628 S.W.3d 486
Tex. App.2019Background
- Lorena Flores sued PSJA after a minor was injured when thrown from a golf cart driven by a PSJA employee; PSJA sought defense/indemnity from its self-insurance fund (TPS), which denied coverage.
- The Auto Policy covers "autos" (land motor vehicles designed for travel on public roads) and excludes "mobile equipment" (vehicles designed principally for off-public-roads use).
- TPS argued all golf carts are "mobile equipment" as a matter of law (citing the Texas Transportation Code definition), so no coverage exists; TPS moved for summary judgment on that theory.
- PSJA produced extrinsic evidence (manufacturer advertisements) showing some modern golf carts are designed for public-road use and thus potentially covered; TPS submitted evidence the subject cart was a standard, non-street-legal golf-course cart used on campus.
- Trial court granted summary judgment for PSJA (finding TPS breached defense and indemnity duties); judgment included $100,000 indemnity (underlying tort cap) and attorney fees; TPS appealed and sought a settlement credit under the one-satisfaction rule.
- The court of appeals held neither party met its summary-judgment burden on the grounds presented, reversed the trial court, and remanded; it did not reach the one-satisfaction issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether all golf carts are "mobile equipment" excluding coverage | TPS: Texas law defines "golf cart" as made primarily for golf courses, so all are mobile equipment (no coverage) | PSJA: "Golf cart" can include models designed for public roads; pleadings potentially cover such carts | Court: Not all golf carts are necessarily mobile equipment; TPS not entitled to summary judgment on that legal theory |
| Insurer's duty to defend (eight-corners vs. extrinsic evidence) | TPS: Eight-corners shows pleadings only allege "golf cart," which under statute means off-road cart — no duty to defend | PSJA: Pleading ambiguous; extrinsic evidence (ads) shows potential for covered road-usable carts, invoking duty to defend | Court: Extrinsic evidence admissible on coverage; PSJA raised possibility of coverage, but TPS raised fact issue about the actual cart, so PSJA did not meet its burden for summary judgment on duty to defend |
| Duty to indemnify and burden of proof / use of no-evidence motion | PSJA: Argued no-evidence on indemnity because "mobile equipment" is an exclusion and TPS must prove exclusion | TPS: Argues indemnity question follows from no duty to defend if all golf carts are excluded | Court: Defined terms show "auto" vs "mobile equipment" govern coverage; PSJA had initial burden to prove coverage, so its no-evidence motion on indemnity was improper; reversed that portion |
| Settlement credit under one-satisfaction rule | TPS: Trial court should have credited PSJA's recovery against prior insurer settlement | PSJA: Opposed credit (or not addressed) | Court: Did not reach this issue because summary-judgment reversal required further proceedings |
Key Cases Cited
- GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305 (Tex. 2006) (applies eight-corners rule for duty to defend)
- Nat'l Union Fire Ins. Co. v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139 (Tex. 1997) (insurer obligated to defend if complaint potentially alleges covered claim)
- Farmers Tex. Cty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81 (Tex. 1997) (distinguishes duty to defend from duty to indemnify; indemnity justiciable where no duty to defend)
- Nassar v. Liberty Mut. Fire Ins. Co., 408 S.W.3d 254 (Tex. 2017) (insurance-policy interpretation principles; ascertain parties' intent from policy language)
- Gilbert Tex. Const., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118 (Tex. 2010) (insured bears initial burden to show coverage; insurer must prove exclusions)
- McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337 (Tex. 1993) (a summary-judgment motion must stand or fall on grounds expressly presented)
- Mid-Continent Cas. Co. v. Global Enercom Mgmt., Inc., 323 S.W.3d 151 (Tex. 2010) (courts should review summary-judgment evidence presented by both sides when cross-motions are filed)
- City of Garland v. Dallas Morning News, 22 S.W.3d 351 (Tex. 2000) (each party on cross-motions bears burden to establish entitlement to judgment)