King v. Dallas Fire Ins. Co., No. 00-1152.

CourtSupreme Court of Texas
Writing for the CourtEnoch
Citation85 S.W.3d 185
PartiesCarlyle KING, individually and d/b/a Tiedown Construction Company, Petitioner, v. DALLAS FIRE INSURANCE COMPANY, Respondent.
Docket NumberNo. 00-1152.
Decision Date29 August 2002
85 S.W.3d 185
Carlyle KING, individually and d/b/a Tiedown Construction Company, Petitioner,
v.
DALLAS FIRE INSURANCE COMPANY, Respondent.
No. 00-1152.
Supreme Court of Texas.
Argued October 10, 2001.
Decided August 29, 2002.

Page 186

Earnest W. Wotring, Micheal Wayne Dobbs, Connelly Baker Wotring & Jackson, Houston, Robert W. Higgason, Law Office of Robert W. Higgason, The Woodlands, Richard Gardner Wilson, David Wayne Hodges, Kennedy Hodges, P.L.L.C., Houston, for Petitioner.

Ronald E. Tigner, Charlotte A. Fields, Preis Kraft & Roy, Cynthia Arm Holub, Greenberg Peden Siegmyer & Oshman, Houston, for Respondent.

Justice ENOCH delivered the opinion of the Court.


Both Dallas Fire Insurance Company and Carlyle King, individually, and doing business as Tiedown Construction Company, have filed motions for rehearing. We deny Dallas Fire's motion, but grant King's motion. We withdraw our opinion and judgment dated May 30, 2002, and substitute the following in its place.

In an underlying lawsuit, Greg Jankowiak sued King for injuries he received when one of King's employees attacked him. In addition to a claim of respondeat superior, Jankowiak also sued King directly for negligent hiring, training, and supervision. In this case, King seeks to enforce the duty to defend contained in a commercial liability policy issued by Dallas Fire.

Our question is whether an employer's alleged negligent hiring, training, and supervision constitute an "occurrence" under the terms of the insurance policy although the injury was directly caused by the employee's intentional conduct. If the employer's alleged negligent hiring, training, and supervision constitute an "occurrence," then Dallas Fire must defend King. The trial court concluded that Dallas Fire did not owe King a duty to defend. The court of appeals affirmed in a divided opinion.1 Because we conclude there was an "occurrence," we reverse the court of appeals' judgment and remand the case to the trial court for proceedings consistent with this opinion. The issue of whether Dallas Fire would owe a duty to defend on only the vicarious liability claim is not before this

Page 187

Court, and we express no opinion on that issue.

I

Carlyle King is the sole proprietor of Tiedown Construction Company, which removes excess materials from building sites. Dallas Fire insured King through a commercial general liability policy. Jankowiak, who was an employee of another company working on the same site as King, sued King, claiming that one of King's employees, Carlos Lopez, assaulted him. According to Jankowiak's petition, after confronting Lopez about some missing and damaged electrical wiring, Lopez attacked him, kicking him in the face and causing serious injury. Jankowiak also alleges that King was liable for the injuries, not only on the basis of respondeat superior, but also because of King's own negligence in hiring, training, and supervising Lopez. Jankowiak amended his petition and specifically alleged that King was negligent in failing to run a criminal-background check, in failing to determine whether Lopez had a propensity for violence, or in failing to provide any training on how to "peaceably and responsibly handle work generated construction site situations."

King forwarded Jankowiak's petitions to Dallas Fire, which refused to defend King because Jankowiak did not allege an "occurrence" within the meaning of King's insurance policy. King brought this declaratory judgment action, asking the trial court to determine that Dallas Fire was legally obligated to defend the underlying action against him. After considering cross-motions for summary judgment, the trial court concluded that Dallas Fire did not owe King a duty to defend. A divided court of appeals affirmed.2

II

The only question we are asked is whether, under the facts alleged in this case, there was an "occurrence" invoking the insurer's duty to defend. The duty to defend and the duty to indemnify are distinct and separate duties.3 An insurer's duty to defend is determined solely by the allegations in the pleadings and the language of the insurance policy.4 This is the "eight corners"5 or "complaint allegation rule."6 "If a petition does not allege facts within the scope of coverage, an insurer is not legally required to defend a suit against its insured."7 But we resolve all doubts regarding the duty to defend in favor of the duty.8

Dallas Fire's policy covers "bodily injury" or "property damage" "caused by an `occurrence' that takes place in the `coverage territory.'" "Occurrence" is further defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions."

Dallas Fire contends that there is no occurrence in this case because the actions of King's employee, Lopez, were intentional. King responds by asserting that he, himself, did not intend to injure Jankowiak; his only potential contribution to Jankowiak's

Page 188

injury was perhaps negligently hiring, training, or supervising Lopez. Therefore, from King's standpoint, Jankowiak's injuries were the result of an accident — an occurrence invoking the duty to defend.

In deciding whether there has been an "occurrence" under the policy, we must determine from whose standpoint we view the injury-triggering event. There are three choices: the insured's, the victim's, or the actor's. The policy's express language, our case law, and the history behind the Commercial General Liability policy all support the conclusion that the insured's standpoint controls in determining whether there has been an "occurrence" that triggers the duty to defend.

A

Express provisions of this policy support construing the policy from King's standpoint. One provision states:

Separation of Insureds.

Except with respect to the Limits of Insurance, and any rights or duties specifically assigned in this Coverage Part to the first Named Insured, this insurance applies:

a. As if each Named Insured were the only Named Insured; and

b. Separately to each insured against whom claim is made or "suit" is brought.

Another provision in pertinent part states:

Exclusions.

This insurance does not apply to:

a. Expected or Intended Injury

"Bodily injury" or "property damage" expected or intended from the standpoint of the insured.

The separation-of-insureds provision expressly creates separate insurance policies for King and King's employee, Lopez. The policy provides that we are to treat the insureds "[a]s if each Named Insured were the only Named Insured." Consequently, we are instructed to determine whether there has been an "occurrence" as if King were the only insured.

Amicus Curiae9 in support of Dallas Fire argue that the separation-of-insureds provision should only be used to interpret an exclusion from coverage and not whether there has been an occurrence. They argue that the separation-of-insured provision evolved from confusion in interpreting "the insured" as that term is used in the policy exclusions.10 We agree that the separation-of-insureds provision has been used in the past to construe exclusionary clauses,11 but these cases have not limited the separation-of-insureds provision to exclusion provisions. And the express language of the separation-of-insureds provision isn't so limited. Furthermore, as this policy indicates, the drafters of the policy knew how to limit applying the separation-of-insureds provision; they did so by specifically excluding Section III, Limits of Insurance, from its application. If the policy drafters did not want the separation-of-insureds provision to affect Section I, Coverages, they could have said so. As the policy is currently drafted, the separation-of-insureds provision applies to all sections except the Limits of Insurance and those rights and duties specifically assigned to King.

Page 189

Dallas Fire argues that the separation-of-insureds provision does not affect this case because this is an occurrence-based policy that requires us to focus on the "injury causing event." Dallas Fire relies on Fidelity & Guaranty Insurance Underwriters, Inc. v. McManus.12 But McManus is inapposite. In McManus, we construed a specific provision that excluded injuries caused by the "ownership, maintenance, operation, use, loading or unloading of a recreational motor vehicle away from the residence."13 We concluded that the exclusion barred the insurer's duty to defend a negligent entrustment claim.14 The difference between McManus and this case is that the exclusion in McManus had no intent element. It was thus not necessary to consider the insured's relationship to the event, because the exclusion was premised on a readily determined fact — whether the recreational motor vehicle was being used away from the residence. Here, the exclusionary provision expressly states that whether an occurrence was an accident depends on the insured's standpoint.

At its core, Dallas Fire's argument is that King's employee's intent should control whether there is a duty to defend King under the policy. That is, because the employee's conduct was intentional, there is no "occurrence" under the policy. That argument not only ignores the policy language that delineates between separate insureds, it also ignores the intended-injury exclusion provision. That exclusion, which excludes coverage for injuries "intended from the standpoint of the insured," would have no purpose if all intended injuries were excluded at the outset from coverage because they would not be an "occurrence."

B

Our previous decisions also support the conclusion that we view the event from the insured's standpoint. In Republic National Life Insurance Co. v. Heyward,15 this Court held that a murder victim's widow could recover the accidental death proceeds in a life insurance contract. In reaching this conclusion, we quoted Hutcherson v. Sovereign Camp, W.O.W.:16

The test of whether the killing is accidental within the terms of an...

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223 practice notes
  • Nat. Union Fire Ins. Co. v. Puget Plastics, Civil Action No. B-05-050.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • August 12, 2009
    ...the harm to Microtherm or whether the injury was highly probable. Microtherm's reliance on King v. Dallas Fire Insurance Company, 85 S.W.3d 185 (Tex.2002) is misplaced, as the case is inapplicable to the specific facts, to the verdict in the Underlying Case, and to the determination of inde......
  • Lamar Homes, Inc. v. Mid-Continent Cas. Co., No. 05-0832.
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    • Supreme Court of Texas
    • August 31, 2007
    ...of the event, that is, whether the damage was expected or intended from the standpoint of the insured. King v. Dallas Fire Ins. Co., 85 S.W.3d 185, 191-92 (Tex. 2002). "Property damage" consists of physical injury to tangible property and includes the loss of use of tangible property. Thus,......
  • Lamar Homes, Inc. v. Mid-Continent Cas. Co., No. 05-0832.
    • United States
    • Supreme Court of Texas
    • August 31, 2007
    ...of the event, that is, whether the damage was expected or intended from the standpoint of the insured. King v. Dallas Fire Ins. Co., 85 S.W.3d 185, 191-92 (Tex. 2002). "Property damage" consists of physical injury to tangible property and includes the loss of use of tangible property. Thus,......
  • National American Ins. Co. v. Breaux, No. CIV.A. 1:03CV1378.
    • United States
    • United States District Courts. 5th Circuit. United States District Court of Eastern District Texas
    • January 6, 2005
    ...policy." Harken Exploration Co., 261 F.3d at 471; see Northfield Ins. Co., 363 F.3d at 528 (citing King v. Dallas Fire Ins. Co., 85 S.W.3d 185, 187 (Tex.2002)); Centrum GS Ltd., 283 F.3d at 713; Bailey, 133 F.3d at 369; Merchants Fast Motor Lines, Inc., 939 S.W.2d at 141. "The duty to defen......
  • Request a trial to view additional results
221 cases
  • Nat. Union Fire Ins. Co. v. Puget Plastics, Civil Action No. B-05-050.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • August 12, 2009
    ...the harm to Microtherm or whether the injury was highly probable. Microtherm's reliance on King v. Dallas Fire Insurance Company, 85 S.W.3d 185 (Tex.2002) is misplaced, as the case is inapplicable to the specific facts, to the verdict in the Underlying Case, and to the determination of inde......
  • Lamar Homes, Inc. v. Mid-Continent Cas. Co., No. 05-0832.
    • United States
    • Supreme Court of Texas
    • August 31, 2007
    ...of the event, that is, whether the damage was expected or intended from the standpoint of the insured. King v. Dallas Fire Ins. Co., 85 S.W.3d 185, 191-92 (Tex. 2002). "Property damage" consists of physical injury to tangible property and includes the loss of use of tangible property. Thus,......
  • Lamar Homes, Inc. v. Mid-Continent Cas. Co., No. 05-0832.
    • United States
    • Supreme Court of Texas
    • August 31, 2007
    ...of the event, that is, whether the damage was expected or intended from the standpoint of the insured. King v. Dallas Fire Ins. Co., 85 S.W.3d 185, 191-92 (Tex. 2002). "Property damage" consists of physical injury to tangible property and includes the loss of use of tangible property. Thus,......
  • National American Ins. Co. v. Breaux, No. CIV.A. 1:03CV1378.
    • United States
    • United States District Courts. 5th Circuit. United States District Court of Eastern District Texas
    • January 6, 2005
    ...policy." Harken Exploration Co., 261 F.3d at 471; see Northfield Ins. Co., 363 F.3d at 528 (citing King v. Dallas Fire Ins. Co., 85 S.W.3d 185, 187 (Tex.2002)); Centrum GS Ltd., 283 F.3d at 713; Bailey, 133 F.3d at 369; Merchants Fast Motor Lines, Inc., 939 S.W.2d at 141. "The duty to defen......
  • Request a trial to view additional results
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