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By Kevin McGillicuddy - Parker & Associates

Claims Software

COURT OF APPEALS INTERPRETS TERM “OCCUPYING” IN UIM POLICY MCKIDDY v. TRINITY LLOYD’S INSURANCE COMPANY, 155 S.W.3d 307 (Tex.App.¯Dallas 2004, review denied) FACTS – Jeffrey McKiddy was a passenger in a car owned by Eddie Deen and Company, Inc. After that vehicle slid off an icy road, McKiddy exited the vehicle and was standing near it when another vehicle, driven by Joe Smith, also skidded off the road. This vehicle struck McKiddy. McKiddy made claim against Smith and recovered the policy limits on that vehicle. He then sought UIM coverage under the Deen policy, issued by Trinity. Trinity denied coverage on the basis that McKiddy was not “occupying” the Deen vehicle at the time of the accident. The policy defines an insured as “anyone…occupying a covered auto,” and “occupying” is defined as “in, upon, getting in, on, out or off.” CASE HISTORY – McKiddy brought a declaratory judgment action against Trinity seeing judgment that he was a “covered” person. Trinity moved for summary judgment, asserting that there was no evidence that McKiddy was ”occupying” the vehicle. The trial court granted this motion. HOLDING – McKiddy appealed the finding that he was not occupying the vehicle. The court of appeals affirms, holding that McKiddy did not prove he was in contact with, or even next to, the Deen vehicle when struck. McKiddy also argued that the term “getting” modified only “in” and does not modify the terms “on,” “out” or “off.” In other words, McKiddy argued that he could be fully “out” of the vehicle and still “occupying” it. The court of appeals rejects this argument, holding that prior cases have looked at whether there was a causal connection between the incident causing the injury and the covered vehicle when construing the “getting in, on, out or off” language of the policy. Here, the court finds that there was no causal connection between McKiddy’s injuries and the Deen vehicle. The only evidence to be considered was McKiddy’s deposition testimony that he was no more than 10 feet from it, and Smith’s deposition testimony that he could not swear where McKiddy was when the accident occurred. McKiddy also testified that he was walking toward another vehicle owned by Deen when he was struck, and there was no evidence showing how long he had been out of the covered vehicle when he was struck. Therefore, there was no evidence showing his injuries were related to any impact with the Deen vehicle. The court also rejects McKiddy’s final argument that the term “occupying” is ambiguous and should be construed in favor of coverage, holding that the term is not ambiguous as applied in other Texas cases. SIGNIFICANCE – The decisive point in this case seems to be the lack of any proof of a causal connection between the covered vehicle and McKiddy’s injuries. The court seems to leave open the possibility that if McKiddy had been walking toward or if he had been very near the covered vehicle, or if the collision had occurred immediately after he had exited the vehicle, that there would be coverage, but here McKiddy had no such proof. COURT OF APPEALS FINDS NO HOMEOWNER NEGLIGENCE IN ASSUALT SPEARS v. COFFEE, 153 S.W.3d 103 (Tex.App.¯San Antonio 2004, no pet.) FACTS – While spending time in the home of Darrell and Jennifer Coffee and their daughter Katherine during the summer of 2000, Michael Spears was assaulted by Billy Corke, another teenager who was also present as a guest in the Coffee’s home. At the time of the assault, Mrs. Coffee was in her front yard and Mr. Coffee was out of town. After the assault, the Spears called the police and Billy was arrested and later convicted of criminal assault. Both Michael and Billy were frequent guests in the Coffee home, where they and other teenagers would gather to watch television, play pool, swim and play water games, such as “chicken.” Billy was there three to five times a week, and prior to the incident had always been well behaved in the Coffee home, with one exception. In that instance, he admitted to writing the word “wicked” on the Coffee’s table in pencil. When Mrs. Coffee asked him to clean the writing off, he did so. Billy and Michael had never been involved in any physical confrontation. On the day of the incident, when Billy arrived at the home he spoke to Mrs. Coffee and she described his demeanor as “just fine.” Katherine described him as being a “little upset” because of girlfriend problems the prior week, but that he “got fine” within a few minutes after his arrival. CASE HISTORY – The Spears sued Billy, his parents and the Coffees, alleging negligence and other claims. The Coffees moved for summary judgment on the grounds that they owed no duty to Michael, and even if they did, that Billy’s intervening criminal conduct was a superseding cause of Michael’s injuries. The trial court granted summary judgment without stating its grounds. The Spears’ claims against the Coffees were severed and a take-nothing judgment was entered in their favor. HOLDING – The Spears appealed, arguing that the Coffees owed Michael a general duty, and more specifically, a duty as owners and occupiers of the property, not to act negligently toward him. They asserted that the Coffees violated a duty to protect him from foreseeable risk of injury by failing to adequately supervise Billy and the other teenagers who were present in their home. Alternatively, they argued that the Coffees were aware that Billy had behavioral problems and violent tendencies and created a dangerous situation, as premises owners, by allowing Billy to remain unsupervised in their home and that they did nothing to prevent the injuries. The court of appeals assumes, without deciding, that the Coffees had a general duty to supervise the teenagers in their home, but determines that the Spears did not raise a fact issue on proximate cause sufficient to defeat the Coffee’s entitlement to summary judgment. The components of proximate cause are cause in fact and foreseeability. “Cause in fact” means the act or omission was a substantial factor in bringing about the injury, and without it, the injury would not have occurred. Foreseeability requires that a person of ordinary intelligence should have anticipated the danger created by a negligent act or omission. Third-party criminal conduct is generally a superseding cause, unless the criminal conduct itself is a foreseeable result of the negligence. The courts consider a number of factors in deciding whether an intervening force rises to the level of a superseding cause: (1) whether the intervening force brings about a harm different in kind from what would otherwise have resulted from the negligence, (2) whether the intervening force or its consequences appear to be extraordinary rather than normal in view of the circumstances at the time, (3) whether the intervening force operated independently of the situation caused by the negligence or is not a normal result of the situation, (4) whether the intervening force is due to a third person’s act or omission, (5) whether the intervening force is due to the act of a third person that is wrongful and subjects the third person to liability to the injured person, and (6) the degree of culpability of the wrongful act of the third person that sets the intervening force in motion. In shorthand, to be a superseding cause, the intervening force must not be ordinarily or reasonably foreseeable. When a party proves that the injury was caused by a criminal act of a third person that is a superseding cause, the burden shifts back to the plaintiff to present evidence that the criminal conduct was foreseeable. The court of appeals writes that the evidence showed that Billy’s criminal act was extraordinary and not the result of normal teenage horseplay or roughhousing. Therefore, the Coffees satisfied the first three tests above to prove superseding cause. The Coffees satisfied the remaining factors with their proof that Billy’s actions were clearly wrongful and that he was found criminally liable. By proving superseding cause, the Coffees also negated the ordinary foreseeability element of proximate cause, and there was no proof that the Coffees were aware of some indication at the time of the assault that such a crime would be committed. SIGNIFICANCE – Had Billy engaged in similar acts prior to this assault, and if the Coffees had been aware of the same, then the Spears would likely have survived the summary judgment motion, however here the Coffees had no reason to anticipate Billy’s criminal actions and therefore the Spears could not overcome the finding of superseding cause. COURT OF APPEALS RULES ON TIMELINESS OF APPEAL FROM TWCC TRINITY UNIVERSAL INSURANCE COMPANY v. DAY, 155 S.W.3d 337 (Tex.App.¯El Paso 2004, review denied) FACTS – Rebecca Day was injured on the job in 1997 and Trinity Universal covered her employer for workers’ compensation. Trinity accepted her claim but disputed her entitlement to SIBs. The TWCC held a CCH on her entitlement and on July 24, 2002 mailed the Decision and Order to Trinity’s attorney. Trinity’s attorney actually received the Decision and Order on July 26, 2004. On July 24, 2002, Trinity’s Austin representative signed for the Decision and Order and stamped it as having been received that day. The carrier filed its request for review with the TWCC’s appeals panel on August 15, 2002. The appeals panel found that this was untimely and therefore found that the hearing officer’s Decision and Order was final. CASE HISTORY – Trinity filed, and the TWCC intervened by filing a plea to the jurisdiction. The trial court found that Trinity’s request for review had not been timely filed and dismissed for lack of jurisdiction. The trial court found that Trinity’s deadline for filing the request for review was August 14, 2002. HOLDING – Trinity appealed, arguing that its request for review was timely filed. The court of appeals looks to TWCC Rule 102.5(d), which provides: For purposes of determining the date of receipt for those written communications sent by the Commission which require the recipient to perform an action by a specific date after receipt, unless the great weight of evidence indicates otherwise, the Commission shall deem the received date to be five days after the date mailed; the first working day after the date the written communication was placed in a carrier's Austin representative box located at the Commission’s main office in Austin as indicated by the commission's datestamp; or the date faxed or electronically transmitted. Since the Decision and Order was placed in the carrier’s box at the TWCC on July 24, 2002 (a Wednesday), the court of appeals accepts Trinity’s argument that the deemed date of receipt was July 25, 2002 and holds that Trinity’s request for review was timely. The court rejects the TWCC’s and Ms. Day’s argument that Trinity had actual notice on July 24, 2002 and that therefore the “deemed date” provision was inapplicable. To hold otherwise, writes the court, would be to “eviscerate the deemed receipt date.” The court does not find that proof of actual receipt on July 24, 2002 amounted to “the great weight of evidence” to overcome the deemed date provision of Rule 102.5. SIGNIFICANCE – The court of appeals’ reasoning that proof of the actual date of receipt does not trump a deemed date of receipt is pretty remarkable. It is hard to imagine what sort evidence other than the admitted actual receipt date could amount to the “great weight” of evidence so as to overcome the deemed received date as described in Rule 102.5. Note that at the time these events occurred, the 15-day deadline did not include weekends and holidays, as provided in §410.202 of the Texas Labor Code. Although the court did not address this provision, if weekends and holidays are not counted, the final day for filing a request for review was August 15, 2002, the day it was actually filed, so the court finds that it was timely. In addition, at the time the events in this case took place, TWCC Rule 143.3, which sets out the deadline for filing a request for review, did not contain any language defining the date of receipt of a Decision and Order. Therefore, the court looked to the general provision of Rule 102.5. Since that time, Rule 143.3 has been amended to include essentially the same provisions as contained in Rule 102.5(d), so this opinion would likely apply to current Rule 143.3 as well. Submitted by:
J.T. Parker & Associates, L.L.C.
1341 W. Mockingbird Ln., Suite 300W
Dallas, TX 75247
214.631.3700 Fax

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