Western Fire Ins. Co. v. Pitts, 9241
| Citation | 683 S.W.2d 739 |
| Decision Date | 06 November 1984 |
| Docket Number | No. 9241,9241 |
| Parties | The WESTERN FIRE INSURANCE COMPANY, Appellant, v. James PITTS, Appellee. |
| Court | Court of Appeals of Texas |
Hardy Moore, Paris, for appellant.
Tom D. Wells, III, Wells & Wells, Paris, for appellee.
Western Fire Insurance Company appeals from a summary judgment entered against it in favor of James Pitts in his action upon a fire policy. Western argues that the court erred in granting Pitts' summary judgment, and also in failing to grant the summary judgment sought by Western. Because the undisputed evidence establishes a change of ownership sufficient to void the policy under its "change of ownership" condition, we reverse and render judgment that Pitts take nothing.
James Pitts married Joan Stribling in 1961. While married, Pitts and his wife purchased a home with community funds, and borrowed $5,500.00 as a community debt to finance the purchase of the home. Upon purchasing the home, James Pitts took out a fire insurance policy with Western Fire Insurance Company through its agents Mackey & Pierson. James and Joan Pitts were divorced in 1977. As a term of the divorce decree, the house they had purchased was awarded to Joan. In 1979, James Pitts complied with the property settlement, and deeded his interest in the house and property to Joan by warranty deed. Neither Mackey & Pierson nor Western ever learned of the divorce or the deeding of the property to Joan by James Pitts.
The insurance policy issued to James Pitts contained a clause relieving the insurance company from liability "following a change in ownership of the insured property." Such a condition is valid in Texas and will be strictly enforced. Lowe v. Michigan Fire & Marine Ins. Co., 236 S.W.2d 168 (Tex.Civ.App.--Beaumont 1950, writ ref'd). See also, Home Ins. Co. v. Brownlee, 480 S.W.2d 491 (Tex.Civ.App.--Eastland 1972, no writ); Bucher v. Employers Cas. Co., 409 S.W.2d 583 (Tex.Civ.App.--Fort Worth 1966, no writ); and Rio Grande Nat'l Life Ins. Co. v. Hardware Dealers Mut. Fire Ins. Co., 209 S.W.2d 654 (Tex.Civ.App.--Amarillo 1948, writ ref'd n.r.e.). The bases for such a condition are the purpose of fire insurance, which is to indemnify against loss, and the public policy objective to eliminate incentives to arson.
Pitts admits that the warranty deed of his interest in the property to his wife was a change of ownership, but argues that the change was not a breach of the policy provision because it was not of a nature calculated to increase the motive to burn the property or to diminish the motive to guard the property against fire.
The proper test for determining whether there has been a change of ownership sufficient to void the policy on such facts was stated in Walters v. Century Lloyds Ins. Co., 154 Tex. 30, 273 S.W.2d 66 (1954), quoting from New Orleans Ins. Co. v. Gordon, 68 Tex. 144, 3 S.W. 718 (1887):
... If there is no change in the fact of title, but only in the evidence of it, and if this latter is merely nominal, and not of a nature calculated to increase the motive to burn, or diminish the motive ... to guard the...
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...or to reduce protection of the property from fire, then the change in ownership has not violated the policy. Western Fire Ins. Co. v. Pitts, 683 S.W.2d 739, 740 (Tex.App.1984). National involved an insurance provision that nullified coverage of an assignee if the insured failed to obtain th......