar. He left Rose Gardens sometime after midnight, apparently many beers after leaving the company yard. Shortly thereafter, he was involved in a collision with another vehicle and, as a result thereof, Reynoldo Coronado lost his life.
Betty Coronado, the surviving wife of Reynaldo, subsequently brought suit against Sotelo and the jury found in her favor. She then sued White Well Service and Employers National Insurance Company, who had issued the auto policy.
It was not contended in this case that Sotelo had express permission to use the vehicle for the purpose it was being used at the time and place he was involved in the fatal accident. In fact, Sotelo testified that such a use was prohibited by his employer. It was urged, however, that his employer had impliedly granted him permission for such use by acquiescence or lack of objection to similar use on prior occasions.
Since the uncontradicted evidence established that Sotelo was permitted to use the vehicle for business purposes only, the precise question before the court was whether his deviation for personal pleasure at the time and place of the accident was such as to avoid coverage under the policy.
The court discussed that there are three different approaches to the problem of deviation in the United States; 1) the "strict" or "conversion" rule, 2) the "liberal" rule, and 3) the "minor deviation" rule. Under the "strict" rule, the actual use at the time of the accident must be within the time limits and geographical area specified or contemplated by the parties, otherwise permission cannot be found to exist. Under the "liberal" rule, coverage is extended so long as the vehicle was originally entrusted by the named insured to the person operating it at the time of the accident. The only essential thing is that permission be given for use of the vehicle in the first instance and coverage remains afforded irrespective of how gross the deviation from the original use. The third position is somewhat between these two extremes and the courts applying this rule modify the strict rule to the extent that protection will be afforded if the use is not a material or gross violation of the terms of the initial permission. Under this rule, the court must determine in each instance taking into account the extent of deviation in actual distance or time, the purposes for which the vehicle was given, and other factors whether the deviation was "minor' or "material."
Based on the evidence in the case and the prior paragraph guidance on these issues the court found there was no coverage in this instance. Each of these cases are fact specific and have to be examined on an individual basis.

If you live in Grand Prairie, Arlington, Fort Worth, Mansfield, Duncanville, De Soto, Hurst, Euless, Bedford, Aledo, Azle, Weatherford, or anywhere else in Texas and a friend or acquaintance uses your car and has a wreck is there coverage? This posting and the two following will show what has happened in three previous cases.
In 1966, the Texas Supreme Court, in the case, Royal Endemnity Company v. H.E. Abbott & Sons, Inc., had this question before them in a case.
In this case, a 1961 pickup truck owned by Jack Herring and driven by George K. Landers ran into and damaged a building owned by H.E. Abbott & Sons, Inc. The truck was insured by a liability policy issued by Royal Indemnity Company. The insurance policy with Royal had a clause extending coverage to anyone operating the truck with Herring's implied permission. In the lawsuit, Abbott obtained a judgment against Landers then sued Royal to enforce its judgment.
The case turns upon whether Landers was using the truck with the permission of Herring. There is no alligation that Landers had express permission to use the truck, but the jury found that Landers had Herring's implied permission to be using the truck.
The relevant facts are that Landers was hired by Herring on April 18, 1963, to work on Herring's ranch which was located some 14 miles from the city of Ballinger, Texas. Landers had a drivers license. Landers was paid monthly, plus his room and board, and lived in a small house on the ranch. Originally, Landers was to prepare his own meals but he soon began eating with the Herring family in the main ranch house. He often prepared his meals there when the Herrings were not at home.
Herring owned three vehicles: a ranch truck, which was unlicensed and intended for use on the ranch only, the 1961 pickup truck, and a passenger vehicle. Landers had permission to use the ranch truck, but only on the ranch. Herring always drove the 1961 pickup truck. Landers had permission to use the 1961 truck only if the ranch truck was being prepared and Herring was not using it. The keys were always left in both vehicles.
On the day of the wreck Herring and Landers had made a trip, with Herring driving, in the 1961 pickup. At the end of the day, Herring and his family left the ranch to spend the night. Landers had told Herring that a friend was coming to get Landers and the two were going to go to San Angelo. This plan did not materialize and Landers ended up leaving the ranch in the 1961 pickup and the wreck eventually occurred.
Upon learning of the wreck, Herring went to see Landers and threatened to "beat the stuffing" out of him. Plus he threatened to file charges against Landers.
On three or four previous occassions prior to the accident, Landers had driven one of the vehicles off the ranch to pick up the Herring children at a school bus stop some five miles from the ranch house. These were the only times Landers had driven off the ranch, and on each occassion he was expressly instructed by Herring to pick up the children. Herring had never told him to use the vehicles off the ranch. Landers had no car of his own, and Herring always took him to town whenever Landers wanted to go.
In this case, the jury hearing the case decided that Landers had the implied permission of Herring to use the vehicle at the time of the wreck. The Texas Supreme Court decided that the weight of the evidence was against such a finding and reversed the decision of the jury, ruling that the great weight of the evidence was against such a finding.
Here is what the court stated in making the above finding:
"In the present case the evidence shows neither a relationship nor a prior course of conduct from which implied permission might fairly be inferred. Landers was employed as a ranch hand. He had never driven one of the vehicles off the ranch except when specifically instructed to do so, and had never used any of them for a personal errand. His employer had always driven him to town whenever he wanted to go, and had no reason to believe that he intended or might need to use one of the vehicles on the evening of the accident. In view of these undisputed facts, the limited privileges Landers was allowed in the Herring house, his occassional pleasure trips with Herring, the availability of the vehicles, his use of the same on the ranch, Herring's inquiry about his driver's license, and the absence of any prior instruction not to take the vehicles off the ranch, afford no basis for concluding that Landers had implied permission to use the truck for a trip to San Angelo on a personal mission."
These types of cases are fact driven and have to be looked at on an individual basis.

Business people in Bedford, Colleyville, Grand Prairie, Arlington, Hurst, Euless, Fort Worth, or anywhere else in Texas will sometimes have mistakes in their commercial insurance policy. How do courts look at these situations?
The United States District Court, Northern District of Texas, Dallas Division, issued an opinion on a case May 26, 2010, where this was the issue. The opinion was issued by Judge Ed Kinkeade. The style of the case is Park Place Motorcars Mid Cities Ltd., and Park Place Motorcars of Texas, Inc. v. Affiliated FM Insurance Company.
The facts in this case are this: Park Place Motorcars Mid Cities Ltd. and Park Place Motorcars of Texas, Inc. (Park Place) operate a Mercedes dealership in Bedford, Texas, selling new and used vehicles. Park Place insured its motor vehicle inventory through two policies -- a "dealer open lot" policy and a "floored" policy, both of which were provided by other insurance companies. Affiliated FM Insurance Company (FM) provided coverage to Park Place for physical loss or damage to insured property and for business interruption loss for such insured property, subject to all policy terms, conditions, limitations and exclusions (the "Policy").
Park Place's property was damaged by a hail storm on April 13, 2007. Hail damaged some of Park Place's real property insured under the Policy, including a small portion of the roof and exterior siding, awnings, and sunshade tents. Hail also damaged approximately 244 of Park Place's motor vehicles. The damage to Park Place's motor vehicles was paid by its motor vehicle insurance companies. FM paid Park Place for the damage to Park Place's real property.
Park Place also submitted a claim to FM to recover under the Policy for lost business income directly resulting from hail damage to the motor vehicles. Park Place supported its claim with language from the Policy appearing to extend coverage to motor vehicles. Specifically, Section D of the Policy is titled "Extensions of Coverage" and according to the Policy's Declarations the following was added to Section D:
3. Motor Vehicles Exclusion
Section D., Property Excluded, Item 6., is amended to:
6. Motor vehicles licensed or unlicensed for highway use or owned by officers a
and employees of the Insured; satelites [sic], aircraft and watercraft except
while on land and in the process of being manufactured including storage of
aircraft or watercraft prior to being sold.
Park Place determined that because this Declaration involving motor vehicles falls under Section D-- "Exclusions of Coverage" --that motor vehicles are covered under the Policy.
But, FM denied Park Place's claim for lost business income because the Policy only provides business interruption coverage for losses "directly resulting from direct physical loss or damage insured by this policy to property not excluded." FM denied coverage on the basis that motor vehicles are excluded under the Policy and that Park Place's claim resulted from the hail damaged motor vehicles. FM reached the conclusion that motor vehicles are excluded under the Policy because of a typographical error in the Policy. The "Motor Vehicles Exclusion" in the Policy's Declarations amends Section D; however, the amendment should have been to Section E --"Property Excluded." FM also relied on the language "Motor Vehicle Exclusion" and "Property Exclusion" found in the Declarations to determine that motor vehicles are excluded under the Policy.
Park Place sued FM, seeking a declaration by the court that the Policy provides coverage for the business loss of the motor vehicles. They also alleged breach of contract, violations of the Texas Insurance Code, and bad faith.
In analysing the case, the court pointed out that under Texas law, the court's primary concern when interpreting a contract is to ascertain the parties true intentions as expressed in the instrument. To achieve this objective, the court should examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. No single provision taken alone will be given controlling effect; rather, all the provisions must be considered with reference to the whole instrument. Moreover, a typographical mistake must yield to the well established doctrine that written contracts will be construed according to the intention of the parties, notwithstanding errors and omissions, by perusing the entire document and to this end, words, names, and phrases obviously intended may be supplied.
Park Place argued that because "Section D" of the Policy is the "Extensions of Coverage" Section and contains the "Motor Vehicles Exclusion" Declaration that the Parties intended for the motor vehicles to be covered, or at the very least, that there is an ambiguity in the Policy that must be construed in favor of the insured, which means motor vehicles would be covered under the Policy. But, Park Place's interpretation of the Policy is not reasonable.
The court said the only reasonable interpretation is that the Parties' true intent was to exclude motor vehicles. In the "Motor Vehicles Exclusion" Declaration, the "D" in "Section D" is a typographical error. Instead, the "D" should be an "E" which would place the Section in the "Property Excluded" Section, not the "Extensions of Coverage" Section. This is clear because the title of the Declaration is "Motor Vehicles Exclusion," which on its face can only be reasonably interpreted as excluding motor vehicles from the Policy. Moreover, the title of the proper Section --"Property Excluded" --for the "Motor Vehicles Exclusion" follows the Section letter "D" which shows that the Parties intended to clarify the Section to which the Declaration pertained. The letter "D" is a typographical error and the words "Exclusion" and "Excluded" are the Parties' unambiguous expression of intent to exclude motor vehicles from coverage.
Moreover even if the Court determined that an ambiguity exists as Park Place alleges, FM's evidence establishes that the Parties' intended to exclude motor vehicles from coverage under the Policy. McQueary Henry Bowles Troy LLP (MHBT) was Park Place's insurance broker and negotiated the Policy with FM on behalf of Park Place. MHBT arranges Park Place's commercial property insurance, as well as most of its other insurance needs. Park Place's broker, Linda Stewart at MHBT, sent applications that included a property application, a statement of values, and loss runs that only referred to Park Place's building, business personal property, and business interruption. Nothing was requested by Stewart from Park Place regarding obtaining insurance for the actual vehicles for sale. Stewart testified that she never sought coverage for motor vehicles from FM or intended to place coverage for business interruption losses with FM for damage to Park Place's vehicles.
Thus, the Court concluded the Parties intended to exclude motor vehicles under the Policy and the Court ruled in favor of FM.

Commercial insurance policies are commonly issued to business people in the Dallas, Fort Worth area, and through out the state. Even business owners in Grand Praire, Arlington, or out in Weatherford, will have one of these policies. When a claim is made, there is often times a dispute as to the coverage provided in the policy.
The Court of Appeals of Texas, Houston (14th Dist.), decided a case on May 20, 2010, that does a pretty thorough job going thru an analysis of how these cases are looked at by the courts. The decision was handed down by Chief Justice, Adele Hedges. The style of the case is Essex Insurance Company v. Eldridge Land, L.L.C.
Some of the facts are that Eldridge Land L.L.C. (Eldridge) owned a vacant building. They had purchased a commercial property insurance policy from Essex Insurance Company (Essex). The policy contained a clause providing for damage "caused by or resulting from theft," and an exception to the theft damage exclusion for "damage caused by the breaking in or exiting of burglars." The relevant language was:
A. COVERED CAUSES OF LOSS
When Basic is shown in the Declarations, Covered Causes of Loss means the following:
....
8. Vandalism, meaning willful and malicious damage to, or destruction of the described property.
We will not pay for loss or damage:
a.....
b. Caused by or resulting from theft, except for building damage caused by the breaking in or exiting of burglars.
On March, 28,2006, Eldridge's property sustained considerable damage. Some intruders apparently forced their way into the building and damaged sheetrock, ceiling tiles, electrical conduit boxes, and wall coverings. They also removed copper wiring and copper pipe from the building. Eldridge thereafter filed a claim with Essex seeking coverage. Essex denied the claim based primarily on the policy exclusion for loss or damage caused by or resulting from theft. Essex admitted some of the claim was covered but that the amount did not exceed the $5,000 deductible.
The issue in this case was one of policy interpretation. The court stated, "Whether policy language is ambiguous is a question of law. Ambiguity does not arise simply because the parties offer conflicting interpretations; rather, ambiguity exists only when the contract is susceptible of two or more reasonble interpretations. Usually, if language in an insurance policy is deemed susceptible to more than one reasonable interpretation, the reasonable construction most favorable to the insured will be imposed. Consequently, we construe an ambiguous insurance policy strictly against the insurer and liberally in favor of the insured."
The court next went into more than a three page analysis of the facts in this case and the policy and the law. The reading is interesting, but ultimately illustrates why an experienced Insurance Law Attorney is needed in these cases.
In this case, the court concluded that the evidence established that all damage above the policy deductible were caused by or resulting from theft. As a result, there was no coverage above the deductible.

Auto policy holders in Grand Prairie, Arlington, Fort Worth, Mansfield, Azle, Dallas, Weatherford, or any other city in Texas would want to know what all that "stuff" in their auto policy means. One part that is pretty easy to explain is the "Named Driver Exclusion." This is other times called the "515-A Exclusion" or "515-A Endorsement".
The normal automobile insurance policy is going to have a part that reads, "You agree that none of the insurance coverage afforded by this policy shall apply while ______________ is operating your covered auto or any other motor vehicle. These exclusions and endorsements are legal in insurance contracts. The language used is partly governed by laws published in the Texas Insurance Code. See Sections 1952.051 et al and Sections 2301.001 et al. As for the "Named Driver Exclusion", it is legal and is intended to give policy holders the option to exclude from coverage drivers who, by virtue of their driving history or other factors, are deemed high risk drivers. This category of drivers would include drivers who have been convicted of violating the Driving While Intoxicated laws found in the Texas Penal Code, drivers with too many moving violations, too many wrecks, and other high risk drivers such as teenagers who have just got their license. It is important to realize that almost all of these drivers can get insurance but the cost of the insurance is much higher than what other drivers must pay.
The Texas Corpus Christ Court of Appeals decided a case in 1996 that is often cited for the validity of the Named Driver Exclusion. The style of the case is, Janie Zamora, Pete Zamora, Jesus Toc, and Gracie Vela v. Dairyland County Mutual Insurance Company. In this case the excluded driver was Gracie Vela, who was driving Jesus Toc's vehicle. She had a wreck with the Zamoras causing them injury. In this case, the court upheld the validity of the exclusion and discussed the reasons for its validity.
Gracie Vela was a known risk to drive because she suffered from epileptic seizures, had been advised not to drive, and did not even have a driver's license.
The court stated that the Named Driver Exclusion furthered Texas public policy on two levels; first, the named driver exclusion furthers public policy by enabling drivers with family members having poor driving records to secure insurance they can afford, rather than being relegated to securing coverage from an assigned risk pool at a much greater cost. And, second, by detering insured drivers from entrusting their automobiles to unsafe drivers, thus, keeping those unfit drivers off public roadways.
Here, Dairyland County Mutual Insurance Company denied the claim made by the Zamora's when the Zamora's were sued for negligently entrusting their vehicle to Vela for her to drive. Toc sued along with rest of the plaintiffs, challenging the validity of the exclusion. It was upheld as being valid by the court.
An experienced Insurance Law Attorney on rare occassion can beat this exclusion. However, the facts allowing this exclusion to be deafeated are limited and each case has to be looked at closely.

Who has "standing" to sue an insuance company for bad faith. Does someone living in Grand Prairie, Arlington, Mansfield, Keller, Colleyville, Fort Worth or Dallas?
USLegal defines "standing" this way:
Standing is the ability of a party to bring a lawsuit in court based upon their stake in the outcome. A party seeking to demonstrate standing must be able to show the court sufficient connection to and harm from the law or action challenged. Otherwise, the court will rule that you "lack standing" to bring the suit and dismiss your case.
The common-law duty of good faith and fair dealing extends protection to the insured, whether the insured obtained the coverage directly or coverage was obtained for the insured. The Texas Supreme Court, in Arnold v. National County Mutual Fire Insurance Co., recognized in 1987, a common-law duty of good faith and fair dealing owed to an insured, which arises from the "special relationship" established by the insurance contract. The court expanded this duty of good faith and fair dealing to a worker insured under a workers' compensation policy purchased by his employer in the 1988 case, Aranda v. Insurance Company of North America.
In the case, CNA Insurance Company v. Scheffey, the Texarkana Court of Appeals, in 1992, held that an insurance company does not owe a duty of good faith and fair dealing to third-party beneficiary. In this case, the third-party beneficiary was a treating physician. A similar result was found the same year by the Fort Worth Court of Appeals in, Transportation Insurance Company v. Archer, when they denied mental anguish damages to a spouse as the result of the insurance companies breach of its duty to an employee.
These cases can be contrasted with a decision by the Court of Appeals in El Paso, that in 1992, held that an insurer does owe a duty of good faith and fair dealing to a third-party beneficiary of an insurance policy. This was followed by another 1992 case decided by the Court of Appeals, Houston, 1st District, saying an HMO owes a duty of good faith and fair dealing to health care providers.
As can be seen, these cases can be all over the board on outcomes. An Insurance Law Attorney can usually distinguish the facts in these cases but even for an experienced attorney the reasoning can be confusing at times.

What if you are a "good ole boy" in Weatherford, Texas? Or for that matter, in Arlington, Grand Prairie, Fort Worth, or Dallas, and you have a gun rack in your vehicle. In the gun rack you have a loaded firearm. Next, the firearm is accidently discharged. Will your insurance company cover the resulting damages to others? The answer is a lawyerly answer for you: It depends.
Here is an interesting case issued by the Texas Supreme Court. This case discusses how the facts should be analysed to see if coverge will exist. The case, decided in 1999, is styled, Mid-Century Insurance Company of Texas, a division of The Farmers Insurance Group of Companies, v. Richard Tanner. The cite is, 997 S.W.2d 153.
The question for the court to decide in this case was whether the underinsured motorist provision of a standard Texas personal auto policy covers the insured's bodily injuries resulting from the unintentional discharge of a shotgun on a gun rack in a pickup truck parked nearby. The answer, in this case, depended on whether, within the meaning of the policy, the injuries resulted from "an accident" "arising out of" the "use" of the truck.
The facts: Richard Metzer and his wife had been fishing with their nine year old son when the boy returned to their pickup to get his coveralls. The truck was locked and the boy climbed into the bed of the truck and attempted to enter the cab through the truck's sliding rear window. In doing this, he accidentally touched a loaded shotgun in the gun rack, in the rear window, causing the gun to discharge. The buckshot struck Richard Lindsey, who was seated in his mother's car parked next to the pickup. Lindsey sued Metzer and recovered the policy limits, which was far less than the total of his damages. He then claimed the underinsured policy limits from his mothers policy which was issued by Mid-Century. Mid-Century denied the claim. Lindsey sued.
The Mid-Century policy states:
We will pay damages which a covered person is legally entitled to recover from the owner or operator of an uninsured (or underinsured) motor vehicle because of bodily injury sustained by a covered person, ...
The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the uninsured (or underinsured) motor vehicle.
The sole dispute was over whether Lindsey's injuries were caused by, 1) an accident, 2) arising out of the use of Metzer's truck.
The court discussed the definition of an accident then ultimately stated, Metzer's son intended only to gain entry to the truck. He did not intend to cause the shotgun to discharge or Linsey to be injured, nor was it reasonably foreseeable that either consequence would result from the boy's trying to enter the pickup through the rear window. Metzer's son was not playing with the gun or acting recklessly. There is no evidence that he even knew it was loaded. His injuring Lindsey was an accident.
The next issue was whether this accident arose out of the use of the pickup. For liability to "arise out of" the pickup, a casual connection or relation must exist between the accident and the use of the motor vehicle. The court stated; "Whether a person is using a vehicle as a vehicle depends not only on his conduct but on his intent."
The court next got into a discussion using well established legal treatises on insurance law. One was, Couch on Insurance. The other was, Appleman's Insurance Law and Practice. Using these treatises they found numerous cases throughout the country using the following test for determining whether an injury arises out of the use of a motor vehicle for purposes of auto liability insurance coverage:
For an injury to fall within the "use" coverage of an automobile policy (1) the accident must have arisen out of the inherent nature of the automobile, as such, (2) the accident must have arisen within the natural territorial limits of an automobile, and the actual use must not have terminated, (3) the automobile must not merely contribute to cause the condition which produces the injury, but must itself produce the injury.
There was much further discussion on the above and what other courts in other states have decided. Applying all these considerations to the facts in this case the court concluded that Lindsey's injuries arose out of the use of the Metzer truck as a matter of law.
There are actually a lot of cases discussing what is covered and what is not covered. An experienced Insurance Law Attorney is familiar with these cases. He would be able to disuss these cases and give advice on whether the facts in any particular situation would be covered by insurance.

Pretend a couple in Grand Prairie, Fort Worth, Arlington, Dallas, Weatherford, or anywhere else in Texas is running a business out of their home and someone gets injured as a result of that business activity. Does a normal Texas homeowners insurance policy cover any claim that may be made?
As a general rule the answer is no. The normal Texas howeowners policy includes a "business pursuits exclusion." This means that incidents arising out the course of that business are excluded from coverage under the insurance policy. There are exceptions to this general rule mainly because the Texas Department of Insurance, several years ago started letting insurance companies write their own policies. Prior to this the policys were standard and followed recommendations from the state. Now, each company writes their own policy and so, there are differences between one policy and the other that now exist. Plus, homeowners can buy endorsements to cover their business pursuits that they are pursueing from their home.
The normal / typical homeowners policy excludes coverage for "bodily injury or property damage arising out of or in connection with a business engaged in by an insured." This is articulated in the case, State Farm Fire & Casualty Company v. Vaughan. This case was decided by the Texas Supreme Court in 1998, and is still good law. Here, State Farm Fire & Casualty Company challenged a claim being made by Vaughan and the court ruled in favor of State Farm, on this business exclusion policy language.
In another case, United Service Auto. v. Pennington, the San Antonio Court of Appeals, decided in 1991, guidelines to go by in determining whether or not the activity being conducted out of a home was a business pursuit.
"Business pursuit" for these purposes encompasses two elements:
1) continuity or regularity of the activity; and
2) a profit motive, usually as a means of livelihood, gainful employment, earning a living, procuring subsistence or financial gain, a commercial transaction or engagement.
In this case the court said that the profit need not be realized; that the issue is the expectation or anticipation of profit in the future. They explained further saying, the insured can even hope that the pursuit will succeed and eventually become profitable, but if his or her present intention and goal were not motivated by profit, then there is no business pursuit.
Anytime this question arises an experienced Insurance Law Attorney should be consulted so that the facts of any one situation can be applied to the existing law and an opinion can be discussed.
In the Pennington case, the homeowner was a car salesman but also ran a quarter horse breeding business with his father. Apart from the breeding business, he and a coworker at the car lot bought a quarter horse to experiment with a new training system to condition horses for racing. They advertised for someone to ride the horse. The woman who answered the ad was injured when the horse fell on her. The court found evidence to support the jury's finding that the ownership of the horse was not a business pursuit. With regard to the continuity element of the definition noted above, the court found that the insured had engaged in the experiment of interval training for a race horse for a month, that there was testimony that the ownership of the horse was separate from the breeding business, that there was no evidence that the homeowner intended to breed the horse or that the father held any ownership interest in the horse, and finally that there was no evidence that the undertaking was engaged in with regularity. As for the second element, profit motive, the jury heard ample evidence upon which it could find that the homeowner did not anticiplate making a profit.

Lightning strikes a home in Grand Prairie, or Arlington, Fort Worth, Dallas, or out in Weatherford. The lightning damages electronic equipment. The homeowner calls his insurance company to make a claim. Then the insurance company invokes an appraisal clause in the insurance contract. What does this mean?
This is what happened in the case, Steven Woodward, et al, v. Liberty Mutual Insurance Company. This case was decided by the United States District Court, N.D. Texas, Dallas Division on March 26, 2010. The Judge was the Honorable, A. Joe Fish. In this lawsuit, Liberty Mutual Insurance Company (Liberty) filed papers with the Court for an order to be issued to compel appraisal and to stay the Court actions in this matter pending the completion of appraisal. Judge Fish granted the motion and ordered the parties to complete the appraisal process.
In this case, the appraisal clause required each side to select a competent, independent appraiser, notify the other side who had been chosen and if the appraisers did not agree to choose an umpire to settle the matter.
The time sequence here was that Liberty notified the Woodwards that they were invoking the appraisal process and named an appraiser. The Woodwards then asked for the appraisers qualifications. Liberty then named a different appraiser and sent his resume. The Woodwards told Liberty that they did not believe that Liberty's appraiser was qualified and the Woodwards named their own appraiser. Liberty then withdrew the named second appraiser and attempted to name a third.
The Woodwards then had their own appraiser estimate the loss and submitted the estimate to Liberty, along with a demand for payment. Liberty refused payment and the Woodwards filed the lawsuit.
The Woodwards arguement was that Liberty had waived their right to appraisal when they withdrew the names of the appraisers they had originally named. Liberty said they had good reasons for their actions and that the appraisal process had not been completed and also pointed out that the process had not been completed yet because they had not been to the umpire.
In ruling for Liberty the Court pointed out that the Texas Supreme Court had as recently as last year, enunciated a strong policy in favor of enforcing appraisal clauses in insurance contracts. This was stated in the case, State Farm Lloyd's v. Johnson. They also stated law that said, "A completed appraisal that complies with the terms of an appraisal clause in an insurance contract is a condition precedent to bringing a suit on that contract." Citing the ruling in another case the Court said, "Indeed, if an appraisal clause is properly invoked and one party to the contract refuses to participate in the appraisal process, a court lacks discretion not to issue an order compelling that party to participate."
The Court went on to discuss issues concerning "waiver" and another legal pleading of "estoppel" and why these theories did not apply in this case. An experienced Insurance Law Attorney knows about these appaisal clauses in insurance contracts and where applicable, knows ways of defeating them. For the most part these appraisal clauses are more favorable to insurance companies and have lots more legal advantages for the insurance company than the persons insured, which is why the insurance companies put them in the insurance contracts and why they try to invoke these clauses.

What about a school district located in Grand Prairie, Arlington, Fort Worth, Weatherford, or somewhere else in Texas? Does that make a difference when deciding how to interpret an insurance policy? The answer is no, but here is a case involving a commercial policy purchased by a school district contractor.
The United States District Court, Northern District, Dallas Division, recently had to decide whether a commercial policy purchased by contractors of the Quinlan Independent School District (QUID) were liable in a claim made by the QISD against one of its contractors. The style of the case is Employers Mutual Casualty Company et al. v. Northern Insurance Company. This case was decided on March 11, 2010, by Senior District Judge, A. Joe Fish.
Dates are relevant in this case. In April 1998, QISD hired DalMac Construction Company (DalMac) to be the general contractor in charge of constructing Ford High School. DalMac hired C. Watts as its "dirt work" subcontractor on the project. QISD took possession of the school in August 1999. Beginning immediately and continuing over the next several years, QISD experienced problems with the building and eventually brought suit against DalMac. In turn, DalMac brought suit against various subcontractors, including C. Watts. C. Watts tendered the defense of the lawsuit to Employers Mutual Casualty Company (Employers). Employers policies went into effect on November 1, 1999. Employers agreed to defend C. Watts in the lawsuit but did so under a reservation of rights. Employers conceded they may have some liability in the lawsuit but that Northern Insurance Company (Northern), which had a policy in effect from November 1, 1998, to November 1, 1999, also had liability under their policy.
The primary issue in this case was whether or not Northern had any liability under its insurance policy on C. Watts. In this regard, the court restated existing law concerning an insurance company's obligations. Northern's obligation to defend in this lawsuit was dependent on the alligations asserted in the lawsuit. These allegations alleged plumbing problems arising from defects in dirt work and the foundation of the school. C. Watts had been the subcontractor doing the dirt work. The court then cited relevant portions of the insurance policy stating the responsibilities of Northern and how the responsibilities were relevant to the allegations in the lawsuit.
The ruling was ultimately in favor of there possibly being coverge under the Northern policy, thus they had to provide a defense for C. Watts in the lawsuit and share the costs and expenses of the lawsuit with C. Watts other insurance, Employers.
This case is yet another good read for understanding how courts decide coverage issues in insurance cases.

Most businesses in Grand Prairie, Arlington, Fort Worth, Dallas, or Weatherford, are going to have insurance policies to cover losses. In addition to the regular liability policy they will also have an "umbrella" policy. An umbrella policy is an insurance policy that covers amounts above those covered under one or more other primary policies, and which does not pay until the losses exceed a certain sum. It is sometimes also called an excess insurance policy.
The United States Court of Appeals for the Fifth Circuit, ruled on a case on March 25, 2010, that dealt with an umbrella policy. The style of the case is, Delta Seaboard Well Serv's Inc. v. American Int'l Specialty Lines Ins. Co.
Delta Seaboard Well Serv's, Inc. (Delta) is an oil and gas well serving company that plugs non-productive wells for operating companies. In 2003, Delta contracted with Fort Apache Energy, Inc. to plug a well. Sometime after plugging the well Fort Apache discovered that the gas pressure at the wellhead had not "bled off", a fact finding that would have required Delta to cease its plugging operation. Fort Apache sued Delta for negligently plugging the hole when there was still recoverable reserves in the hole.
During this time, Delta was insured by Gemini Insurance Company (Gemini). After this time, Delta had purchased an umbrella policy from American Int'l Specialty Lines Ins. Co. (American). Delta informed Gemini of the lawsuit and Gemini denied coverage. In the lawsuit against Delta, Delta was found liable for more than $2 million in damages to Fort Apache.
Delta then brought suit against American for a portion of the claim that Delta claimed was due under the umbrella policy. The facts of this case are not complicated but are extensive. The importance of the case is the reading of the Gemini policy and the reading of the American policy together to see whether or not the American policy becomes liable for any portion of the claim. The court ultimately ruled that there was no coverage under the umbrella policy.
This case demonstrates again how courts read the policies to see if there is coverage. For the company purchasing insurance it is important that they understand what it is they are buying and that they make clear to the agent they buy the insurance from, that they get the coverage they want.