Emscor, Inc. v. Alliance Ins. Group

• Decision Date: 17 January 1991
• Docket Number: No. C14-89-01128-CV,C14-89-01128-CV
• Citation: 804 S.W.2d 195
• Parties: EMSCOR, INC. and Walter P. Manning, Individually, Appellants, v. ALLIANCE INSURANCE GROUP, Alliance Syndicate, Inc., and Alliance General Insurance, Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 195

804 S.W.2d 195

EMSCOR, INC. and Walter P. Manning, Individually, Appellants, v. ALLIANCE INSURANCE GROUP, Alliance Syndicate, Inc., and Alliance General Insurance, Appellees.

No. C14-89-01128-CV.

Court of Appeals of Texas Houston (14th Dist.).

Jan. 17, 1991.

Rehearing Denied Feb. 14, 1991.

Donald B. McFall, Matthew S. Muller and Jill A. Hurd, Houston, for appellants.

Linda M. Cipriani and Michael O. Connelly, Houston, for appellees.

Before PAUL PRESSLER, CANNON and ELLIS, JJ.

OPINION

CANNON, Justice.

Appellants Emscor, Inc., and Walter P. Manning (Emscor) brought a declaratory judgment action to determine whether appellees Alliance Insurance Group, Alliance Syndicate, Inc., and Alliance General Insurance (Alliance) were required to defend Emscor in three lawsuits. The trial court granted summary judgment in favor of Alliance and denied Emscor's motion for summary judgment. We affirm.

On February 28, 1987, Stone Mountain Insurance Company issued a $500,000.00 general liability policy to Emscor. That same day, Alliance issued a $500,000.00 excess insurance policy to Emscor. Both policies were effective through February 28, 1988. On April 28, 1987, a construction crane collapsed killing two men, injuring another, and causing substantial property damage. Emscor was subsequently named as a defendant in three different lawsuits. On July 26, 1988, during the pendency of the three lawsuits, Stone Mountain was placed in receivership. At some point during that time, Emscor submitted legal bills to Alliance in connection with the wrongful death action styled, Cindy R. Ketcher v. Linbeck Construction Co. On January 29, 1989, Emscor filed this declaratory judgment action based upon Alliance's refusal to defend Emscor in the wrongful death action.

On May 22, 1989, Alliance moved for summary judgment claiming it did not have a duty to defend Emscor in the Ketcher suit until the Stone Mountain policy limits were exhausted. Alliance argued its position was supported by the unambiguous, express terms of the excess insurance policy it issued to Emscor. Emscor filed its cross-motion for summary judgment claiming the express terms of the Alliance policy incorporated the terms of the Stone Mountain policy and, therefore, required Alliance to defend Emscor in the Ketcher suit, as well as in two other suits arising from the same accident. On August 16, 1989, the trial court entered a final judgment granting Alliance's motion for summary judgment and denying Emscor's cross-motion for summary judgment.

In two points of error, Emscor contends the trial court erred in granting Alliance's motion for summary judgment and in overruling Emscor's cross-motion for summary judgment. Despite ambiguity in the Alliance policy, Emscor contends Alliance owed a duty to defend Emscor when the primary insurance carrier, Stone Mountain, became insolvent.

When both parties move for summary judgment and one such motion was granted and the other denied, the appellate court should determine all questions presented including whether the losing party's motion should have been overruled. Jones v. Strauss, 745 S.W.2d 898, 900 (Tex.1988). A movant for summary judgment has the burden of showing there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985). In reviewing summary judgment proof, evidence favorable to the non-movant is taken as true, the court indulging all inferences and resolving all doubts in the non-movant's favor. Id. When parties file opposing motions for summary judgment, neither party can prevail merely because of the failure of the other to discharge his burden. See Clark v. Perez, 679 S.W.2d 710, 713 (Tex.App.--San Antonio 1984, no writ).

Courts follow the well established rule that insurance policies are strictly construed in favor of the insured to avoid exclusion of coverage. Puckett v. U.S. Fire Insurance Co., 678 S.W.2d 936, 938 (Tex.1984). That rule does not apply, however, when the term in question is susceptible of only one reasonable construction. Id. In the absence of ambiguity, courts interpret insurance contracts like other contracts. Whether a contract is ambiguous is a question of law for the court. If a written instrument is worded so a court can properly give it a certain or definite legal meaning, it is not ambiguous. A contract is ambiguous only when the application of pertinent rules of interpretation results in genuine uncertainty as to which one of two meanings is proper. All parts of insurance contracts are to be taken together, and such meaning shall be given to them as will effectuate to the fullest extent the intention of the parties. Courts must interpret the meaning of the language actually used in a contract and give effect to the intention of the parties as expressed in the writing. If the language is plain, it must be enforced as written. State Farm Lloyds, Inc. v. Williams, 791 S.W.2d 542, 543 (Tex.App.--Dallas 1990, no writ).

The Coverage provision in the Insuring Agreement of the Alliance policy provides:

Coverage: To indemnify the Insured for such loss as would have been payable under all of the terms of the Liability Coverages afforded by the underlying policies listed in Item 5 of the Declarations if the limits of liability stated in Item 4 of the Declarations were available under the underlying policies in addition to the limits of liability stated in Item 5 of the Declarations (hereinafter called the "underlying limits"); provided the Company's obligation hereunder shall apply only to loss in excess of such underlying limits. (Emphasis added).

There are no underlying policies listed in Item 5 of the Declarations. Only Item 4 refers to the "schedule of underlying insurance attached." The attached schedule of insurance is the Stone Mountain policy. That policy provides that "the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage." According to Emscor, Alliance's Coverage provision incorporates the duty to cover and defend against losses that would have been covered by Stone Mountain absent its insolvency.

The Coverage provision clearly states the basic risks covered by Alliance's policy. Those risks are the same risks covered by Stone Mountain's policy. Alliance's obligations, however, "shall apply only to loss in excess of such underlying limits." In addition, the Maintenance of Underlying Insurance condition also does not incorporate Stone Mountain's duty to defend as Emscor contends. That...