Exclusions In Insurance Policies

Insureds in Weatherford, Mineral Wells, Millsap, Hudson Oaks, Aledo, Azle, Peaster, Cresson, Cool, Brock, Poolville, Springtown, and other places in Texas would have a very hard time reading and understanding what an insurance policy says. That is the main reason why an experienced Insurance Lawyer needs to be consulted whenever a claim is denied.
The Texas Court of Appeals in Amarillo decided a case on April 18, 2011, that dealt with policy interpretation. The style of the case is, Evanston Insurance Company v. D&L Masonry of Lubbock, Inc. In this case the court of appeals granted a summary judgment in favor of D&L Masonry. Here is some background.
Evanston issued a commercial general liability policy to D&L. The policy periods are not in dispute. D&L was engaged in the masonry business and contracted to install masonry and renovations to public schools in Muleshoe, Texas. Because of difficulties and weather concerns, D&L did not do the masonry work until after the window frames and windows had been installed. Because the windows and frames were already in place, D&L had to attempt to seal the area between the frames and brick with mortar. In an effort to prevent masonry mortar from damaging the windows and frames, D&L used masking tape around the window frames and soap and water to soap the windows. After D&L had completed the masonry work, the schools were examined and mortar stains were found on many of the window frames. Additionally, some of the frames were scratched when D&L attempted to remove some of the excess mortar that had fallen on the frames during the masonry work. D&L was eventually charged and they paid to have the windows replaced at a cost of $58,113. D&L paid the amount and submitted a claim to Evanston for reinbursement. Evanston denied the claim stating the policy exclusions applied because the window frame damage was damage to property upon which D&L performed its work. D&L then sued Evanston.
At the trial court level, the trial court ruled in favor of D&L based on the policy language and this appeals courts affirmed that ruling.
The question presented to the court was whether the exclusions relied upon by Evanston to deny D&L’s claim were proper.
The policy in question provided for coverage for “damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” However, paragraph 2 of the policy provided for certain exclusions from coverage. Evanston contended that paragraph 2. J. (5) and (6) excluded the property damage to the window frames in question from coverage. These exclusions deny coverage for damages caused to:
(5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the “property damage” arises out of those operations;
(6) That particular part of any property that must be restored, repaired, or replaced because “your work” was incorrectly performed on it.
Section V, Paragraph 21 of the policy defines “Your Work” as follows:
a. Work or operations performed by you or on your behalf, and
b. Materials, parts or equipment furnished in connection with such work or operations.
In this case, no one was contesting the definitions, rather, it appears the conflict arises in the application of the definitions to the facts. The main point of contention between the parties was whether the actions taken by D&L in preparing to apply the mortar, and applying the mortar, to the space between the last brick and the window frame constitutes working on the window frames. Evanston’s position was that the activity of applying the tape to the window frames and soap to the windows was work on the window frames for purposes of the exclusions. Further, Evanston contended that allowing the mortar to come into contact with the window frame also constituted work on the frames. Finally, Evanston contended that any effort D&L took to eliminate any of the mortar from the window frame was also work on the window frames. Under Evanston’s theories, all of this work on the window frames placed D&L squarely within the ambit of both exclusion J(5) and J(6). D&L contended that the policy in question was designed to protect them when its work damages someone else’s property. Under D&L’s theory, their work did not include work on the frames. Rather, their work was with the brick and mortar which had to be placed next to the frames in order to seal the frames. Accordingly, the exclusions would not apply.
In discussion of this case the court asked; What work was D&L contracted to perform in connection with the renovations of the schools in question? The answer, and both parties agreed, was masonry work. D&L was not contracted to perform work on the window frames. D&L’s contact with the window frames came about only as a prophylactic measure to attempt to prevent damage.
This court then began an analysis of other court decisions where a similar issue was presented. After reviewing those cases and their discussions of “Your Work” and “That Particular Part” language of the various policies at issue, this court was of the opinion that the trial court was not unreasonable in its ruling.
These types of cases can be very difficult and usually require exstinsive research. A reading of this case does allow someone to understand how these cases are analyzed by the courts.