COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 02-14-00130-CV

ILLINOIS UNION INSURANCE 

COMPANY

APPELLANT

V.

SABRE HOLDINGS 

CORPORATION, SITE 59.COM 

LLC, TRAVELOCITY.COM LP, 

TRAVELOCITY.COM LLC AND 

SABRE INC.

APPELLEES

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FROM THE 48TH DISTRICT COURT OF TARRANT COUNTY

TRIAL COURT NO. 048-252770-11

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MEMORANDUM OPINION1

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The question in this appeal is whether an insured properly invoked 

coverage for the reimbursement of defense costs under an excess insurance 

 1

See Tex. R. App. P. 47.4.
2

policy. After a partial summary judgment ruling that the insured did properly 

invoke coverage under the excess policy, the trial court rendered a final judgment 

in the insured’s favor. We affirm.

Background

Beginning in December 2004, appellees Sabre Holdings Corporation, Site 

59.com LLC, Travelocity.com LP, Travelocity.com LLC, and Sabre Inc.

(collectively, Sabre) were sued by various governmental entities for allegedly 

failing to fully remit hotel taxes collected from consumers. In March 2004, Sabre 

had obtained a primary insurance policy from American International Specialty 

Lines Insurance Company (“AISLIC”) and an excess policy from appellant Illinois 

Union Insurance Company; the policy period for both policies began March 15, 

2004 and ended March 15, 2005.

Sabre’s insurance broker notified AISLIC in writing of the first three suits 

on March 11, 2005. AISLIC acknowledged that its policy provided coverage for 

the suits and provided periodic payments totaling $15 million, the primary policy’s 

limit, for defense costs. On December 14, 2010, Sabre sent a letter to Illinois 

Union’s policy representative, ACE USA. In the letter, Sabre’s associate general 

counsel stated,

As you know, Illinois Union and its authorized claims 

representative, ACE USA (“Ace”), were previously notified, pursuant 

to the Policy, that aggregate limits of the [AISLIC] Underlying Policy 

could be exhausted within a year. To date, Illinois Union and Ace 

have not stated whether coverage has been accepted or rejected 

and whether Illinois Union will comply with its obligation to step in as 

the primary carrier once the Underlying Policy has been exhausted.
3

. . . It is anticipated that once the AISLIC policy is exhausted, 

Illinois Union will continue the defense of Sabre and provide Sabre 

with insurance benefits until the aggregate limits of the [excess] 

Policy have been exhausted.

Illinois Union subsequently denied coverage under the excess policy, contending 

that its policy is a “follow-form policy which means that it follows all of the terms 

and conditions of the primary policy. As such, this claim would have to have 

been reported to ACE during the same policy period as it was reported to” 

AISLIC.

On September 10, 2012, AISLIC notified Sabre that the limits of the 

primary policy had been fully exhausted. Sabre sued Illinois Union seeking a 

declaratory judgment that it was entitled to coverage for defense costs under the 

Illinois Union policy; it also sought attorney’s fees. Illinois Union answered, 

raising numerous affirmative defenses to coverage, including that Sabre did not 

timely report the claim. During discovery, the parties stipulated that Illinois 

Union’s only defense to Sabre’s allegation that Illinois Union has a duty to 

defend2 the ongoing tax-related suits against Sabre “is that Sabre did not report 

AISLIC Claim No. 656-000351 to Illinois Union during the period of the Illinois 

Union policy.”

Sabre filed a traditional motion for summary judgment seeking to have the 

policy construed as a matter of law. Illinois Union filed its own motion for 

 2

During this litigation, Sabre’s claim changed from seeking a continuation 

of its defense to a reimbursement for defense costs expended in defending the 

suits.
4

summary judgment but did not file any counterclaims. The trial court denied 

Illinois Union’s motion and granted Sabre’s; in the same order, the trial court 

overruled both Illinois Union’s and Sabre’s objections to the other’s summary 

judgment evidence.

After granting the summary judgment, the trial court allowed Sabre to 

amend its petition to include claims for breach of contract and violation of the 

Prompt Payment of Claims Act (PPA). Tex. Ins. Code Ann. §§ 542.051–.061 

(West 2009 & Supp. 2014). After granting the amendment, the trial court 

rendered a final judgment incorporating the declaratory judgment relief it granted 

in the summary judgment order and also awarding Sabre damages for breach of 

contract and violation of the PPA. Illinois Union challenges only the underlying 

summary judgment rulings upon which the final judgment is based.

Standard of Review

We review a summary judgment de novo. Travelers Ins. Co. v. Joachim, 

315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the 

light most favorable to the nonmovant, crediting evidence favorable to the 

nonmovant if reasonable jurors could and disregarding evidence contrary to the 

nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp

Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every 

reasonable inference and resolve any doubts in the nonmovant’s favor. 20801, 

Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A plaintiff is entitled to 

summary judgment on a cause of action if it conclusively proves all essential 
5

elements of the claim. See Tex. R. Civ. P. 166a(a), (c); MMP, Ltd. v. Jones, 710 

S.W.2d 59, 60 (Tex. 1986).

When both parties move for summary judgment and the trial court grants 

one motion and denies the other, the reviewing court should review both parties’ 

summary judgment evidence and determine all questions presented. Mann 

Frankfort, 289 S.W.3d at 848; see Myrad Props., Inc. v. Lasalle Bank Nat’l Ass’n, 

300 S.W.3d 746, 753 (Tex. 2009). The reviewing court should render the 

judgment that the trial court should have rendered. Mann Frankfort, 289 S.W.3d 

at 848.

Grounds for Summary Judgment

On appeal, Illinois Union challenges the summary judgment rulings for 

Sabre on which the remainder of the final judgment is based. Whether Sabre is 

entitled to recover on its breach of contract and PPA claims depends on whether 

it properly invoked coverage under Illinois Union’s policy.

An appellant must attack every ground upon which summary judgment 

could have been granted to obtain a reversal. Malooly Bros., Inc. v. Napier, 461 

S.W.2d 119, 121 (Tex. 1970); Columbia Lloyds Ins. Co. v. Mao, No. 02-10-

00063-CV, 2011 WL 1103814, at *7 (Tex. App.––Fort Worth Mar. 24, 2011, pet. 

denied) (mem. op.). Here, Sabre raised the following grounds in its summary 

judgment motion: (1) by its plain language, the excess policy does not require 

that notice be given until the primary policy’s limits are almost exhausted; it does 

not require that notice be given at the same time as notice is required under the 
6

primary policy; or (2) alternatively, the primary policy is only a claims-made, not 

claims-made-and-reported, policy and Illinois Union has not and cannot show

actual prejudice from the delay between the end of the policy period and the date 

Sabre gave notice. As relief, Sabre requested that the trial court

enter the requested declarations that: (1) notice was timely provided 

by Sabre to Illinois Union; and (2) Illinois Union is required to 

immediately assume the defense of AISLIC Claim No. 656-000351-

001[,] . . . [and grant] summary judgment on Illinois Union’s

affirmative defense of untimely notice because Illinois Union cannot, 

as a matter of law, prove it suffered prejudice as a result of any 

untimely notice.

Illinois Union’s issues on appeal are (1) whether its policy provided 

coverage on the same basis as the primary policy, which it contends is a claimsmade-and-reported policy and, if not, (2) whether any constructive notice from 

Sabre excuses its late reporting, or (3) whether Sabre is required to show actual 

prejudice from the late notice to defeat coverage. Because all of Sabre’s 

summary judgment grounds and requested relief involve the timeliness of its 

notice of claim and because Illinois Union addresses all of Sabre’s arguments 

regarding the timeliness of the claim in its issues on appeal, we conclude and 

hold that Illinois Union has challenged all possible grounds upon which the trial 

court could have granted Sabre’s motion for summary judgment.3

 3

Although Illinois Union did not directly challenge the damage awards for 

breach of contract and violations of the PPA awarded in the final judgment, if we 

determine that the trial court erred by denying Illinois Union’s summary judgment 

motion and granting Sabre’s, we must reverse the entire judgment because the 

trial court’s judgment on both of those claims is premised on the declaratory 
7

Notice Required Under Excess Policy

In its first issue, Illinois Union contends that the trial court erred by ruling 

for Sabre because its policy followed form to the primary policy, which is a 

claims-made-and-reported policy; thus, Illinois Union argues that Sabre was 

required to––but did not––notify both insurers no later than the end of the primary 

policy’s policy period or extended reporting period in order to invoke coverage 

under the excess policy.

Applicable Rules of Construction

Generally, courts construe insurance policies according to the same rules 

of construction that apply to contracts. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. 

v. Crocker, 246 S.W.3d 603, 606 (Tex. 2008); Robertson v. Home State Cnty.

Mut. Ins. Co., 348 S.W.3d 273, 277 (Tex. App.––Fort Worth 2011, pet. denied)

(en banc op. on reh’g). Enforcing the parties’ expressed intent is our primary 

concern. Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994) (op. on 

reh’g); Robertson, 348 S.W.3d at 277. The policy’s terms are given their ordinary 

and generally accepted meanings unless the policy shows that the words were 

meant in a technical or different sense. Gilbert Tex. Constr., L.P. v. Underwriters 

at Lloyd’s London, 327 S.W.3d 118, 126 (Tex. 2010) (op. on reh’g); Robertson,

348 S.W.3d at 277. If terms in the contract can be given a definite or certain 

legal meaning, they are not ambiguous, and the court will construe the contract 

 

judgment relief sought by Sabre in its motion for summary judgment and 

awarded by the trial court in its summary judgment order.
8

as a matter of law. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. CBI Indus., Inc., 

907 S.W.2d 517, 520 (Tex. 1995) (op. on reh’g); Robertson, 348 S.W.3d at 277. 

However, if a contract of insurance is susceptible to more than one reasonable 

interpretation and is, thus, ambiguous, we must resolve the uncertainty by 

adopting the construction that most favors the insured even if the construction 

urged by the insurer appears to be more reasonable or a more accurate 

reflection of the parties’ intent. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. 

Hudson Energy Co., 811 S.W.2d 552, 555 (Tex. 1991); Robertson, 348 S.W.3d 

at 277. An ambiguity does not exist simply because the parties interpret a policy 

differently. See Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex.

2003); Robertson, 348 S.W.3d at 277.

Texas courts follow the eight corners rule in determining an insurer’s duty 

to defend. Ewing Const. Co. v. Amerisure Ins. Co., 420 S.W.3d 30, 33 (Tex. 

2014). Under that rule, courts look to the facts alleged within the four corners of 

the pleadings, measure them against the language within the four corners of the 

insurance policy, and determine if the facts alleged present a matter that could 

potentially be covered by the insurance policy. Id. We generally do not look 

outside the pleadings and the policy. However, with respect to documents 

referred to in the policy to be construed, the supreme court has recently held,

[W]hile our inquiry must begin with the language in an insurance 

policy, it does not necessarily end there. In other words, we 

determine the scope of coverage from the language employed in the 

insurance policy, and if the policy directs us elsewhere, we will refer 

to an incorporated document to the extent required by the policy.
9

In re Deepwater Horizon, No. 13-0670, 2015 WL 674744, at *5 (Tex. Feb. 13, 

2015).

In interpreting the policy, we attempt to give a reasonable meaning to all 

provisions rather than interpret it so that one part is inexplicable or creates 

surplusage. Liberty Mut. Ins. Co. v. Am. Emp’rs Ins. Co., 556 S.W.2d 242, 245 

(Tex. 1997); United States Fire Ins. Co. v. Gnade, No. 10-03-00289-CV, 2005 

WL 552473, at *2 (Tex. App.––Waco Mar. 9, 2005, pet. denied) (mem. op.). 

Excess Policy’s Terms

Illinois Union argues (1) that its policy “follows form” to AISLIC’s primary 

policy and (2) that because AISLIC’s policy required Sabre to provide written 

notice of a claim before expiration of the policy period or extended reporting 

period to invoke coverage, Sabre was required to do the same under the excess 

policy to invoke coverage under that policy.

Some of the relevant terms of Illinois Union’s policy are as follows:

• In the declarations page, “UNLESS OTHERWISE PROVIDED IN THE 

FOLLOWED POLICY, THIS POLICY IS A CLAIMS MADE POLICY 

WHICH COVERS ONLY CLAIMS FIRST MADE AGAINST THE 

INSUREDS DURING THE POLICY PERIOD.” The Declarations page also 

defines the primary policy as the “Followed Policy”: “American 
10

International Specialty Lines Insurance Company Policy Number: 

00640972.”4

• Under the title, “INSURING CLAUSE,” the following:

In consideration of the payment of the premium and in reliance 

upon all statements made in the application including the information 

furnished in connection therewith, and subject to all terms,

definitions, conditions, exclusions and limitations of this policy, the 

Insurer agrees to provide insurance coverage to the Insureds in 

accordance with the terms, definitions, conditions, exclusions and 

limitations of the Followed Policy, except as otherwise provided 

herein.

This section was amended by a Non-Follow Form endorsement, as 

discussed in more detail below.

• In the Definitions section, “The terms ‘Claim’ and ‘Loss’ have the same 

meanings in this policy as are attributed to them in the Followed Policy.”

• In the section regarding any primary policies,

This policy is subject to the . . . same terms, definitions, 

conditions, exclusions and limitations (except . . . as otherwise 

provided herein) as are contained in or as may be added to the 

Followed Policy . . . . In no event shall this policy grant broader 

coverage than would be provided by any of the Underlying Policies.

• In the same section, “As a condition precedent to coverage under this 

policy, the Insureds shall give to the Insurer as soon as practicable written 

 4

An endorsement issued after the fact defines the Followed Policy as 

number 6409472 issued by American International Specialty Lines Insurance 

Company. The number on the primary policy is listed as 640-94-72. Therefore, 

the policy numbers in both the original Declarations page and endorsement 

appear to be referring to the same AISLIC policy.
11

notice and the full particulars of . . . the exhaustion of the aggregate limit of 

liability of any Underlying Policy.”

• Under the “GENERAL CONDITIONS” section, “Discovery Period Premium: 

If the Insureds elect a discovery period or extended reporting period 

(‘Discovery Period’) as set forth in the Followed Policy following the 

cancellation or non-renewal of this policy, the Insureds shall pay to the 

Insurer the additional premium set forth in Item 6 of the Declarations.”

• In the same section, “Notice: All notices under this policy shall be given as 

provided in the Followed Policy and shall be properly addressed to the 

appropriate party at the respective address as shown in the Declarations.”

• Also under the “GENERAL CONDITIONS” heading, “Claim Participation: 

The Insurer shall have the right, but not the duty, and shall be given the 

opportunity to effectively associate with the Insureds in the investigation, 

settlement or defense of any Claim even if the Underlying Limit has not 

been exhausted.”

• And, finally, also under the same section, “Changes and Assignment: 

Notice to or knowledge possessed by any person shall not effect waiver or 

change in any part of this policy or estop the Insurer from asserting any 

right under the terms of this policy.”
12

Primary Policy’s Terms

Illinois Union argues that its policy, especially the notice section,

incorporates all of the notice provisions in the primary policy. The relevant terms 

of that policy are set forth below:

• On the Declarations page, “THIS POLICY CONTAINS ONE OR MORE 

COVERAGE MODULES. CERTAIN LIABILITY COVERAGE PARTS OF 

THIS POLICY ARE LIMITED TO LIABILITY FOR CLAIMS THAT ARE 

FIRST MADE AGAINST THE INSUREDS DURING THE POLICY PERIOD 

AND REPORTED IN WRITING TO THE INSURER AS REQUIRED.”

• In the Introduction of the Insuring Agreements section,

For Coverages A and B, and all other claims made and 

reported coverage in this policy, solely with respect to claims first 

made against an insured and reported to us during the policy period 

or any applicable extended reporting period, and subject to the other 

terms, conditions, exclusions and other limitations of this policy, this 

policy affords the following coverage[.]

Coverage is then defined and explained in various coverage “modules.”

• In the Definitions section, “‘Claim’ means . . . (1) a written or oral demand 

for money, services, non-monetary relief or injunctive relief; or (2) a suit.”

• “‘Loss’ means the total sum of damages and claim expenses.” The 

definition of “Claim expenses” includes defense costs.

• Under the “NOTICE AND AUTHORITY” section, “Notice in connection with 

this policy shall be given in writing to us (i) in the case of claims, as 

provided in Paragraph 7(b) . . . .”
13

• In section 7(b)(1), “With respect to claims or circumstances, notice and all 

other information and documentation required to be provided under this 

policy should be directed to us c/o AIG Technical Services, Inc., 

Professional Liability Division, at our address indicated In the Declarations.

To be effective, such notice must reference this policy.”

• In section 7(b)(2), as amended by endorsement #5,

For any and all coverage under this policy afforded on a 

claims made and reported basis:

(a) before coverage will apply, an insured must notify us in 

writing of a claim made against an insured as soon as practicable

after notice of such claim is reported to any personnel in your office 

of the General Counsel, Office of the Chief Financial Officer or risk 

management department;

(b) if an insured has notified us in writing of a claim pursuant 

to Subparagraph 7(b)(2)(a) above, then any claim which is 

subsequently made against an insured and reported to the insurer 

alleging, arising out of, based upon or attributable to the facts 

alleged in the claim for which such notice has been given, or alleging 

any wrongful act which is the same as or related to any wrongful act 

alleged in the claim of which such notice has been given, shall be 

considered related to the first claim and made at the time such 

notice was given; and

(c) if during the policy period or during an applicable extended 

reporting period an insured shall become aware of any 

circumstances which may reasonably be expected to give rise to a 

claim being made against an insured for a wrongful act that occurs

prior to the end of the policy period, and, during the policy period or 

any applicable extended reporting period, an insured gives written 

notice to us of (i) such circumstances, (ii) the wrongful acts

allegations anticipated and (iii) the reasons for anticipating such a 

claim, with full particulars as to dates, persons and entities involved, 

then any claim that is subsequently made against an insured arising 

out of such wrongful act or the same wrongful act or series of 

continuous, repeated or related wrongful acts, shall be treated as a 
14

claim made against such insured and reported to us at the time such 

notice of such circumstances was given.

Excess Policy Does Not Follow Form to Reporting Requirements of Primary

Illinois Union argues that the section of its policy that states, “All notices 

under this policy shall be given as provided in the Followed Policy and shall be 

properly addressed to the appropriate party at the respective address as shown 

in the Declarations,” means that Sabre was required to provide notice of the 

underlying hotel-tax suits against it to Illinois Union in addition to AISLIC before 

the expiration of the primary policy’s reporting period in order for the claim to be 

covered by the excess policy.

According to Illinois Union, the analysis is simple: the primary policy is a 

claims-made-and-reported policy, and the excess policy follows form to the 

primary policy; therefore, coverage under the excess policy is also on a claimsmade-and-reported basis, especially given the notice provision in section 7(a) of 

the excess policy. However, interpretation of the excess policy is more 

problematic due to the Non-Follow Form endorsement that was added. That 

endorsement amended the Insuring clause so that it states, in full, as follows:

I. INSURING CLAUSE

In consideration of the payment of the premium and in reliance upon 

all statements made in the application including the information 

furnished in connection therewith, and subject to all terms, 

definitions, conditions, exclusions and limitations of this policy, the 

Insurer agrees to provide insurance coverage to the insureds in 

accordance with the terms, definitions, conditions, exclusions and 

limitations of the Followed Policy, except as otherwise provided 

herein. However, the Insurer shall not provide Insurance coverage 
15

to the Insureds in accordance with the terms and conditions, 

including those pertaining to Guaranteed Renewal as set forth in the 

endorsement of the American International Specialty Lines 

Insurance Company, Policy Number 006409472, as that coverage is 

provided under the American International Specialty Lines Insurance 

Company’s Policy. [Bold and italics emphasis added.]

We construe policies and their endorsements together unless they are so 

much in conflict that they cannot be reconciled. Plantation Pipe Line Co. v. 

Highlands Ins. Co., 444 S.W.3d 307, 311 (Tex. App.––Eastland 2014, pet. filed); 

Mesa Operating Co. v. Cal. Union Ins. Co., 986 S.W.2d 749, 754 (Tex. App.––

Dallas 1999, pet. denied). The language added by the endorsement at first 

glance appears to render the insuring clause ambiguous. It seemingly 

contradicts itself, stating that the excess policy follows form to the primary policy, 

yet does not follow form to the primary policy. Thus, we must look further to 

determine if these two sentences can be reconciled so as not to create a nullity.

The clause could be read as referring to two different policies: the excess 

policy follows form to policy number 6409472 but not policy number 006409472. 

However, the only difference in the numbers is the addition of the zeroes at the 

beginning. And item 8 on the Declarations page, “Schedule of Underlying 

Policies,” which was not amended by endorsement, lists the primary policy as 

“American International Specialty Lines Insurance Company 006409472.” 

Accordingly, we do not believe this interpretation is reasonable. See also, supra, 

note 4.
16

Upon close inspection of the two parts of the clause together, it can be 

discerned that three key words are not included in the nonfollow form language 

that are included in the follow form language: definitions, exclusions, and 

limitations. Thus, the insuring clause as amended by the endorsement could be 

reasonably interpreted to mean that the excess policy follows form to the 

definitions, exclusions, and limitations of the primary policy but not the terms and 

conditions of the primary policy.5

 Because the reporting requirements in the 

primary policy are more properly characterized as conditions rather than 

definitions, exclusions, or limitations, the amended insuring clause can be read 

as not incorporating the notice conditions of the primary policy. See Love of God 

Holiness Temple Church v. Union Std. Ins. Co., 860 S.W.2d 179, 180 (Tex. 

App.––Texarkana 1993, writ denied).

Although this interpretation appears to conflict with other sections of the 

policy,6 it is the only reasonable way to resolve the apparent conflict in the two 

 5

This interpretation would still provide coverage under the excess policy, 

which expressly incorporates the definitions of “Claim” and “Loss” in the primary 

policy; those definitions, along with other definitions incorporated within them, 

help define the scope of coverage in the primary policy.

6

For instance, in the “UNDERLYING INSURANCE” section, the excess 

policy states that it is “subject to . . . the same terms, definitions, conditions, 

exclusions and limitations (except as regards the premium, the limits of liability, 

the policy period and except as otherwise provided herein) as are contained in or 

may be added to the Following Policy . . . . In no event shall this policy grant 

broader coverage than would be provided by any of the Underlying Policies.” 

Additionally, the Discovery Reporting Period and claim participation sections 

appear to contemplate that Illinois Union would be given notice of claims within 

the primary policy’s reporting period. 
17

sentences of the clause. See Fiess v. State Farm Lloyds, 202 S.W.3d 744, 751 

(Tex. 2006) (construing seemingly conflicting parts of same clause to effect 

reasonable result). Accordingly, we conclude and hold that the excess policy, 

regardless of any apparent intent between the parties, does not follow form to the

reporting requirements in the primary policy. We must therefore look to the 

notice provision in the excess policy itself, which Illinois Union also contends 

incorporates the reporting requirements in the primary policy.

Excess Policy’s Notice Provision Does Not Incorporate Primary’s Reporting 

Requirements

The excess policy contains a stand-alone notice provision, which states, 

“Notice: All notices under this policy shall be given as provided in the Followed 

Policy and shall be properly addressed to the appropriate party at the respective 

address as shown in the Declarations.” [Emphasis added.] Only two provisions 

in the excess policy require the giving of notice:

C. If during the Policy Period or any Discovery Period the terms, 

definitions, conditions, exclusions or limitations of the Followed 

Policy are changed in any manner, the Insureds shall as a condition

precedent to coverage under this policy give to the Insurer written 

notice of the full particulars thereof as soon as practicable but in no 

event later than 30 days following the effective date of such change. 

This policy shall become subject to any such changes upon the 

effective date of the changes in the Followed Policy, provided that 

the Insureds shall pay any additional premium reasonably required 

by the Insurer for such changes.

[the following paragraph is added, not substituted or replaced, by 

endorsement number 5]

If the terms, definitions, conditions, exclusion or limitations of the 

Underlying Policies are changed in any manner during the Policy 
18

Period of this policy, or differ in any respect from the binders for such

Underlying Policies:

1. It is a condition precedent to coverage under this policy 

that the Insureds give to the Insurer written notice as 

soon as practicable of the full particulars thereof. If 

such written notice is not provided, such changes shall 

not apply to this Policy. If such written notice is 

provided,

2. Such changes shall apply to this policy upon the 

effective date of the changes to the Underlying 

Policy(ies) only if the Insureds pay any reasonable 

additional premium required by the Insurer.

D. As a condition precedent to coverage under this policy, the Insureds 

shall give to the Insurer as soon as practicable written notice and the 

full particulars of (i) the exhaustion of the aggregate limit of liability of 

any Underlying Policy, (ii) any Underlying Policy not being 

maintained in full effect during the Policy Period, or (iii) an insurer of 

any Underlying Policy becoming subject to a receivership, 

liquidation, dissolution, rehabilitation or similar proceeding or being 

taken over by any regulatory authority.

To construe both of these provisions as requiring concurrent notice of such 

circumstances to AISLIC would not be reasonable because these specific 

sections deal with circumstances of which the primary insurer would already be 

aware: changes to its policy, receivership, and exhaustion of the underlying 

limits. Section C is not at issue here because there is no evidence that any 

changes were made to the primary policy that required notice. In addition, 

subsections (ii) and (iii) of Section D were not triggered. The only notice 

requirement under section D triggered in this case is under subsection (i) 

regarding exhaustion of the primary policy’s limits. There is no corresponding 

notice provision in the primary policy.
19

Sabre argued in the trial court, and argues on appeal, that the notice 

provisions in section C and D are fact-specific provisions which, according to the 

rules of construction of insurance policies, control over more general provisions 

like the one Illinois Union contends incorporates the claims-made-and-reported 

notice provisions of the primary policy. We agree that Sabre’s interpretation is 

reasonable. See El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 

802, 815 (Tex. 2012) (“[W]e have long treated specific provisions as exceptions 

to general provisions.”); Tarrant Cnty. Ice Sports, Inc. v. Equitable Gen. Life Ins. 

Co. of Okla., 662 S.W.2d 129, 132 (Tex. App.––Fort Worth 1983, writ ref’d, 

n.r.e.). The general notice provision in the excess policy requiring that notices 

under the excess policy be given as provided in the primary policy could not 

apply to the specific provision regarding exhaustion of limits when there is no 

corresponding provision in the primary policy. See Westchester Fire Ins. Co. v. 

Stewart & Stevenson Servs., Inc., 31 S.W.3d 654, 658–59 (Tex. App.––Houston 

[1st Dist.] 2000, pet. denied) (looking to entire excess policy in determining that 

some parts followed form to primary policy and some did not).

Therefore, we overrule Illinois Union’s first issue. Because the remainder 

of its issues are contingent upon this court’s sustaining its first issue, we need not 

address the remaining issues. See Tex. R. App. P. 47.1.
20

Conclusion

Having overruled Illinois Union’s dispositive issue, we affirm the trial court’s 

judgment.

/s/ Terrie Livingston

TERRIE LIVINGSTON

CHIEF JUSTICE

PANEL: LIVINGSTON, C.J.; DAUPHINOT and MEIER, JJ.

DELIVERED: June 25, 2015