Maryland Casualty Company v. Knorpp

NORTHCUTT, Justice.

This is a suit brought by an assured, to-wit: Art Knorpp, Sr. and Art Knorpp, Jr., d/b/a Askco Steel Building Company, ap-pellees, against their insurer, to-wit: Maryland Casualty Company, appellant, to recover the cost of defending and settling a suit brought against the assured by L. O. Weaks, a third party.

Prior to the institution of this suit ap-pellees were sued by the third party, L. O. Weaks, in Cause No. 1694 in the 110th Judicial District Court of Briscoe County, Texas. Appellees called upon appellant to defend them and presented their pleadings *899of the third party against appellees to the appellant.

Appellant refused to defend the cause on the grounds that the petition alleged a claim for which the policy did not furnish the appellees’ coverage. Appellees retained their own attorneys and, at their own expense, defended and settled the suit brought by the third party. Subsequent to the disposition of the suit between appellant and third party, appellees brought suit against appellant to recover the cost of defense, together with the amount paid in settlement.

Both appellant and appellees moved for summary judgment and the trial court denied the motion of appellant and granted the motion of appellees rendering judgment in favor of appellees for $2,925. From that judgment appellant perfected this appeal.

By appellant’s first point of error it is contended the trial court erred in considering the affidavit of Art Knorpp, Jr. in support of appellees’ motion for summary judgment. We do not believe it necessary to pass upon this issue since we are of the opinion because of points two and three the case should be reversed and rendered. However, we are of the opinion the only things to consider herein are the petition on file in Cause No. 1694 above mentioned when this appellant refused to defend that suit and the insurance policy. Appellant’s second and third points of error are as follows:

“SECOND POINT: The error of the Court in granting Plaintiffs’ (Appel-lees’) Motion for Summary Judgment since the policy of insurance in question does not as a matter of law, afford plaintiffs’ coverage for the cause of action alleged in Third Party’s Petition.
“THIRD POINT: The error of the ¿ourt in denying Defendant’s (Appellant’s) Motion for Summary Judgment, since the policy of insurance in question does not, as a matter of law, afford plaintiffs’ coverage for the cause of action alleged in Third Party’s Petition.”

L. O. Weaks, plaintiff in Cause No. 1694, alleged in his petition that he contracted with Clifford McNutt to construct a grain-type building and that thereafter it was apparent that McNütt would not be able to complete said building and that Askco Steel Building Company agreed to assume the responsibility of said contract and to complete the construction of said building, then further pleaded as follows:

“Plaintiff would show that the building was not completed by the deadline agreed on and some 18 days thereafter, defendants Hill and Askco stated that the building was completed to a point that plaintiff could begin storage of grain therein. Plaintiff began to do so. When the building was approximately one-fourth (¼) filled, the entire north end of said building collapsed and fell. Much of the grain that had been placed therein ran out onto the ground and could not be recovered. The remainder of the building is still standing though it is damaged and is completely unfit for grain storage purposes.”,

then proceeded to plead his damages.

The policy of insurance upon which ap-pellees sought to require appellant to defend the Weak’s action against them was issued by this appellant. The policy provided :

“With respect to such insurance as is afforded by this policy for bodily injury liability and for property damage liability, the company shall:
“(a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent * *

This provision could be construed no other way than that the petition of the *900plaintiff in Cause No. 1694 should allege such damages as was afforded under the policy before appellant had to defend the law suit. As to appellant having the right to look to the allegations of the plaintiff’s petition in Cause No. 1694 to determine whether it was obligated to defend the suit, we believe we were correct in our holding in the case of Travelers Insurance Company v. Newsom, Tex.Civ.App., 352 S.W.2d 888 where we held as follows:

“The great weight of authority both in Texas and in most other jurisdictions has consistently held that in policies wherein the insurer bound itself to defend any suit against the insured alleging damages within the terms of the policy, even though such suit may have been groundless, false, or fraudulent, the test of the liability of the insurer to defendant depends upon the allegations of the plaintiff’s petition.3 In an ex-
haustive search of all jurisdictions this writer has found but few exceptions to the rule just announced.4

The hazards insured against under the policy here in question were under divisions one and three of the policy and are as follows :

“Division 1 — Premises—Operations: The ownership, maintenance or use of premises, and all operations. Division 3 — Independent Contractors: Operations performed for the named insured by independent contractors and general supervision thereof by the named insured, if the accident occurs in the course of such operations, other than (a) maintenance and repairs at premises owned by or rented to the named insured and (b) structural alterations at such premises which do not involve changing the size of or moving buildings or other structures.”

The pleadings in the case of Weaks v. McNutt et al. in Cause No. 1694 did not present a cause of action which the insurance company was required to defend under the terms of the policy as provided under divisions one and three. These provisions protect the appellees as to damages happening at their place of business and not for damages happening to someone else caused by the appellees at some other place as alleged in third party’s suit. The insurance company’s obligation to defend or pay judgment is based upon the contractural liability assumed under the terms of its policy. U. S. Fidelity & Guaranty Co. v. Baldwin Motor Co., 34 S.W.2d 815 (Com.App. judgment rendered by Sup.Ct.).

Since there were no pleadings in Cause No. 1694 as to require this appellant to answer and defend that suit under its policy of insurance, it was under no obligation to do so. Judgment of the trial court is reversed and rendered for appellant and that appellees recover nothing.

“3 Maryland Casualty Co. v. Moritz, Tex.Civ.App., 138 S.W.2d 1095 (writ refused) ; Farmers Cooperative Soc. No. 1 of Quanah v. Maryland Casualty Co., Tex.Civ.App., 135 S.W.2d 1033 (NWH) ; West Texas Stone Co. v. Employers Casualty Co., Tex.Civ.App., 178 S.W.2d 168 (refused W.M.) ; U. S. Fidelity & Guaranty Co. v. Baldwin Motor Co., 3.4 S.W.2d 815 (Com.App.) ; General Insurance Corp. v. Harris [Tex.Civ.App.], 327 S.W.2d 651 (N.W. H.) ; Soper v. Fidelity & Casualty Co. of New York, 198 Misc. 1117, 101 N.Y. S.2d 581; Boyle v. National Casualty So. [Co.], D.C.Mun.App., 84 A.2d 614; MacDonald v. United Pacific Insurance Co., 210 Or. 395, 311 P.2d 425 (Sup. Court of Oregon) ; Hardware Mutual Casualty Co. v. Schantz, 186 F.2d S68 (5 Cir.).

“4. Trinity Universal Insurance Co. v. Bethancourt, Tex.Civ.App., 331 S.W,2d 943 (N.W.H.), and the Koessler [Massachusetts Bonding & Insurance Co. v. Roessler, Tex.Civ.App., 112 S.W.2d 275] case therein cited; McGettrick v. Fidelity & Casualty Co. of New York, 264 F.2d 883 (2 Cir.); cases cited from Missouri and Pennsylvania in the dissenting opinion.”