Farm And Ranch Owners Insurance Policy

Parker County insurance lawyers will deal with clients who have Farm and Ranch insurance policies. Here is a case that deals with one of those policies. It is a 2014 case styled, Texas Farm Bureau Underwriters v. Terry Graham, and is out of the Texarkana Court of Appeals. Here is some of the relevant information.
Terry Graham shot and killed would-be burglar, Chambers, at Graham’s ranch house. In successfully defending the resulting wrongful death lawsuit by Chambers’ family members, Graham incurred $130,841.43 in defense costs, which Graham sought to recover from Texas Farm Bureau Underwriters (Underwriters), the issuer of Graham’s Texas Farm and Ranch Owner’s Insurance Policy. From competing motions for summary judgment, contesting the question of whether Underwriters had the duty to defend Graham in the Chambers lawsuit, the trial court awarded Graham judgment. Underwriters appealed. Because, under the terms of the policy, there was no duty to defend the Chambers lawsuit, this curt reversed the trial court’s judgment and render a take-nothing judgment in favor of Underwriters.
Underwriters filed a legal denial based on the governing “eight corners rule,” which provides that an insurer is entitled to rely solely on the factual allegations contained in the four corners of the complaint in conjunction with the four corners of the liability policy to determine whether it has a duty to defend. In its answer, Underwriters argued that the eight corners rule precluded recovery because (1) the Chambers family’s petition established that the incident was not a covered occurrence and (2) the policy expressly excluded coverage for bodily injury caused by an intentional act of the insured. Underwriters filed a traditional motion for summary judgment on its legal defense. In response, Graham filed a cross-motion for summary judgment, arguing (1) that Underwriters’ duty to defend was established by the jury’s finding of no wrongdoing on Graham’s part and (2) that the policy’s exclusion for intentional acts did not apply to the Chambers family’s allegations of negligence and gross negligence.
The insured has the initial burden to establish coverage under the policy. If it does so, then to avoid liability the insurer must prove one of the policy’s exclusions applies. If the insurer proves that an exclusion applies, the burden shifts back to the insured to establish that an exception to the exclusion restores coverage.
Interpretation of insurance contracts in Texas is governed by the same rules as interpretation of other contracts. When construing a contract, the court’s primary concern is to give effect to the written expression of the parties’ intent.
The initial four corners to consider are the four corners of the insurance policy. The terms of Graham’s personal liability coverage provide,
COVERAGE C (Personal Liability). If a claim is made or a suit is brought against an insured for damages because of bodily injury5 or property damage caused by an occurrence to which this coverage applies, we will:
1. pay up to our limit6 of liability for the damages for which the insured is legally liable.
2. provide a defense at our expense by counsel of our choice even if the suit is groundless, false or fraudulent . . . .

The policy defines the term “occurrence” as “an accident, including exposure to conditions which results in bodily injury or property damage during the policy period.” It also contains the following exclusion: “Coverage C (Personal Liability) . . . do[es] not apply to: . . . bodily injury or property damage which is caused intentionally by or at the direction of an insured.”
This Court had to determine whether the Chambers family’s petition alleged that Graham committed a negligent act in addition to an intentional one. Graham claims that the Chambers family “pled . . . two distinct positions with regard to state of mind.” In support of his argument that the petition alleged a negligent state of mind, Graham looks to (1) the language stating that the Chambers family has “no way of knowing why [Chambers] was killed . . . because the only living persons who participated in the events leading up to his untimely and tragic death are the two Defendants,” and (2) the language “alleging that Mr. Graham was negligent and grossly negligent in causing the death of Mr. Chambers.” Urging a liberal interpretation of the pleadings, Graham argues that because the petition set forth causes of action for negligence and gross negligence, in addition to the cause of action for an intentional tort, it “presented a matter that could potentially be covered by the insurance policy,” requiring Underwriters to defend him in the Chambers lawsuit.
An accident is generally understood to be a fortuitous, unexpected, and unintended event. Underwriters argued that the factual allegations in the petition (1) stating that a gun was used “to carry out Graham’s intent and purpose of bringing about the death of Chambers” and, (2) describing the incident as a “vicious assault” and “violent assault and battery,” alleged only intentional conduct. Thus, Underwriters claims that it has no duty to defend because (1) the underlying petition alleges one injury-causing act, pointing the gun at Chambers and pulling the trigger, (2) there are no facts in the petition alleging that the shooting was anything other than intentional, and (3) the shooting was not a covered occurrence (a) since it was not an accident and (b) because the policy excluded coverage for intentional acts.
Courts have established that a mere allegation of negligence does not control the duty to defend. Thus, the underlying petition’s causes of action for negligence and gross negligence, on their own, were insufficient to require Underwriters to defend Graham in the Chambers lawsuit.
Here, the four corners of the petition demonstrate that Graham’s use of a “loaded 410 shotgun . . . to carry out his intent and purpose of bringing about” Chambers’ death was intentional. Because Chambers’ death was the type of injury that ordinarily follows from pointing a shotgun at a person’s head and shooting him or her “at very close range,” the Court concluded that the injury was not caused by accident.
Under the terms of the policy, coverage applied only to accidents causing bodily injury and was expressly excluded for acts “caused intentionally by . . . an insured.”
a natural and probable result of Graham’s act Where acts are voluntary and intentional and the injury is the natural result of the act, the result was not caused by accident.