Rust v. Texas Farmers Insurance Co.
341 S.W.3d 541
Tex. App.2011Background
- Kurosky owned two adjacent homes in Haltom City insured by Farmers under separate homeowner policies; Rust was a named insured on the 33-Fossil policy.
- Rust was injured while operating a riding lawnmower at the 33-Fossil rental property, allegedly due to Kurosky’s failure to provide proper instruction and lack of fencing.
- Rust sued Farmers for medical-payment benefits and other relief, asserting coverage under the policies and alleging Texas Insurance Code violations.
- Rust pursued multiple amended petitions, adding claims including reformation of the 33-Fossil policy and a duty-to-defend/indemnify Kurosky.
- Farmers filed competing summary-judgment motions arguing no coverage for a named insured/resident and no direct coverage for a third-party claimant under the policies.
- The trial court denied Rust’s hybrid motion and granted Farmers’ traditional summary judgment; an agreed final judgment later followed after appellate proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Rust have coverage under the policies and is Farmers liable for medical payments? | Rust asserts coverage under the 25-Fossil policy and argues no valid exclusions apply. | Farmers contends exclusions for insureds and residents bar medical payments. | Issue One overruled; Farmers entitlement to judgment affirmed; no coverage found. |
| Whether the trial court properly adjudicated Farmers' duty to defend and indemnify Kurosky. | Rust argues indemnification/defense duties were ripe and should be adjudicated; the motion did not address them adequately. | Farmers' motion was broad enough to encompass indemnification issues raised by the amended petition. | Issue Two overruled; trial court properly granted summary judgment; indemnification issue deemed encompassed. |
| Whether the grant of summary judgment implies no coverage for Kurosky's negligence. | Rust contends the court’s ruling implies no coverage for Kurosky's negligence. | Farmers argues no separate issue of liability coverage for Kurosky was ripe or properly adjudicated. | Issue Three overruled; judgment affirmed as to Farmers' coverage position. |
Key Cases Cited
- In re Allstate County Mut. Ins. Co., 227 S.W.3d 667 (Tex. 2007) (cannot enforce policy directly until insured’s liability is established)
- Ollis, 768 S.W.2d 722 (Tex. 1989) (third-party claimant cannot enforce against insurer without judgment or agreement)
- Murray, 437 S.W.2d 265 (Tex. 1969) (principle that third-party rights attach only after insured’s liability is established)
- Lloyds & Other Various Insurers, 37 S.W.3d 59 (Tex.App.-Austin 2000) (burden-shifting framework for exclusions and exceptions in coverage analysis)
- Venture Encoding Service, Inc. v. Atlantic Mut. Ins. Co., 107 S.W.3d 729 (Tex.App.-Fort Worth 2003) (insurer bears burden to prove avoidance/affirmative defenses to coverage)