State Farm Lloyds, Inc. v. Williams

• Decision Date: 13 April 1990
• Docket Number: No. 05-89-00857-CV,05-89-00857-CV
• Citation: 791 S.W.2d 542
• Parties: STATE FARM LLOYDS, INC., Appellant, v. Paula Mallow WILLIAMS and William Scott Wallace, Appellees.
• Court: Texas Court of Appeals

Page 542

791 S.W.2d 542

STATE FARM LLOYDS, INC., Appellant, v. Paula Mallow WILLIAMS and William Scott Wallace, Appellees.

No. 05-89-00857-CV.

Court of Appeals of Texas Dallas.

April 13, 1990.

Rehearing Denied May 29, 1990.

Michael W. Huddleston, Cowles & Thompson, Dallas, Joseph W. Stewart, Steven R. Pierett, Arlington, for appellant.

Joe H. Jones, Carter, Jones, Magee, Rudberg and Mayes, Dallas, for appellees.

Before ENOCH, C.J., and LAGARDE and THOMAS, JJ.

OPINION

ENOCH, Chief Justice.

State Farm Lloyds, Inc. appeals from a summary judgment granted in favor of Paula Mallow Williams and William Scott Wallace. The case involves the question of liability coverage under a homeowners' insurance policy. We reverse the judgment of the trial court and remand the case for further proceedings consistent with this opinion.

On June 20, 1987, Claude F. Fulton shot his wife, Frances Fulton, his stepgranddaughter, Dava Williams Wallace, and his stepdaughter, Paula Mallow Williams. He then shot himself. Paula Williams and Frances Fulton survived the attack, although Frances later died of an unrelated illness. Claude Fulton and Dava Wallace died as a result of their injuries.

In connection with the shootings, Paula Williams and William Scott Wallace (an heir of Dava Wallace) sued both the estates of Claude Fulton and of Frances Fulton. Claude and Frances were insured under a homeowners' policy issued by State Farm, and State Farm defended Frances Fulton's estate. The petition filed by Williams and Wallace against the estates of Claude and Frances alleged that Claude caused the death of Dava Wallace and the personal injuries inflicted on Paula Williams. The petition alleged no acts or omissions on the part of Frances Fulton. With respect to Frances, the petition merely stated that she was married to Claude at the time of the occurrences, and "by reason thereof, both estates have liability for the conduct above set forth."

The trial court awarded judgment in favor of Williams and Wallace against the estates of Claude and Frances, jointly and severally. However, the trial court's judgment included the following:

As concerns Defendant STEVE MALLOW, Independent Executor of the Estate of FRANCES MALLOW FULTON, Deceased, his liability for the aforesaid Judgments can be enforced against only the community property assets in the Estate of FRANCES MALLOW FULTON that were in existence on June 20 1987. In this connection, the Court finds and holds as a result of the occurrences in question that the liability insurance policy owned by Claude and Frances Fulton was part of the community property of their respective estates.

State Farm refused to pay any part of the judgment against the estate of Frances Fulton. Steve Mallow, as independent executor of Frances's estate, assigned all claims that the estate of Frances Fulton might have against State Farm to Paula Williams and William Wallace. Williams and Wallace then sued State Farm, alleging, among other things, breach of the homeowners' insurance contract. Both sides moved for summary judgment. The trial court granted a partial summary judgment in favor of Williams and Wallace, concluding that the estate of Frances Fulton was an insured under the homeowners' policy and that State Farm was liable under the policy to the extent of the policy limit of $300,000 per occurrence. The court further found that there were two occurrences. The partial summary judgment was severed from the rest of the lawsuit, and all other summary judgment relief sought by the parties was denied. State Farm appeals from this partial summary judgment.

In its first point of error, State Farm contends that the trial court erred in granting the partial summary judgment. In its second point, State Farm argues that the trial court erred in granting judgment on the basis that Frances Fulton's estate was insured under the policy and that State Farm had liability under the policy. In reviewing the propriety of the partial summary judgment, we are guided by the rule that a movant is entitled to summary judgment if the summary judgment record shows 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. TEX.R.CIV.P. 166a(c).

By the terms of the policy, and under the heading "COVERAGE D--PERSONAL LIABILITY," State Farm agreed "[t]o pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury...." The limit of liability for such coverage (designated as Coverage D) was specified in this manner:

LIMITS OF LIABILITY COVERAGES

....

$ 300,000 D. PERSONAL LIABILITY,

EACH OCCURRENCE

The policy also contained a severability of interests clause which provided that "[t]he insurance afforded under Coverage D applies separately to each Insured against whom claim is made or suit is brought...."

In the absence of ambiguity, insurance contracts are to be interpreted generally as other contracts are interpreted. Southern Life and Health Ins. Co. v. Simon, 416 S.W.2d 793, 795 (Tex.1967). The question of whether a contract is ambiguous is a question of law for the court. R & P Enterprises v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex.1980). If a written instrument is worded so that a court can properly give it a certain or definite legal meaning, it is not ambiguous. A contract is ambiguous only when the application of pertinent rules of interpretation results in genuine uncertainty as to which one of two or more meanings is proper. Id. at 519; Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 517, 243 S.W.2d 154, 157 (1951). The rule that insurance contracts are to be strictly construed against the insurer and in favor of the insured is applied only in cases of ambiguity. See Southern Life and Health, 416 S.W.2d at 795; Republic Nat'l Life Ins. Co. v. Spillars, 368 S.W.2d 92, 94 (Tex.1963). All parts of insurance contracts are to be taken together, and such meaning shall be given to them as will effectuate to the fullest extent the intention of the parties. Courts must interpret the meaning of the language actually used in a contract and give effect to the intention of the parties as expressed in the writing. If the language is plain, it must be enforced as written. Republic Nat'l Life, 368 S.W.2d at 94.

Reading the pertinent provisions of the policy together, we determine that the insurance policy provisions quoted above unambiguously provide coverage to an insured who becomes legally obligated to pay money as damages because of personal injury. Moreover, the legal obligation to pay must be based on the personal liability of the insured, according to the provisions on coverage and liability limits. There is no genuine uncertainty as to the meaning of these provisions, and they can properly be given a certain or definite legal meaning. We are therefore required to enforce the terms as written.

Having determined what the applicable policy provisions say, we now turn to a review of the judgment. In pertinent part, the judgment states:

IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that WILLIAM SCOTT WALLACE have and recover Judgment, jointly and severally, of and from MARGARET CHRISTINE FULTON THOMASON AND REX G. ROBERTS, INDEPENDENT EXECUTORS OF THE ESTATE OF CLAUDE F. FULTON, DECEASED, AND STEVE MALLOW, INDEPENDENT EXECUTOR OF THE ESTATE OF FRANCES MALLOW FULTON, DECEASED, Defendants herein, in the total sum of $1,750,000.00; that PAULA MALLOW WILLIAMS have and recover Judgment, jointly and severally, of and from MARGARET CHRISTINE FULTON THOMASON AND REX G. ROBERTS, INDEPENDENT EXECUTORS OF THE ESTATE OF CLAUDE F. FULTON, DECEASED, AND STEVE MALLOW, INDEPENDENT EXECUTOR OF THE ESTATE OF FRANCES MALLOW FULTON, DECEASED, Defendants herein, in the total sum of $2,500,000.00; that these Judgments are to bear interest at the rate of ten per cent (10%) per annum until paid in full; and Plaintiffs are entitled to recovery of all costs of Court incurred herein.

As concerns Defendant STEVE MALLOW, Independent Executor of the Estate of FRANCES MALLOW FULTON, Deceased, his liability for the aforesaid Judgments can be enforced against only the community property assets in the Estate of FRANCES MALLOW FULTON that were in existence on June 20, 1987. In this connection, the Court finds and holds as a result of the occurrences in question that the liability insurance policy owned by Claude and Frances Fulton was part of the community property of their respective estates.

Earlier paragraphs in the judgment find that the plaintiffs, Williams and Wallace, have been damaged, and the sums awarded correspond to the damages found. The judgment states that Claude Fulton recklessly caused the death of Dava Wallace and the personal injuries of Paula Williams, but it is silent on the question of whether the liability of Frances's estate is based on the personal liability of Frances. It also does not specify whether it operates in rem or in personam with respect to the sums assessed against the estate of Frances.

The same rules of interpretation apply in ascertaining the meaning of judgments as in ascertaining the meaning of other written instruments. Lone Star Cement Corp. v. Fair, 467 S.W.2d 402, 404-05 (Tex.1971); McLeod v. McLeod, 723 S.W.2d 777, 779 (Tex.App.--Dallas 1987, no writ); see Ellis v. Mortgage and Trust, Inc., 751 S.W.2d 721, 723 (Tex.App.--Fort Worth 1988, no writ). If the judgment is plain and unambiguous, extrinsic matters may not be considered in order to give the decree a different effect from that expressed by the literal meaning of the words used therein. McLeod, 723 S.W.2d at 779; see Ellis, 751 S.W.2d at 723. On the other hand, if the judgment is ambiguous, the entire content of the judgment and the record should be considered. See Point Lookout West, Inc. v. Whorton, 742 S.W.2d 277, 278 (Tex.1987) (per curiam); Lone Star Cement, 467 S.W.2d at 404-05. If the...