*1 HARDWARE DEALERS MUTUAL INSUR- CO., Petitioner, ANCE

Clifford L. Robbie BERGLUND and Mae Berglund, wife, Respondents. husband and

No. A-10418.

Supreme Court of Texas.

June 1965.

Rehearing July Denied *2 provisions 94,

the of Rule Rules Texas company Civil Procedure. The insurance pleaded that the sustained re- spondents policies was not covered because the causes of such were expressly excluded cov- insurance erage of the contracts. policies

One of the risks” contains an “all coverage relating clause to house a beach Crooker, Freeman, Bayou located in Fulbright, Vista Addition to Bates & Jaworski, Hitchcock, Boston, Respondents Texas. Charles D. cite Newton Jewel Gresham, Balogh, ers firm, Houston, with Mutual Insurance above for petitioner. (5th argue 272 F.2d 889 that and Cir.1959) authority proposition it is for the that when Gann, Bryan, Miller & Jr., Austin Y. recovery sought a is under an “all risks” Houston, respondents. for policy, plaintiff proves prop and that erty policy described in the has been lost NORVELL, damaged, in the burden shifts to the Justice. surer a to show that the loss arose from This is a Hurricane Carla case. Peti- policy cause which is excluded from the tioner, Hardware Dealers Mutual Insur- words, coverage. In other an “all when pol- ance issued two insurance plea risks” upon, is sued of loss respondents, Berglund icies to L. Clifford being an sim excluded risk is treated as and Berglund; his Robbie Mae one plea ilar to a of confession and avoidance. contained both an “all risks” clause a logic position Balogh There is clause,” peril pol- “named second while the support does thereof. not stand alone icy only. peril” contained a “named clause Annotation, “All Risks” Insuranc e —Cov peril” The “named direct covered 1122, 1.c., 6, erage, Burden of 88 A.L.R.2d § hail,” by “windstorm, hurricane, losses etc. Proof, However, p. Balogh was a 1129. September 11, On a result of the as storms, Florida case tried in the federal court accompany- winds and waters hurricane, ing respondents’ much of preclude our Rules Civil Procedure property destroyed. brought Suit was proof shift of from the insured burden upon policies mentioned and after trial risks” though to an insurer even an “all jury, respondents to a were awarded a policy is involved. $1,820.00 recovery represented for Ass’n, Troy Co-op. In Pelican Ins. Co. v. only items of which were not related to the excluded hazards named in (1890) it was 77 Tex. S.W. policies. judgment This was reversed upon party held an insurance suing that Appeals the Court of and the case Civil proving has the burden of remanded another trial. S.W.2d hence insurance covered the loss and judgment reverse the of the prove We upon it was incumbent him to judg- Court of and affirm the insurance Civil loss was not excluded from the ment of the trial court. coverage. This said: Court paramount no- provisions relates “The of the above before us exceptions general liability ticed are construction of the contracts between However, by appellant parties. pro- insurer], assumed there one [the petition the fire think should have averred that cedural matter raised which we excepted prior did not occur from of the cases decided one Settled

3H upon covers policies sued One of the necessary to show a causes. This was per- * * unscheduled and certain beach house cause of action beach house as the property. Insofar sonal The use of an “all risks” clause stat- Mr. concerned, insured the contract “all “general liability” company ing Berglund against of the and Mrs. except as otherwise physical loss risks of change rule forth. calls for no set *3 excluded.” plaintiff necessary If it be for a to aver that ex-

the loss did not from one of the occur certain unsched- covered policy This also cepted causes, in order cause to state a insured Mr. property and personal uled action, necessary for him it would be certain against Berglund loss Mrs. prove same in to recover. the order others, among including perils, named “Windstorm, and Hail.” Hurricane The rule of the Pelican case insofar as pleading is concerned modified in 1941 was policy A a boathouse second covered by part adoption the of Rule 94 as a of the Coverage,” heading, “Extended under the The rule Texas Rules of Procedure. Civil Berglund against loss Mrs. insured Mr. and provides brought upon that when a suit is Hail, “Windstorm, Hurricane, Ex- from, insures certain “which Smoke, Commotion, Air- Riot, plosion, Civil general hazards, provi- but contains other craft and Land Vehicles.” liability, limiting general sions such following ex- The first contains party suing such never on contract shall by com- pleaded (which clusion was required allege that the loss was not pany) viz.: any coming due to a risk or cause within contract, exceptions specified of the in the by resulting from: “D. Loss caused or nor shall insurer be allowed to raise waves, water, Flood, “(1) surface allege specifically such issue unless it shall wave, tidal overflow tidal water or loss was due to a risk or cause of streams or of other bodies of wa- coming particular exception to within a ter, spray any fore- or general liability; provided nothing by going, all whether driven wind herein change shall construed to he ** not; or *.” burden proof on such issue as it now (Italics supplied) exists.” The second contains a similar ex- (which pleaded by

clusion the com- was pany) viz.: company plead Here the insurance specific

ed exclusions which were set forth herein, specifically “Unless named thus raised issues shall not be liable for pro contract coverage. The burden of * * * * ** by caused tidal ducing evidence to that their demonstrate wave, water, overflow, or wheth- pleaded losses were not attributable to the * * by er not; driven wind or upon respondents. excluded hazards rested Co., parties stipulated Shaver National Title & Abstract that: “The amount of damage to the dwelling beach (Tex.Sup.1962); 361 867 T. I. M. [the S.W.2d $6,000 in question ap- was and the house] E., Co., Maryland Casualty Inc. 157 plicable amount of deductible is $100. (1957). Tex. 68 8 S.W.2d See damage ques- amount contents (1945). Texas Bar As the mat Journal $2,400. tion was The amount of specifically ter by covered Texas deci to the boathouse in was $450 Procedure, sions and our Rules of Civil the amount of deductible is $100.” upon practice cases based rules of other jurisdictions application have little or no trial court submitted the case to inquiring per- here. jury upon issues as to the centage relating of loss to each item responsible which the insurer was not to be by was occasioned specifically whatever, excluded any damage, due to the perils. percentage As to the action of water caused wind. part water, or resulted from All the loss caused “flood, water, waves, surface though tidal water action due to water’s wave, spray tidal foregoing, wind, from the is thus eliminated. There- not,” whether driven jury fore, wind or invoked, the rule that where there per house, found 70 as cent to the beach is no order of succession in time and per personal as cent to the unscheduled there are two concurrent causes of a property per and 100 cent as to the boat- loss in each which the done Judgment house. accordingly wass ren- distinguished, predomi- cannot be per $100, dered for 30 $6,000, cent of less nating proxi- cause be deemed will plus $120, making $1,820.00. a total of cause; application. mate can have no cause, or *4 The water as a concurrent general The theory of em submission any cause, as element in the which ployed by the supported by trial court is loss, produced by the contract Coyle v. Company, Palatine Insurance Tex. put out of the case.” Com.App., 222 in which (1920) S.W. judgment Ap- by opinion recommended the Com of The of the Commission Appeals adopted by peals Company mission of was refers Trust to Newark Supreme opinion by Court in Agricultural an written Insurance 237 F. Chief Phillips setting' 1916). forth case in- (3rd This was a Cir. Justice Supreme Court’s volving views with reference to a and an insurance hurricane loss appeared building case. It “hurri- expressly that a sit mentions policy which Galveston, Texas, uated by in owned B. A. “all policy against canes.” The insured Coyle windstorms, Langbehn by H. insured tor- damage by direct loss or J. damaged nadoes, hurricanes, except Palatine cyclones, Insurance as or by by a coastal storm provided.” which was attended con- hereinafter The high exception winds and The provided wind-driven water. tained that the an “tornado, against damage by any insured company loss “shall not be liable for cyclone,” expressly rain, windstorm or damage by but ex- or whether caused water or “ ** directly cluded loss indi- by ‘occasioned or The driven wind or not * * * rectly by any or through tidal in of the judgment court affirmed a favor * * * overflow, water, insurer, high insuring wave or stating and after that the ’ * * * cloudburst; by unambiguous exclusionary whether driven clauses were * * (and company wind or not ad- of conflicting) the Circuit Court liability mitted damage for the caused sole- said: ly by parties stipulated the wind. The that the terms of is manifest from “[I]t damage remainder of the was caused contract, the enu- as well as by the combined of and water action wind elements, perils merated that the in- and that a the extent to which each was air, perils sured are factor could not be determined from the excepted among expressly those approving judgment evidence. In for water; perils after and that company by the insurance recommended disclaiming liability for caused Commission, Phillips, Chief Justice by specific such as tidal water forces Court, Supreme speaking for the said: wave, water, cloud- overflow and may admitted, plain- burst, broadly company

“It as the the insurance any urge, liability in to assume tiffs error that wind refuses water, generally the cause of the action of the water. or * * * But, dispute, in as related to the loss even when ‘driven wind.’ opinion provided this dis- expressly the contract We are of that penses coverage apparent with the that the insurance consideration of It is proximate substantially cause as raised the contract would be ** theory con- respondents’ case if broadened accepted. it would

struction be In essence damage, mean all hurricane whether respondents contend that water, Coyle caused wind or a combina- distinguishable case is from the case poli- would be covered now tion of both before us because of a difference provided cies a hurricane is the dominant wording contained in the involved proximate cause of the destruction or and the wording the contracts insur- property described in the now before loss of the us. We have heretofore set whereas, theory policy; under the out the ance wording ex insuring adopted by the insurance cluding the trial court policies. clauses of such damage un- peril” coverage would extend wind “named expressly insuring clauses by the cover mixed with water occasioned direct resulting losses from “wind storm, York hurricane, hurricane. Cf. McDonald v. New hail” etc. As direct loss Co., es Central Mutual Fire Ins. 380 S.W.2d many hurricanes are not in so (Tex.Sup.1964). words excluded from the “all risks” clause contained in covering the beach respondents position, support of their house, such compre losses are within the Hurri- Indian or Gulf assert that West hension provision, subject of the “all risks” high winds phenomenon in which cane is to the exclusion clauses of the contract. *5 accompanied by heavy rains invariably are In Coyle there was no reference to losses water; insuring clauses that the high and by “hurricane” exception and the hurricane purport cover policies to of coverage employed words, “directly interpretation of that an damage, and indirectly.” Respondents describe such to exclude clause so as water exclusion policy as an “inland windstorm” and by would a hurricane water seek distinguish policies it from of rule ambiguity and invoke create an type now theory before us. Their of con in cases of contracts should that insurance tract recovery construction and theory of is favorably ambiguity be construed doubt or well by illustrated special issue sub argument that This to the insured. is requested mission them, by viz.: by accepted the Court Civil was con- persuasive, there it while you “Do find preponderance from a rejection. compel its siderations which

of the evidence that Hurricane Carla proximate cause of the standpoint, there underwriting an From to the dwelling house of Clifford L. insuring difference between is a vast Berglund Berg- Robbie Mae only and winds by hurricane lund?” by against loss a combination insuring a From and waters. winds hurricane proximate Definitions of cause and new little dif- standpoint verbiage, there is independent re- cause were likewise the ex- wording of between the ference quested. proximate The cause instruction which and that clause before us now clusion requested was as follows: Coyle In construed Coyle. this Court ap- “You are “hurricane” does instructed that the word term ‘proximate “dam- cause,’ mentioned pear. as used in this insuring cyclone.” charge tornado, windstorm or age by means the actual and dominant cause here involved peril” clauses which sets motion “named a series “windstorm, hur- which, events and by any unbroken direct loss new mention is not independent cause, ricane,” hurricane produces loss from an etc. As risks” event the “all without as such expressly which the excluded event would hurricane clause, say not have that loss from may occurred.” we 314 relate, naturally

is within insuring policy. they clause of such and the matters problem, may thereto,” As usually only illustrative of the we con- or it is incident when “the words admit of construc two question: reasonably sider this it Can tions, adopted that one will be most favor said wording from the of contracts which able to the Brown Palatine insured.” v. clauses, pol- contain water exclusion that a 590, Company, Insurance 35 S.W. 89 Tex. icy covering loss windstorm does not 287, (1896). 1060 Con See 13 Tex.Jur.2d water, overflow, cover loss high tracts, § not, whether driven wind or while a policy covering loss from hurricane does in this involved The exclusion clauses cover high part property loss from water or overflow suit have been used as years. The policies many when a insurance hurricane is the dominant cause of of Newark in the case clause was involved such water or overflow? Insurance Company Agricultural Trust Friedman, Mitchell’s Inc. v. 157 Tex. Co., (3rd Cir.) decided 1916 237 F. 788 424, 303 S.W.2d (1957), 775 it asserted spe- That case and heretofore referred to. that an indemnity contract he should con- by hur- cifically mentioned loss or strued favorably to the indemnitor. This by the approval with ricanes and was cited Court said: Coyle Appeals in v. Palatine Commission (1920). Insurance 222 S.W. 973 rights determining “In and lia- case, Coyle the decision in the Since therefore, parties, bilities of the their exclusionary clause construction of intention will first be ascertained regarded Cf. in Texas. must be as settled rules applicable of construction con- Insurance Newman v. Great American generally. point tracts At neither Company, N.J.Super. A.2d 167 party simply is favored the other over (1964); Brindley Firemen’s Insurance agreement because their in- is one of Newark, N.J.Super. 113 A.2d Co. of demnity.” (1955). risk assumed construed case under the rules of ap We the rule believe stated *6 vastly different from that of uncertainty plicable ambiguity here. No which would insure all arises from the words used the contract. proximately by a hurricane. caused say In that accom order to water feasibility coverage providing of a broad excepted panying a hurricane is not from fifty “hurricane” or hundred necessary give the it would be the to strip, mile considering coastal the neces- exception high the and words of water — therefor, sary premium charges may pre- overflow, etc.—a different when meaning industry sent a for the and the covering used with an clause losses insuring authorities, regulatory cf. In- United States cyclone” “tornado, windstorm, from and Waco, Boyer, surance of Texas v. they than would when used with an have 415, (1954), 153 Tex. 269 S.W.2d 340 but type “all risks” or one insuring of duty it our construe con- to and enforce “windstorms, covering losses hurri from and tracts not to make them. cane, hail,” opinion this can etc. our accomplished not be unless we refuse to insurer has been held Cases in which an ordinary accepted by a give to words their mean proximately for a liable interpretation not ing disregard peril against, although and of a hazard insured involved, phrases in standard insurance use which was also covered prior opinions Providence apposite have been considered in not here. See are Proffitt, poli 150 Tex. language Washington Court. The in the Co. v. this used Ins. Ins. according (1951); “must be construed Farmers cies to 239 379 S.W.2d Wallace, (Tex. parties, Exch’g evident be derived intent of the to 275 S.W.2d used, Civ.App.1955, e.). n. These subject-matter to wr. ref. words r. express By incidentally policy. its thereto of an insurance cases and those similar “be terms, provides it coverage had the rule that shall involved risks for which no proof on express purchased. change been are not construed to the burden They rule Coyle exclusion cases such as v. Palatine such issue as it now exists.” recog- Company, 973, supra. impliedly pleadings, Insurance relates to but S.W. extant nized that there was a doctrine set forth For hereinabove the reasons controlled the burden State which judgment the Court of Civil adopted. proof at the time the rule was af- trial court is reversed and that of the re- argument probandis over the onus firmed. lia- lating exceptions general to policy is bility assumed in an insurance REHEARING ON MOTION FOR by the use an old one and is not altered simply a of an “all risks” clause which is is not cast rehearing The motion for general liability broad- statement of in its us, in the mold which is most familiar Harris, est form. In Travelers’ Ins. Co. v. respondents complain because we have (Tex.Com.App.1919, hold- S.W. 933 precedent disregarded followed rather than approved Supreme Court) the ing by the ability again as- vigor it. it is With problem was considered with thoroughly serted that v. Palatine Insurance the citation of numerous authorities Tex.Com.App., 222 S.W. it was said: period is a in the voice from the “mauve of the words of Lord Atkin in the House mistaken one at that. history of Lords case of United ^[1940] Barkclay 4 All E.R. 20: of the United Bank, Ltd., We States,” [1941], Australia, are reminded A.C. Ltd., is a 1; the contracts as principal cover as clauses of the insurer “ * * * declaring contract ‘stipulations Those courts which being general, to avoid the what way they added to of defeasance shall not promise treat excuse,’ hold that these clauses past these “When Ghosts of defensive, pleaded and must be stand in path justice clanking insurer; sustained while chains, proper their medieval exception construe the courts which Judge pass through course for the is to ‘taking out of something clauses as them undeterred. finest We act in the contract, general portion so adopt common law tradition when we promise perform only is to produce and alter decisions of law excepted part what remains after the justice.” common sense away,’ place is taken the burden *7 pleading proof upon the assured However, problems con when negative his showing them involved, precedent tractual clauses cause of action does not come within necessarily highly important factor. exception. (Here citation follows Contracting parties generally ju select a authorities.) dicially construed the inten clause with adopting meaning tion of “In view of the decisions our Su- given courts to it. the reasons have For preme Court, and the indication made stated in original opinion, our we decline case, granting the writ we to overrule v. Palatine. opinion burden are of plaintiff upon the show that rests it deference to the motion her cause of action does fall with- should stated nor that we do not hold excepting in the clause.” did we intend to infer that Rule 94 “binds proof this Court to freeze forever the burden of of the burden has questipn proof” relating exclusionary holdings clauses settled of this Court been prior remain until numerous

and must so

decisions abro- are overruled or otherwise

gated. simply recognizes Rule 94 this cir-

cumstance.

Respondents’ motion rehearing for

overruled. wife, Julia B. PAULSON and

Clarence Paulson, Petitioners, EXCHANGE,

FIRE INSURANCE Respondent. EXCHANGE,

FIRE INSURANCE Petitioner,

Clarence PAULSON and Julia B. Paulson, Respondents.

No. A-10325.

Supreme Court of Texas.

June 1965.

Rehearing July 21, Denied Houston, Bryan, Jr.,

Austin Paul- Y. son et ux.

Baker, Botts, Shepherd & Coates and Houston, McKinney, Ins. B. D. for Fire Exchange.

NORVELL, Justice. *8 case. The This is a Hurricane Carla parties designation of the will trial court Plaintiffs, opinion. Clarence used in this prop- Julia, owned Paulson and his Texas, Palacios, County, erty Matagorda severely damaged the winds which was attended the hurricane. waters