Lincoln General Ins. v. Aisha's Learning Center, No. 05-10981.

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtEdith H. Jones
Citation468 F.3d 857
Docket NumberNo. 05-10981.
Decision Date24 October 2006
PartiesLINCOLN GENERAL INSURANCE COMPANY, Plaintiff-Counter Defendant-Appellee, v. AISHA'S LEARNING CENTER, Defendant-Counter Claimant-Appellant.

Page 857

468 F.3d 857
LINCOLN GENERAL INSURANCE COMPANY, Plaintiff-Counter Defendant-Appellee,
v.
AISHA'S LEARNING CENTER, Defendant-Counter Claimant-Appellant.
No. 05-10981.
United States Court of Appeals, Fifth Circuit.
October 24, 2006.

David John Kennedy Metzler (argued), Cowles & Thompson, Dallas, TX, for Lincoln Gen. Ins. Co.

Wade Austin Barrow (argued), Fort Worth, TX, for Aisha's Learning Ctr.

On Appeal from the United States District Court for the Northern District of Texas.

Before JONES, Chief Judge, and REAVLEY and PRADO, Circuit Judges.

EDITH H. JONES, Chief Judge:


Aisha's Learning Center ("ALC") challenges the district court's decision that it is not covered for injuries to a child in its care by operation of the automobile exclusion of a commercial general liability

Page 858

("CGL") policy. Finding no error in the court's analysis, we AFFIRM.

I. Background

On September 4, 2002, a van owned and operated by ALC transported two year old Le'Yazmine McCann from her home to the daycare center in Dallas, Texas. Upon arriving at ALC, the driver did not unload Le'Yazmine along with the other children. She was trapped in the parked van for approximately seven hours while the external temperature reached ninety-five degrees Fahrenheit. Her mother sued ALC to redress the resulting tragic injuries.

At the time of the incident, ALC was insured by two policies: a CGL policy with appellee Lincoln General and a general automobile policy with American International Insurance Company ("American International"). ALC and McCann's mother agreed to abate the proceedings to seek a determination of insurance coverage.

Taking the initiative, Lincoln General sought a declaratory judgment in federal court against ALC to enforce a CGL policy exclusion for injuries arising from the "use" of ALC's van. ALC answered and counterclaimed against Lincoln General. American International intervened, seeking a declaratory judgment that Lincoln General had the sole duty to defend ALC. McCann's mother also intervened in the coverage dispute, but she did not participate further. The district court resolved the parties' cross-motions for summary judgment in favor of Lincoln General, holding that the company owed no duty to defend or indemnify ALC, because of the CGL policy's automobile exclusion. This appeal followed.

II. Discussion

This court reviews a district court's grant of summary judgment de novo. Evans v. City of Houston, 246 F.3d 344, 347 (5th Cir.2001). Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED.R.CIV.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). On a motion for summary judgment, a court must review the facts in the light most favorable to the nonmovant. Walker v. Thompson, 214 F.3d 615, 624 (5th Cir. 2000).

Insurance policies are generally controlled by the rules of construction and interpretation applicable to contracts. Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995). Nevertheless, "[t]he court must adopt the construction of an exclusionary clause urged by the insured as long as that construction is not unreasonable . . . ." Nat'l Union Fire Ins. Co. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex.1991).

In Texas, the duty to defend is distinct from, and broader than, the duty to indemnify. Gulf Chem. & Metallurgical Corp. v. Assoc. Metals & Minerals Corp., 1 F.3d 365, 369 (5th Cir.1993). The duty to defend is governed by the "eight-corners" rule, whereby a court considers only the allegations in the underlying complaint and the terms of the insurance policy. Nat'l Union Fire Ins. Co. v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex.1997). If the petition filed against the insured, liberally construed, alleges facts within the scope of coverage, the insurer must defend. Id. Doubts are resolved in favor of the insured. Heyden Newport Chem. Corp. v. S. Gen. Ins. Co., 387 S.W.2d 22, 25 (Tex.1965). And, although the duty to indemnify is generally not ascertainable until after the insured has been held liable, it is justiciable prior

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to a finding of liability when the same reasons negating the duty to defend also negate any duty to indemnify. Farmers Tex. County Mut. Ins. Co. v. Griffin, 955 S.W.2d 81, 84 (Tex.1997).

The sole issue in this case is whether McCann's injuries arose out of the "use" of ALC's van as a matter of law, thus triggering the auto exclusion provision in the CGL policy.1 The policy excludes: "[b]odily injury" . . . arising out of the ownership, maintenance, use or entrustment to others of any . . . "auto" . . . owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading." Lincoln General bears the burden of applying the exclusion. Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523, 528 (5th Cir.2004). If the policy is susceptible to two or more reasonable interpretations, it is ambiguous and must be strictly construed in favor of the insured to avoid the exclusion. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998); see also Empire Fire & Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 681 (5th Cir.2000). An unambiguous policy will, however, be accorded its plain meaning. DeWitt County Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999).

Texas courts define "use" broadly: "the phrase `arising from use' is treated as being a `general catchall . . . designed and construed to include all proper uses of the vehicle not falling within other terms of definition . . . .'" Tucker v. Allstate Tex. Lloyds Ins. Co., 180 S.W.3d 880, 886 (Tex.App.2005)(quoting State Farm Mut. Auto. Ins. Co. v. Pan Am. Ins. Co., 437 S.W.2d 542, 545 (Tex.1969)). The phrase "arise out of" means there is "simply a `causal connection or relation,' which is interpreted to mean that there is but for causation, though not necessarily direct or proximate causation." Utica Nat'l Ins. Co. v. Am. Indem. Co., 141 S.W.3d 198, 203 (Tex.2004) (citations omitted). "Use" means "to put or bring into action or service; to employ for or apply to a given purpose." LeLeaux v. Hamshire-Fannett Indep. Sch. Dist., 835 S.W.2d 49, 51 (Tex. 1992).

In Texas, "[f]or liability to `arise out of' the use of a motor vehicle, a causal connection or relation must exist between the accident or injury and the use of the motor vehicle." Mid-Century Ins. Co. v. Lindsey, 997 S.W.2d 153, 156 (Tex.1999)(citing LeLeaux, 835 S.W.2d at 51). Further, "the use required is of the vehicle qua vehicle, rather than simply as an article of property." Lindsey, 997 S.W.2d at 156. If the vehicle at issue "is only...

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  • Simco Enterprises, Ltd. v. James River Ins. Co., Civil Action No. 1:07-CV-860.
    • United States
    • United States District Courts. 5th Circuit. United States District Court of Eastern District Texas
    • July 11, 2008
    ...and the language of the insurance policy." Harken Exploration Co., 261 F.3d at 471; see Lincoln Gen. Ins. Co. v. Aisha's Learning Ctr, 468 F.3d 857, 858 (5th Cir.2006) (citing Merchants Fast Motor Lines, Inc., 939 S.W.2d at 141); Northfield Ins. Co., 363 F.3d at 528 (citing King v. Dallas F......
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    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • October 10, 2007
    ...both the grant of summary judgment and a district court's statutory construction de novo. Lincoln Gen. Ins. Co. v. Aisha's Learning Ctr., 468 F.3d 857, 858 (5th Cir.2006); FTC v. Nat'l Bus. Consultants, Inc., 376 F.3d 317, 319 (5th Cir.2004). Summary judgment is appropriate "if the pleading......
  • Country Mut. Ins. Co. v. Oehler's Home Care, Inc., NO. 4-19-0080
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    • United States Appellate Court of Illinois
    • October 21, 2019
    ...Mount Vernon 's conclusion that the van was the mere situs of the injury. See Lincoln General Insurance Co. v. Aisha's Learning Center , 468 F.3d 857, 861 (5th Cir. 2006) (declining to follow Mount Vernon on nearly identical facts because the failure to remove a child from a car arose out o......
  • Alea London Ltd. v. Bickford, Civil Action No. H-08-648.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • June 12, 2009
    ...duty to indemnify an insured is more narrow than its duty to defend the insured. Lincoln Gen. Ins. Co. v. Aisha's Learning Cent., 468 F.3d 857, 858 (5th Cir.2006); Gulf Chem. & Metallurgical Corp. v. Assoc. Metals & Minerals Corp., 1 F.3d 365, 369 (5th Cir.1993); St. Paul Ins. Co. v. Tex. D......
  • Request a trial to view additional results
48 cases
  • Simco Enterprises, Ltd. v. James River Ins. Co., Civil Action No. 1:07-CV-860.
    • United States
    • United States District Courts. 5th Circuit. United States District Court of Eastern District Texas
    • July 11, 2008
    ...and the language of the insurance policy." Harken Exploration Co., 261 F.3d at 471; see Lincoln Gen. Ins. Co. v. Aisha's Learning Ctr, 468 F.3d 857, 858 (5th Cir.2006) (citing Merchants Fast Motor Lines, Inc., 939 S.W.2d at 141); Northfield Ins. Co., 363 F.3d at 528 (citing King v. Dallas F......
  • Kaluom v. Stolt Offshore, Inc., No. 06-40396.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • October 10, 2007
    ...both the grant of summary judgment and a district court's statutory construction de novo. Lincoln Gen. Ins. Co. v. Aisha's Learning Ctr., 468 F.3d 857, 858 (5th Cir.2006); FTC v. Nat'l Bus. Consultants, Inc., 376 F.3d 317, 319 (5th Cir.2004). Summary judgment is appropriate "if the pleading......
  • Country Mut. Ins. Co. v. Oehler's Home Care, Inc., NO. 4-19-0080
    • United States
    • United States Appellate Court of Illinois
    • October 21, 2019
    ...Mount Vernon 's conclusion that the van was the mere situs of the injury. See Lincoln General Insurance Co. v. Aisha's Learning Center , 468 F.3d 857, 861 (5th Cir. 2006) (declining to follow Mount Vernon on nearly identical facts because the failure to remove a child from a car arose out o......
  • Alea London Ltd. v. Bickford, Civil Action No. H-08-648.
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Southern District of Texas
    • June 12, 2009
    ...duty to indemnify an insured is more narrow than its duty to defend the insured. Lincoln Gen. Ins. Co. v. Aisha's Learning Cent., 468 F.3d 857, 858 (5th Cir.2006); Gulf Chem. & Metallurgical Corp. v. Assoc. Metals & Minerals Corp., 1 F.3d 365, 369 (5th Cir.1993); St. Paul Ins. Co. v. Tex. D......
  • Request a trial to view additional results

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