State Farm Lloyds, Inc. v. Williams, 05-93-00191-CV
| Decision Date | 29 August 1997 |
| Docket Number | No. 05-93-00191-CV,05-93-00191-CV |
| Citation | 960 S.W.2d 781 |
| Parties | STATE FARM LLOYDS, INC., State Farm Lloyds, and State Farm Fire & Casualty Co., Appellants, v. Paula Mallow WILLIAMS and William Scott Wallace, Appellees. |
| Court | Texas Court of Appeals |
Michelle E. Robberson, Dana Harbin, R. Brent Cooper, Cooper, Aldous & Scully, P.C.,Dallas, for Appellants.
Joe Hill Jones, John E. Agnew, Carter, Jones, Magee, Rudberg & Mayes, Bruce A. Budner, Budner & Weber, P.C.,, Bryan A. Garner, Dallas, for Appellees.
Before KINKEADE, WHITTINGTON and ROSENBERG, 1 JJ.
Appellees' motions for rehearing are granted. We withdraw our opinion of October 24, 1996, and substitute the following opinion in its place. We also vacate our previous judgment.
In this insurance case, State Farm Lloyds, Inc., State Farm Lloyds, and State Farm Fire & Casualty Co. (collectively, "State
Farm") appeal a jury verdict in favor of Paula Mallow Williams and William Scott Wallace (collectively, "appellees"). In twenty-one points of error, State Farm contends (1) the evidence is legally and factually insufficient to support the jury's verdict; (2) the trial judge erred in concluding as a matter of law that there were two occurrences under the policy; (3) the trial judge erred in awarding damages as a matter of law; (4) the trial judge erred in admitting certain expert testimony; and (5) the trial judge erred in submitting certain jury instructions. Appellees each bring a conditional cross-point of error complaining of error in the court's charge. For the reasons set forth below, we conclude the evidence is legally sufficient to support the jury's findings on appellees' negligence, DTPA, and insurance code claims. Nevertheless, we conclude the trial judge erred in awarding damages based on those claims. Accordingly, we reverse the trial court's judgment and remand this cause for a new trial.
On June 20, 1987, Claude Fulton pointed a pistol at his wife, Frances Fulton, while Frances's daughter, Paula Mallow Williams (Paula), and Frances's granddaughter, Dava Williams Wallace (Dava), were present. 2 Claude fatally shot Dava as she dialed 911. Claude then shot Paula and Frances before shooting and killing himself. Paula and Frances survived the attack; however, Frances later died of cancer.
At the time of the shooting, Claude and Frances were covered by a homeowner's policy issued by State Farm. The policy provided $300,000 coverage per occurrence. In December 1987, appellees sued Claude's and Frances's estates, seeking compensation for injuries they sustained as a result of the shootings. Claude's and Frances's estates sought a defense and coverage under the homeowner's policy. State Farm tendered a defense to both Claude's and Frances's estates, but reserved its right to later deny coverage as to Claude's estate. State Farm took no similar action with respect to Frances's estate. In March 1988, appellees offered to settle their claims against Frances's estate for $600,000. Appellees claimed the demand was within policy limits because the shooting involved two separate occurrences. Frances's executor urged State Farm to accept appellees' offer, but State Farm refused to do so.
On July 21, 1988, the case was called for trial. After hearing evidence and the arguments of counsel, the trial court found Claude's and Frances's estates jointly and severally liable for $4.25 million. However, the judgment specifically stated that the judgment against Frances's estate could be enforced only against the community property assets of the estate that were in existence on June 20, 1987 (the day of the shootings). No appeal was taken from this judgment.
State Farm refused to pay any part of the judgment against Frances's estate. The first notice Frances's executor received of State Farm's intent to contest coverage occurred when State Farm filed a declaratory judgment suit against the estate following the July 21st judgment. Sometime thereafter, Frances's estate assigned any claims it might have against State Farm to appellees. In return, appellees agreed not to execute the July 21st judgment against any of Frances's estate's assets other than the homeowner's policy.
Appellees subsequently filed this suit against State Farm as assignees of Frances's estate. In their petition, appellees asserted causes of action against State Farm for (1) breach of contract, (2) negligence, (3) breach of the duty of good faith and fair dealing, and (4) violations of the Texas Insurance Code and the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA). Appellees sought actual and exemplary damages as well as attorney's fees.
Both sides moved for summary judgment. After a hearing, the trial judge granted a partial summary judgment in favor of appellees, holding that Frances's estate was an insured under the policy. The trial judge On remand from Williams I, the jury found State Farm had waived its coverage defenses and was estopped from denying coverage. The jury also found State Farm (1) was negligent in handling the underlying claim and lawsuit, (2) committed a false or deceptive act or practice, and (3) breached its duty of good faith and fair dealing. The jury awarded appellees $619,077.87 in actual damages for State Farm's breach of the duty of good faith and fair dealing. The trial court did not submit a question to the jury asking for a determination of damages based on the negligence, DTPA, and insurance code findings.
then severed the partial summary judgment, and State Farm appealed to this Court. On appeal, we concluded the claims against Frances's estate were not covered under the policy. Nevertheless, we concluded fact issues existed on whether State Farm had waived or was estopped from asserting its coverage defenses. Thus, we remanded the case to the trial court. State Farm Lloyds, Inc. v. Williams, 791 S.W.2d 542, 552-53 (Tex.App.--Dallas 1990, writ denied) (Williams I ).
Following the verdict, appellees filed a motion for judgment on the verdict. In the motion, appellees asked the court to enter judgment as a matter of law in the amount of the underlying judgment. In support of this request, appellees relied on the Tyler Court of Appeals' opinion in Allstate Insurance Co. v. Kelly, 680 S.W.2d 595 (Tex.App.--Tyler 1984, writ ref'd n.r.e.). The trial judge agreed with appellees that Kelly applied, disregarded the jury's award of damages for breach of the duty of good faith and fair dealing, and entered judgment as a matter of law in favor of appellees for $4.25 million in actual damages. The trial judge then trebled the damage award based on the jury's finding that State Farm had acted "knowingly." The trial court's final judgment awarded appellees $25,951,930. 3 This appeal followed.
In its eleventh point of error, State Farm contends the trial judge erred in (1) concluding as a matter of law that Claude's acts constituted two occurrences under the policy, and (2) instructing the jury to that effect. State Farm contends the instruction was improper because the actions at issue were based on a single individual, a single evening, and a single "fit of violence." 4
Insurance policies are contracts and, as such, are governed by the rules of construction applicable to contracts generally. See Barnett v. Aetna Life Ins. Co., 723 S.W.2d 663, 665 (Tex.1987). Normally, in the insurance context, the language and terms of a policy are chosen by the insurance company. Barnett, 723 S.W.2d at 666. Therefore, when the language chosen is ambiguous or inconsistent, and susceptible to more than one reasonable construction, the policy should be construed strictly against the insurer and liberally in favor of the insured. Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734, 737 (Tex.1990); Barnett, 723 S.W.2d at 666. A strict construction is particularly appropriate when the case involves an exception or limitation to liability under the policy. Barnett, 723 S.W.2d at 666.
In this case, the homeowner's policy provides $300,000 coverage "per occurrence." However, the policy does not define the term "occurrence." Because the term is susceptible to more than one reasonable construction, we conclude the term is ambiguous. See Barnett, 723 S.W.2d at 665. Thus, we must construe the term strictly against the insurer. Gonzalez, 795 S.W.2d at 737; Barnett, 723 S.W.2d at 666. In Maurice Pincoffs Co. v. St. Paul Fire & Marine Insurance Co., 447 F.2d 204 (5th Cir.1971), the Fifth Circuit held that multiple sales of contaminated bird seed resulted in multiple "occurrences" under a liability insurance policy despite the fact that the bird seed was contaminated on only one occasion. In reaching its decision, the court concluded that the meaning of the We find the court's reasoning in Maurice Pincoffs instructive in the instant suit. Here, the insured's liability arose out of the shootings of Williams and Dava. Williams and Dava were not injured by a single shot. Rather, their injuries resulted from two separate acts. Because each "act" independently gave rise to liability, we conclude the shootings constituted two separate occurrences under the policy. See Maurice Pincoffs Co., 447 F.2d at 206-07. 5 The trial judge did not err in concluding as a matter of law that Claude's actions constituted two occurrences under the policy and instructing the jury to that effect. 6 We overrule State Farm's eleventh point of error.
term "occurrence" referred to the actual sales of the bird seed, rather than the act of contamination, because the insured's liability arose out of the sale of the seed, not its contamination. Maurice Pincoffs Co., 447 F.2d at 207.
In six points of error, State Farm challenges the legal sufficiency of the evidence to support the jury's findings on (1) estoppel, (2) waiver, (3) negligence, (4) DTPA violations, (5) insurance...
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