Gonzalez v. Mission American Ins. Co.

• Decision Date: 06 September 1990
• Docket Number: No. C-9476,C-9476
• Citation: 795 S.W.2d 734
• Parties: Amparo Dolores Riefkohl Craules Vda de GONZALEZ, et al., Petitioners, v. MISSION AMERICAN INSURANCE COMPANY, Respondent.
• Court: Texas Supreme Court

Page 734

795 S.W.2d 734

Amparo Dolores Riefkohl Craules Vda de GONZALEZ, et al., Petitioners, v. MISSION AMERICAN INSURANCE COMPANY, Respondent.

No. C-9476.

Supreme Court of Texas.

Sept. 6, 1990.

Rehearing Overruled Oct. 24, 1990.

Steven A. Gibbins and Bob Gibbins, Austin, for petitioners.

J. Michael Colpoys and Charles H. Smith, Dallas, for respondent.

OPINION

MAUZY, Justice.

This case involves the interpretation of policy limits of an insurance contract. Petitioners are the relatives and beneficiaries of three passengers who died in an airplane crash. Mission American Insurance Company (Mission) had provided liability insurance to the plane's owner. Petitioners brought this suit seeking a declaratory judgment that the liability insurance policy held by the owner of the airplane sets a limit for wrongful death actions of $1,000,000 rather than $300,000 as claimed by Mission. The trial court rendered judgment for Petitioners, holding that there is a $1,000,000 coverage. The court of appeals reversed and rendered, holding that the policy provides a maximum coverage of $300,000 for bodily injury including death. We reverse the judgment of the court of appeals, and affirm the judgment of the trial court.

The dispute between the Petitioners and Mission arises over the interpretation of Endorsement No. 1 of the policy. The pertinent policy provisions are as follows:

TRANSPORT INDEMNITY COMPANY

Agrees with the insured, named in the declarations made a part hereof, in consideration of the payment of the premium and in reliance upon the statements in the declarations and subject to all of the terms of this policy:

INSURING AGREEMENTS

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Coverage D--Single Limit Bodily Injury (including or excluding passengers) and Property Damage Liability. To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, excluding passengers as defined herein, unless the Declarations describe Coverage D as "Including Passengers," and for damages because of injury to or destruction of property, including the loss of use thereof, caused by an occurrence and arising out of the ownership, maintenance or use of the aircraft. (Emphasis added).

* * * * * *

CONDITIONS

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4. Limits of Liability. The limit of liability stated in the Declaration for Coverages C and D is the limit of the Company's liability for all damages arising out of one occurrence.

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DECLARATION

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4. COVERAGES: The insurance afforded is only with respect to such and so many of the following coverages as are indicated by specific premium charge or charges. The limit of the Company's liability against each such coverage shall be as stated herein, subject to all of the terms of this policy having reference thereto ...

COVERAGES LIMITS OF LIABILITY

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D. Single Limit Bodily Injury and Property SEE ENDORSEMENT # 1 $1,000,000

Damage Liability Including Passengers each occurrence

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ENDORSEMENT NO. 1

LIMIT OF PASSENGER LIABILITY ENDORSEMENT

IT IS AGREED THAT WITH RESPECT TO COVERAGE D, THE COMPANY'S LIMIT OF LIABILITY FOR BODILY INJURY SUSTAINED BY ANY ONE PASSENGER SHALL NOT EXCEED $100,000 AND THAT AMOUNT MULTIPLIED BY THE NUMBER OF PASSENGER SEATS, AS DEFINED, FOR EACH ACCIDENT BUT IN NO EVENT MORE THAN $300,000 EACH OCCURRENCE. SAID LIMITS OF PASSENGER

LIABILITY ARE PART OF AND NOT IN ADDITION TO THE LIMIT OF LIABILITY SET FORTH FOR COVERAGE D OF ITEM 4 OF THE DECLARATIONS. (Emphasis added).

In the trial court, Mission moved for summary judgment arguing that the policy language clearly and unambiguously limits the damages of each decedent's survivors to $100,000. In its order denying Mission's motion for summary judgment, the trial court found:

... the Court is of the opinion that based on the policy language itself, the Defendant's Motion for Summary Judgment should be overruled.

Subsequently, Petitioners moved for summary judgment, arguing: first, that it was undisputed that Endorsement No. 1 limits only Mission's liability for bodily injury sustained by any one passenger to not exceed $100,000, and does not provide by its terms for limitations in the event of death; second, that it was undisputed that the policy was intended to provide coverage for the event of death and that the insuring agreement, specifically the paragraph entitled "Coverage D," referred to death as an insurable event expressly separate from the event of bodily injury; and third, that it is undisputed that the insuring agreement in "Coverage A" and "Coverage B" provided a litany of insured or coverable events wherein bodily injury was listed separately from the event of death. Based on these expressed terms of the insurance contract, the trial court entered summary judgment in favor of Petitioners. We affirm the trial court's judgment.

In reviewing a summary judgment record, this Court must determine whether a disputed material fact issue exists that would preclude a summary judgment. Bayouth v. Lion Oil Co., 671 S.W.2d 867 (Tex.1984). Every reasonable inference must be indulged in favor of the nonmovants and any doubt resolved in their favor. Id. The question on appeal is not whether the summary judgment proof raises a fact issue with reference to essential elements of plaintiff's cause of action, but whether the summary judgment proof establishes that the movant is entitled to summary judgment as a matter of law. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970). In the case at bar, Petitioners' uncontroverted summary judgment proof established, as a matter of law, that Endorsement No. 1 does not refer to death.

Paragraph One of Condition 4 of the policy clearly states that Mission will pay all damages arising out of one occurrence up to $1,000,000. Then, in Endorsement No. 1, Mission limits its liability for bodily injury sustained by a passenger to $100,000 per seat; and since there were three passenger seats in the airplane, it limits its total liability for bodily injuries sustained by passengers to $300,000. However, nowhere in the policy or in Endorsement No. 1 does Mission ever state that its liability for all damages resulting from each passenger's death is limited to $100,000.

Mission argues that the term "bodily injury" in Endorsement No. 1 includes "death" and therefore, the Petitioners are only entitled to $300,000. However, the words "bodily injury" and "death" are used together throughout the policy as independent and different terms, thus it is clear that Mission did not intend one to include the other. We hold that because Endorsement No. 1 only uses the phrase "bodily injury," the Endorsement does not include "death."

Further, the policy contains no technical definition of the terms "bodily injury," "sickness," "disease," "death," or "including." Therefore, these words should be given their plain, ordinary and generally accepted meanings. Western Reserve Life Ins. Co. v. Meadows, 152 Tex. 559, 261 S.W.2d 554, 557 (1953). Words used in one sense in one part of a contract are, as a general rule, deemed to have been used in the same sense in another part of the instrument, where there is nothing in the context to indicate otherwise. McDaniel v. Newton, 187 S.W.2d 139, 142 (Tex.Civ.App.--Fort Worth 1945, writ ref'd w.o.m.); Wood Motor Co. v. Nebel, 232 S.W.2d 772, 776 (Tex.Civ.App.--Texarkana 1949, aff'd in part and rev'd in part, 150 Tex. 86, 238 S.W.2d 181 (1951). The language of Endorsement No. 1 that "the company's limit of liability for bodily injury sustained by any one passenger shall not exceed $100,000," means that the insurance company's liability for any passenger's own damages resulting from the passenger's own bodily injury is limited to $100,000. There is no language in Endorsement No. 1 that would limit Mission's liability for all damages arising out of the death of each individual passenger to $100,000.

If Mission intended to limit its liability for payment to $100,000 for all damages resulting from any one passenger's bodily injury, including death, then Mission had the duty to make such an intention in its policy clear and unambiguous because the terms, language, and conditions of the insurance policy were selected by Mission itself to express the terms and conditions on which the policy was issued. See Republic National Bank v. Northwest National Bank, 578 S.W.2d 109 (Tex.1978); Glover v. National Insurance Underwriters, 545 S.W.2d 755 (Tex.1977). Where an insurance policy's provisions are ambiguous or inconsistent, and is subject to two or more reasonable interpretations, then that construction which affords coverage will be the one adopted. See Glover v. National Insurance Underwriters, 545 S.W.2d 755, 761 (Tex.1977); Adrian Assoc., General Contractors v. National Surety Corp., 638 S.W.2d 138 (Tex.App.--Dallas 1982, writ ref'd. n.r.e.), approved, 650 S.W.2d 67 (Tex.1982); M.C. Industries, Inc. v. Federal Insurance Co., 562 S.W.2d 30 (Tex.App.--Houston [14th Dist.] 1978, writ ref'd n.r.e.). Mission argues that the policy can be read to provide for a limit on coverage of $100,000 per passenger in the event of death by referring to Coverage D in conjunction with Endorsement No. 1. This interpretation requires the reader to conclude that either Endorsement No. 1 is ambiguous or that Mission's policy construction requires drafting the words "or death" after the words "bodily injury" in Endorsement No. 1. It is well-established law that where an ambiguity exists in a contract, the contract language will be construed strictly against the party who drafted it since the drafter is responsible for the language used. See Republic National Bank v. Northwest National Bank, 578 S.W.2d 109 (Tex.1978).

The ambiguity in this case exists because of the way Mission chose to draft the policy. If Mission had intended to limit its...