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Safeco Insurance Co. of Indiana v. Moss

Court of Appeals of Texas, Third District, Austin

June 29, 2017

Safeco Insurance Company of Indiana, Appellant
Logan Moss, Appellee


          Before Chief Justice Rose, Justices Field and Bourland


          Scott K. Field, Justice

         Appellee Logan Moss sued appellant Safeco Insurance Company of Indiana after Safeco denied Moss's claim for water damage under his homeowners insurance policy. After the parties both filed motions for summary judgment on the issue of coverage, the trial court signed an order denying Safeco's motion and granting a partial summary judgment in favor of Moss. This permissive appeal followed.[1] Because we conclude as a matter of law that the policy's exclusion for damage caused by surface water applies and consequently bars coverage for Moss's claim, we will reverse the trial court's order.


         From April 23, 2015 to April 23, 2016, Safeco insured Moss's home at 11902 Pleasant Panorama View, Austin, Texas, under Texas Quality Select Homeowners Policy No. OY6936502 ("the Policy"). Following excessive rainstorms in May 2015, Moss contacted Safeco to report water damage at his home, namely, water in the master bedroom closet, a bedroom, and two additional rooms.

         Safeco hired two professional engineers to inspect the damage. First, Safeco hired Jason Womack to determine the cause of the interior water intrusion into Moss's home. Upon completion of his inspection of the Moss home, Womack issued a report concluding that the water had entered the home through an electrical meter conduit and traveled into the closet. Safeco then hired a second engineer, Darin Lasater, to determine the original source of the water. In his report, Lasater concluded, in relevant part, that (1) surface water runoff flowed down the swale south to north between 11905 and 11901 Pleasant Panorama View; (2) the runoff flowed into an uncovered electrical basin at the corner of 11905 Pleasant Panorama View, filling the basin with water; (3) the rising water in the electrical distribution basin then drained through an electrical conduit outlet in the basin downgrade to the electric distribution basin at the southeast corner of 11906 Pleasant Panorama View and, in turn, drained downgrade to the Moss's residence; and (4) "sufficient head pressure in the electrical service conduit" forced the water up the riser and out of the service entrance into the master closet, and the water spread across the floor and into the other rooms in the house. Based on the engineers' reports, Safeco denied Moss's water damage claim citing the Policy's exclusion for damage caused by surface water.

          Moss subsequently filed suit against Safeco asserting that the insurance company had committed breach of contract and seeking a declaration that his claim was covered under the Policy. In addition, Moss claimed that Safeco had breached the common-law duty of good faith and fair dealing and had violated various provisions of the Texas Insurance Code. Moss filed a traditional motion for summary judgment on his claims for breach of contract and for declaratory relief. In his motion, Moss asserted that Safeco had incorrectly applied the Policy's exclusion for surface water and, therefore, had wrongly denied coverage on his claim.

         Safeco then filed a combined traditional and no-evidence motion for summary judgment on the issue of coverage. In support of its motion, Safeco attached the business-records affidavit of the Safeco manager assigned to Moss's claim and, as exhibits to the affidavit, copies of the Policy, Womack's report, and Lasater's report. Safeco also attached the affidavit of Lasater, in which Lasater testified to his education, qualifications, the scope of his investigation, and a summary of his conclusions. Lasater's curriculum vitae and a copy of his report were attached to Lasater's affidavit as exhibits. In moving for summary judgment on traditional grounds, Safeco asserted that its summary-judgment evidence established, as a matter of law, that Moss's claim was excluded from coverage under the Policy. In the no-evidence portion of its motion for summary judgment, Safeco argued that "there is no evidence that the water damage to Moss's home was not caused directly or indirectly by surface water."

         Upon considering the competing motions, the trial court signed an order granting Moss's motion for summary judgment and denying Safeco's motion for summary judgment. In addition, the trial court found that Moss was entitled to judgment on his claim that Safeco "breached the insurance contract making the basis of this lawsuit" and declared that Moss was "entitled to coverage under the insurance contract making the basis of this lawsuit." This permissive appeal followed.


         We review a party's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Summary judgment is proper when there are no disputed issues of material fact and the movant is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c). When, as here, both parties move for summary judgment on overlapping issues and the trial court grants one motion and denies the other, we consider the summary-judgment evidence presented by both sides, determine all questions presented, and render the judgment the trial court should have rendered. Texas Workers' Comp. Comm'n v. Patient Advocates of Tex., 136 S.W.3d 643, 648 (Tex. 2004). When the trial court does not specify the ground for its ruling, summary judgment must be affirmed if any of the grounds on which the judgment was sought were meritorious. State v. Ninety Thousand Two Hundred Thirty-Five Dollars & No Cents in U.S. Currency, 390 S.W.3d 289, 292 (Tex. 2013).

         The resolution of this appeal requires us to interpret Moss's insurance policy with Safeco. Texas courts construe insurance policies "using ordinary rules of contract interpretation" to ascertain the parties' intent as reflected in the terms of the policy itself. Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W.3d 254, 257 (Tex. 2017) (quoting Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 126 (Tex. 2010)). "When interpreting an insurance contract, we consider all its parts, read all of them together, and give effect to all of them." Greene v. Farmers Ins. Exch., 446 S.W.3d 761, 766 (Tex. 2014) (citing Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994)). The terms of the policy are given their ordinary and generally accepted meaning unless the policy shows the words were meant in a technical or different sense. 3109 Props, L.L.C. v. Truck Ins. Exch., No. 03-13-00350-CV, 2015 WL 3827580, at *2 (Tex. App.-Austin June 18, 2015, pet. denied) (mem. op.) (citing Don's Bldg. Supply, Inc. v. OneBeacon Ins. Co., 267 S.W.3d 20, 23 (Tex. 2008)).

         Whether an insurance contract is ambiguous is a question of law. State Farm Lloyds v. Page, 315 S.W.3d 525, 527 (Tex. 2010). If the language of the policy lends itself to a clear and definite legal meaning, the policy is not ambiguous and will be construed as a matter of law. Great Am. Ins. Co. v. Primo, 512 S.W.3d 890, 893 (Tex. 2017); Kachina Pipeline Co. v. Lillis, 471 S.W.3d 445, 459 (Tex. 2015). A policy is ambiguous only if it is genuinely subject to more than one reasonable interpretation after applying the pertinent rules of contract interpretation. Nassar, 508 S.W.3d at 258 (citing RSUI Indem. Co. v. The Lynd Co.,466 S.W.3d 113, 118 (Tex. ...

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