Bituminous Cas. Corp. v. Maxey, 01-01-01111-CV.

• Decision Date: 22 May 2003
• Docket Number: No. 01-01-01111-CV.,01-01-01111-CV.
• Citation: 110 S.W.3d 203
• Parties: BITUMINOUS CASUALTY CORPORATION, Appellant, v. Kathy MAXEY, Individually and as Next Friend of Kristen Tucker, and Kristen Tucker, Appellees.
• Court: Texas Court of Appeals

110 S.W.3d 203

BITUMINOUS CASUALTY CORPORATION, Appellant, v. Kathy MAXEY, Individually and as Next Friend of Kristen Tucker, and Kristen Tucker, Appellees.

No. 01-01-01111-CV.

Court of Appeals of Texas, Houston (1st Dist.).

May 22, 2003.

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Dawn Christine Hansen Woelfel, Sidney H. Davis, Touchstone, Bernays, Johston, Beall & Smith, LLP, Dallas, TX, for Appellant.

Joe Scott Evans, Evans & Kitchens, Groveton, TX, for Appellee.

Panel consists of Justices HEDGES, KEYES, and DUGGAN.^*

OPINION ON MOTION FOR REHEARING

EVELYN V. KEYES, Justice.

On this day, the Court considered appellant's motion for rehearing en banc. The motion is denied. However, we withdraw our opinion of March 27, 2003, and issue this opinion in its stead.

This is an appeal from a declaratory judgment holding that Bituminous Casualty Corporation ("Bituminous") is obligated to indemnify L & R Timber, Inc., and its employee, Billy Wiggins, for the judgment awarded in cause number 17,746 to Kathy Maxey, individually and as next friend of Kristen Tucker (collectively referred to as "Maxey"). We reverse and render judgment in favor of Bituminous.

Facts and Procedural Background

Appellant, Bituminous, issued a commercial lines policy to two companies, L & R Timber Co., Inc. and Triple L Express, Inc. That policy included, among other coverages, general liability coverage pursuant to the terms of a commercial general liability coverage ("CGL") form contained in the policy. The CGL form is a standard insurance industry form widely used across the nation to provide general liability insurance to businesses. Grossly over-simplified, general liability insurance may generally be said to cover an insured's liability for damages accidentally caused to third parties that are not covered under other, more specific types of liability insurance policies — business, automobile, and employer's liability, for example.

On May 26, 1999, Kristen Tucker was turning into a convenience store parking lot when her car was hit from behind by a truck and trailer operated by Terrance Rose. Rose was employed by Triple L, which leased the truck from Mike Lout Trucking and the trailer from L & R. L & R's employee, Wiggins, was responsible for maintenance of both the tractor/trailer and the brakes. Tucker suffered severe injuries resulting in permanent paralysis of her lower extremities. Tucker sued L & R, Triple L, Rose, and Wiggins for damages in the 411th Judicial District Court of Trinity County, Texas, cause number 17,-746, styled Maxey v. L & R Timber, Inc.

Bituminous sought a declaratory judgment that it had no duty to defend or indemnify Triple L and L & R. The trial court ruled that Bituminous had the duties to defend and indemnify L & R, but not Triple L. Bituminous appealed to this Court, and, on joint motion of the parties, we reversed and remanded to the trial court without addressing the merits. Bituminous Cas. Corp. v. L & R Timber Co., Inc., No. 01-00-01333-CV, 2001 WL 831664 (Tex.App.-Houston [1st Dist.] July 19, 2001, no pet.) (not designated for publication).

A settlement was subsequently reached between Maxey and Triple L and its employee, Rose, wherein Triple L and Rose were released from liability for payment of the full coverage amount of their automobile liability policy in the amount of $1,500,000. Judgment was then entered on July 13, 2001, against L & R and Wiggins for $1,000,000 (the Tucker judgment), the full amount of coverage under the Bituminous CGL policy.

The Tucker judgment stated:

The accident occurred when the vehicle Tucker was driving was struck in the rear by a tractor/trailer. The tractor, a 1996 Mack, was owned by Mike Lout Trucking, Inc. and under lease to and being used in the furtherance of the business of [Triple L]. The trailer being pulled by the tractor was a 1989 Nabors Open Box Van owned by [L & R], which was leased to and being operated in the furtherance of the business of [Triple L]. The tractor/trailer was being driven by [Rose], an employee of Triple L, acting in the course and scope of his employment.

[L & R] was responsible for the maintenance and upkeep of the tractor/trailer being operated by [Triple L] at the time of the accident.... [Wiggins] was ... the truck maintenance supervisor/foreman/superintendent. ... [Wiggins] was charged with the responsibility of seeing that the tractor and trailer being operated by [Triple L] at the time of the accident were maintained in a safe and roadworthy condition....

The accident occurred because the tractor/trailer was unable to safely stop before striking the vehicle driven by Tucker, due to the fact that three of the six braking systems on the tractor and two of the four braking systems on the trailer were so far out of adjustment as to exceed the minimum standards adhered to by the Federal Motor Carrier Safety Administration, the Department of Transportation and the Texas Department of Public Safety.

[L & R and Wiggins] were negligent ... in the operation on the roads of an improperly or inadequately maintained tractor and trailer ...

* * *

Each of these acts or omissions, singularly or in combination with the others was a proximate cause of the accident and of [Tucker's] injuries and damages, in that the tractor and trailer were unable to safely stop due to the poorly maintained brakes.

* * *

It is therefore ORDERED, ADJUDGED and DECREED that Defendants L and R Timber, Inc. and Billy Wiggins are jointly and severally liable to Plaintiffs Kathy Maxey and Kristen Tucker for the total sum of $1,000,000.00 (one million dollars), inclusive of all prejudgment interest.

* * *

The court below found Bituminous had a duty to indemnify L & R and Wiggins for the damages awarded by the judgment, and Bituminous appeals. Bituminous and Maxey have stipulated that they are the only parties having a justiciable interest in the issue of coverage under the CGL policy and that the sole issue presented to the trial court was a duty to indemnify.

Issues

Bituminous argues in three issues that (1) the trial court erred in declaring that it has a duty to indemnify L & R and Wiggins for the Tucker judgment because the auto exclusion clause in the CGL policy precludes coverage for damages for bodily injury arising out of the conduct of "any insured"; (2) the "separation of insureds" clause does not alter the auto exclusion clause so that the exclusion applies only to damages caused by L & R's own conduct; and (3) the trial court erred in denying Bituminous's motion for judgment on the stipulated facts and by granting judgment in favor of Maxey. Because the first and second issues are interrelated, we address them together.

Standard of Review

We review declaratory judgments under the same standards as other judgments and decrees. City of Galveston v. Giles, 902 S.W.2d 167, 170 (Tex.App.-Houston [1st Dist.] 1995, no writ). We look to the procedure used to resolve the issue at trial to determine the standard of review on appeal. Id. Here, because the case was resolved by stipulated facts, we review the propriety of the declaratory judgment under the standards applied to judgments rendered upon stipulated facts. See id. at 170-71; Unauthorized Practice of Law Comm. v. Jansen, 816 S.W.2d 813, 814 (Tex.App.-Houston [14th Dist.] 1991, writ denied) (submitting the case on agreed statement and on motion for summary judgment). If reversal is warranted, we render the judgment the trial court should have rendered, unless a remand is necessary for further proceedings. FDIC v. Projects Am. Corp., 828 S.W.2d 771, 772 (Tex.App.-Texarkana 1992, writ denied).

Insurance policies are controlled by rules of interpretation and construction applicable to contracts generally. National Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995). The primary concern of a court in construing a written contract is to ascertain the true intent of the parties as expressed in the instrument. Id. Terms in contracts are given their plain, ordinary, and generally accepted meaning unless the contract itself shows that particular definitions are used to replace that meaning. Western Reserve Life Ins. v. Meadows, 152 Tex. 559, 261 S.W.2d 554, 557 (1953). If a written contract is so worded that it can be given a definite or certain legal meaning, then it is not ambiguous. National Union Fire Ins. Co. of Pittsburgh, Pa., 907 S.W.2d at 520. The interpretation of an unambiguous contract is a question of law for the court. Perry v. Houston Indep. Sch. Dist., 902 S.W.2d 544, 547 (Tex.App.-Houston [1st Dist.] 1995, writ dism'd w.o.j.). If an insurance policy is ambiguous, however, it will be interpreted in favor of the insured. Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 458 (Tex. 1997).

Discussion

The Auto Exclusion Clause

Bituminous argues in its first issue that it is entitled to a judgment declaring that it has no duty to indemnify L & R and Wiggins for the Tucker judgment because the auto exclusion clause in the CGL policy precludes all coverage for the accident.

The auto exclusion clause in the CGL policy reads as follows:

2. Exclusions

This insurance does not apply to:

. . . .

g. Aircraft, Auto or Watercraft

"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading".

(Emphasis added.) An "auto" is defined in the CGL policy as "a land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment."

Section II of the CGL policy, "Who Is an Insured," states, in relevant part, If you are designated in the Declarations as "[a]n organization other than a partnership or joint venture, you are an insured." The section also states,

Each of the following is also an insured:

...