Gomez v. Hartford Co. of the Midwest, 08-90-00024-CV

• Decision Date: 16 January 1991
• Docket Number: No. 08-90-00024-CV,08-90-00024-CV
• Parties: Joe F. GOMEZ, Consuelo Gomez, Diane Gomez, Individually and next friend of Sultan Noor Gomez, Appellants, v. HARTFORD COMPANY OF THE MIDWEST, Appellee.
• Court: Texas Court of Appeals

Page 438

803 S.W.2d 438

Joe F. GOMEZ, Consuelo Gomez, Diane Gomez, Individually and next friend of Sultan Noor Gomez, Appellants, v. HARTFORD COMPANY OF THE MIDWEST, Appellee.

No. 08-90-00024-CV.

Court of Appeals of Texas El Paso.

Jan. 16, 1991.

Rehearing Overruled Feb. 13, 1991.

C.R. Kit Bramblett, Bramblett & Bramblett, P.C., Susan Larsen, El Paso, for appellants.

Jim Curtis, Kemp, Smith, Duncan & Hammond, Brenda J. Norton, El Paso, for appellee.

Before FULLER, WOODARD and KOEHLER, JJ.

OPINION

KOEHLER, Justice.

Appellants bring this appeal from a take nothing summary judgment rendered in favor of Appellee in a suit brought by Appellants, as assignees of M.J.D. Enterprises, Inc., to enforce the provisions and coverage of a multi-peril insurance policy sold by Appellee through its agent to M.J.D. Enterprises, Inc. against which Appellants had obtained a judgment for substantial damages. We affirm.

This case originally grew out of a head-on collision accident which occurred on September 1, 1984 and which resulted in serious injuries to Joe and Consuelo Gomez, husband and wife, and to Diane Gomez and her son, Sultan Noor Gomez, Appellants herein, all of whom were passengers in Joe Gomez' pickup truck, one of the two vehicles involved. They filed suit against M.J.D. Enterprises, Inc., doing business as Dudley's ("Dudley's"), a tavern in El Paso, alleging that Dudley's was negligent in serving alcoholic beverages to an obviously intoxicated person, Roger Allen Hawthorne, who was driving the other vehicle on the wrong side of the road, and that Dudley's negligence and Hawthorne's intoxication caused the accident.

Dudley's had purchased a Texas Commercial Multi-Peril policy issued by Hartford Company of the Midwest, Appellee herein, through its agent, D.C. Crowell & Co., that provided various coverages, including personal injury and property damage liability, at the time of the accident. The specific coverage was contained in two endorsements, which also included a number of exclusions. It was on the basis of certain exclusions in both endorsements that Appellee declined to provide Dudley's with a defense in the lawsuit. As a result of a bench trial in which Dudley's offered no defense, the judge awarded Appellants over seven million dollars for their past and future damages and injuries. Dudley's subsequently assigned to Appellants any and all of its causes of action against Appellee, including breach of contract, failure to defend and failure to provide coverage and settle. Appellants then filed this suit against Appellee and its agent, alleging that they "were negligent, grossly negligent and/or acted intentionally and in bad faith in refusing to defend and/or in failing and refusing to settle the [Appellants'] claims" in the prior suit. Appellants also asserted causes of action under the Deceptive Trade Practices Act (Tex.Bus. & Com.Code Ann. § 17.41 et seq.) and the Texas Insurance Code (Tex.Ins.Code Ann., art. 21.21). Appellee moved for and was granted summary judgment. The case against Appellee was then severed from the remainder of the case against the agent, and this appeal was perfected.

In their first two points of error, Appellants assert that the trial court erred in granting a summary judgment because a genuine issue of material fact existed regarding whether the policy could reasonably be interpreted to impose on Appellee the duty to defend any personal injury liability suit, and that the rules of construction require that the language in the policy be liberally construed to provide coverage.

In reviewing a summary judgment appeal, the general rule established by the Supreme Court is that this Court must determine whether the successful movant in the trial court carried its burden of showing that there is no genuine issue of a material fact issue and that it is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Company, Inc., 690 S.W.2d 546, 548 (Tex.1985). In deciding whether or not there is a disputed fact issue precluding summary judgment, evidence favorable to the non-movant is to be taken as true, and in that connection, every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in his favor. Nixon, 690 S.W.2d at 548-49. If the defendant is the movant and he submits summary judgment evidence disproving at least one element of the plaintiff's case, then summary judgment should be granted. Bradley v. Quality Service Tank Lines, 659 S.W.2d 33, 34 (Tex.1983); Rayos v. Chrysler Credit Corporation, 683 S.W.2d 546, 547 (Tex.App.--El Paso 1985, no writ).

Appellants claim coverage by Appellee and its duty to defend under the policy coverage paragraph contained in both endorsements which provides, in part, as follows:

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 arising out of the ownership, maintenance or use of the insured premises and all operations necessary or incidental to the business of the named insured conducted at or from the insured premises and 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, even if any of the allegations of the suit are groundless, false or fraudulent....

Appearing below under "Exclusions" in the same column and size of type, the policy provides:

This insurance does not apply:

(h) to bodily injury or property damage for which the insured or his indemnitee may be held liable

(1) as a person or organization engaged in the business of manufacturing, distributing, selling or serving alcoholic beverages, or

(2) if not so engaged, as an owner or lessor of premises used for for [sic] such purposes;

if such liability is imposed

. . . . .

(b) by reason of the selling, serving or giving of any alcoholic beverage to a minor or to a person under the influence of alcohol or which causes or contributes to the intoxication of any person;

but part (b) of this exclusion does not apply with respect to liability of the insured or his indemnitee as an owner or lessor described in (2) above; ....

Appellants basically advance two arguments. First, that Dudley's thought that the policy would provide coverage for alcohol related accidents because it was sold to a bar operator, and second, that the general provision affording coverage is ambiguous. Under the first contention, Appellants claim that a fact question is presented "if the insurer knew or should have known that the insureds were buying the policy for their liquor-dispensing business, and that they believed the policy they purchased contained an obligation to defend the bar, even against groundless, false, or fraudulent suits, then plaintiffs should have their day in court on the issue." By itself, what Dudley's believed the policy covered does not raise an issue of fact and therefore, does not defeat the motion for summary judgment. The record contains no evidence, and Appellants do not allege or contend, that either the Appellee or its agent represented to Dudley's that the policy would provide coverage for the kind of accident involved in this case.

Appellants also argue that a fact question is presented because the insuring clause set out above would lead a reasonable insured to believe that Appellee would be obligated to provide a defense in a suit even if it would ultimately have no duty to pay. In support of this position, Appellants offer the affidavits and depositions of the owners of Dudley's as summary judgment proof of their belief that Appellee would have the duty to defend them under such circumstances. Appellee, on the other hand, urges that this Court should apply the "complaint allegation" rule, and that under this rule, the Appellants' pleadings in the trial court place their suit squarely within the exclusion. The court, according to that rule, looks to language in the policy and the allegations in the petition to determine whether there is a duty to...