Gonzales v. American States Ins. Co. of Texas, 2171
| Decision Date | 28 January 1982 |
| Docket Number | No. 2171,2171 |
| Parties | Herby GONZALES, Appellant, v. AMERICAN STATES INSURANCE COMPANY OF TEXAS, Appellee. |
| Court | Texas Court of Appeals |
William A. Orr, Jr., Bay City, Russell H. McMains, Edwards & Perry, Corpus Christi, Ernest H. Cannon, Ernest Cannon & Associates, Houston, for appellant.
Larry Funderburk, Funderburk & Funderburk, Houston, for appellee.
Before BISSETT, YOUNG and GONZALEZ, JJ.
This is an appeal from a declaratory judgment. American States Insurance Company of Texas (hereinafter "American States") filed a petition in the 23rd District Court of Matagorda County seeking a declaratory judgment that it had no duty to defend Herby Gonzales (hereinafter "Gonzales") in a suit filed against him. Following a trial before the court, judgment was rendered in favor of American States. Gonzales has appealed.
Gonzales is the insured in a liability insurance policy issued by American States. The lawsuit in which Gonzales seeks to have American States defend him arose from injuries received by Tony Perez, Jr., a minor, when his leg was caught in an ice auger at the Palacios Fuel and Ice Co. Gonzales welded a grate or guard which was placed over the auger.
American States contends that the Perez suit is within the "completed operations hazard" exclusion. The policy defines "completed operations hazard" as follows:
" 'completed operations hazard' includes bodily injury and property damage arising out of operations or reliance upon a representation or 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 premises owned by or rented to the named insured. 'Operations' include materials, parts or equipment furnished in connection therewith. Operations shall be deemed completed at the earliest of the following times:
(1) When all operations to be performed by or on behalf of the named insured under the contract have been completed.
(2) when all operations to be performed 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 engaged in performing operations for a principal as a part of the same project.
Operations which may require further service or maintenance work, or correction, repair or replacement because of any defect or deficiency, but which are otherwise complete, shall be deemed complete."
In this case, American States refused to defend Gonzales on the ground that its investigation of the Perez suit disclosed that the events giving rise to the suit came within the "completed operations hazard" exclusion.
The first point of error presented by Gonzales reads:
"THE TRIAL COURT ERRED IN ENTERING JUDGMENT FOR APPELLEE BECAUSE THE UNDISPUTED EVIDENCE SHOWS THAT THE 'COMPLETED OPERATIONS HAZARD' AND THE 'PRODUCTS LIABILITY HAZARD' POLICY EXCLUSIONS ARE NOT APPLICABLE TO APPELLANT AND DO NOT RELIEVE APPELLEE OF ITS DUTY TO DEFEND APPELLANT IN THE PEREZ ACTION."
The point attacks the judgment on the ground that the evidence, in effect, conclusively shows that the "completed operations hazard" exclusion does not apply to this case. Our review of this case is therefore limited to an examination of the evidence and a determination of whether the "completed operations hazard" exclusion applies. Before doing this, however, we must ascertain what evidence may be considered in determining this issue.
In his supplemental brief and oral argument, Gonzales argues that the insurer's duty to defend must be determined solely from the allegations in the Perez petition, without regard to the evidence adduced at the trial on the declaratory judgment action. In support of this argument, he cites Argonaut Southwest Ins. Co. v. Maupin, 500 S.W.2d 633 (Tex.1973), Heyden Newport Chemical Corp. v. Southern General Ins. Co., 387 S.W.2d 22 (Tex.1965), and Fort Worth Lloyds v. Garza, 527 S.W.2d 195 (Tex.Civ.App.-Corpus Christi 1975, writ ref'd n.r.e.).
The cases cited by Gonzales set forth the general rule that the insurer's duty to defend is determined by the allegations of the petition without reference to the truth or falsity of such allegations. A careful reading of these cases, however, discloses that the allegations referred to are allegations as to the insured's liability. In other words, no legal determination of the insured's ultimate liability is required before the insurer's duty to defend arises. Heyden Newport Chemical Corp. v. Southern General Ins. Co., supra, at 25. But where the petition does...
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