Goose Creek Consol. I.S.D. v. Continental Cas. Co., 01-83-0162-CV

• Decision Date: 22 September 1983
• Docket Number: No. 01-83-0162-CV,01-83-0162-CV
• Parties: 14 Ed. Law Rep. 223 GOOSE CREEK CONSOLIDATED I.S.D., Appellant, v. CONTINENTAL CASUALTY CO., et al., Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 338

658 S.W.2d 338

14 Ed. Law Rep. 223

GOOSE CREEK CONSOLIDATED I.S.D., Appellant, v. CONTINENTAL CASUALTY CO., et al., Appellee.

No. 01-83-0162-CV.

Court of Appeals of Texas Houston (1st Dist.).

Sept. 22, 1983.

Stephen Doncarlos, Houston, for appellant.

Brock Akers, Houston, for appellee.

Before WARREN, DUGGAN and DOYLE, JJ.

OPINION

DOYLE, Justice.

This is an appeal from an order granting summary judgment to the appellee. The trial court found that each of two fires occurring at two different schools at different locations and at different times constituted separate occurrences as a matter of law under the insurance policy in this case and granted appellees' motion for summary judgment.

We affirm the trial court's judgment.

Goose Creek Consolidated Independent School District purchased insurance coverage from the appellee for its several properties. On or about December 23, 1979, two fires occurred on two of Goose Creek's properties. The first occurred at San Jacinto Elementary School and was reported to the fire department at 5:43 a.m. The second occurred at Baytown Junior School and was reported to the fire department at 7:29 a.m. The two schools are located at different addresses, several blocks apart. The reports prepared by the Baytown Fire Department indicated that the cause of each fire was arson. In its brief, the appellant maintains that there is evidence to support a conclusion that the fires were started by the same individual or group of individuals. The appellees specifically denied the statement, pursuant to Tex.R.Civ.Pro. 419.

The appellees paid all claims except $200,000, representing two deductibles for two separate occurrences. The appellant's position is that the fires at its buildings were in all likelihood caused by the same individual or group acting at or near the same time, therefore, only one $100,000 deductible should be retained by the appellees. The appellees contend that since there were two fires, the retention clause should be applied twice, therefore, appellees are liable only for damages over $200,000 for the two buildings.

The appellant argues that the trial court erred in granting the motion for summary judgment in that the trial court used an erroneous standard to hold that as a matter of law the two fires in question constituted two separate loss occurrences. It contends that traditionally courts apply either a "cause" or "effect" analysis in determining whether a certain set of facts involved only one or several occurrences as the term was used in the context of any insurance policy. In the instant case, the appellant argues that had the trial court applied the "cause" analysis, it would have reached a different result.

The appellees contend that this court must interpret the insurance policy and determine whether the two fires constitute one loss occurrence or two. They further contend that regardless of which test is used, the result would be the same. They argue that the facts presented do not lend themselves to a cause or effect analysis, but should be analyzed in terms of the "unbroken chain of events" or "process or condition" type analysis.

In its simpliest form, the issue before this court is whether the two fires constitute one loss occurrence or two. The facts are undisputed that the fires occurred at two different locations several blocks apart at different times. Our decision must rest upon the applicability of the retention clause and the definitions thereunder as set out in the policy under which the appellant was insured. Thus, we must interpret the policy as a matter of law in view of the undisputed facts.

The retention clause of the subject insurance policy provides as follows:

Article I--Retention

A. The company shall be liable in respect of each and every loss occurrence irrespective of the number and kinds of risks involved, for 100% of the excess over and above an initial net loss to the Insured of $100,000.00, in each and every loss occurrence, subject to the limits set forth in Article V.

B. It is warranted by the Insured that in respect of each and every loss occurrence, its initial net loss retention of $100,000.00 shall be retained at its own risk and not insured in any way.

Article II--Definitions

A. The term "initial net loss" as used herein means the ultimate net loss by perils insured against after deducting any salvage and recoveries from any source other than this Agreement.

B. The term "loss occurrence" as used herein, means the total loss by perils insured against arising out of a single event. When, however, the term "occurrence" shall apply to loss or losses from windstorm, it shall be held to mean a period of 48 consecutive hours.

Immediately it becomes apparent that the appellee intended to limit its liability to "each and every loss occurrence". By definition we are told that "loss occurrence", as used in the retention clause, "means the total loss by perils insured against arising out of a single event." (emphasis added) A fair, reasonable and logical interpretation, therefore, would equate "loss occurrence" with "single event", so that each "single event"...