American Economy Ins. Co. v. Tomlinson

• Decision Date: 31 January 1994
• Docket Number: No. 92-9108,92-9108
• Citation: 12 F.3d 505
• Parties: AMERICAN ECONOMY INSURANCE COMPANY, Plaintiff-Appellee, v. Sandra TOMLINSON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 505

12 F.3d 505

AMERICAN ECONOMY INSURANCE COMPANY, Plaintiff-Appellee, v. Sandra TOMLINSON, Defendant-Appellant.

No. 92-9108.

United States Court of Appeals, Fifth Circuit.

Jan. 31, 1994.

Sandra W. Gould, Daniel L. Tatum, Bishop, Payne, Williams & Werley, Fort Worth, TX, for defendant-appellant.

Stephen Stingley Goodman, IV, Shannon, Gracey, Ratliff & Miller, Fort Worth, TX, for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Texas.

Before GOLDBERG, JONES, ^* and DUHE, Circuit Judges.

GOLDBERG, Circuit Judge:

In this appeal, we must determine whether the defendant, a woman who received a one-half interest in an automobile through a probated will, owned that car within the meaning of her Texas personal automobile insurance policy. If the defendant owned the car in question, two "owned-but-unscheduled-vehicle" exclusion clauses in her insurance policy apply and eliminate coverage for the injuries that she suffered in an accident that occurred while she was driving the car. If the exclusions apply, we must decide whether they conflict with the requirements of the Texas Insurance Code. After the plaintiff moved for summary judgment and the defendant failed to respond, the district court found that the defendant owned the car and that the exclusion clauses were enforceable. The defendant appeals. Finding no error in the district court's judgment, we affirm.

I. Facts and Proceedings Below

Sandra Tomlinson was injured in an automobile accident in April of 1992. When the accident occurred, Tomlinson was driving a 1985 Mercedes Benz 190E that had belonged to her father, George Rashti. Rashti had died approximately two years earlier, and Tomlinson and her sister were the co-beneficiaries of his estate. Under Rashti's will, Tomlinson and her sister each inherited an undivided one-half interest in their father's estate, including the Mercedes 190E. Rashti's will had been admitted to probate, but the administration of the estate had not closed at the time of the accident. The certificate of title for the Mercedes 190E was still in Rashti's name.

American Economy Insurance Company ("American Economy") issued a Texas Personal Auto Policy ("Policy") to Tomlinson in June of 1991. The only car listed as a covered automobile on the Policy was a 1985 Mercedes Benz 380; the Mercedes 190E was not listed as a covered automobile. After the accident, Tomlinson filed a claim for personal injury protection coverage and uninsured motorists coverage under the Policy. American Economy then filed this suit, seeking a declaration that it was not obligated to pay Tomlinson either the personal injury protection coverage or the uninsured motorists coverage that she sought. American Economy relied on two "owned-but-unscheduled-vehicle" exclusion clauses contained in the Policy. These clauses excluded personal injury protection and uninsured motorists coverage for any injury that Tomlinson suffered while she occupied an automobile that she owned but which was not listed as a covered automobile in the Policy. Specifically, the first exclusion clause excepted "Personal Injury Protection Coverage for any person for bodily injury sustained ... [w]hile occupying, or when struck by, any motor vehicle (other than your covered auto) which is owned by you." The second clause eliminated uninsured and underinsured motorists coverage "for any person ... [f]or bodily injury sustained while occupying, or when struck by, any motor vehicle or trailer of any type owned by you or any family member which is not insured for this coverage under this policy."

After American Economy moved for summary judgment, Tomlinson failed to respond. The district court granted the motion for summary judgment and entered a final judgment, declaring that American Economy was not obligated to pay Tomlinson's claim. After the district court denied Tomlinson's motion for new trial, Tomlinson appealed.

II. Discussion

In reviewing a grant of summary judgment, we apply the same standard employed by the district court. Specifically, we ask whether the summary judgment evidence on file shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Hibernia National Bank v. Carner, 997 F.2d 94, 97 (5th Cir.1993). In this case, summary judgment is appropriate when the moving party "presents evidence which negates any essential element of the opposing party's claim or where any essential element is without factual support." First American Bank & Trust v. Texas Life Ins. Co., 10 F.3d 332, 334 (5th Cir.1994).

A. Ownership of the Automobile

Tomlinson first contends that whether she owned the Mercedes 190E that she was driving at the time of the accident is ambiguous and that we should construe the Policy in favor of coverage by holding that she was not the owner of the car within the meaning of the Policy. We do not find Tomlinson's arguments persuasive.

The Texas Supreme Court has succinctly articulated the rules of interpretation applicable to insurance contracts such as the one at issue here:

Generally, a contract of insurance is subject to the same rules of construction as other contracts. Barnett v. Aetna Life Ins. Co., 723 S.W.2d 663, 665 (Tex.1987). If the written instrument is worded so that it can be given only one reasonable construction, it will be enforced as written. Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938 (Tex.1984). However, if a contract of insurance is susceptible to more than one reasonable interpretation, we must resolve the uncertainty by adopting the construction that most favors the insured. Barnett, 723 S.W.2d at 667; Ramsay v. Maryland Am. Gen. Ins. Co., 533 S.W.2d 344, 349 (Tex.1976); Brown v. Palatine, 89 Tex. 590, 35 S.W. 1060, 1061 (1896). The court must adopt the construction of an exclusionary clause urged by the insured as long as that construction is not unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties' intent.

Nat'l Union Fire Ins. Co. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex.1991). Of course, courts may not "resort to [these] rules of contract construction if the policy is unambiguous, that is, if it is susceptible of only one reasonable interpretation." Upshaw v. Trinity Companies, 842 S.W.2d 631, 633 (Tex.1992).

The issue is whether Tomlinson owned the Mercedes 190E that she was driving when she was injured. The Policy does not define the term "owned". The Texas Probate Code does, however, provide that when a person dies, leaving a lawful will, the estate vests in the devisees or legatees immediately upon the testator's death. See Tex.Prob.Code Ann. Sec. 37 (Vernon supp.1993). Courts that have interpreted this statute have written that "title to an estate vests in the heirs immediately upon the death of the decedent. There is never a time when title is not vested in someone." Welder v. Hitchcock, 617 S.W.2d 294, 297 (Tex.Civ.App.--Corpus Christi 1981, writ ref'd n.r.e.). To be sure, section 37 of the Probate Code provides that the vesting of the estate is subject to the payment of the debts of the testator and that, upon the issuance of letters testamentary or of administration, an executor or administrator of an estate has the right to possess the property of an estate. However, this latent qualification of the devisees' or legatees' right to retain the devised property does not alter the fact that title to the property of the estate passes to the devisees or legatees immediately upon the death of the testator. ¹

Moreover, once a will is admitted to probate, it becomes effectual to prove title to the property disposed of by the will. See Tex.Prob.Code Ann. Sec. 94 (Vernon 1980). In other words, after it has been probated, "a will becomes evidence of the right of the devisees and legatees to take their devises and bequests, and their title is subject to defeasance only in the event that the order probating the instrument is set aside in a subsequent suit to contest its validity." 74 Tex.Jur.3d Wills Sec. 293, at 481-82 (1990) (footnotes omitted); Hardin v. Hardin, 66 S.W.2d 362, 363 (Tex.Civ.App.--Fort Worth 1933, no writ).

Applying these principles to the present case, we find that once Rashti died, leaving a lawful will, the property of his estate (including the Mercedes 190E) vested immediately in Tomlinson and her sister. Thus, Tomlinson and her sister became the co-owners of the Mercedes 190E immediately upon the death of their father. Although the administrator of Rashti's estate could have taken possession of the car and sold it to satisfy the debts of the estate, title to the Mercedes 190E would have remained in Tomlinson and her sister until the administrator sold the car. The fact that the administrator of the estate could have taken possession of the car and that the car could have been sold to satisfy the debts of the estate is thus irrelevant to Tomlinson's status as an owner of the car when she was involved in the accident.

Moreover, Rashti's will was probated on October 9, 1990. After Rashti's will was probated, it became effectual to prove that title of the Mercedes 190E had vested in Tomlinson and her sister. Thus, when American Economy submitted Rashti's probated will in support of its motion for summary judgment, American Economy satisfied its burden of showing that Tomlinson owned the automobile that she was driving when she had her accident. ² Tomlinson had the opportunity to submit evidence showing that she did not own the Mercedes 190E; however, when she declined to respond to American Economy's motion for summary judgment, she failed to do so. Therefore, on the record before us, we hold that the only reasonable interpretation of the Policy is that Tomlinson owned the Mercedes 190E that she was driving when she was involved in the accident that caused her injuries.

B. Validity of the Exclusions

Since...