Insurance Lawyers Arguing The Case

Attorneys in Grand Prairie, Arlington, Fort Worth, and other places in the Dallas – Fort Worth area are paid to argue cases. Here is a case where the reasoning sounds pretty good.
The style of the case is Raymundo Salcedo v. Evanston Insurance Company. The opinion was issued on February 22, 2012, by the United States Court of Appeals, 5th Circuit. The appeal arises from the district court’s grant of summary judgment in favor of Evanston upon a conclusion that Evanston owed no coverage under its commercial general liability (CGL) insurance policy issued to Villegas & Sons, Incorporated (Villegas). Salcedo, the injured claimant, argued on appeal that the district court errred by construing the “auto” exclusion to preclude coverage for the judgment he obtained in state court against Villegas. Here are the facts.
Salcedo is a judgment creditor of Villegas pursuant to a final judgment entered by the 448th District Court of El Paso, Texas, for $1.1 million plus interest. Evanston denied coverage in the state court proceeding based on the “auto” exclusion in its CGL policy.
The injury took place at Villegas’s asphalt plant, which it had loaned to another company, Southwestern Growth, (Southwestern). On the day of the accident, Southwestern was using the premises to upload a shipment of oil and employed Salcedo to assist with the transfer.
In the underlying case that ensued, Salcedo alleged that he was injured when a hose attached from the plant’s asphalt reservoir to an oil truck ruptured while he was uploading oil from the truck to the reservoir, causing him to be burned by the hot oil.
It is undisputed that the general insuring language of the CGL policy at issue would cover this situation. The parties’ sole dispute centers on the language of Exclusion g. Specifically, the policy excludes bodily injury: “arising out of, caused by, or contributed to by the ownership, non-ownership, maintenance, use, or entrustment to others of any aircraft, ‘auto,’ or watercraft. Use includes operations and ‘loading and unloading.'” The parties stipulated that the oil truck in question is an “auto,” as defined by the policy. It is essentially undisputed that Salcedo was “unloading” the truck at the time of the accident.
Thus, the court moved to the question of whether Salcedo’s injury “arose out of the use” of an auto. Under Texas law, “for liability to ‘arise out of’ the use of a motor vehicle, a casual connection or relation must exist between the accident or injury and the use of the motor vehicle.” This casual connection is “interpreted to mean that there is but for causation, though not necessarily direct or proximate causation.” In turn, “use” means “to put or bring into action or service; to employ for or apply to a given purpose.” The Texas Supreme Court has set out several factors to determine whether an injury arises out of the use of a vehicle for the purposes of auto liability insurance coverage:
(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.
Applying this framework to the facts, this appeals court found that the district court was correct in concluding that Salcedo’s injury arose from the use — including loading and unloading — of the oil truck.
First, his injury occurred while the oil truck was being used as it was inherently intended — uploading oil. Though it was no longer moving, its inherent purpose included activities that involved the truck at a stop, and there was nothing “unexpected or unnatural” about the use of the oil truck in this way.
Second, the accident occurred with the truck’s natural territorial limits, before the actual use terminated. Indeed, the use — uploading oil — was still in progress because the movement of hot oil and rupture of the hose was the instigating factor in causing Salcedo’s injury.
Third, the oil truck produced the injury in question, rather than merely contributing to it. Salcedo was injured because he was uploading oil into the asphalt reservoir when the pump switch broke and the hose ruptured. The truck was not just the situs of the injury, but a producing cause. Salcedo could not have been injured in the way he was, without the use of the oil truck; the accident did not merely happen near the truck; and the expected purpose of the oil truck was to perform the activity that led to Salcedo’s injury. Simply stated, but for the use of the oil truck in its expected and intended state of uploading oil, Salcedo would not have been injured.
This is a case for seeing how courts interpret insurance policy language.

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