Court of Appeals of Texas, Second District, Fort Worth
COUNTY COURT AT LAW NO. 2 OF TARRANT COUNTY TRIAL COURT NO.
WALKER, MEIER, and GABRIEL, JJ.
Eugene and Mary McClain (the McClains) appeal the trial
court's orders granting appellee State Farm Fire and
Casualty Company (State Farm) judgment as a matter of law on
the McClains' claims that State Farm had a duty to
defend. Concluding that State Farm had no duty to defend the
McClains as a matter of law, we affirm the trial court's
The Underlying Lawsuit and Request to Defend
Luis Ramirez and Ofelia Ramirez (the Ramirezes) bought a home
from the McClains (the property). The Ramirezes paid the
McClains $7, 500 and signed a promissory note, agreeing to
pay the McClains the remainder of the purchase price-$60,
500-in monthly installments for eighteen years. The
Ramirezes' promissory note for the balance was secured by
a deed of trust to the property. After the Ramirezes paid on
the note for eight years, the McClains declared the note in
default, accelerated the debt, and posted the property for
foreclosure. On April 1, 2014, the McClains bought the
property at the foreclosure sale for $42, 000.
August 15, 2014, the Ramirezes filed suit against the
McClains, raising claims for wrongful foreclosure;
for breach of contract, i.e., the promissory note; for
negligence per se based on their violations of the finance
code, the property code, and a federal administrative
regulation; and seeking a declaration of rights under the
foreclosure-sale deed. The Ramirezes sought actual and
McClains requested that their insurer, State Farm, defend
them against the Ramirezes' suit. State Farm had issued a
commercial-liability, umbrella-coverage policy to the
McClains. As relevant to this case, the policy
provided that State Farm would have "the right and duty
to defend" the McClains against any "suit"
seeking specified damages-"bodily injury, "
"property damage, " or "personal and
advertising injury"-caused by an "occurrence."
An occurrence was defined in the policy as "an accident,
including continuous or repeated exposure to substantially
the same general harmful conditions." Each of the
resultant type of damages also was specifically defined in
• Bodily injury was defined as "bodily injury,
sickness, or disease sustained by a person, " which
included "mental anguish or other mental injury caused
by the 'bodily injury.'"
• Property damage was defined as "[p]hysical injury
to tangible property, including all resulting loss of use of
• Personal and advertising injury was defined as an
"injury, including consequential 'bodily injury,
' arising out of . . . the wrongful eviction from,
wrongful entry into, or invasion of the right of private
occupancy of a room, dwelling[, ] or premises that a person
occupies, committed by or on behalf of its owner, landlord or
these specified damages, the policy contained exclusions from
coverage. First, the policy did not apply to bodily injury or
property damage that was "expected or intended to cause
harm as would be expected by a reasonable person" or was
"the result of willful and malicious or criminal acts of
the insured." Second, personal and advertising injuries
were not covered if they were (1) "caused by or at the
direction of the insured with the knowledge that the act
would violate the rights of another and would inflict
'personal and advertising injury'" or (2) arose
out of a breach of contract.
State Farm Denies Coverage and the ...