399 S.W.3d 197
Tex. App.2012Background
- Lynd manages apartment complexes and was insured by Westchester for primary coverage ($20 million per occurrence).
- RSUI provided excess property coverage above Westchester, up to $480 million per year per occurrence; both policies covered hurricane damage.
- Hurricane Rita in 2005 damaged 15 Lynd properties; Westchester paid $20 million, Lynd submitted a proof of loss for $4,544,310.96 which RSUI initially refused.
- RSUI recalculated losses using a Scheduled Limit of Liability endorsement, resulting in a total liability of $701,487.83, and Lynd accepted that amount without prejudice to the earlier proof.
- Lynd demanded an additional $3,842,823.08; the unpaid portion totaled $4,190,400.65; Lynd sued RSUI for the balance; the trial court granted RSUI summary judgment denying Lynd.
- The Texas appellate court reversed, holding RSUI must apply a single limitation option uniformly to all losses arising from the same occurrence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RSUI may apply different limitation options to losses from the same occurrence. | Lynd argues RSUI mixed options and should aggregate losses. | RSUI contends it may apply per-property limitations or separate treatments. | RSUI must apply the same limitation option uniformly to all losses from one occurrence. |
Key Cases Cited
- Gulfport-Brittany, LLC v. RSUI Indemnity Co., 339 F. App’x 413 (5th Cir. 2009) (policy overall vs. per-item limits; not ambiguous)
- Reliance Ins. Co. v. Orleans Parish School Bd., 322 F.2d 803 (5th Cir. 1963) (blanket vs scheduled policy distinctions)
- Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738 (Tex. 1998) (interpretation of contract terms to give effect to written intent)
- Neighborhood Comm. on Lead Pollution. v. Bd. of Adjustment of the City of Dallas, 728 S.W.2d 64 (Tex. App.—Dallas 1987) (usage of 'and' vs 'or' in contract terms)