Fort Worth Lloyds v. Garza

• Decision Date: 19 June 1975
• Docket Number: No. 935,935
• Citation: 527 S.W.2d 195
• Parties: FORT WORTH LLOYDS, Appellant, v. Raul GARZA et al., Appellees.
• Court: Texas Court of Appeals

Page 195

527 S.W.2d 195

FORT WORTH LLOYDS, Appellant, v. Raul GARZA et al., Appellees.

No. 935.

Court of Civil Appeals of Texas Corpus Christi.

June 19, 1975.

Rehearing Denied Aug. 29, 1975.

James R. Harris, Harris, Cook, Browning & Barker, Corpus Christi, for appellant.

Pat Morris, Nicolas & Morris, George D. Shaffer, Corpus Christi, for appellees.

OPINION ON MOTION FOR REHEARING

NYE, Chief Justice.

We withdraw the original opinion delivered on May 15, 1975, and substitute the following opinion limiting the facts discussed in this opinion to those alleged in the complainant's petition which was filed against Fort Worth Lloyds' insureds, Raul Garza and his wife, Carmela G. Garza.

The appellant Fort Worth Lloyds in its motion for rehearing contends in three (3) points of error that this Court erred in considering facts other than the allegations contained in the complainant's petition in determining the insurer's duty to defend a lawsuit against one of its insureds. The insurance company argues that in determining the duty of a liability insurance company to defend a lawsuit, such responsibility depends solely upon the allegations contained in the complainant's petition against its insured, without any reference to what the parties testify concerning the true facts. Fort Worth Lloyds say that we were in error in considering any facts outside the complainant Reasonover's petition.

Generally speaking, a suit to decide the question of the insurance company's responsibility to defend is brought by its insured after the insurance comany has refused to defend. In the case before us, the insurance company brought a declaratory judgment action to determine its responsibility to defend in advance. Where such course of action is taken by an insurance company and facts are developed, we see no reason why such facts cannot be used along with those contained in the complainant's petition. This would be a calculated risk the insurance company would take when it seeks a declaratory judgment. See Firemen's Insurance Co. Of Newark, New Jersey v. Burch, 426 S.W.2d 306 (Tex.Civ.App., Austin, 1968), rev'd on other grounds, 442 S.W.2d 331 (Tex.Sup.1969) where facts were considered in determining the company's duty to defend.

However, because the trial court's findings of fact are not as clear as they should be and because we arrive at the same result by restricting our consideration to the allegations in Reasonover's petition only we withdraw our original opinion and substitute this opinion in its place. We have considered all of the appellant's points of error in its motion for rehearing and they are overruled. Our substituted opinion follows.

This is a declaratory judgment suit involving the question of the insurance company's duty to defend the owner of a standard home owners' policy. The trial court rendered judgment against the insurance company. The company appeals to this Court.

Fort Worth Lloyds Insurance Company issued a standard home owners' policy to Raul Garza and wife, who own property and reside in Corpus Christi, Texas.

On or about March 4, 1972, J. L. Reasonover was seriously injured while attempting to start a pump for Garza. Upon attempting to start the pump, it blew up in Reasonover's face causing extensive injuries to his face. Reasonover then filed suit against Garza for personal injuries alleging that:

'On or about March 4, 1972, the Defendant was the owner of a tract of land in Starr County, Texas near the town of Rosita. Located on the property was an irrigation pump. On said date the Plaintiff was assisting the Defendant's wife in starting the irrigation pump when the guard on the drive shaft came off and struck the Plaintiff on the face causing him severe injuries. Plaintiff would show that the Defendant, Raul Garza, had shortly prior to the incident disassembled the irrigation pump. When putting it back together, he was unable to find the screws for the guard and used instead a piece of coat hanger wire. Plaintiff would further show that the wire holding the guard in place over the drive shaft was not open and obvious and that he was not warned of such defective condition. Plaintiff alleges that the act of the Defendant in using a piece of coat hanger wire in reassembling the pump was negligence and the proximate cause of the Plaintiff's injuries.'

After Reasonover filed suit against Garza and Garza was served with process, he notified his insurance company of the suit and furnished them with a copy of the petition calling on the company to defend him. The insurance company then filed this suit in the form of a declaratory judgment against Garza, his wife, and Reasonover asking the court: 1) to declare that the insurance company be relieved of any responsibility to defend the insured in the suit filed by Reasonover or any suit which may name the insureds as defendants; 2) to declare that under the circumstances, the insured has no coverage for the accident in question; and 3) to declare that the insurance company will have no liability for any judgment which may be rendered against defendants Raul Garza and wife, Carmela G. Garza, in favor of J. L. Reasonover.

The trial court entered judgment against the insurance company declaring: 1) that the insurance company was obligated to defend Garza in the suit filed by Reasoover; 2) that the insurance policy in question covered Garza and his wife and was applicable to the injuries sustained by Reasonover; 3) that the insurance company was obligated to pay any judgment rendered on behalf of Reasonover against Garza to the limits of the liability provided in the policy.

The insurance company appeals under one point of error that: the case should be reversed because the trial court erred in failing to render judgment for the insurance company when it was alleged by claimant Reasonover that he was injured by the malfunction of an irrigation pump located on land owned by the insured Garza and the parties had contracted in writing that there would be no coverage for such an occurrence.

The contract provided that the Garzas would have personal liability insurance under coverage D of their policy as follows:

'To 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, and the Company shall defend any suit against the Insured alleging such bodily injury or property damage and seeking damages which are payable under the terms of this policy, Even if any of the allegations of the suit are groundless, false or fraudulent; but the Company may make such investigation and settlement of any claim or suit as it deems expedient.'

The insurance policy excluded certain coverages. It stated that 'Coverage D shall not apply:

. . . 3. to any act or omission in connection with premises, other than as defined, which are owned, rented or controlled by an Insured, but this does not apply with respect to bodily injury to residence employee arising out of and in the course of his employment by the Insured; . . .'

The definition of premises in the policy is as follows:

'The term 'premises' means, unless otherwise indicated:

1. All premises where the Named Insured or his spouse maintains a residence and includes private approaches thereto and other premises and private approaches thereto for use in connection with said residence, except business property and farms;

2. individual or family cemetery plots or burial vaults;

3. premises in which an Insured is temporarily residing, if not owned by an Insured;

4. vacant land, other than farm land, owned by or rented to an Insured. Land shall not be deemed vacant following the commencement of any construction operations thereon unless such operations are being performed solely by independent contractors in connection with the construction of a one or two family dwelling for the Insured.'

The insurance company argues that it is entitled to a judgment as a matter of law because Reasonover's suit alleged that the Garzas owned the premises in question and that as a matter of law, the policy of...