Mid-Continent Cas. v. Global Enercom Mgmt.
| Citation | 293 S.W.3d 322 |
| Decision Date | 21 July 2009 |
| Docket Number | No. 14-07-01006-CV.,14-07-01006-CV. |
| Parties | MID-CONTINENT CASUALTY COMPANY, Appellant v. GLOBAL ENERCOM MANAGEMENT, INC., Appellee. |
| Court | Court of Appeals of Texas |
Panel consists of Chief Justice HEDGES and Justices ANDERSON and SEYMORE.
MAJORITY OPINION
This case involves an insurance coverage dispute arising out of a fatal accident that occurred on a work project in Arkansas. Appellee, Global Enercom Management, Inc., sought defense and indemnity from appellant, Mid-Continent Casualty Company, under a commercial general liability policy and a commercial auto policy issued to the subcontractor on the project, Allstates Construction Company ("Allstates"). When appellant denied appellee's requested defense and indemnity, appellee filed a declaratory judgment action. The parties ultimately filed cross-motions for summary judgment. The trial court granted appellee's motion, denied appellant's, and appellant appealed. Finding no error, we affirm.
In December 2001, appellee transmitted a proposed subcontract to Allstates for repair work to be performed on a cellular telephone tower in Forrest City, Arkansas. On December 27, 2001, Allstates signed the subcontract and returned it to appellee. Allstates' employees commenced work on the tower project prior to Christmas Day, 2001. After the Christmas vacation, the Allstates workers returned to the project on January 2, 2002. As part of the repair project, the Allstates workers installed a pulley and rope system on the tower. One end of the pulley system was attached to a headache ball, which consists of a heavy weight. The other end was attached to a pick-up truck, which would provide the power to raise and lower the headache ball. An equipment building on the tower site was between the headache ball end of the pulley system and the pickup truck.
During the afternoon of January 2, the job site foreman, Forester Barnes, instructed three workers, John Seabolt, Jamie Anders, and Brian Barnes, to climb to the 280 foot level of the tower to take measurements. Approximately ten minutes later, Barnes heard the signal to raise the headache ball. Barnes then went to the pick-up truck, started it, and started slowly backing the truck up to raise the headache ball. Barnes did not know where the three workers were or that they had attached themselves to the headache ball. When the headache ball had been raised fifteen to twenty feet, the headache ball moved above the equipment building and Barnes was able to see the three men attached to the headache ball. When they came into view, Barnes exchanged hand signals with the workers asking what was going on? The men signaled for Barnes to continue raising them to the top of the tower. Barnes then continued slowly backing the truck up until the men had reached about the eighty foot elevation level. At that point, the rope broke and the men fell to their deaths.
Allstates performed no further work under the subcontract after January 2, 2002. On January 3, 2002, appellee signed the subcontract.
On August 12, 2002, Anders' and Seabolts' heirs filed suit against appellee in federal district court in Mississippi. Appellee sought defense and indemnification from appellant, Allstates' insurer, pursuant to an indemnity clause found in the subcontract. Appellant had insured Allstates with both a commercial general liability policy ("CGL policy") and a commercial automobile policy ("auto policy"). Appellant denied coverage. Appellee then filed a declaratory judgment action in Texas state court. Appellant counterclaimed for declaratory judgment as well. While the declaratory judgment action was pending, appellee settled the Mississippi lawsuit.
Eventually, the two sides narrowed the issues in the declaratory judgment action down to whether two exclusions of coverage applied. Both exclusions are found in section I, part 2 of the CGL policy:
Exclusion b:
This insurance does not apply to:
b. Contractual Liability
"Bodily injury" or "property damage" for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages:
* * *
(2) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement.
Exclusion g:
"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading".
The same contractual liability exclusion is also found in the auto policy. Both sides filed competing traditional motions for summary judgment on the applicability of the exclusions. The trial court ultimately granted appellee's and denied appellant's motion. This appeal followed.
Appellant raises two issues on appeal. First, appellant contends Exclusion g in the CGL policy, the auto exclusion, applies to the Arkansas accident because a pick-up truck was used to power the pulley system. Next, appellant asserts the contractual liability exclusion precludes coverage under both the CGL and auto policies because appellee did not sign the subcontract until the day after the Arkansas accident.
Insurance policies are construed according to the ordinary rules of contract construction. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex.2003). In determining the scope of coverage, a court examines the policy as a whole to ascertain the true intent of the parties. Utica Nat'l Ins. Co. of Texas v. Am. Indem. Co., 141 S.W.3d 198, 202 (Tex.2004) citing Mid-Century Ins. Co. v. Lindsey, 997 S.W.2d 153, 158 (Tex.1999). To determine this intent, we generally limit our inquiry to the "four corners" of the policy. See Esquivel v. Murray Guard Inc., 992 S.W.2d 536, 544 (Tex.App.-Houston [14th Dist.] 1999, pet. denied). When dealing with an exclusionary clause, a court must adopt the construction urged by the insured as long as that construction is not unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties' intent. Utica Nat'l Ins., 141 S.W.3d at 202 citing Nat'l Union Fire Ins. Co. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex.1991). Because this case deals with exclusions, the appellant insurance company bears the burden of proof to establish that the exclusions apply in this case. Id. at 204.
Declaratory judgments decided by summary judgment are reviewed under the same standards of review that govern summary judgments generally. Tex. Civ. Prac. & Rem.Code Ann. § 37.010 (Vernon 2006); Lidawi v. Progressive County Mut. Ins. Co., 112 S.W.3d 725, 730 (Tex.App.-Houston [14th Dist.] 2003, no pet.). Under the traditional summary judgment standard of review, a movant has the burden to show at the trial level that there are no genuine issues of material fact, and it is entitled to judgment as a matter of law. KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999). In determining whether there is a genuine fact issue precluding summary judgment, evidence favorable to the non-movant is taken as true and we make all reasonable inferences in his favor. Id. We review the trial court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005). A movant is entitled to summary judgment only if it conclusively proves all essential elements of its claim. Johnston v. Crook, 93 S.W.3d 263, 273 (Tex.App.-Houston [14th Dist.] 2002, pet. denied).
When both parties move for summary judgment, each party bears the burden of establishing that it is entitled to judgment as a matter of law. City of Garland v. Dallas Morning News, 22 S.W.3d 351, 356 (Tex.2000). When the trial court grants one motion and denies the other, we review the summary judgment evidence presented by both parties and determine all questions presented. Id. The reviewing court should render the judgment that the trial court should have rendered or reverse and remand if neither party has met its summary judgment burden. Id.
The trial court, by granting appellee's motion for summary judgment, decided Exclusion g did not apply. The parties agree the resolution of this issue is guided by the test found in the Lindsey case cited above. There, the Supreme Court held:
(3) the automobile must not merely contribute to cause the condition which produces the injury, but must itself produce the injury.
In Lindsey, a young boy climbed through the back window of a pick-up, which dislodged a gun from a gun rack, which in turn discharged, hitting another boy sitting in a car parked next to the pick-up. The injured boy's family settled with the pick-up owner for the limits of that insurance policy. The settlement fell far short of the amount needed to pay the injured boy's medical expenses so the family sought coverage under their own Uninsured/Underinsured Motorist Policy. The insurance company denied coverage because the injury did not involve the "use" of an automobile. The Supreme Court disagreed, holding the incident met all three elements. In the process, the Supreme Court distinguished an entire line of cases addressing...
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