Paulson v. Fire Insurance Exchange

• Decision Date: 23 June 1965
• Docket Number: No. A-10325,A-10325
• Parties: Clarence PAULSON and wife, Julia B. Paulson, Petitioners, v. FIRE INSURANCE EXCHANGE, Respondent. FIRE INSURANCE EXCHANGE, Petitioner, v. Clarence PAULSON and wife, Julia B. Paulson, Respondents.
• Court: Texas Supreme Court

Page 316

393 S.W.2d 316

Clarence PAULSON and wife, Julia B. Paulson, Petitioners, v. FIRE INSURANCE EXCHANGE, Respondent.

FIRE INSURANCE EXCHANGE, Petitioner, v. Clarence PAULSON and wife, Julia B. Paulson, Respondents.

No. A-10325.

Supreme Court of Texas.

June 23, 1965.

Rehearing Denied July 21, 1965.

Austin Y. Bryan, Jr., Houston, for Paulson et ux.

Baker, Botts, Shepherd & Coates and B. D. McKinney, Houston, for Fire Ins. Exchange.

NORVELL, Justice.

This is a Hurricane Carla case. The trial court designation of the parties will be used in this opinion. Plaintiffs, Clarence Paulson and his wife, Julia, owned property in Palacios, Matagorda County, Texas, which was severely damaged by the winds and waters which attended the hurricane. The defendant, Fire Insurance Exchange, was the insurer of such property. In a suit brought by plaintiffs, the District Court rendered judgment against the insurance company. The Court of Civil Appeals reversed the trial court's judgment and remanded the case to the District Court for another trial. 381 S.W.2d 199. As the Court of Civil Appeals at Houston, in Berglund v. Hardware Dealers Mutual Fire Insurance Co., 381 S.W.2d 631, placed a different construction upon the water exclusionary clause of the policy than that placed upon it by the Court of Civil Appeals in this case, we granted writ of error to settle this conflict in interpretation.

(1) After having heard argument in both cases and considered the briefs of the parties, we have reached the conclusion that the judgment of the Court of Civil Appeals in Berglund should be reversed and that, in the main, the views of the Court of Civil Appeals in this case as to the proper construction of the insurance policy should be approved. Fire Insurance Exchange has filed an application for writ of error herein contending that the Court of Civil Appeals should have rendered judgment that plaintiff take nothing rather than ordering a remand for another trial. This position is well taken and the judgment of the Court of Civil Appeals will be modified accordingly.

The policy purchased by Mr. and Mrs. Paulson from Fire Insurance Exchange was a 'named peril' policy which insured them 'against direct loss resulting from any of the perils (listed below): * * * E. Extended Coverage-Windstorm, Hurricane, Hail, Explosion, Riot, Civil Commotion, Smoke, Aircraft and Land Vehicles.'

Under the heading 'Specific Coverage Conditions' appears the following exclusionary clause: 'Conditions applicable only to windstorm, hurricane and hail: Unless specifically named hereon this Exchange shall not be liable for loss to metal smokestacks * * *, nor for loss caused * * * by snowstorm, tidal wave, high water, or overflow, whether driven by wind or not, unless the wind or hail shall first make an opening in the walls or roof of the described building and shall then be liable only for the loss to the interior of the building, or the insured property therein, caused immediately by rain entering the building through such openings.'

The policy sued upon covered a residence house, an outbuilding and certain unscheduled personal property situated in such residence and outbuilding. The case was submitted to the jury and judgment rendered in the trial court upon the theory that if the damage to plaintiff's property was the direct result of Hurricane Carla the defendant was liable. For example, the issue relating to the residence house and the jury's answer thereto were as follows:

'Do you find from a preponderance of the evidence that plaintiffs' residence house on Lot 5, Block 97, Palacios, Matagorda County, Texas, was damaged on or about September 10 and 11, 1961, as a direct result of Hurricane Carla?

We the jury answer-yes.'

The following definition was applicable to this issue:

'By the term, 'proximate cause' or 'direct cause' as used herein is meant a cause which in a natural and continuous sequence, unbroken by any new and independent cause, produces an event, and without which the event would not have happened.'

A similar question was asked as to an outbuilding on Lot 5, Block 97, and personal property belonging to the plaintiffs and located in the building on said Lot 5, Block 97, and affirmative replies were returned by the jury.

In addition to these answers, the jury answered 'no' to issues inquiring if the residence house, outbuilding and personal property of plaintiff had 'sustained loss and damage as a direct result of tornado winds passing in the area of plaintiffs' property.'

The jury was also asked in three issues if they found from a preponderance of the evidence that plaintiffs' residence house 'did not sustain loss which was directly caused by high water, whether driven by rain or not.' These issues were all answered, 'Did not sustain such high water loss.'

Some seven issues were submitted relating to the dollars and cents amount of damages, such as repair costs and the value of the various items of property before and after the passage of the hurricane.

(2) We have examined the Statement of Facts in some detail. We conclude that there is no dispute but that plaintiffs' property sustained loss and damage as a result of Hurricane Carla. The Court of Civil Appeals held that the jury's findings that plaintiffs' property did not sustain loss caused by 'high water, whether wind driven or not' was against the overwhelming preponderance of the evidence. We think that the evidence shows conclusively as a matter of law that a substantial portion of plaintiffs' loss or damage was the result of wind driven water.

In Hardware Mutual Dealers Insurance Company v. Berglund, Tex., 393 S.W.2d 309, this day decided, we held that although it could be said...