SMI Realty Management Corp. v. Underwriters at Lloyd's, London

does hold this case Accordingly, we agreement, the Board concluded to the with remanded Board not need be complaint could have filed a with BGMH findings the Board’s requiring instructions led to a the Board would have statuto- limited to Texas. conclusions ry stay keeping agree- the 2001 franchise Therefore, final is- Liberty’s we overrule ment in effect until the Board ruled on the appeal. sue on Ann. complaint. Tex. Occ.Code 2301.453(e),(f)(3), Liberty §§ .803. insists

the Board was not sensitive to national CONCLUSION implications its decision because the all of Because we have overruled obligated decision have Board’s could Lib- Liberty’s appeal, issues BGMH’s and on erty agreement to the franchise outside in all we affirm the order Board though Liberty Texas even had acted with- respects. rights

in its contractual terminate agreement. Participating. KIDD Not Justice agree Liberty. not

We do with Motor authority

vehicle dealers derive the to en-

gage in business in Texas from franchise

agreements with manufacturers and from regarding

licenses the Board issues each §

dealership’s location. id. 2301.257. Cf agreement Liberty franchise The between MANAGEMENT SMI REALTY dealership and BGMH a Texas involved CORPORATION, and a dealer licensed the state Texas. Appellant, authority The Board had the to determine Liberty’s non-renewal letter did not satisfy occupation requirements code’s LLOYD’S, AT UNDERWRITERS agreement for termination of a franchise LONDON, Appellee. involving a dealer. licensed Texas The No. 01-03-01340-CV. legislature granted Board fact-finding responsibilities alleged for violations Texas, Appeals Court of Subaru, occupations code. (1st Dist.). Houston 224-25. 31, 2005. Aug. Further, Liberty’s argument Nov. 2005. Rehearing Overruled Board’s conclusion that BGMH could have kept agreement franchise effect

filing protest is too broad and has nation- implications

al founded on event that protest

did not occur: did not BGMH agreement. franchise

termination 2301.453(e). §

Tex. Occ.Code Ann. over, relationship

franchise will we speculate possible implica- about of an did not under-

tions action BGMH (constitu- Brown, at 566

take. issuing advisory opinions).

tion forbids provided cov- “all-risks”

2000. The Rutledge Apartments, for the erage managed by SMI. apartment complex founda- discovered September filed a complex. at the SMI damage tion loss notice with Underwriters’s property damage foundation agent, attributing the underground.” leak plumbing to “a pay ultimately refused Underwriters suit policy. SMI filed the claim under 9, 2002, “the alleging that on December was apartments to the foundation leak, pipe which caused sewer [policy].” SMI based covered under the on viola- against its claims articles of Texas Insurance Code tions 21.55, breach of Underwriters’s 21.21 and Edwards, Burns & Bra- George, David dealing, faith and fair and duty good ziel, LLP, Houston, appellant. for breach of contract. Christopher, Christopher A. Vance pro- discovery process, SMI During the Prine, Crain, James, P.C., Hous- Catón & Underwriters, report of a copy duced a ton, appellee. for Grissom, a licensed by David prepared 6, 2001 professional engineer. The March Panel consists Chief Justice inspected had report stated that Grissom and HANKS and RADACK Justices subject apartment build- surveyed HIGLEY. dam- experiencing foundation ing that was that the report, Grissom noted age. his OPINION a “cast building built in 1963 and has was HIGLEY, LAURA CARTER Justice. system.” explained He sewage iron insurance-coverage dispute, In this SMI clay soil in nature of the corrosive “[t]he (“SMI”) Realty Management Corporation deterio- [sic] the area has been known summary judg- the trial court’s appeals leaking pipe point cast iron to the rate Lloyd’s, in favor ment of Underwriters regard to the years.” than 20 With less (“Underwriters”). London We determine subject building, he advised as follows: “Leakage,” found in an whether the term leaking appears to be system The whole exclusionary provision pol- of an “all-risks” very and deterioration and age due to whether, icy, ambiguous or as a matter completely replaced. to be likely needs law, coverage in deny it serves- to SMI just replace ill advised to You would be this case. system on the areas of the sewer reverse and remand. We All the case iron sewer known leaks. foundation mo- replaced. should Background Factual and Procedural one would ex- tion now evident is what discharging if the sewer has been pect for SMI contracted with Underwriters for almost 20 insurance, under the slab covering water first-party property 9,1999 January years. January period concluded, reports contended that Grissom’s my opinion Grissom “It is summary judgment not competent were responsible repairs sewer leaks are for the was not SMI’s evidence because Grissom In a now needed on this foundation.” “designated” expert.1 SMI offered the re- 31, 2002, supplemental report May dated Adams, port Ralph professional engi- professional reiterated in his Grissom neer, expressly designated had who SMI opinion, apartment the sewer lines at the report, expert. as its his Adams disa- complex leaking were due to deterioration greed opinion regarding with Grissom’s age. opined He is clear that “[i]t Al- line leaks. the cause sewer badly system sewer leaks corroded though the cause of the he stated motion” and have caused the foundation known, Adams pipe sewer leaks was not re- seems clear sewer leaks are “[i]t leakage by was caused doubted repairs now needed on sponsible for the corrosion, by as concluded Grissom. this foundation.” damage to the opined Adams filed a motion for sum- Underwriters foundation occurred as a result of a broken mary judgment, contending that SMI’s relatively period “in a short of sewer line claim was not covered because the opinion and its time.” Based on Adams’s caused, damage expressly excludes loss or exclusion, reading of the SMI asserted deterioration, by directly indirectly, or cor- genuine material fact exist- that a issue of rosion, leakage. poli- or addition to the to loss fell within the ed as whether SMI’s loss, cy property of and SMI’s notice Un- by exclusion cited Underwriters. report derwriters offered Grissom’s and reply filed a in which it Underwriters summary judg- supplemental report as alia, contended, “Leak- inter that the term to as Referring ment evidence. Grissom applicable found in the exclusion was age” “plaintiffs expert,” pointed Underwriters ambiguous. Following hearing, a true, reports, out that Grissom’s taken as signed granting trial court an order Un- showed that the claimed loss was caused summary judg- derwriters’s motion for deterioration, corrosion, leakage; and nothing ment and ordered that SMI take thus, and properly the claim was excluded against its claims Underwriters. as judgment Underwriters was entitled to a matter law. of Review Standard governing principles that the The well-settled response, SMI contended Underwriters, summary judgments apply exclusion relied on review v. Re coverage cases. Hanson particular “Leakage,” the term found insurance (Tex. exclusion, ambiguous. public SMI asserted Ins. S.W.3d denied). 1999,pet. reasonably App.-Houston the exclusion could be [1st Dist.] is, on is whether the only appeal that occur That the issue read to exclude losses reasoned, summary judgment burden movant met its gradually, over time. SMI issue of “Thus, by establishing genuine that no is reasonable to assume fact exists and that the movant damages not intend to exclude material Lloyds did a matter of law. relatively judgment entitled to as period that occurred in a short 166a(c); Elec. Power time, oc- Tex.R. P. S.W. only damages but rather Civ. (Tex. Grant, 211, 215 gradually.” Co. curred ruling appeal. objection lenge that on overruled SMI’s to 1. The trial court reports, and SMI does not chal- the Grissom exclusion, under 2002). on above cy based produces suffi Once the defendant right Both report. to establish Adams’s cient evidence or either Grissom’s the burden shifts summary judgment, damage that the foundation experts opined compe to come forward with plaintiff experts’ leak. The by a sewer was caused raising genu controverting evidence tent differing as can be characterized opinions regard fact issue of material with ine that the in that believed Grissom challenged by the defendant. the element grad- that were by sewer leaks was caused Siegler, Inc. v. Centeq Realty, time, ual, period of long over a (Tex.1995). an order When that the sewer leaks while Adams believed summary judgment does not granting pipes, by broken were caused grant on it was specify grounds which time. period over short here, judgment if ed, we will affirm the supported are any of the movant’s theories in the “Leakage” is not defined Brasher, 776 by the evidence. Carr v. definition. offers its own party and each (Tex.1989). 567, 569 exclusionary term reads leakage, regardless type to mean Policy Provisions Contentions gradually. or rapidly it occurred whether the Parties be reason- counters that the term can the rele policy, In this “all-risks” occur- only gradually exclude ably read to provisions vant are as follows: ring leaks. PERILS INSURED AGAINST 5. against All This Certificate insures doctrine of relies on the Physical or Dam- Risks of Direct Loss construing a con or proferentem, contra age property to covered in favor of against the insurer tract term during period of this Certificate. doctrine, however, is em coverage. This EXCLUDED 6. PERILS ambiguous only construing an ployed when insure This Certificate does Evergreen Nat’l Indem. policy provision. directly against damage loss or caused All, Inc., 669, 111 v. Tan It S.W.3d Co. indirectly following, by any or of the 2003, pet.); no (Tex.App.-Austin 676-77 or was whether the loss v. Bea Farm Ins. Co. see also State Life part by in or in caused whole (Tex.1995) (ex ston, 430, 433 907 S.W.2d peril any and whether other excluded policy if re only insurance plaining peril contributed to such loss or dam- canons ambiguous apply after courts mains age. policy’s language should interpretation Wear, gradual 1. tear or deteriora- in manner against insurer be construed rot, mould; tion; dry rot or Wet Thus, if the coverage). that favors decay decomposition; or Spoilage, than one reasonable subject to more shrinking or ex- settling, Normal adopt the con interpretation, we must buildings; struc- pansion [sic] to the insured foundations; struction most favorable tures or Corrosion rust; Erosion; uncertainty. Leakage; any State or we resolve when loss; or gradually other 968 Vaughan, Co. v. Farm Fire & Cas. prior commenced any loss which (Tex.1998). 931, ambiguity An 933 S.W.2d inception of this Certificate. to the respect does not arise with added.) con (Emphasis parties advance merely because Dealers flicting interpretations. Grain SMI’s contends 455, McKee, 943 S.W.2d Mut. Ins. Co. v. poli- under the claimed loss is not covered 624 (Tex.1997). mind, policy provi

458 Whether a we turn to crucial question sion is ambiguous question is a of law for interpretation this case: Is SMI’s of the Kelley-Coppedge, the court to decide. “Leakage” Inc. term in the exclusion reason Co., 462, Highlands Ins. S.W.2d able? (Tex.1998). parties The have not directed us to interpreting precise exclusionary cases this determination, making this we provision and our own research has found interpret policies according insurance none. phrase SMI asserts the last the rules of contract construction. Am. exclusion, “any gradually occur- Mut. Schaefer, Ins. Co. v. Mfrs. loss,” (Tex.2003). 154, ring only gradually indicates that primary S.W.3d Our therefore, occurring leaks are excluded from goal, cover- give is to effect to the SMI, age. expression According written the use of the parties’ intent. Beaston, end, signals contracting word “other” that the 433. To this (SMI Underwriters) parties we construe the terms of contract viewed terms, perils phrase, whole and consider all of its not in the listed before that includ- isolation, ing “Leakage,” gradually but within the context of the to also be occur- Id.; contract. Forbau v. Aetna Ins. ring losses. SMI contends at a mini- Life Co., (Tex.1994); mum, 133-34 immediately refers to the Lloyds Hartrick v. Am. Ins. Great preceding term listed the exclusion: (Tex.App.-Houston [1st “Leakage.” pet.). Dist.] no essence, offering SMI is the reverse interpretive ejusdem gener- canon of only

If a can given contract ejusdem generis provides is. rule of meaning, one reasonable not ambigu that, a general when words of nature are ous and will be enforced as written. See designation used connection with the of Kelley-Coppedge, 980 S.W.2d at 464. On objects hand, particular persons or classes of or the other if a contract susceptible is things, meaning general words interpretations, to two or more reasonable particular designa it will be restricted to the ambiguous. alleged Id. When an tion. Hilco v. ambiguity Coop., contract involves an exclusion Elec. Inc. Midlothian Co., (Tex. 75, ary of an Butane 111 provision policy, insurance then Gas 81 “ 2003). adopt ejusdem geneñs” we ‘must the construction ... The “reverse by urged long principle applied by the insured as as that con has been courts to unreasonable, category struction is not even if the a broader to define the allow specific example. of a urged appears scope construction the insurer more See Inst., 877, Dong or a accurate v. 125 F.3d to be more reasonable more Smithsonian ” (D.C.Cir.1997) parties’ (applying reflection of the intent.’ Balan 879-80 reverse Am., that, ejusdem generis dran v. Ins. 972 to conclude when Co. Safeco of (Tex.1998) 738, statute, 552(f), 42 (quoting 741 Nat’l Union federal U.S.C. section “any depart Pittsburgh, agency Fire Ins. Co. Pa. v. Hudson defines as executive of (Tex. Co., 552, ment, military 555 Government Energy department, 811 S.W.2d 1991)). corporation, corpo of controlled The insurer has the burden Government ration, proving that a limitation or exclu or other establishment the exec branch,” four, specific sion an avoidance or an affir utive first classes constitutes in the exec mative defense. Nat’l Ins. Co. are limited to “establishments Utica of Co., 198, branch”); Bristol-Myers Squibb Co. v. Am. Indem. 141 S.W.3d utive Tex. (2000) (Tex.2004). States, 350, principles in v. 48 Fed.Cl. 358 204 With these United 625 may state li fishing ute ejusdem generis regulating to con (applying reverse ‘bass, ... catch may censed individuals courts provision). strue contractual “ trout, any fish.’ The or other fresh water ‘A, B, phrase have ‘the or reasoned bass, limits would to fresh water apply any other indicates that A is a of C’ subset ” bass, bass, not to sea such as black but Dong, (quoting C.’ 125 F.3d at 880 Unit any ‘or other fresh because clause Williams-Davis, 490, ed 90 F.3d States v. ‘trout’ to water fish’ limits ‘bass’ and those (D.C.Cir.1996)); Cochran, also 508-09 see water.”).2 Similarly, in fresh SMI con Co., Comm’n, &Fox Inc. v. Public Serv. only gradu tends that the excludes (Wis. 98-1765, 624395, at No. 1999 WL *3 ally occurring leakage, but sudden 1999) 18, Ct.App. Aug. (concluding “any leakage, phrase other because equip when statute defines “transmission occurring scope loss” limits gradually conduit, “any ment property” and sub “Leakage” gradually of to that which tower, way, pole, transmission wire or oth is, occurring. “Leakage” is That modified on, equipment er over or under any street of, by, “any gradually a other subset “on, over highway,” phrase or or under conclude that such a loss.” We highway” or further street restricts reading “Leakage” term is reason meaning specific types terms able. equipment along structural transmission public rights way); or under United surprisingly, Not dis (9th 780, 4 Delgado, agrees “any gradual States v. F.3d Cir.1993) (providing example ly occurring that “a stat serves to limit the mean loss” meaning scope gradually 2. To ascertain the not limited to corrosion rust; parties implicitly rather, "Leakage,” argue and rust or all corrosion are related maxim of noscitur sociis—that a coverage regardless of excluded from whether company keeps. word is known gradual-forming or nature. it is fast Gil applied Noscitur a sociis is rule often so Co., Bldg. No. hane Co. v. The Altman 04AP- meaning may that the aof doubtful word 664, 534906, (Ohio Ct.App. at *5 WL meaning ascertained reference to the 8, 2005); Arkwright-Bos 10th Dist. see Mar. words associated with it. & Me Farmers’ Paper ton Wausau Mills F.2d Mfrs. Hanks, 320, chanics’ Nat’l Bank v. 104 Tex. (7th Cir.1987) (concluding that rate (1911); County S.W. see at which occurred "not corrosion relevant Eaton, (Tex. Harris v. it corrosion whether falls under the exclu 1978) J., (Steakley, dissenting) (discussing sion”). Similarly, another court has held that statutory noscitur a sociis in context of con peril the rate of "contamination” —another meaning particular "the struction: terms listed in the not determinative exclusion—was by may in a statute be ascertained reference rather, applied; of whether exclusion the the statute, to words associated with them in the applied exclusion to both fast and slow con and that where two or more words analo Prods., Valley tamination. Richland Inc. v. gous employed together meaning are a 161, Co., St. Paul Fire 201 Wis.2d & Cos. statute, they to are understood be used in 1996). (Ct.App. But see N.W.2d Lar sense, express cognate their to the same rela gent State Cas. Farm Fire & Or. give expression tions and color and to each (1992) App. (holding 842 P.2d other”). regard, we look to In this the other applied only that "contamination exclusion” exclusionary terms de listed in the clause to time). happens over when contamination general termine whether those conditions are However, distinguishable cases are these ly gradually occurring to be or considered they do from the one because not instant rapidly occurring. We that note courts have modifying involve exclusions that include perils held listed in the that other exclusion phrase "any gradually loses.” other subject any type issue to here are not Thus, is not the rule of noscitur a sociis deter temporal example, at least limitation. For "Leakage” meaning perils minative of the in this one that two other court has held listed exclusion, rust,” in the and case. “corrosion are Criswell, ing “Leakage.” perils It contends that all ated is excluded. As in leakage, only gradually occurring appear and not semicolons in the exclusion to de- However, leakage, coverage is excluded from be note the word “or.” Id. unlike Criswell, “Leakage” phrase phrases cause the term and the those at issue here “any gradually occurring completely other loss” are are not self-referential. Rath- brief, er, by “any a In its the final of the separated phrase semicolon. exclusion— avers, gradually occurring Underwriters semi-colon es other loss”—can be “[T]he phrases reasonably meaning tablishes that the two have inde construed to both lend to, from, pendent significance, and that terms meaning denotes derive Moreover, they precede not on not depend do each other for it. SMI is seeking rely effectively to meaning but instead should be read inde on one clause another; instead, pendently.” nullify promotes asserts “Leakage” independent phrase reading is “an not the terms of the harmonizes precede modified those that or follow exclusion. it.” Underwriters further contends that ac- Underwriters also contends ‘Leakage’ capitalized fact “[t]he cept interpretation “Leakage” SMI’s only high adds to this conclusion.” As to read the term out of the would be lighted by dissenting opinion, Under superfluous. contract and render it Un- reading of the

writers’s exclusion is one asserts, accept argu- derwriters “To SMI’s However, reasonable interpretation. is ment and construe the exclusion for only interpretation reasonable ‘Leakage’ only damage to mean caused reading does not serve to make SMI’s leakage ‘occurring gradually’ would be su- the disputed language unreasonable. See because the loss would be ex- perfluous, Balandran, 972 at 741. ‘any cluded other simply ” support position reading gradually occurring disagree To that its loss.’ We definitive, reasoning. of the exclusion is Underwriters with Underwriters’s European cites Criswell v. Crossroads phrases The relevant exclu- Center, Ltd., Shopping can superfluities. sion be read avoid (Tex.1990). case, In that the Texas Su- numerous, specific per- The exclusion lists preme although Court noted words excluded, “Leakage.” including that are ils contained in instrument should be the catch-all The exclusion also contains controlling guides, punctuation used as phrase “any gradually other of a marks can aid the construction loss,” which strives to exclude from cover- interpreting Id. at 948. In document. age any gradually occurring pre- losses not provision, contractual the court deter- viously encompassed within exclusion. sepa- mined effect of a semicolon that words, “any gradually other phrases rated two in the contract. Id. reasonably can occurring phrase loss” case, specific Based on the facts of that the preceding read to indicate that the terms court concluded that the use of Criswell paragraph it in are not exhaustive. the by semicolons the drafter “indicated that manner, in this neither “Leak- Construed phrase by set off a semicolon was to each age” “any gradually nor other independent signifi- having be read as superfluous. That the loss” is rendered cance.” Id. to phrase latter catch-all can also be read Here, peril scope “Leakage” in the exclusion limit the does not ren- each listed exclusionary “independent significance”; “Leakage” that der useless as also has is, by any a loss caused one of the enumer- term. event, occurring. In we gradually also contends that the are

Underwriters provision” governs over “specific ‘Leakage’ phraseology conclude the issue general gradually ‘any the “more other “specific gen- not controls the does fit the provision.” loss’ In this regard, interpretation. eral” rubric of contract on the Underwriters relies well-established points further out that the Underwriters maxim that is a conflict when there be portion provides the exclusion first provisions, specific tween two contract the “Wear, gradual tear or caused general the provision provi controls over (Emphasis deterioration” are not covered. Tensor, Agency C.M. v. sion. See Asfahl added.) that, be- Underwriters contends Inc., 768, (Tex.App.-Hous 135 S.W.3d modify it cause chose to term “deterio- 2004, pet.); Dist.] ton no Ostrowski v. [1st “gradual,” ration” the lack with the word Prop. Improvement Ivanhoe Owners term of such modification before the Inc., Ass’n, 248, 254 (Tex.App.- “Leakage” limit shows a clear intent not to denied). However, 2001, pet. Texarkana leakage gradually to leaks that are occur- no “conflict” exists between the term noteworthy ring. “gradual It dete- is “Leakage” “any and the phrase other among rioration” the first listed in Rather, perils is gradually occurring loss.” exclusion, last, “Leakage” are provisions harmonized under while is SMI’s “Any reading provision. juxtaposed directly phrase other next gradually occurring loss” serves further “any gradually occurring other loss.” Un- “Leakage” operates define also find more derwriters’s contention would additional, phrase catch-all to exclude support “gradual if deterioration” had gradually occurring specifically losses not placed been toward the end of the exclu- contemplated in the exclusion. sion, “any gradually near phrase other occurring loss.”

Moreover, a matter of this is not wheth- general er a term controls over a specific sum, though Underwriters

one; rather, whether, is matter interpretation “Leakage” of the term is read contextually, when one can reasonable, not render read it does SMI’s reasonably be or limit- qualifying read as ing contrary, To we unreasonable. ing another. noteworthy It is also “Leak reading conclude that SMI’s reading arguably Underwriters’s renders gradually occurring leak age” limited “Leakage” general more term. Un- age interpretation is not an unreasonable interprets “Leakage” derwriters to denote light syntax leaks, of the word choice types “any all while views drafting utilized gradually occurring limiting loss” as Thus, perils types exclusionary provision.3 excluded to those that the exclu- duct, agree reading expressly appears 3. SMI’s even more excluded in the reason able when it is that this all- Royal remembered is an ment. Indem. Miles Balandran, policy. 1979, risks 972 S.W.2d at (Tex.Civ.App.-Corpus Christi Cf. (explaining reading poli that insured’s n.r.e.); Lloyds, writ v. State Farm ref’d Muniz cy exclusion "even more became reasonable” (Tex.App.-San Antonio considering surrounding when circumstances writ); no see also Lee R. Russ & Thomas promulgation form committee (3d § F. 148:50 Segalla, Couch on Insurance appointed by Board former state of Insur 1998). discussing gene ed. the historical ance). rule, general As a an all-risks doctrine,” “fortuity of one oft-cited sis the special coverage type a creates of in which to journal explains, "If is central article risk the insurer undertakes the risk for all of losses insurance, certainty is to it. then antithetical that, a fortuitous nature in the absence of the requirement any in loss be accidental fraud insured’s or other intentional miscon 628

sionary RADACK, Justice, in in provision policy, particu the SHERRY Chief dissenting. “Leakage,” ambiguous. lar the term is Balandran, See 972 S.W.2d at 741. Be I policy Because believe the unam insured, adopt cause SMI is the we must biguously coverage all excludes for “leak interpretation their as proper con age,” gradually occurring, both sudden and struction of at policy. By See id. 742. respectfully I dissent. v. Eu Criswell offering expert opinion of Adams that Center, Ltd., ropean Shopping Crossroads damage to (Tex.1990), the foundation had occurred the su preme a court as result of a broken sewer line “in a stated use of semicolons drafting agreement indicates relatively period time,” short of SMI creat each set off a semicolon is to be genuine regard ed a issue of material fact read having independent significance. as ing coverage.4 hold that the trial We case, In this the items the list of exclud court properly grant summary did not perils apart by ed are set semi-colons. judgment in this case. Therefore, indepen I believe that each has sustain sole We SMI’s issue. significance, dent and one item cannot be such, modify poli used to another. As cy that it provides “leakage” excludes Conclusion “any gradually occurring loss.” I judgment We reverse the of the trial cannot policy only read the to exclude court and remand the cause for further “gradually occurring leakage,” as the term proceedings. “leakage” policy. is not so modified in the County See Maverick v. Tex. Ass’n Fund, dissenting. Chief Comp. Justice RADACK Counties Workers’ Self-Ins. Bennett, (2d Cir.2003); compensable some sense in order to be & F.3d see Cozen implicit very ("[A]n in flie nature of insurance.” pra, at 224 insurance su Bennett, Stephen A. & Richard C. soundness, Cozen For 222, warranty anot and the carrier's Exclusion, tuity: The Unnamed 20 Forum obligations do not extend to that is (1985). Arguably, reading SMI’s not occasioned external or extraneous exclusionary language "Leakage” to limit forces”). proffered of "Leak SMI's definition gradually occurring leaks is consistent with age” can be read to be consistent with such a purpose policies the overall of all-risk to limit reading of the exclusion. is, coverage to fortuitous events. That it gradual seems intuitive that leaks are more 4. Underwriters contends that SMI cannot cre- events, likely to involve non-fortuitous while by producing conflicting ate a fact issue ex- sudden, rapidly occurring leaks are more like pert reports. admits that it has However, ly to involve fortuitous ones. as the authority support found this contention no Fifth Circuit remarked Aetna Cas. & Sur. event, and we know of none. Yates, description Co. v. "[t]he as regarding record is not clear the exact rela- 'All Risks' is rather misnomer since it con tionship of SMI and Grissom. Some indica- tains fourteen lettered exclusions....” produced tion exists in the record that SMI (5th Cir.1965). Thus, may F.2d during reports dis- Grissom's to Underwriters helpful interpret to consider how courts have covery, wording but we do not know the equivalent exclusionary provisions. ed In this discovery request reports under which the Circuit, regard, reading Second similar produced. appears undisputed were It ly provision, worded concluded as a Grissom’, Adams, designated SMI has as whole, purpose of the exclusion was to litigation. expert purposes for this coverage remove from all-risk those losses Thus, caused, assuming opinion Grissom's is admitted intrinsically opposed that are trial, to deter- City it will be for the fact-finder those that are caused external forces. Am., Burlington expert v. Indem. Ins. Co. mine which it chooses to believe. of N. 700, 705 Antonio (Tex.App.-San writ) (“[If] party’s interpreta no one of a require quali the insertion tion would phrase, interpretation must be

fying rule of

rejected violating giving meaning.”). Accord

language ordinary I I affirm the

ingly, dissent. would sum judgment granted in favor Under

mary

writers. HARRISON, Jr., Appellant,

Millet Texas, Appellee.

STATE

No. 09-05-025 CR. Texas, of Appeals

Court

Beaumont. 12, 2005. Sept.

Submitted

Nov. 2005.

Case Details

Case Name: SMI Realty Management Corp. v. Underwriters at Lloyd's, London

Court Name: Court of Appeals of Texas

Date Published: Nov 29, 2005

Citation: 179 S.W.3d 619

Docket Number: 01-03-01340-CV

Court Abbreviation: Tex. App.