Vanguard Ins. Co. v. McWilliams
| Decision Date | 24 October 1984 |
| Docket Number | No. 13960,13960 |
| Citation | 680 S.W.2d 50 |
| Parties | The VANGUARD INSURANCE COMPANY, Appellant, v. Ronald O. McWILLIAMS, et al., Appellees. |
| Court | Texas Court of Appeals |
Tom Whiteside, Griffis, Griffis, Whiteside & Woodward, San Angelo, for appellant.
Charles Whittenburg, Davis, Wardlaw, Hay, Whittenburg & Aboussie, San Angelo, for appellees.
Before PHILLIPS, C.J., and EARL W. SMITH and GAMMAGE, JJ.
Vanguard Insurance Company appeals from the judgment of the trial court awarding damages and attorneys' fees to Ronald O. and Clarice McWilliams for breach of an insurance contract. We will reform the judgment and, as reformed, affirm.
Vanguard insured the McWilliams against hull damage to their airplane, with a policy limit of $30,000. The plane subsequently received extensive superficial hail damage. After protracted negotiations failed to produce a settlement, the McWilliams filed this action.
In a bench trial, the court found that the plane had a post-occurrence value of $22,500, and that the reasonable cost to restore the plane to its prior condition was $17,748. The trial court further found that, despite the damage, the plane was still capable of safe flight and was fully usable for its originally intended purpose. The trial court, therefore, found the loss was partial.
In its multifarious first point of error, Vanguard contends the trial court erred in finding that the loss was partial, arguing that it was a "constructive total loss" pursuant to the following language in the insuring agreement:
In the event of total loss or constructive total loss, the Company's Limit of Liability shall not exceed the applicable Limit of Liability stated in the DECLARATIONS, less deductible, if applicable. A constructive total loss shall exist when the cost of repairs plus the amount determined as salvage equals or exceeds the Limit of Liability of the aircraft as indicated in Item 4 of the DECLARATIONS--COVERAGE X or Y. (emphasis added)
Vanguard asserts that the post-occurrence value ($22,500) is "salvage" value, and that this amount plus the cost to repair ($17,748) exceeds its $30,000 limit of liability under the policy, constituting a "constructive total loss."
The insuring agreement does not define "salvage." The trial court held, in its conclusion of law number 2:
"Salvage" in this case means a state of damage or disrepair such that the airplane is rendered unsuitable for its originally intended use, in the absence of major alteration or repair and is in such condition that it is usable only for scrap value or secondary purposes.
The term "salvage" as used in this policy is subject to multiple interpretations. Vanguard cites no Texas authority construing this term, and we find none. It is well settled that an ambiguous term in an insurance policy will be construed to provide coverage. Glover v. National Insurance Underwriters, 545 S.W.2d 755 (Tex.1977). Exceptions and rules of limitation within insurance contracts are to be strictly construed against the insurer. Continental Casualty Co. v. Warren, 152 Tex. 164, 254 S.W.2d 762 (1953). We hold the trial court did not err in its construction of this term.
The amount found by the trial court to be the reasonable cost to restore the plane included the cost to repaint the entire airplane. Vanguard argues that this expense was not reasonably necessary to restore the plane. We are urged to apply the standard prescribed in Glen Falls Insurance Co. v. Peters, 386 S.W.2d 529 (Tex.1965), i.e., whether a reasonably prudent uninsured person would have the questioned repair made. The record discloses that two expert witnesses disagreed concerning the necessity or desirability of repainting the plane, and Ronald McWilliams testified he would have the plane repainted even if he was uninsured. The trial court found that the expense was reasonably necessary, and we must resolve every doubt in favor of the trial court's finding of fact. Chitsey v. Pat Winston Interior Design, Inc., 558 S.W.2d 579 (Tex.Civ.App.1977, no writ). We hold that the...
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