Colony Ins. Co. v. H.R.K., Inc.
| Decision Date | 17 March 1987 |
| Docket Number | No. 05-86-00276-CV,05-86-00276-CV |
| Citation | 728 S.W.2d 848 |
| Parties | COLONY INSURANCE COMPANY, Appellant, v. H.R.K., INC., d/b/a the Hock Shop, Appellee. |
| Court | Texas Court of Appeals |
Marc A. Sheiness, Houston, for appellant.
James F. Boyle, Grand Prairie, for appellee.
Before DEVANY, McCLUNG and THOMAS, JJ.
This is an appeal from a summary judgment rendered against Colony Insurance Company, hereinafter referred to as Colony. Colony filed an action seeking a judgment declaring that it had no duty to defend a wrongful death suit or provide coverage therein to H.R.K., Inc., d/b/a The Hock Shop, hereinafter referred to as H.R.K. H.R.K. filed a motion for summary judgment seeking to have the trial court declare that Colony was under a duty to defend. Colony filed its own motion for summary judgment asking the court to deny H.R.K.'s motion for summary judgment and to declare that there was no duty to defend or provide coverage. The trial judge granted summary judgment in favor of H.R.K. Because we agree that Colony owed a duty to defend as a matter of law, we affirm.
On May 28, 1983, Colony issued a "multi-peril comprehensive general liability insurance policy" to H.R.K. On or about July 15, 1983, Boyd Leslie Kyles allegedly committed suicide with a handgun purchased from H.R.K. A wrongful death action by the decedent's estate, hereinafter referred to as Kyles, ensued. As a result of this suit, H.R.K. requested Colony to honor its policy and defend the Kyles action. Colony undertook the defense pursuant to a reservation of rights letter.
Colony contends that the trial court erred because a proper construction of the "completed operations" and "product hazard" exclusions, together with the summary judgment evidence, established as a matter of law that it had no duty to defend. We hold that the allegations of the underlying wrongful death petition, when considered in the light of the policy provisions, establish as a matter of law that Colony has a duty to defend H.R.K.
The Kyles petition alleges that H.R.K. is strictly liable pursuant to the Restatement (Second) of Torts § 402(a) (1965) and also because H.R.K. was engaged in ultrahazardous activity. Additionally, the Kyles petition alleges H.R.K. was negligent in the sale of the weapon in that, inter alia, it sold a pistol to Kyles when it knew, or should have known, that Kyles was mentally unstable and posed a threat to himself or others.
The general coverage provision of the policy in question states:
The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies caused by an occurrence, and the Company shall defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements.
The "Completed Operations and Products Hazard Exclusion" relied upon by Colony states:
It is understood and agreed that insurance does not apply to bodily injury or property damage included with the completed operations hazard or product hazard of the policy.
In the definition of "completed operations hazard," the insurance policy states:
"Completed Operations Hazard" includes bodily injury or property damage arising out of operations or reliance upon a representation or a warranty made at any time with respect thereto, but only if the bodily injury or property damage occurs after such operations have been completed or abandoned and occurs away from the premises owned by or rented to the named insured.
"Operations" includes materials, parts or equipment furnished in connection therewith. Operations shall be deemed completed at the earliest of the following times:
1) When all the operations to be performed by or on behalf of the named insured under the contract have been completed.
2) when all operations to be completed by or on behalf of the named insured at the site of the operations have been completed, or
3) When the portion of the work out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaging in performing operations for a principal as part of the same project.
While the obligation to defend an action against an insured is broader than the obligation to pay, an insurance carrier cannot be called on to furnish a defense for the insured unless the third party's claim against the insured is shown to be within coverage provisions of the policy. In determining the duty of a liability insurance company to defend a lawsuit brought against the insured, the allegations of the complainant should be considered in the light of the policy provisions without reference to the truth or falsity of such allegations, and without reference to what the parties know or believe the true facts to be, or without reference to a legal determination thereof. Argonaut Southwest Insurance Co. v. Maupin, 500 S.W.2d 633, 635 (Tex.1973).
Further, in considering the allegations in the complainant's petition to determine whether they fall within the provisions of the insurance policy, a liberal interpretation of the meaning of those allegations should be indulged. Heyden Newport Chemical Corp. v. Southern General Insurance Co., 387 S.W.2d 22, 26 (Tex.1965); and Norvell Wilder Supply v. Employers Casualty Co., 640 S.W.2d 338, 340 (Tex.App.--Beaumont 1982, no writ). Even where the injured person's complaint does not state facts...
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