Grain Dealers Mut. Ins. Co. v. McKee

• Decision Date: 27 September 1995
• Docket Number: No. 04-94-00815-CV,04-94-00815-CV
• Citation: 911 S.W.2d 775
• Parties: GRAIN DEALERS MUTUAL INSURANCE CO., Appellant, v. Gerald Wayne McKEE and Wife, Diana Michelle McKee, Individually and as Next Friends of Kelly McKee, Minor, Appellees.
• Court: Texas Court of Appeals

Page 775

911 S.W.2d 775

GRAIN DEALERS MUTUAL INSURANCE CO., Appellant, v. Gerald Wayne McKEE and Wife, Diana Michelle McKee,

Individually and as Next Friends of Kelly McKee,

Minor, Appellees.

No. 04-94-00815-CV.

Court of Appeals of Texas,

San Antonio.

Sept. 27, 1995.

Rehearing Overruled Nov. 28, 1995.

Edward C. Mainz, Jr., Thornton, Summers, Biechlin, Dunham & Brown, L.C., San Antonio, for Appellant.

Malcolm C. Halbardier, San Antonio, for Appellees.

Before CHAPA, C.J., and RICKHOFF and STONE, JJ.

OPINION

CHAPA, Chief Justice.

Grain Dealers Mutual Insurance Co. appeals from a summary judgment. This case reviews a business auto insurance contract in which the named insured is a corporation, but which includes uninsured/underinsured and personal injury protection endorsements that provide coverage to "you or any family member." Because this family-oriented language caused an ambiguity, we find that the corporation's sole shareholder could reasonably understand that his family members were covered. We affirm the summary judgment which so held.

Procedural and Factual Background

The appellant insurance company issued a Business Auto Coverage policy for Future Investments, Inc. d/b/a/ DK & M Construction, of which Gerald McKee is president and sole shareholder. ¹ The policy includes Personal Injury Protection (PIP) and Uninsured/Underinsured Motorist protection, and additional premiums were paid for this coverage. McKee's eleven-year-old daughter, Kelly, was seriously injured in a one-car auto accident in which her stepsister was the driver. The parties stipulated that the car involved in the accident was not covered under the policy, the stepsister was not covered, and the accident occurred on a purely personal outing, which was not made in connection with any business pursuit of the corporate named insured. Both the stepsister's policy and the McKees' personal policy paid off to their maximum limits. When McKee filed claims against his corporation's business policy, the appellant refused to pay on the grounds that Kelly was not an insured. Appellees filed suit alleging breach of contract, negligence, bad faith, and deceptive trade practices. The parties agreed to submit the issue of coverage to the trial court by way of counter-motions for summary judgment to avoid delay and expense in the event the court determined that coverage was not applicable. The remaining causes of action were severed and abated pending resolution of the coverage issue. The trial court granted a general summary judgment to appellees finding in favor of coverage. Thus, the appeal before us presents the single issue of whether, as a matter of law, the policy's UM/UIM and PIP endorsements provide coverage to Kelly. Appellant brings this appeal on four points of error, all asserting that the trial court erred in granting appellees' summary judgment and in denying appellant's summary judgment.

Standard of Review

The standard of review in a summary judgment case is whether the movant met its burden for summary judgment by establishing there exists no genuine issue of material fact and that it is entitled to a judgment as a matter of law. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548 (Tex.1985); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979); TEX.R.CIV.P. 166a(c). When both parties move for summary judgment, each party must carry its own burden of establishing a right to judgment. State Farm Lloyds, Inc. v. Williams, 791 S.W.2d 542, 549-50 (Tex.App.--Dallas 1990, writ denied). Neither can prevail solely because of the failure of the other party to discharge its burden. Federal Deposit Ins. Corp. v. Attayi, 745 S.W.2d 939, 948 (Tex.App.--Houston [1st Dist.] 1988, no writ); see The Atrium v. Kenwin Shops of Crockett, Inc., 666 S.W.2d 315, 318 (Tex.App.--Houston [14th Dist.] 1984, writ ref'd n.r.e.). When counter-motions for summary judgment are properly before the trial court at the time judgment is rendered, all the evidence accompanying both motions should be considered in deciding whether to grant either party's motion. Dallas County Appraisal Dist. v. Institute for Aerobics Research, 766 S.W.2d 318, 319 (Tex.App.--Dallas 1989, writ denied). The trial court is not limited to considering only the evidence filed in support of a party's motion, but can look to the other movant's proof as well when granting the first party's motion. Farm Credit Bank v. Snyder Nat'l Bank, 802 S.W.2d 709, 712 (Tex.App.--Eastland 1990, writ denied). Thus, when both parties file motions for summary judgment and one is granted and one is denied, we review all questions presented. Nationwide Property & Casualty Ins. Co. v. McFarland, 887 S.W.2d 487, 490 (Tex.App.--Dallas 1994, writ denied).

When a trial court enters a summary judgment order that does not specify the particular ground on which it is based, the party appealing must show that each independent argument alleged in the motion for summary judgment is insufficient to support the trial court's order. McCrea v. Cubilla Condominium Corp., 685 S.W.2d 755, 757 (Tex.App.--Houston [1st Dist.] 1985, writ ref'd n.r.e.). When the trial court's order does not specify the grounds relied on for its ruling, summary judgment will be affirmed if any of the theories advanced are meritorious. Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 79 (Tex.1989).

The Insurance Policy

In the disputed policy, the "named insured" in the declarations page is the corporation. The corporation is also the named insured on the UM/UIM and PIP endorsements. On the UM/UIM endorsement, a space for a "Designated person" has been left blank. The business auto coverage page provides that throughout the policy the words "you" and "your" refer to the named insured on the declarations page. There is also a definitions section, but the word "you" does not appear there.

The UM/UIM lists three categories of "insured." The policy provides UM/UIM coverage to:

1. You and any designated person and any family member of either.

2. Any other person occupying a covered auto.

3. Any person or organization for damages that person or organization is entitled to recover because of bodily injury sustained by a person described in 1. or 2. above.

The PIP has two categories of insured:

1. You or any family member while occupying or when struck by any auto.

2. Anyone else occupying a covered auto with your permission.

(emphasis in original to denote specially defined terms deleted). Both parties agree that Kelly must fit into the first category as a family member in each instance to receive coverage.

"Family member" is defined in both endorsements as "a person related to you by blood, marriage or adoption who is a resident of your household, including a ward or foster child." It is undisputed that Kelly is the appellees' daughter residing in their household.

Analysis

The sole issue before us is whether a family member of the president and sole shareholder of a family-owned corporation is covered under family-oriented language in an insurance policy in which only the corporation is the named insured. This is a case of first impression in Texas, although courts in other jurisdictions have both approved and disapproved coverage in comparable circumstances. In a similar claim, one Texas court of appeals has found that a corporation's employee is not covered as a "family member" under an identical policy in which the entity is the named insured. Webster v. U.S. Fire Ins. Co., 882 S.W.2d 569 (Tex.App.--Houston [1st Dist.] 1994, writ denied). In Webster, an employee of a car dealership sought to recover under the corporation's uninsured motorist coverage for injuries incurred while he and his wife were test driving a customer's car by contending they were "family members" of the corporation. We agree with the Houston court's conclusion that it is "not reasonable to interpret the family-oriented language in a policy issued to a corporation to extend to employees," and that the contract is not ambiguous in this regard. Id. at 573 (emphasis added). In the instant case, however, we are confronted with a situation in which the injured is a member of the immediate family of the sole shareholder of a family-owned corporation. Thus, we must determine whether a reasonable interpretation of the policy could encompass actual family members.

Appellant contends that the contract is not ambiguous, and also contends that appellees did not move for summary judgment on the basis of ambiguity, although they pleaded it in the alternative in their Second Amended Original Petition. However, a court may conclude that a contract is ambiguous even in the absence of such pleading by either party. Sage Street Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex.1993); Coker v. Coker, 650 S.W.2d 391, 394 (Tex.1983). Whether a contract is ambiguous is a question of law for the court. Yancey v. Floyd West & Co., 755 S.W.2d 914, 917 (Tex.App.--Fort Worth 1988, writ denied). The parties agree that specific grounds alleged in the appellees' motion were (1) that the Grain Dealer's policy clearly covered the McKees as insureds, and (2) that the McKees were clearly covered under Grain Dealer's policy by virtue of articles 5.06-1 and 5.06-3 of the insurance code, which mandate UM/UIM and PIP coverage. See TEX.INS.CODE ANN. arts. 5.06-1, 5.06-3 (Vernon 1981). Nonetheless, in the event a court finds an insurance policy ambiguous, it must necessarily find in favor of coverage. Ramsay v. Maryland Am. Gen. Ins. Co., 533 S.W.2d 344, 349 (Tex.1976); see State Farm Life Ins. Co. v. Beaston, 907 S.W.2d 430, 438 (Tex.1995) (Phillips, C.J., concurring in part and dissenting in part) (noting he would affirm trial court's directed verdict in favor of insured because under an ambiguous contract an insurance company owes "the proceeds of the policy as a matter of law"). We conclude that appellees' motion sufficiently stated a ground upon which the summary judgment...