REVERSE and REMAND; Opinion issued July 11, 2007

In The
Court of Appeals
Fifth District of Texas at Dallas
……………………….
No. 05-06-00100-CV
……………………….
LINDA RICHARDSON, Appellant
V.
ALLSTATE TEXAS LLOYD’S, Appellee
…………………………………………………….
On Appeal from the 160th Judicial District Court
Dallas County, Texas
Trial Court Cause No. 02-01779-H
…………………………………………………….
MEMORANDUM OPINION
Before Justices Moseley, O’Neill, and Lagarde
Opinion By Justice Lagarde   See Footnote 1

Appellant Linda Richardson sued Allstate Texas Lloyd’s (Allstate), seeking to overturn an appraisal award entered on her insurance claim for sewer damage to her home. After originally denying Allstate’s successive motions for summary judgment, upon reconsideration, the trial court granted Allstate’s second motion and dismissed Richardson’s claims with prejudice.
Richardson appeals the summary judgment order and the trial court’s denial of her motion to designate experts. For reasons that follow, we conclude the summary judgment was improperly granted and we remand this case to the trial court for further proceedings. Because all dispositive issues are settled in law, we issue this memorandum opinion. Tex. R. App. P. 47.2(a), 47.4.

Factual and Procedural Background
In December 2001, “a catastrophic pressurized infusion of raw sewage spewed through every plumbing opening” in Richardson’s home in Lancaster, Texas. Richardson’s home was insured by Allstate. Immediately after her home was flooded with sewage, Richardson contacted Allstate to make a claim under her insurance policy. Shortly thereafter, a dispute arose between Richardson and Allstate concerning the amount of Richardson’s insured loss. Accordingly, Allstate sent Richardson a written notice informing her that Allstate was invoking the appraisal provision of her insurance policy. The terms of that provision read, in pertinent part, as follows:

Appraisal. If you and we fail to agree on the actual cash value, amount of loss, or cost of repair or replacement, either can make a written demand for appraisal. Each will then select a competent, independent appraiser and notify the other of the appraiser’s identity within 20 days of receipt of the written demand. The two appraisers will choose an umpire. If they cannot agree upon an umpire within 15 days, you or we may request that the choice be made by a judge of a district court of a judicial district where the loss occurred. The two appraisers will than [sic] set the amount of loss, stating separately the actual cash value and loss to each item.
. . .

If the appraisers fail to agree, they will submit their differences to the umpire. An itemized decision agreed to by any two of these three and filed with us will set the amount of such loss. Such award shall be binding on you and us.

Allstate selected Jim Greenhaw as its independent appraiser. Richardson selected C.R. Johnson as her independent appraiser. The parties then agreed to use Sally Montgomery as the umpire, and she was appointed by the trial court in March 2002. On March 25, 2002, Johnson and Greenhaw signed their names on a blank form “Appraisal Award.” The top of that one-page form contains general information about the claim, including the names of the parties, the appraisers, and the umpire. The appraiser’s signatures are in the middle of the page beneath that general information. Directly underneath the appraisers’ signatures on the form award is a chart with three columns. The first column is titled “ITEM,” and the phrase “to be determined by hygienist” is hand- written beneath that title on the first numbered line. The next two columns, titled “LOSS REPLACEMENT COST” and “LOSS ACTUAL CASH VALUE,” are blank.
According to the record, after they signed the blank form, Greenhaw and Johnson each conferred separately with the umpire during the next few months. It appears, however, that neither appraiser prepared an itemized list of the cash value and loss to each item in Richardson’s house. According to Richardson, sometime prior to June 21, 2002, Johnson sent Montgomery a written estimate totaling approximately $141,000. The written estimate itself is not in the record. On June 21, 2002, Montgomery met with Greenhaw at Greenhaw’s office. During that meeting, Montgomery or Greenhaw wrote “$39,650.75” on the form appraisal award under the column “LOSS REPLACEMENT COST,” next to the phrase “to be determined by hygienist” previously written on the form award. Montgomery and Greenhaw then dated the award June 21, 2002 and both signed it. There is no evidence in the record that Montgomery or Greenhaw discussed this award with Johnson either before or after it was entered.
On July 16, 2002, Allstate sent Richardson a check for $27,813.95, the net amount of the award after deducting the amounts already paid to Richardson and half of the umpire’s fee. The next day, Johnson and Richardson wrote to the trial court complaining about the impropriety of the appraisal award and requested a meeting with the trial judge. There is no evidence in the record about whether such meeting occurred. On October 2, 2002, Richardson cashed Allstate’s check.         Thereafter, Richardson filed a petition seeking to set aside the appraisal award. In her suit against Allstate, Richardson asserted claims against Allstate for breach of contract, breach of the duty of good faith and fair dealing, negligence, negligence per se, and violation of articles 21.21 and 21.55 of the Texas Insurance Code.         Allstate moved for summary judgment twice. In its second motion for summary judgment, Allstate asserted it was entitled to summary judgment because (i) Richardson could not establish any grounds for setting aside the appraisal award, (ii) Richardson’s claims were barred by the affirmative defense of accord and satisfaction, (iii) Richardson was estopped to assert a breach-of-contract claim, and (iv) Richardson’s extra-contractual claims were “unsupportable, as a matter of law.” The trial court denied Allstate’s first and second motions; but upon Allstate’s one-page motion to reconsider, the trial court granted Allstate’s second motion and dismissed Richardson’s claims with prejudice.
In this appeal, Richardson asserts five main points of error, each with multiple subpoints. In her first point, Richardson argues the summary judgment order is improper because the appraisal award is “void as a matter of law,” based, inter alia, on her contention that the appraisal procedure was not followed. In her second point, Richardson argues she is entitled to summary judgment on Allstate’s affirmative defense of accord and satisfaction. In her third issue, Richardson argues she is not estopped to assert her breach of contract claim. In her fourth issue, Richardson argues genuine issues of material fact preclude summary judgment dismissing her extra-contractual claims. Finally, in her fifth point, Richardson argues the trial erred in denying her motion to designate experts.

The Appraisal Procedure

1. Applicable Law

Because courts “seek to implement the intention of the parties as expressed in the language of a contract,” it has long been the rule in Texas that “[a]ppraisal awards made pursuant to the provisions of an insurance contract are binding and enforceable.” Providence Lloyds Ins. Co. v. Crystal City Ind. Sch. Dist., 877 S.W.2d 872, 875 (Tex. App.-San Antonio 1994, no writ) (citing Scottish Union and Nat’l Ins. Co. v. Clancy, 8 S.W. 630 (Tex. 1888)). “Although every reasonable presumption will typically be made in favor of an appraisal award, when reviewing a summary judgment proceeding, that rule must yield to the degree its application conflicts with the presumptions required to be made in favor of the nonmovant.” Wells v. Am. States Preferred Ins. Co., 919 S.W.2d 679, 683 (Tex. App.-Dallas 1996, writ denied) (citing Hennessey v. Vanguard Ins. Co., 895 S.W.2d 794, 797-98 (Tex. App.-Amarillo 1995, writ denied)). There are three circumstances in which an appraisal award may be set aside on appeal: (1) the award was made without authority, (2) the award was made as a result of fraud or accident, or (3) the award was not make in substantial compliance with the terms of the insurance policy. Crystal City, 877 S.W.2d at 875-76.

1. Analysis

In her first issue, Richardson argues the award in this case should be set aside because it was not made in substantial compliance with the policy. We agree. The policy expressly requires that the appraisers each make an itemized list, “stating separately the actual cash value and loss to each item.” It also requires the appraisers to submit to the umpire only the items on which the two appraisers fail to agree. The policy then requires at least two of these individuals must agree on the final appraisal award, and the final award must be “itemized.”
The record in this case does not reflect substantial compliance with this required procedure. There is no evidence in the record the appraisers made the requisite itemized lists or that they submitted only disputed items to the umpire for a decision. Instead, the record contains testimony that, prior to Montgomery and Greenhaw signing the award, Johnson never saw any written estimate from Greenhaw and did not meet with Greenhaw or Montgomery to discuss the appraisers’ disputed items. The record contains no itemized list prepared by either appraiser. There is testimony in the record that Johnson prepared a written estimate and forwarded it to the umpire, but that estimate is not in the record. There is no evidence that Johnson ever met with Greenhaw to discuss their itemized estimates so the appraisers could determine their differences. Moreover, the appraisal award signed by Montgomery and Greenhaw is not an “itemized decision” as required by the terms of the insurance policy. Instead, it merely reflects a lump-sum award written next to the phrase “to be determined by hygienist.”
Allstate argues that a document prepared by Greenhaw several days after Greenhaw and Montgomery signed the award “comprises the itemized decision upon which the appraisal award was based.” We reject this argument. A document prepared after the appraisal award was issued cannot, as a matter of common sense and law, constitute the itemized list Greenhaw was supposed to prepare before any award was issued. Allstate also argues the award is proper because “nothing in the policy requires that the two individuals agreeing on the award delineate every item to be replaced.” We agree that in a situation like this, in which raw sewage may have contaminated the entire contents of a home, it would not be necessary to list and separately appraise, for example, every item of clothing and kitchen utensil in the home. Nevertheless, we reject Allstate’s contention that the appraisers were entirely relieved of their obligation to make an itemized list that at least categorized the contents of the home in a manner customary in the insurance industry.
Under these facts, we conclude the appraisal award should be set aside because the award was not made in substantial compliance with the terms of the insurance policy. E.g., Fisch v. Transcon. Ins. Co., 356 S.W.2d 186, 189-90 (Tex. Civ. App.-Houston 1962, writ ref’d n.r.e.) (setting aside appraisal award because record contained no evidence appraisers failed to agree and only submitted disagreements to umpire, as required by policy) .

Conclusion
We reverse the trial court’s summary judgment and remand this case for further proceedings consistent with this opinion. Tex. R. App. P. 43.2(d). The ultimate disposition of this case, including Richardson’s extra-contractual claims and Allstate’s affirmative defenses, will depend on the facts developed and decisions made during the further proceedings in the trial court. Accordingly , we need not address Richardson’s remaining issues at this time. Tex. R. App. P. 47.1.

SUE LAGARDE
JUSTICE, ASSIGNED

060100F.P05

Footnote 1 The Honorable Sue Lagarde, Justice, Court of Appeals, Fifth District of Texas at Dallas, Retired, sitting by assignment.

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Fort Worth, Texas insurance defense lawyers in Tarrant County who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
MARIA del CARMEN ESPARZA, §
Individually and as Next Friend of, §
MIGUEL ANGEL ESPARZA, a Minor, §
JUAN ESPARZA MANCILLA, a Minor, §
MANUEL ESPARZA-MANCILLA, a Minor, §
MELISSA ESPARZA MANSILLAS, a Minor, §
ROLANDO ESPARZA, a Minor, §
MICHELLE ESPARZA, a Minor, and as the §
Representative of the Estate of Manuel Esparza,§
Deceased, CANDELARIO ESPARZA, §
JAVIER ESPARZA, BRIGIDA CADENA, §
Individually and as Personal Representative §
of the Estate of J. MARCOS ESPARZA, §
CELIA MERCADO ESPARZA, §
Individually and as Representative of the §
Estate of MANUEL ESPARZA, Deceased §
and A/N/F of MANUEL ESPARZA §
MERCADO, a Minor, MANEOR ESPARZA §
ESPARZA and MA SANTOS ESPARZA § Case No. 4:05-CV-315
ZAPATA, Individually and as §
Representatives of the Estates of §
JUAN MARCOS ESPARZA and §
GERMAN ESPARZA, Deceased, and §
A/N/F of GRISELDA ESPARZA, a Minor, §
§
Plaintiffs, §
§
v. §
§
EAGLE EXPRESS LINES, INC., §
KV EXPRESS, INC., MIROSLAW JANUSZ §
JOZWIAK, ILLINOIS NATIONAL §
INSURANCE COMPANY, CONTINENTAL §
CASUALTY COMPANY, and §
LEXINGTON INSURANCE COMPANY, §
§
Defendants. §
MEMORANDUM OPINION AND ORDER GRANTING IN PART PLAINTIFFS’
Case 4:05-cv-00315-RAS Document 232 Filed 03/28/2007 Page 1 of 20

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JOINT MOTION FOR SUMMARY JUDGMENT AND DENYING IN PART
DEFENDANTS CONTINENTAL CASUALTY COMPANY, LEXINGTON
INSURANCE COMPANY AND ILLINOIS NATIONAL INSURANCE
COMPANY’S JOINT MOTION FOR SUMMARY JUDGMENT
The following are pending before the court:
1. Defendants Continental Casualty Company, Lexington Insurance Company and
Illinois National Insurance Company’s joint motion for summary judgment and brief
in support (docket entry #74);
2. Contractor Plaintiffs’ joint response to carrier Defendants’ joint motion for summary
judgment (docket entry #108);
3. Martin Plaintiffs’ joinder in Contractor Plaintiffs’ joint response to Carrier
Defendants’ joint motion for summary judgment (docket entry #109);
4. Defendants Lexington Insurance Company, Continental Casualty Company and
Illinois National Insurance Company’s joint reply to Plaintiffs’ response to Carrier
Defendants’ joint motion for summary judgment (docket entry #123); and
5. Contractor Plaintiffs’ sur-reply to the Carrier Defendants’ joint motion for summary
judgment (docket entry #127).
1. Plaintiffs’ joint motion for summary judgment and brief in support thereof (docket
entry #’s 91 & 94);
2. Defendants Continental Casualty Company, Lexington Insurance Company and
Illinois National Insurance Company’s response to Plaintiffs’ joint motion for
summary judgment and supplement to Defendants Continental Casualty Company,
Lexington Insurance Company and Illinois National Insurance Company’s joint
motion for summary judgment (docket entry #110);
3. Contractor Plaintiffs’ amended joint reply brief to Carriers’ response to Plaintiffs’
joint motion for summary judgment (docket entry #130); and
4. Carrier Defendants’ joint sur-reply to Plaintiffs’ reply to Carrier Defendants’
response to Plaintiffs’ motion for summary judgment (docket entry #128).
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1. Contractor Plaintiffs’ joint motion to strike exhibits from Carriers’ joint response and
supplemental motion for summary judgment (docket entry #125);
2. Defendants Continental Casualty Company, Lexington Insurance Company and
Illinois National Insurance Company’s response to Plaintiffs’ joint motion to strike
exhibits from Carriers’ joint response and supplemental motion for summary
judgment and, alternatively, motion for leave to supplement the record (docket entry
#’s 134 & 135); and
3. Plaintiffs’ response to Carriers’ response to Plaintiffs’ joint motion to strike exhibits
from Carriers’ joint response and supplemental motion for summary judgment and,
alternatively, motion for leave to supplement the record (docket entry #’s 156 &
157).
1. Contractor Plaintiffs’ motion to strike affidavits of Cline Young and Patricia
Strickland and objections thereto (docket entry #147);
2. Contractor Plaintiffs’ first amended motion to strike affidavits of Cline Young and
Patricia Strickland and objections thereto (docket entry #160);
3. Defendants Continental Casualty Company, Lexington Insurance Company and
Illinois National Insurance Company’s response to Contractor Plaintiffs’ amended
motion to strike affidavits of Cline Young and Patricia Strickland and objections
thereto (docket entry #167);
4. Contractor Plaintiffs’ reply to Carriers’ response to Contractor Plaintiffs’ motion to
strike affidavits of Cline Young and Patricia Strickland and objections thereto
(docket entry #172); and
5. Illinois National’s sur-reply to Contractor Plaintiffs’ reply to Carriers’ response to
motion to strike the affidavits of Cline Young and Patricia Strickland and objections
thereto (docket entry #179).
1. Contractor Plaintiffs’ motion to strike affidavit of Tina Jahn and objections thereto
(docket entry #149);
2. Continental Casualty Company’s response to Contractor Plaintiffs’ motion to strike
affidavit of Tina Jahn and objections thereto (docket entry #166); and
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3. Contractor Plaintiffs’ reply to Continental Casualty Company’s response to
Contractor Plaintiffs’ motion to strike affidavit of Tina Jahn and objections thereto
(docket entry #174).
1. Contractor Plaintiffs’ motion to strike the response of Illinois National to the joinder
of Eagle Express Lines, Inc. in part of Plaintiffs’ summary judgment motion and to
strike the affidavit of Harrison Yoss and objections thereto (docket entry #162);
2. Illinois National’s response to Contractor Plaintiffs’ motion to strike the response of
Illinois National to the joinder of Eagle Express Lines, Inc. in part of Plaintiffs’
summary judgment motion and to strike the affidavit of Harrison Yoss and objections
thereto (docket entry #171); and
3. Contractor Plaintiffs’ reply to Illinois National’s response to Contractor Plaintiffs’
motion to strike the response of Illinois National to the joinder of Eagle Express
Lines, Inc. in part of Plaintiffs’ summary judgment motion and to strike the affidavit
of Harrison Yoss and objections thereto (docket entry #181).
1. Illinois National’s motion to substitute the affidavit of Harrison H. Yoss in
connection with its response to the joinder of Eagle Express Lines, Inc. in part of
Plaintiffs’ summary judgment motion (docket entry #175); and
2. Contractor Plaintiffs’ response to Illinois National’s motion to substitute the affidavit
of Harrison H. Yoss (docket entry #182).
1. Continental Casualty Company’s motion for leave to file affidavit of Tina Jahn
(docket entry #189);
2. Contractor Plaintiffs’ response to Continental Casualty Company’s motion for leave
to file affidavit of Tina Jahn (docket entry #192); and
3. Continental Casualty Company’s reply to Contractor Plaintiffs’ response to
Continental Casualty Company’s motion for leave to file affidavit of Tina Jahn
(docket entry #193).
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1. Plaintiffs’ motion for leave to file supplemental summary judgment evidence in
support of motion for summary judgment and response to motion for summary
judgment (docket entry #196);
2. Martin Plaintiffs’ joinder in Contractor Plaintiffs’ motion to supplement Plaintiffs’
joint motion for summary judgment (docket entry #200); and
3. Defendants Continental Casualty Company, Lexington Insurance Company and
Illinois National Insurance Company’s response to Plaintiffs’ motion for leave to file
supplemental summary judgment evidence in support of motion for summary
judgment and response to motion for summary judgment (docket entry #203).
1. Contractor Plaintiffs’ motion to supplement Plaintiffs’ joint motion for summary
judgment (docket entry #199); and
2. Defendants Continental Casualty Company, Lexington Insurance Company and
Illinois National Insurance Company’s response to Plaintiffs’ motion to supplement
Plaintiffs’ joint motion for summary judgment (docket entry #201).
The court will address the above-referenced motions in turn.
OBJECTIONS, MOTIONS TO STRIKE AND MOTIONS TO SUPPLEMENT
A. DR. CLINE YOUNG
In response to the Plaintiffs’ joint motion for summary judgment, the Carrier Defendants, for
the first time, introduced the expert opinion of Dr. Cline Young. See Def. Resp. to Pl. Mtn. for
Summ. Judg., Exhs. Y(1), Y(2) & Y(3). The Carrier Defendants also sought to supplement their
motion for summary judgment with the same.
In his report, Dr. Young opines about the September 20, 2004 events which form the basis
of this lawsuit. Although the facts of this case are more specifically set forth below, Dr. Young, in
his March 15, 2006 report, provides the following opinions about the facts of this case:
2. The time between the collision of the truck with the Expedition
and the collision of the truck with the Pickup was approximately
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0.1 ± 0.1 seconds with the collision between the truck and the
pickup occurring first. This time was calculated based on the points
of impact between the vehicles, the separation distances associated
with those points of impact, the angle at which the truck was crossing
the roadway at the impacts and the speed of the truck. A computer
simulation reflecting this analysis is attached. Note: Some of these
measurements were taken from a scaled drawing. More precise
measurements are possible from the actual measured data itself.
The author would like to have that data.
3. For all practical purposes, the two collisions can be considered to
be simultaneous. As can be seen from the data items wherein a
combined perception / reaction time of 1.5 seconds is generally used
in accident reconstruction, there is no possibility of Mr. Jozwiak
responding to the collision of his truck with Mr. Esparza’s pickup,
regain control and then have a second collision with Ms. Martin’s
vehicle. 1/10th of a second is essentially the time span of a blink of
the eye. Furthermore, besides the time needed for perception and
reaction, there is additional time needed for driver controls to take
effect on the motion of the vehicle.
Def. Resp. to Pl. Mtn. for Summ. Judg., Exh. Y(1).
The Carrier Defendants seek to introduce Dr. Young’s report to show that the collisions
occurred within approximately 1/10th of a second apart and that, as such, the collisions occurred
virtually simultaneously. Additionally, the Carrier Defendants seek to introduce Dr. Young’s report
to demonstrate that Jozwiak could not have regained control of his truck between the two collisions.
The Plaintiffs object to the introduction of Dr. Young’s report on several bases, most
important of which is that Dr. Young’s report is not based on an adequate factual foundation. The
court agrees. In addition to the above-referenced remarks, Dr. Young further states in his report that
he understands
. . . that discovery is still ongoing and thereby reserve[s] the right to alter or augment
this report and the opinions contained within should additional information become
available that warrants such action. More specifically, I would like to have the
government documents containing the measurements of the vehicles and the accident
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1The court notes, however, that even if it did consider Dr. Young’s report, the result would not
change. Although Dr. Young’s report indicates that the collisions were, for all practical purposes,
simultaneous, Dr. Young’s opinions reveal that the collisions were separated in time, albeit a short period
of time. As such, the fact remains that the collisions did not result from a simultaneous impact.
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site in both printed and electronic formats.
Def. Resp. to Pl. Mtn. for Summ. Judg., Exh. Y(1). Although Dr. Young, in a later filed affidavit,
states that his conclusions and opinions are based on “all available measurements,” Dr. Young did
not mention any review of the actual measured data from the vehicles and the accident site. Since
Dr. Young specifically noted that more precise measurements were possible from the actual
measured data and since there is no indication that Dr. Young reviewed such data, the court
concludes that Dr. Young’s report is not based on an adequate factual foundation. Accordingly, the
court declines to consider Dr. Young’s report and hereby strikes it from the record.1
B. THE NTSB REPORT
The Carrier Defendants have further offered as summary judgment evidence the National
Transportation Safety Board’s (“NTSB”) report. The Plaintiffs object to the admission of the same
because “[n]o part of a report of the [NTSB], related to an accident or an investigation of an accident,
may be admitted into evidence or used in a civil action for damages resulting from a matter
mentioned in the report.” 49 U.S.C. § 1154(b). The Carrier Defendants argue, however, that the
report was not offered for the truth of the matter asserted but, rather, to show that the NTSB referred
to the events which transpired on September 20, 2004 as a single accident. Since consideration of
the NTSB report appears to be prohibited by statute, the court hereby declines to consider the same
and strikes the report from the record.
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2The court notes that resolution of the Plaintiffs’ affirmative defenses of waiver and estoppel
cannot be accomplished via a motion for summary judgment because genuine issues of material fact have
been raised regarding the same.
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C. RESERVATION OF RIGHTS LETTERS AND EVIDENCE RELATED THERETO
In their joint motion for summary judgment and in their response to the Carrier Defendants’
motion for summary judgment, the Plaintiffs raised the affirmative defenses of waiver and estoppel.
The Plaintiffs argue that the Carrier Defendants waived (or are estopped from raising) their right to
assert that the events which transpired on September 20, 2004 resulted in a single accident. As
discussed more fully below, the court concludes that the events which transpired on September 20,
2004 resulted in two accidents. As such, it is not necessary for the court to reach the Plaintiffs’
affirmative defenses of waiver and estoppel.2 Accordingly, the court overrules the Plaintiffs’
objections to Exhibits Z and CC of the Carrier Defendants’ response to the Plaintiff’s joint motion
for summary judgment as moot. Additionally, the court denies as moot all other motions related to
the affirmative defenses of waiver and estoppel.
D. SUPPLEMENTAL EVIDENCE
The Plaintiffs seek to supplement their summary judgment evidence with certain deposition
testimony which refutes the expert opinions of Dr. Young. Since the court is not considering Dr.
Young’s expert opinions, it is not necessary for the Plaintiffs to supplement their summary judgment
evidence with this additional testimony. Likewise, it is not necessary for the Carrier Defendants to
supplement said deposition testimony with additional portions of the same.
BACKGROUND
On September 20, 2004, Miroslaw Janusz Jozwiak (“Jozwiak”) was driving a tractor-trailer
rig (“tractor-trailer”) northbound on U.S. Highway 75 near Sherman, Texas. KV Express, Inc.
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(“KV”) owned the tractor while Eagle Express Lines, Inc. (“Eagle Express”) owned the trailer.
Jozwiak crossed the median on U.S. Highway 75 and collided with two vehicles traveling
southbound on U.S. Highway 75. Those two vehicles were a Ford F-150 pick-up truck (“the truck”)
and a Ford Expedition (“the Expedition”). Although it is unclear which vehicle was first impacted
by the tractor-trailer, the resolution of that issue is not relevant to the determination of the issues
currently before the court.
It is clear, however, that the tractor-trailer (apparently, the trailer portion of the rig) collided
with the truck while the truck was traveling southbound in the left lane. Of the seven individuals
traveling in the truck, five were fatally injured. The two survivors were seriously injured.
It is also clear that the tractor-trailer (apparently, the tractor portion of the rig) collided with
the Expedition while the Expedition was traveling southbound in the right lane. At some time after
impact, the Expedition and tractor, as well as a portion of the trailer, burst into flames. Five
individuals were traveling in the Expedition; none survived. Jozwiak survived with minimal
injuries.
At the time of the September 20, 2004 events, Illinois National Insurance Company provided
truckers’ liability insurance coverage to KV (the “Illinois National Policy”) under policy number
SFT165302601. The Illinois National Policy provides $1,000,000 in primary coverage for each
“accident.”
Additionally, Continental Casualty Company provided truckers’ liability insurance coverage
to Eagle Express (the “Continental Casualty Policy”) under policy number 0 1080827873. The
Continental Casualty Policy provides for $1,000,000 in coverage for each “accident.”
Finally, Lexington Insurance Company provided excess insurance coverage to Eagle Express
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3Additionally, in the event the court concludes that the September 20, 2004 events involved a
single accident / occurrence under the terms of the insurance policies, the Plaintiffs seek a declaration
that the MCS-90 endorsements contained within the primary insurance policies provide for either
$1,000,000 per judgment or, in the alternative, that the endorsements require a finding of two distinct
collisions. Since the court concludes that the plain language of the policies mandates a finding of two
accidents / occurrences, the court need not reach the issues concerning the MCS-90 endorsements.
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(the “Lexington Policy”) under policy number 3167729. The Lexington Policy provides for
$1,000,000 in coverage for each “occurrence.” In this declaratory judgment action, the parties seek
a declaration under the terms of the insurance policies as to whether the events which transpired on
September 20, 2004 involved one or two accidents / occurrences.3
LEGAL STANDARD
The purpose of summary judgment is to isolate and dispose of factually unsupported claims
or defenses. See Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986). Summary judgment is proper
if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” FED. R. CIV. P. 56(c). A dispute about a material fact
is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The trial court must resolve all
reasonable doubts in favor of the party opposing the motion for summary judgment. Casey
Enterprises, Inc. v. American Hardware Mut. Ins. Co., 655 F.2d 598, 602 (5th Cir. 1981)(citations
omitted). The substantive law identifies which facts are material. See id. at 248.
The party moving for summary judgment has the burden to show that there is no genuine
issue of material fact and that it is entitled to judgment as a matter of law. See id. at 247. If the
movant bears the burden of proof on a claim or defense on which it is moving for summary
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judgment, it must come forward with evidence that establishes “beyond peradventure all of the
essential elements of the claim or defense.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir.
1986). But if the nonmovant bears the burden of proof, the movant may discharge its burden by
showing that there is an absence of evidence to support the nonmovant’s case. Celotex, 477 U.S.
at 323, 325; Byers v. Dallas Morning News, Inc., 209 F.3d 419, 424 (5th Cir. 2000). Once the
movant has carried its burden, the nonmovant “must set forth specific facts showing that there is a
genuine issue for trial.” FED. R. CIV. P. 56(e). The nonmovant must adduce affirmative evidence.
See Anderson, 477 U.S. at 257.
CHOICE OF LAW
In the Carrier Defendants’ motion for summary judgment, the Carrier Defendants refer the
court to both Texas law and Illinois law. The Carrier Defendants argue that this court should apply
Illinois law because, under the most significant relationship test, the insurance policies at issue were
purchased by, and issued to, the insureds in Illinois. Accordingly, the Carrier Defendants reason that
“Illinois law applies to the interpretation of the insurance policies at issue, as Illinois bears the most
significant relationship to such policies.” Def. Reply, p. 2, ¶ 2. The Carrier Defendants note,
however, that since both Illinois and Texas apply the same analysis to determine whether the events
herein involve one accident or two, the results would be the same under both states’ laws.
“‘If the laws of the states do not conflict, then no choice-of-law analysis is necessary.’”
Schneider National Transport v. Ford Motor Co., 280 F.3d 532, 536 (5th Cir. 2002), quoting W.R.
Grace and Co. v. Continental Cas. Co., 896 F.2d 865, 874 (5th Cir. 1990); National Union Fire Ins.
v. CNA Ins. Companies, 28 F.3d 29, 32, n. 3 (5th Cir. 1994). Accordingly, in this diversity suit, the
law of the forum state, Texas, should apply here because there is no conflict between the substantive
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state law of Texas and Illinois. See Schneider National Transport, 280 F.3d at 536.
DISCUSSION AND ANALYSIS
“A contract of insurance is generally subject to the same rules of construction as other
contracts.” H.E. Butt Grocery Co. v. National Union Fire Ins. Co. of Pittsburgh, PA, 150 F.3d 526,
529 (5th Cir. 1998) (citation omitted). “The court’s primary concern is to give effect to the written
expression of the parties’ intent.” Id. (citation omitted). “If the written contract is worded so that
it can be given a definite or certain legal meaning, it is not ambiguous and will be enforced as
written.” Id. (citation omitted).
“If the court is uncertain as to which of two or more meanings was intended, a provision is
ambiguous.” Id. (citation omitted). “An ambiguity in a contract is either ‘patent’ or ‘latent.’” Id.
(citation omitted). “‘A patent ambiguity is evident on the face of the contract. A latent ambiguity
arises when a contract which is unambiguous on its face is applied to the subject matter with which
it deals and an ambiguity appears by reason of some collateral matter.’” Id., quoting National Union
Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). “Only after a court has
determined a contract is ambiguous can it consider the parties’ interpretations.” Id. (citation
omitted). “When a contract is not ambiguous, the court will construe the contract as a matter of
law.” Id. (citation omitted).
The outcome of this case depends on the meaning of “accident” and “occurrence” as defined
by the policies herein. See H.E. Butt Grocery Co., 150 F.3d at 529. The Carrier Defendants argue
that the plain language of the polices results in a finding of one accident or occurrence. Conversely,
the Plaintiffs contend that the plain language of the policies results in a finding of two accidents or
occurrences. Alternatively, the Plaintiffs argue that the policies’ provisions are ambiguous;
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accordingly, the court should interpret the ambiguity in favor of coverage and find two accidents or
occurrences as a matter of law.
The Lexington Policy provides coverage as follows:
I. COVERAGE
A. We will pay on behalf of the Insured that portion of the loss which the
Insured will become legally obligated to pay as compensatory
damages (excluding all fines, penalties, punitive or exemplary
damages) by reason of exhaustion of all applicable underlying limits,
whether collectible or not, as specified in Section II of the
Declarations, subject to:
1. the terms and conditions of the underlying policy listed in
Section IIA of the Declarations, AND
2. our Limit of Liability as stated in Section 1C of the
Declarations.
III. LIMITS OF LIABILITY
A. Aggregate
This policy is subject to an aggregate limit of liability as stated in the
Declarations. This aggregate limit of liability is the maximum
amount which will be paid under this policy for all losses in excess
of the underlying policy limits occurring during the policy period,
except automobile liability for which there is no applicable aggregate
limit of liability.
B. Occurrence Limit
Subject to the above provision respecting aggregate, the Limit of
Liability stated in the Declarations as per occurrence is the total limit
of our liability for ultimate net loss including damages for care, loss
of services or loss of consortium because of personal injury and
property damage combined, sustained by one or more persons or
organizations as a result of any one (1) occurrence.
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C. Limit Exhaustion
This policy shall cease to apply after the applicable limits of liability
have been exhausted by payments of defense costs and / or judgments
and / or settlements.
In the event of exhaustion of the aggregate limits of liability of the
underlying insurance as stated in Section II of the Declarations, this
policy will continue in force as underlying insurance.
The aggregate limits of the underlying insurance will only be reduced
or exhausted by payment of claims that would be insured by this
policy.
Def. Jt. Mtn. for Summ. Judg., Exh. A, pp. 1-2. The Lexington Policy defines “occurrence” as
follows:
The word occurrence means an event, including continuous or repeated exposures to
conditions, neither expected or intended from the standpoint of the Insured. All such
exposure to substantially the same general conditions shall be deemed one
occurrence.
Id. at 4.
The Continental Casualty Policy and the Illinois National Policy provide coverage as follows:
SECTION II – LIABILITY COVERAGE
A. Coverage
We will pay all sums an “insured” legally must pay as damages because of
“bodily injury” or “property damage” to which this insurance applies, caused
by an “accident” and resulting from the ownership, maintenance or use of a
covered “auto”.
C. Limit Of Insurance
Regardless of the number of covered “autos”, “insureds”, premiums paid,
claims made or vehicles involved in the “accident”, the most we will pay for
the total of all damages and “covered pollution cost or expense” combined,
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4Again, the court notes that the Plaintiffs seek a finding of ambiguity only in the alternative.
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resulting from any one “accident” is the Limit of Insurance for Liability
Coverage shown in the Declarations.
All “bodily injury”, “property damage” and “covered pollution cost or
expense” resulting from continuous or repeated exposure to substantially the
same conditions will be considered as resulting from one “accident”.
Id. at Exh. B, pp. 2, 5; Exh. C, pp. 2, 5-6. The Continental Casualty Policy and the Illinois National
Policy define “accident” as follows:
“Accident” includes continuous or repeated exposure to the same conditions resulting
in “bodily injury” or “property damage”.
Id. at Exh. B, p. 10, § VI(A), Exh. C, p. 11, § VI(A).
Here, none of the parties primarily contend that the terms “accident” and “occurrence” as
defined by the policies are ambiguous.4 See U.E. Texas One-Barrington, Ltd., v. General Star
Indemnity Co., 332 F.3d 274, 277 (5th Cir. 2003). Further, the parties do not argue that the court’s
determination of the number of accidents or occurrences hinges on the resolution of a factual dispute.
See id. Accordingly, “Texas courts agree that the proper focus in interpreting ‘occurrence’ is on the
events that cause the injuries and give rise to the insured’s liability, rather than on the number of
injurious effects.” H.E. Butt Grocery Co., 150 F.3d at 530, quoting Maurice Pincoffs Co. v. St. Paul
Fire & Marine Ins. Co., 447 F.2d 204, 206 (5th Cir. 1971).
In H.E. Butt Grocery Co., an insurance coverage dispute arose from an H.E. Butt Grocery
Company’s (“HEB”) employee’s sexual abuse of two children in an HEB store. H.E. Butt Grocery
Co., 150 F.3d at 528. An HEB employee sexually assaulted two different children approximately
one week apart in the restroom of an HEB store. Id. Litigation ensued which subsequently led to
HEB seeking a declaratory judgment against National Union Fire Insurance Company. HEB argued
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that each instance of sexual abuse arose from the same “occurrence”, i.e., HEB’s negligence in
overseeing its pedophilic employee. Id. Conversely, National Union Fire Insurance Company
argued that the two separate instances of sexual abuse constituted two occurrences under the policy.
Id. The policy defined “occurrence” as follows:
“Occurrence” means an event, including continuous or repeated exposure to
conditions, which result[s] in Personal Injury or Property Damage during the policy
period, neither expected nor intended from the standpoint of the Insured. All
Personal Injury or Property Damage arising out of the continuous or repeated
exposure to substantially the same general conditions shall be considered as arising
out of one occurrence.
H.E. Butt Grocery Co., 150 F.3d at 529. The court concluded that “the two independent acts of
sexual abuse ‘caused’ the two children’s injuries and gave rise to HEB’s separate and distinct
liability in each case.” Id. at 531.
Likewise, in Maurice Pincoffs Co., supra., an insurance coverage dispute arose from the sale
of contaminated birdseed. Maurice Pincoffs Co., 447 F.2d at 205. Maurice Pincoffs Company
imported 110,000 pounds of canary seed from Argentina. Id. The birdseed was sold in the original
110 pound bags to eight different feed and grain dealers in Texas and Oklahoma. Id. The dealers,
in turn, sold the birdseed to bird owners. Id. The birdseed, apparently contaminated with a chemical
insecticide toxic to birds, killed many birds. Id. Litigation ensued which eventually led to a
declaratory judgment action. The central issue was whether there was one “occurrence” of liability
or more than one “occurrence” of liability under the insurance policy at issue. Id. at 206. The policy
defined “occurrence” as follows:
“Occurrence” means an accident, including injurious exposure to conditions, which
results, during the policy period, in bodily injury or property damage neither expected
nor intended from the standpoint of the insured.
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Id. In finding that there was more than one occurrence of liability, the court reasoned as follows:
We think that the ‘occurrence’ to which the policy must refer is the
occurrence of the events or incidents for which Pincoffs is liable. It was the sale of
the contaminated seed for which Pincoffs was liable. Although the cause of the
contamination is not clear, it seems apparent that Pincoffs received the seed in a
contaminated condition and did not itself contaminate the seed. However, it was not
the act of contamination which subjected Pincoffs to liability. If Pincoffs had
destroyed the seed before sale, for instance, there would be no occurrence at all for
which the insured would be liable. But once a sale was made there would be liability
for any resulting damages. It was the sale that created the exposure to ‘a condition
which resulted in property damage neither expected nor intended from the standpoint
of the insured,’ under the definition of the policy. And for each of the eight sales
made by Pincoffs, there was a new exposure and another occurrence.
Id.
Moreover, in Liberty Mutual Ins. Co. v. Rawls, 404 F.2d 880 (5th Cir. 1968), the single
question presented to the court was whether the insured had been involved in one accident or two
accidents. As the insured was proceeding north upon a public highway at a high rate of speed, he
collided with the left rear of a northbound automobile and knocked it off the highway to the right.
Id. The insured continued northerly, veering across the centerline and collided head-on with a
southbound automobile. Id. The impacts were separated by both time (two to five seconds) and
distance (30 to 300 feet apart). Id. In finding as a matter of law that there were two accidents, the
court reasoned as follows:
There were two distinct collisions, or more than a single sudden collision. There is
no evidence that the [insured’s] automobile went out of control after striking the rear
end of appellees’ automobile. On the contrary, the only reasonable inference is that
[the insured] had control of his vehicle after the initial collision.
Id. at 880.
Here, the Carrier Defendants argue that both the truck and the Expedition were exposed to
continuous or repeated exposure to the same condition, that is, Jozwiak crossing the median into the
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5The Carrier Defendants have provided the court with numerous newspaper articles which refer
to the events which transpired on September 20, 2004 as a single accident. The court notes, however,
that the authors of those articles were not construing the terms of the insurance policies herein.
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southbound lanes of U.S. Highway 75. The Carrier Defendants contend that the tractor-trailer
crossed into southbound traffic in one continuous event. The Carrier Defendants further argue that
the evidence does not indicate that the tractor-trailer stopped and then started again, nor does the
evidence indicate that Jozwiak lost control of the tractor-trailer and then subsequently regained
control. The Carrier Defendants apply the following reasoning:
There is no evidence showing that Jozwiak regained control between the two
collisions. In fact, as the entire accident occurred within seconds, . . ., it would have
been impossible for Jozwiak to regain control after hitting the Expedition and before
hitting the pickup truck.
Based on the distance between the cars in the southbound lanes prior to the
first collision, the rapid succession of the collisions and the absence of any evidence
showing that Jozwiak ever regained control of the tractor-trailer after the first
collision, . . ., this Court must find that there was only one accident / occurrence. . .
The collisions in this case resulted from the same cause – namely, a tractor-trailer
that struck two cars before coming to rest. Thus, under the terms of the insurance
policies at issue, there was a single accident / occurrence.
Def. Jt. Mtn. for Summ. Judg., p. 13.5
The court concludes that the Carrier Defendants’ arguments are over-reaching. First, as
likened to the facts of Maurice Pincoffs, if the tractor-trailer had crossed the median into the
southbound lanes of traffic but there were no oncoming vehicles, then the insureds would not be
subject to liability. Under the theory propounded by the court in Maurice Pincoffs, it was each
collision in the instant case that created the continuous or repeated exposure to the same, or
substantially the same, conditions, not the fact that the tractor-trailer crossed the median. Second,
it is clear that each collision occurred independently. Regardless of which collision occurred first,
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6In the Plaintiffs’ joint motion for summary judgment, the Plaintiffs raise the issue that the
Carrier Defendants appear to contend that the policy limits have been exhausted as a result of a
settlement reached with certain Plaintiffs. The court, however, denied the motion to approve that
settlement. Furthermore, the policies state that exhaustion occurs upon payment of any judgments or
settlements. Since the court has neither approved any settlements nor entered any judgments, the policy
limits have not yet been exhausted.
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the collision between the tractor-trailer and the truck did not cause or affect the collision between
the tractor-trailer and the Expedition. The truck’s collision with the tractor-trailer did not cause the
truck to spin out of control into the Expedition. Likewise, the Expedition’s collision with the tractortrailer
did not cause the Expedition to spin out of control into the truck. Similarly, neither the truck’s
nor the Expedition’s collision with the tractor-trailer caused the tractor-trailer to lose control and
collide with any other vehicle. In following the teachings of H.E. Butt Grocery Co., the court must
conclude that each individual collision with the tractor-trailer created the continuous or repeated
exposure to the same, or substantially the same, conditions. See H.E. Butt Grocery Co., 150 F.3d
at 533. Finally, as in Rawls, the collisions were separated by both time and distance. All of the
foregoing leads the court to the conclusion that, as a matter of law, the events which transpired on
September 20, 2004 resulted in two separate accidents or occurrences. The court reaches this
conclusion by looking to the events that caused the injuries and gave rise to the insureds’ liability,
not to the number of injuries or the number of victims. H.E. Butt Grocery Co., 150 F.3d at 535.6
CONCLUSION
Based on the foregoing, the court concludes as follows:
1. Defendants Continental Casualty Company, Lexington Insurance Company and
Illinois National Insurance Company’s joint motion for summary judgment and brief
in support (docket entry #74) is DENIED IN PART;
2. Plaintiffs’ joint motion for summary judgment and brief in support thereof (docket
entry #’s 91 & 94) is GRANTED IN PART;
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3. Contractor Plaintiffs’ joint motion to strike exhibits from Carriers’ joint response and
supplemental motion for summary judgment (docket entry #125) is GRANTED IN
PART;
4. Defendants Continental Casualty Company, Lexington Insurance Company and
Illinois National Insurance Company’s motion for leave to supplement the record
(docket entry #135) is DENIED;
5. Contractor Plaintiffs’ motion to strike affidavits of Cline Young and Patricia
Strickland and objections thereto (docket entry #147) and Contractor Plaintiffs’ first
amended motion to strike affidavits of Cline Young and Patricia Strickland and
objections thereto (docket entry #160) are GRANTED IN PART;
6. Contractor Plaintiffs’ motion to strike affidavit of Tina Jahn and objections thereto
(docket entry #149) is DENIED AS MOOT;
7. Plaintiffs’ motion for leave to supplement the record (docket entry #156) is
DENIED;
8. Contractor Plaintiffs’ motion to strike the response of Illinois National to the joinder
of Eagle Express Lines, Inc. in part of Plaintiffs’ summary judgment motion and to
strike the affidavit of Harrison Yoss and objections thereto (docket entry #162) is
DENIED AS MOOT;
9. Illinois National’s motion to substitute the affidavit of Harrison H. Yoss in
connection with its response to the joinder of Eagle Express Lines, Inc. in part of
Plaintiffs’ summary judgment motion (docket entry #175) is DENIED AS MOOT;
10. Continental Casualty Company’s motion for leave to file affidavit of Tina Jahn
(docket entry #189) is DENIED AS MOOT;
11. Plaintiffs’ motion for leave to file supplemental summary judgment evidence in
support of motion for summary judgment and response to motion for summary
judgment (docket entry #196) is DENIED; and
12. Contractor Plaintiffs’ motion to supplement Plaintiffs’ joint motion for summary
judgment (docket entry #199) is DENIED.
Case 4:05-cv-00315-RAS Document 232 Filed 03/28/2007 Page 20 of 20

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