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TIG Insurance Co. v. North American Van Lines8/26/2005
agreed to pay: the ULTIMATE NET LOSS (1) in excess of all UNDERLYING INSURANCE, and (2) only after all UNDERLYING INSURANCE has been exhausted by the payment of the limits of such insurance for losses arising out of occurrences insured by all of the policies designated in the Declarations as UNDERLYING INSURANCE.
The TIG policy defines "ultimate net loss" as:
he principal sum, award or verdict actually paid or payable in cash in the settlement or satisfaction of claims for which the insured is liable, either by adjudication or compromise with the written consent of , after making proper deduction for all recoveries and salvages. TIG argues its definition of "ultimate net loss" means the USF&G and Royal policy limits had to be exhausted by the payment of actual damages, not "claim expenses," before TIG's coverage was triggered because "principal sum" includes only actual damages. NAVL agrees that "principal sum" means actual damages only. However, NAVL argues, and we agree, that the TIG policy cannot be interpreted to say that the underlying insurance must be exhausted by the payment of actual damages only.
The TIG policy pays for actual damages in excess of the USF&G and Royal policy limits that have been exhausted by the payments of losses arising out of occurrences insured by those policies. The TIG policy does not define "losses" but, as we have seen, the Royal policy included "claim expenses" in its definition of "ultimate net loss." TIG did not exclude "claim expenses" from its definition of "losses . . . insured by . . . underlying insurance." And an intent to exclude or limit coverage must be expressed in clear and unambiguous terms. Hudson Energy, 811 S.W.2d at 555. We can find no such contractual provision in the TIG policy. We conclude the trial court did not err when it held that, by payment of actual damages and "claim expenses," the USF&G and Royal policy limits were exhausted, thereby triggering coverage under the TIG policy.
Conclusion
We conclude the trial court did not err by denying TIG's motion for summary judgment and granting, in part, NAVL's motion. However, because we conclude the trial court used an incorrect ratio in allocating "claim expenses" to USF&G, we modify the trial court's judgment to award NAVL the sum of $261,174 from TIG, and we remand to the trial court for recalculation of prejudgment interest.
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