Progressive Cnty. Mut. Ins. Co. v. Caltzonsing

• Decision Date: 17 November 2022
• Docket Number: NUMBER 13-21-00209-CV
• Citation: 658 S.W.3d 384
• Parties: PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY, Appellant, v. Anselmo M. CALTZONSING, Appellee.
• Court: Texas Court of Appeals

658 S.W.3d 384

PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY, Appellant,

v.Anselmo M. CALTZONSING, Appellee.

NUMBER 13-21-00209-CV

Court of Appeals of Texas, Corpus Christi-Edinburg.

Delivered and filed November 17, 2022

ATTORNEY OF RECORD FOR THE APPELLANT: David L. Plaut, Hanna & Plaut, LLP, 211 E. Seventh Street, Suite 600, Austin, TX 78701-3203.

ATTORNEY OF RECORD FOR THE APPELLEE: Rex Luther Easley, Cole, Cole, Easley & Sciba, P.C., 302 W. Forrest Street, Victoria, TX 77901.

Before Chief Justice Contreras and Justices Benavides and Longoria

Opinion by Justice Benavides

This is an interlocutory appeal that stems from the trial court's denial of appellant Progressive County Mutual Insurance Company's (Progressive) motion for summary judgment against appellee Anselmo M. Caltzonsing. We granted Progressive's petition for permissive appeal to address a matter of first impression: whether Caltzonsing is precluded from recovering under Progressive's uninsured/underinsured motorist (UIM) coverage because the owner of the tortfeasor's vehicle was issued a certificate of self-insurance. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(f) ; TEX. R. APP. P. 28.3. We answer "no" and affirm the trial court's judgment.

I. BACKGROUND

The underlying facts of this case are not in dispute. On March 9, 2018, Caltzonsing was driving a vehicle owned by his employer, Gerado Lozada, and insured through Progressive. Janet Gaitan, the tortfeasor, "failed to control her speed and struck the trailer towed by [Caltzonsing]," causing him "serious personal injury." The car Gaitan drove was leased through EAN Holdings, LLC, d/b/a Enterprise Rent-A-Car (Enterprise). Caltzonsing recovered through Gaitan's personal auto liability policy. However, the amount recovered was insufficient to cover the entirety of the damages Caltzonsing suffered.

On August 20, 2019, Caltzonsing filed suit against: (1) Progressive, his employer's insurer; (2) Gaitan; and (3) Allstate, Caltzonsing's own insurer.¹ In his original petition, Caltzonsing sought, inter alia , a declaratory judgment that Gaitan was liable for the accident and that he had the right to receive UIM benefits under the Progressive policy. On September 20, 2019, Progressive filed an answer asserting in part that Caltzonsing had not established that he was legally entitled to recover through the policy's UIM coverage.

On December 10, 2020, Progressive filed a combined motion for summary judgment, on both traditional and no-evidence grounds. Progressive asserted that Caltzonsing could not prove he was " ‘legally entitled to recover’ from the underinsured motorist involved in the accident" because the "underinsured motorist, [Gaitan], was operating a vehicle owned by [Enterprise], a self-insured entity."

Attached as an exhibit to Progressive's motion for summary judgment was the insurance policy setting forth the coverage afforded to Caltzonsing through his employer. The policy contained a "[UIM] coverage Endorsement" stating:

Subject to the Limits of Liability, if you pay the premium for this coverage, we will pay for the damages, other than punitive or exemplary damages, which an insured is legally entitled to recover from the owner or operator of an uninsured auto because of bodily injury:

1. sustained by an insured;

2. caused by an insured; and

3. arising out of the ownership, maintenance, or use of an uninsured auto.

The endorsement defined "[u]ninsured auto," in part, to include an "underinsured auto," which was in turn defined as:

[O]ne to which a liability bond or policy applies at the time of the accident, but its limit of liability either:

(i) is not enough to pay the full amount the insured is legally entitled to recover as damages; or

(ii) has been reduced by payment of claims to an amount which is not enough to pay the full amount the insured is legally entitled to recover as damages.

It also excluded certain categories of vehicles from being considered uninsured. Relevant to this appeal, the endorsement excluded from the definition of an uninsured vehicle any vehicle that was "owned or operated by a self-insurer under any applicable vehicle law, except a self-insurer that is or becomes insolvent." Progressive also attached as an exhibit a certificate of self-insurance issued to Enterprise by the Texas Department of Public Safety (TDPS).

The trial court ultimately denied Progressive's motion for summary judgment but granted it permission to appeal. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(d). We accepted the appeal. See TEX. R. APP. P. 28.3.

II. STANDARD OF REVIEW

We review a trial court's decision to grant or deny a motion for summary judgment de novo. See Tex. Mun. Power Agency v. Pub. Util. Comm'n of Tex. , 253 S.W.3d 184, 192 (Tex. 2007) ; see also Mahoney v. Slaughter , No. 01-14-00471-CV, 2015 WL 2159476, at *2 (Tex. App.—Houston [1st Dist.] May 7, 2015, no pet.) (mem. op.). To be entitled to summary judgment, a movant must show that there is no genuine issue of material fact and that they are entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., Inc. , 690 S.W.2d 546, 548 (Tex. 1985). We indulge all reasonable inferences and resolve any doubts in favor of the non-movant. Id. at 549.

III. ANALYSIS

A. Interpretation of Policy

When we accept a permissive appeal, we must "do what the Legislature has authorized and ‘address the merits of the legal issues certified.’ " Elephant Ins., LLC v. Kenyon , 644 S.W.3d 137, 147 (Tex. 2022) (quoting Sabre Travel Int'l, Ltd. v. Deutsche Lufthansa AG , 567 S.W.3d 725, 733 (Tex. 2019) ). This includes "addressing all fairly included subsidiary issues and ancillary issues pertinent to resolving the controlling legal issue." Id.

Here, the controlling question of law that was certified to us was "whether the ‘Self-Insured Exception’ provisions of [Caltzonsing]’s Auto Policy preclude uninsured/underinsured ("UM/UIM") policy benefits when the tortfeasor's vehicle is owned or operated by a self-insurer like Enterprise." This question necessarily depends on an interpretation of the self-insurer exclusion in Caltzonsing's policy, which is where we shall begin our analysis.

1. Standard of Review

"[W]e interpret insurance policies in Texas according to the rules of contract interpretation." Kelly-Coppedge, Inc. v. Highlands Ins. , 980 S.W.2d 462, 464 (Tex. 1998). "[W]e must give an insurance policy's undefined words their common, ordinary meaning unless the policy itself demonstrates that the parties intended a ‘different’ or more ‘technical’ meaning." Anadarko Petrol. Corp. v. Hous. Cas. Co. , 573 S.W.3d 187, 193 (Tex. 2019). "[W]e determine the meaning of an undefined term as used in an insurance policy by applying its ‘ordinary and generally accepted meaning,’ as construed ‘in context and in light of the rules of grammar and common usage.’ " Pharr-San Alamo Indep. Sch. Dist. v. Tex. Pol. Subdivisions Property/Casualty Joint Self Ins. Fund , 642 S.W.3d 466, 473–74 (Tex. 2022). "An interpretation that gives each word meaning is preferable to one that renders one surplusage." U.S. Metals, Inc. v. Liberty Mut. Grp., Inc. , 490 S.W.3d 20, 23–24 (Tex. 2015). "To determine a term's common, ordinary meaning, we typically look first to dictionary definitions and then consider the term's usage in other authorities." Anadarko Petrol. , 573 S.W.3d at 192. "But just as there are words that are so clear in meaning that they may never be altered by technical definitions or custom and usage, there may be words that simply do not have a nontechnical meaning." RPC, Inc. v. CTMI, LLC , 606 S.W.3d 469, 487 (Tex. App.—Fort Worth 2020, pet. denied).

An intent to exclude coverage in an insurance policy must be expressed in "clear and unambiguous language." Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy , 811 S.W.2d 552, 555 (Tex. 1991). Both the presence of an ambiguity and the interpretation of an unambiguous contract are questions of law that we review de novo. URI, Inc. v. Kleberg County , 543 S.W.3d 755, 763 (Tex. 2018). "To determine whether a contract is ambiguous, we look at the agreement as a whole in light of the circumstances present when the parties entered into the contract." Edascio, L.L.C. v. NextiraOne L.L.C. , 264 S.W.3d 786, 796 (Tex. App.—Houston [1st Dist.] 2008, pet. denied). "If a written contract is so worded that it can be given a definite or certain legal meaning when so considered and as applied to the matter in dispute, then it is not ambiguous." Id. at 765. "If, however, the language of a policy or contract is subject to two or more reasonable interpretations, it is ambiguous." Kelley-Coppedge, Inc. , 980 S.W.2d at 464 (quoting Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc. , 907 S.W.2d 517, 520 (Tex. 1995) ). That the parties propose two different interpretations of the provision at issue does not make it ambiguous; "ambiguity exists only if both parties’ interpretations are reasonable." Piranha Partners v. Neuhoff , 596 S.W.3d 740, 743–44 (Tex. 2020).

"Contract ambiguity comes in two flavors: patent or latent." Kleberg County , 543 S.W.3d at 765. "A patent ambiguity is evident on the face of the contract." Mescalero Energy, Inc. v. Underwriters Indem. Gen. Agency , 56 S.W.3d 313, 319 (Tex. App.—Houston [1st Dist.] 2001, pet. denied). "A latent ambiguity arises when a contract which is unambiguous on its face is applied to the subject matter with which it deals and an ambiguity appears by reason of some collateral matter." CBI Indus., Inc. , 907 S.W.2d at 520. "[T]he language of the polic[y] must be interpreted with reference to both the facts of the claim and the facts within the contemplation of the parties at the signing of the polic[y]." Id. "If we determine that only one party's interpretation of the insurance policy is reasonable, then the policy is unambiguous and the reasonable interpretation should be adopted." Nassar v. Liberty Mut. Fire Ins. , 508 S.W.3d 254, 258 (Tex. 2017).

If, however, more than one...