Greg TANNER and Maribel Tanner, Individually and as Next Friends of K.T. and R.T., Minor Children, Petitioners, v. NATIONWIDE MUTUAL FIRE INSURANCE COMPANY, Respondent.
No. 07-0760
Supreme Court of Texas.
April 17, 2009.
289 S.W.3d 828
Saw Pipes seeks a writ of mandamus directing the trial court to compel arbitration of the wrongful death claims. A party denied the right to arbitrate pursuant to an agreement subject to the FAA does not have an adequate remedy by appeal and is entitled to mandamus relief to correct a clear abuse of discretion. In re L & L Kempwood Assocs., L.P., 9 S.W.3d 125, 128 (Tex.1999). In this case, the arbitration agreement executed by Lara provides that any disputes related to the benefit plan or to his employment with Saw Pipes must be arbitrated. Pursuant to the agreement, if Lara had sued for his own injuries immediately prior to his death, he would have been compelled to arbitrate his claims. Accordingly, his beneficiaries must arbitrate. See In re Labatt, 279 S.W.3d at 649. The trial court clearly abused its discretion by refusing to compel arbitration.
We grant Saw Pipes‘s petition for writ of mandamus and without hearing oral argument, conditionally grant mandamus relief. See
Don R. Cotton, Bob Richardson, The Bob Richardson Law Firm, Austin TX, for Petitioners.
Justice WILLETT delivered the opinion of the Court, in which Chief Justice JEFFERSON, Justice HECHT, Justice O‘NEILL, Justice WAINWRIGHT, Justice MEDINA, Justice GREEN, and Justice JOHNSON joined.
A high-speed police chase resulting in a traffic accident sparked a personal-injury lawsuit against the fleeing driver by the family injured in the crash. This related insurance-coverage dispute asks whether the driver‘s attempts to elude police forfeit coverage under an intentional-injury exclusion in his automobile liability insurance policy. We hold that the insurer did not establish as a matter of law that its insured intentionally caused the family‘s injuries. The exclusion requires intentional damage, not just intentional conduct. We therefore render judgment on the jury‘s verdict in favor of the injured family.
I. Background
Richard Gibbons was driving his pickup truck on Interstate 35 south of San Marcos when he was pulled over by a Texas state trooper. Gibbons initially stopped but then fled, with the trooper in hot pursuit chasing him into San Marcos. There, three local police officers responded and continued the pursuit. Gibbons exited the interstate and raced through the city, winding
Gibbons left San Marcos on Highway 80 and entered a rural area, topping 100 miles per hour and swerving into oncoming traffic to pass slower vehicles. He drove off the road and through a freshly plowed cornfield, then turned around and headed back towards San Marcos on a road running parallel to Highway 80. One San Marcos police officer tried to block the road with her cruiser, but Gibbons veered off the road and went around her.
Gibbons continued and approached the intersection with Old Bastrop Road in a rural area that, according to trial testimony, “does not have businesses or houses or anything,” but rather consists of “open fields, corn fields.” Gibbons reached the intersection at the same time as a car carrying the Tanner family, who had the right-of-way. Gibbons slammed on his brakes but could not avoid the collision. All four Tanners suffered injuries, but seven-year-old Roney‘s were the most serious, as he was sitting where Gibbons’ truck struck the car.1 Gibbons fled the accident scene, doubling back and eventually driving into yet another field. Determined to end the chase, an officer shot out two of the truck‘s tires. Officers forcibly removed Gibbons from his truck and placed him under arrest.
The Tanners sued Gibbons and obtained a default judgment.2 Gibbons’ insurer, Nationwide Mutual Fire Insurance Company, refused to pay damages and filed this declaratory-judgment action, arguing the intentional-injury exclusion barred coverage for the Tanners’ claims. The jury disagreed, finding that Gibbons did not intentionally cause the Tanners’ injuries. The trial court granted Nationwide‘s motion for judgment notwithstanding the verdict, and the court of appeals affirmed, “because, as a matter of law, the intentional-acts exclusion in Gibbons’ liability policy excluded any coverage for the Tanners’ claims.”3
II. Discussion
A. Standard of Review
We review a JNOV under a no-evidence standard, meaning we “credit evidence favoring the jury verdict if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not.”4 We will uphold the jury‘s finding if more than a scintilla of competent evidence supports it.5 “The final test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review.”6 Thus, to merit the trial court‘s JNOV, Nationwide was required to show that the evidence conclusively proved that Gibbons intentionally injured the Tanners and that no reasonable jury was free to think otherwise.
Since insurance policies are contracts, we construe them using ordinary rules of contract interpretation.8 Our cardinal concern is determining the parties’ intent as reflected in the terms of the policy itself.9 Accordingly, we give policy language its plain, ordinary meaning unless something else in the policy shows the parties intended a different, technical meaning.10
Nationwide contends that when Gibbons fled police, he voided coverage under the policy‘s intentional-injury exclusion, which withholds coverage for:
Property damage or bodily injury caused intentionally by or at the direction of an insured, including willful acts the result of which the insured knows or ought to know will follow from the insured‘s conduct.
1. “Property damage or bodily injury caused intentionally ...”
We have not construed this precise policy language before.11 At the outset, however, we emphasize this critical point: “intentionally” as used in the exclusion speaks to the resulting damage or injury, not to the actions that led to it. That is, the language is effect-focused and not cause-focused, voiding coverage when the resulting injury was intentional, not merely when the insured‘s conduct was intentional.
A contrary reading of the exclusion—that reckless acts absent deliberate injury are sufficient to forfeit coverage—“would render insurance coverage illusory for many of the things for which insureds commonly purchase insurance.”12 For example, Texas mandates liability coverage for drivers,13 but if ordinary Texans are unprotected from those who intentionally speed or run red lights, but intend no harm to others by doing so, then Texas is replete with noncoverage notwithstanding its mandatory-coverage requirement. As one leading commentator puts it, coverage can still exist “when the injury was unintended, even if the act which gave rise to the injury was intentional.”14
We construed similar language in State Farm Fire & Casualty Co. v. S.S.15
A similar analysis applies to the Nationwide policy, which, like the policy in S.S., excludes coverage where the injury is “caused intentionally” by the insured. The evidence at trial does not indicate, as the jury charge puts it, that “the property damage or bodily injury to the Tanners was caused intentionally,” much less indicate such intent as a matter of law. On the contrary, Gibbons slammed on his brakes hard enough to skid before impact, showing he actively tried to avoid the collision. The insured in S.S. only hoped to avoid causing harm while Gibbons actually, if belatedly, tried to avoid causing harm.
Nor does the evidence establish as a matter of law that Gibbons believed his conduct was substantially certain to injure the Tanners. While leading police on a protracted high-speed chase is not merely reckless but reprehensible, we cannot say on this record that no reasonable juror could resist finding that injury to others was unavoidable. In fact, the chase could have ended in any number of ways: with Gibbons rolling his vehicle, with Gibbons hitting a fixed object, with officers using preventive techniques to stop Gibbons’ vehicle, or even with officers discontinuing the pursuit, rather than with Gibbons crashing into the Tanners. Nationwide therefore did not establish as a matter of
2. “... willful acts the result of which the insured knows or ought to know will follow ....”
Nationwide‘s policy exclusion has additional language excluding coverage for “willful acts the result of which the insured knows or ought to know will follow.” Insofar as this passage also focuses on whether the insured intended the injurious result, the language reinforces the view that the dispositive inquiry is whether the insured intended to inflict damage or injury. To forfeit coverage, the insured must intend to harm, not merely intend to act.
This part of Nationwide‘s exclusion also denies coverage if the insured “ought to know” that injury will result. This language might be read as stating an alternative objective test,22 excluding coverage not only where the insured subjectively knew that injury would follow, but also where a reasonable person would know that injury would follow.
However, this objective ground for denying coverage does not alter the unequivocal “will follow” language that completes the sentence. The clause requires that the insured “ought to know” that the resulting injury “will follow,” not “might follow” or “will likely follow” or anything else. “Will” is “used to express inevitability.”23 Tracking precisely the language of the exclusion, the jury charge—to which Nationwide did not object—asked whether “the property damage or bodily injury to the Tanners was caused intentionally by or at the direction of [Gibbons], including willful acts the result of which [Gibbons] knows or ought to know would follow from his conduct.”
Under the evidence presented at trial, a reasonable and fair-minded jury would not be compelled to find, under an objective standard, that a reasonable person would know that injury to third parties would result from Gibbons’ conduct. Such a jury finding was no more required by the evidence than a finding, under a subjective standard, that Gibbons personally knew that such injury would result. Hence, we part company with the dissent on the effect of the “ought to know” language of the exclusion, and cannot say a reasonable jury in this case would necessarily find that Gibbons ought to have known that injury would result from his conduct, as indisputably reckless as it was. Put simply, the injury was not so inevitable that we can say as a matter of law it was intended.
Nationwide relies on Nationwide Mutual Insurance Co. v. Finkley,24 an Ohio intermediate appeals court decision that construed the same policy exclusion and concluded “no coverage.” We find Finkley unpersuasive as it misapplies the policy exclusion. Although Finkley describes a Texas-like standard that would bar coverage where the insured‘s conduct is “substantially certain to result in injury,”25 Finkley actually applies a different standard, opining that “[a]ny reasonable person would know, or should know, that such actions [of the driver] would probably lead
We understand the appeal of a broader exclusion that would withhold coverage for, as Nationwide‘s predecessor policy put it, “willful acts which can be reasonably expected to result in damage or injury.” But Nationwide replaced that test with the more restrictive version that controls today‘s case. We must construe the policy as written, not as we might have written it nor as Nationwide once wrote it. Given the clarity of the exclusion and the jury charge, which mirrors the exclusion virtually verbatim, we cannot conclude jurors disregarded the policy and the evidence in reaching their verdict, much less conclude they were obliged to reach the opposite result.
III. Conclusion
Because Nationwide did not establish as a matter of law that Gibbons intentionally caused the Tanners’ injuries, the jury‘s verdict must stand. Accordingly, we reverse the court of appeals’ judgment and render judgment on the jury verdict.
Justice BRISTER filed a dissenting opinion.
Anyone who drives a huge 4-ton pickup at 100 miles an hour through city streets during rush hour “ought to know” that someone is going to get hurt. This insurance policy excluded such conduct, so the judges of the trial court and court of appeals correctly denied coverage. Because the Court holds otherwise, I respectfully dissent.
There will never be a more extreme case than this. After being pulled over by a state trooper around 5 p.m. on Interstate 35 in San Marcos, Richard Gibbons took off in his Ford F-350 heavy-duty truck, with the trooper and then several local police cars in hot pursuit. Gibbons cut through residential neighborhoods at more than 80 miles an hour, careening around corners and running through yield and stop signs. Turning onto Highway 80, he hit speeds above 100 miles an hour, swerving head-on into oncoming traffic to pass, cutting across open fields, and driving around a police roadblock. Ultimately he smashed into the Tanners’ car at an intersection, which slowed him down only for a moment. He was finally stopped when police shot out half of the truck‘s six tires. Charged with eight felony counts, Gibbons was released on $10,000 bail; true to form, he fled and has never been prosecuted.
The $300,000 auto liability policy issued to Gibbons excluded “[p]roperty damage or bodily injury caused intentionally by or at the direction of an insured, including willful acts the result of which the insured knows or ought to know will follow from the insured‘s conduct.” “Ordinarily,” we have said, “whether an insured intended harm or injury to result from an intentional act is a question of fact.”1 But “ordi-
Texas courts have apparently not addressed whether a high-speed police chase falls within the intentional-acts exclusion. But this Ohio insurance policy was issued to Gibbons in Ohio, and Ohio courts have. “[W]here an insured willfully and purposefully attempts to elude police in an automobile chase through an urban area in reckless disregard of traffic control devices, his actions are substantially certain to result in injury.”2 This is both sensible and consistent with Texas law, which applies an intentional-injury exclusion if an insured “intends the consequences of his act, or believes that they are substantially certain to follow.”3
The Court‘s main mistake is in viewing this accident far more narrowly than the policy does. The Court says the exclusion requires “intentional damage, not just intentional conduct,” but the exclusion applies even if he did not intend damage but “ought to know [it] will follow from [his] conduct.” The Court requires proof that the insured “intentionally injured the Tanners,” but the exclusion does not require that an insured know precisely who or what he would hit. The Court says reasonable jurors could conclude the chase could have ended with Gibbons “rolling his vehicle” or “hitting a fixed object,” but either would still be the kind of property damage he ought to have known would follow. The Court says Gibbons ought to have known the police might “discontinu[e] the pursuit,” though it is a mystery why an objective, reasonable-person standard would include such an unreasonable hope. The Court focuses narrowly on the rural area of “open fields, corn fields” where an accident finally occurred, forgetting all of Gibbons’ willful acts on I-35, Highway 80, and the residential areas through which this high speed police chase passed. And the Court emphasizes that Gibbons applied his brakes before the collision, even though someone driving a truck this big this fast in these circumstances ought to know an accident would follow even if he tried to avoid it at the last second. In sum, the Court avoids this policy exclusion by focusing narrowly on what Gibbons knew a split second before this precise crash.4
The rest of the Court‘s opinion consists largely of red herrings and straw men:
- the insurer did not object to the jury charge, but there was no reason to do so as the charge merely quoted the policy;
- the current policy exclusion is more restrictive than a former one, but the circumstances here meet either; and
- Texans need coverage from drivers who “intentionally speed or run red lights,” but Gibbons did a lot more than run a red light.
It should not be debatable whether an insured “ought to know” that harm would follow from this kind of outrageous driving. The police certainly thought so, breaking off the chase in a residential area because it was too dangerous, and shooting at the truck (an act requiring supervisory
Not surprisingly, that is precisely what the Tanners’ counsel urged jurors to do. In his opening, he summarized the issue for trial as follows: “Does Nationwide have a technicality in this document buried in one sentence of one page that somehow lets them off the hook or not?” Exclusions, of course, are not technicalities—they are part of the contract. Jurors may naturally tend to favor a victimized family rather than a big insurance company, but judges exist to make sure contracts mean what they say, no matter whom the judges or jurors want to win.
If insurers must pay for intentional, criminal acts by policyholders like Gibbons, they will have to charge everyone higher premiums. As a result, some drivers will simply do without insurance. Ignoring the policy terms in this case may seem compassionate, but in the long run it may prove otherwise.
By any measure, an insured like Gibbons “ought to know” that driving like he did would hurt someone or something sooner or later. As his insurer did not agree to pay for that kind of intentional conduct, I would affirm the courts below.
SCOTT A. BRISTER
JUSTICE