Dallas Insurance Lawyers Need To Know This

A 1997, Texas Supreme Court case is important for insurance law attorneys to know. The style of the case is, Trinity Universal Insurance Company v. Cowan.
Here are some of the facts to know about in the case.
A male, Gage, was working at an HEB photo shop. He developed a roll of revealing pictures of Cowan. He made extra prints for himself. He shared these prints with friends. This eventually got back to Cowan. Cowan sued Gage and HEB alleging negligence and gross negligence, among other allegations. Cowan alleged she had suffered severe mental pain, loss of privacy, humiliation, embarrassment, fear, frustration, mental anguish, etc. She did not allege any physical manifestation of these injuries. Gage notified his parents’ homeowners insurance company, Trinity. Trinity initially defended Gage under a reservation of rights, but later denied coverage and withdrew the payment of defense lawyers. Cowan settled with HEB and Gage in return for a covenant not to execute against any of Gage’s assets except the Trinity insurance policy. At trial, Gage did not appear or defend. Cowan and her mother testified that she suffered mental anguish, along with headaches, stomachaches and sleeplessness. The trial Judge found Gage responsible and awarded Cowan $250,000.00.
Cowan then filed suit against Trinity as Gage’s judgment creditor and as Gage’s assignee of the bad faith insurance claim. Both sides moved for summary judgment. The Judge granted Cowan’s motion and denied Trinity’s, leaving the issues of damages, bad faith claims, and attorney fees for trial.
Before trial, Cowan and Trinity settled most of the dispute with Trinity agreeing to pay the money plus interest and attorney fees. Cowan agreed to waive any extra-contractual claims. Trinity reserved the right to appeal the partial summary judgement on coverage and whether Trinity was bound by the amount of the underlying judgement. Trinity then appealed.
Here is what the Texas Supreme Court held.
Cowan’s injures were not “bodily injuries” resulting from a covered “occurrence.” The judgment was reversed with Cowan getting nothing.
Under the “complaint allegation rule,” factual allegations in the pleadings and the policy language determine an insurance company’s duty to defend a lawsuit. An insurance company is entitled to rely solely on the factual allegations contained in the petition in conjunction with the terms of the policy to determine whether it has a duty to defend.
Pure mental anguish is not “bodily injury.” Texas tort law allows recovery of mental anguish damages unaccompanied by physical manifestations in some circumstances. That does not mean that insurance coverage for “bodily injury” necessarily encompasses purely emotional injuries. “Bodily injury” as defined in the Trinity policy does not include purely emotional injuries such as those alleged by Cowan and unambiguously requires an injury to the physical structure of the human body.
Although Cowan testified she had experienced headaches, stomachaches and sleeplessness, Cowan never alleged these or any physical manifestations of mental injuries. In the context of determining an insurance company’s duty to defend a lawsuit, the court will not presume a claim for physical manifestations when none is pled. The court refused to conclude that a claim for mental injuries necessarily implies a claim for physical manifestations. Because Cowan did not plead any physical manifestations, she did not plead a “bodily injury” such that Trinity’s duty to defend was triggered.
Gage’s conduct in making copies of photographs was not an “accident.” He did exactly what he intended to do when he purposefully copied the photographs and showed them to friends. That Gage did not expect or intend Cowan to learn of his actions is of no consequence. The injury to Cowan, the invasion of her privacy, is of a type that “ordinarily follows” from Gage’s conduct. The injuries could be reasonably anticipated from the use of the means or an effect that Gage can be charged with producing.
Trinity had no duty to investigate coverage under these facts. Trinity was entitled to rely solely on the factual allegations contained in the petition in conjunction with the policy to determine whether it had a duty to defend.

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