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TIG Insurance Co. v. North American Van Lines8/26/2005
icy's meaning and intent from its four corners. Houston Lighting & Power Co. v. Tenn-Tex Alloy & Chem. Corp., 400 S.W.2d 296, 300 (Tex. 1966); La. Nat'l Gas Pipeline, Inc. v. Bludworth Bond Shipyard, Inc., 875 S.W.2d 458, 461 (Tex. App.-Houston [1st Dist.] 1994, writ denied); Carrabba v. Employers Cas. Co., 742 S.W.2d 709, 716 (Tex. App.-Houston [14th Dist.] 1987, no writ).
An ambiguity does not arise merely because the parties to an agreement advance differing interpretations. Vincent, 109 S.W.3d at 867; see Lopez v. Munoz, Hockema & Reed, 22 S.W.3d 857, 861 (Tex. 2000). The contract is ambiguous only if the application of established rules of construction leaves an agreement susceptible to more than one reasonable meaning. Vincent, 109 S.W.3d at 867. If a contract of insurance is susceptible to more than one reasonable meaning, we must resolve the uncertainty by adopting the construction that most favors the insured. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co., Inc., 811 S.W.2d 552, 555 (Tex. 1991). In particular, exceptions or limitations on liability are strictly construed against the insurer and in favor of the insured. Id. We give effect to the whole policy when construing a particular provision, using each clause to help interpret the others. Wynnewood State Bank v. Embrey, 451 S.W.2d 930, 932 (Tex. Civ. App.-Dallas 1970, writ ref'd n.r.e.); W. Indem. Ins. Co. v. Am. Physicians Ins. Exch., 950 S.W.2d 185, 188 (Tex. App.-Austin 1997, no writ).
B. Arguments on Appeal
TIG argues the trial court should have granted its motion for summary judgment because the actual damages were less than the combined limits of the USF&G and Royal policies and coverage under the TIG policy was never triggered. Alternatively, TIG argues the trial court miscalculated the amount of indemnification TIG owed NAVL. In its cross-appeal, NAVL argues the trial court should have included defense costs in its calculation of "claim expenses" and apportioned NAVL's share of those costs to the Royal policy, resulting in greater recovery against TIG.
1. Coverage for "Claim Expenses"
The USF&G policy states: When the "insured's" legal obligation to pay damages under LIABILITY COVERAGE . . . exceeds the self-funded retention amount shown in the above Schedule, we will indemnify you for a portion of the "claim expenses" . . . . in addition to the applicable Limits of Insurance.
TIG argues this provision means NAVL contracted to pay its share of the "claim expenses," in addition to its SFR, before coverage was triggered under the Royal policy and that NAVL could not pass its obligation to pay those expenses to the Royal policy. The trial court ruled the Royal policy provided coverage for "claim expenses" and allocated a portion of the prejudgment and postjudgment interest as "claim expenses" to Royal under its policy. We agree with the trial court.
Although we can find no cases interpreting this language, the literal meaning of this provision in the USF&G policy is that USF&G's indemnification of a portion of NAVL's "claim expenses," in this case prejudgment and postjudgment interest, is in addition to the policy's limits. The clause does not say that NAVL must pay those expenses out of its own pocket. We can find nothing in this provision or in the USF&G policy as a whole that prevents NAVL from apportioning these expenses to its excess carrier when those expenses are covered by that policy. And we can find nothing in the Royal policy precluding coverage under its terms. In fact, both TIG and NAVL agree the definition of "ultimate net loss" in the Royal policy includes coverage for prejudgment and postjudgm
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