Opinion ID: 7489
Heading Depth: 2
Heading Rank: 4

Heading: Apportionment of the Deductible

Text: 48 After determining, pursuant to Porter v. American Optical Corp., 641 F.2d 1128 (5th Cir.), cert. denied, 454 U.S. 1109, 102 S.Ct. 686, 70 L.Ed.2d 650 (1981), that Hartford was liable only for its time on the risk, the district court held that Lafarge's deductible under the Hartford policy should also be reduced. Although noting that the language of the policy was unambiguous, the district court held 49 [t]hat Hartford demands a full deductible when it has been found responsible for only a portion of Lafarge's defense costs simply does not seem to coincide with either the spirit behind the insurance contract between the parties, or this Court's previous Order which attempted to apportion the defense costs as equitably as possible. 50 The district court cited Clemtex, Inc. v. Southeastern Fidelity Insurance Co., 807 F.2d 1271 (5th Cir.1987), in support of its decision to reduce the deductible. 51 If the deductible clause truly were unambiguous, Texas law would require that the language be given its plain meaning. Clemtex, however, clearly supports the district court's decision to reduce the deductible when the insurer has been held liable for only a prorated share of defense costs. In Clemtex, the district court determined that the Forty-Eight Insulations proration rule should apply and thereby proportionately reduced each of Clemtex's insurers' liability for costs. We noted that [e]ach defendant, however, indemnifies Clemtex, under the Forty-Eight rule of apportionment, for only part of Clemtex's liability under a silicosis victim's claim. It follows that each insurer herein has been demanding a full deductible for a partial claim. The insurance policies do not clearly so provide. Id. at 1276-77. The Clemtex Court thus found the policy deductible provisions ambiguous and remanded to the district court to determine what the provisions meant. Id. at 1277. 52 This is exactly the case here. The policy provides that the deductible will apply to each occurrence; it is at best ambiguous as to what happens when the insurer is held liable for only part of a continuous occurrence. The district court therefore did not have to rely on equitable principles in order to reduce the deductible obligation; its decision is supported simply as a valid choice of one of at least two reasonable interpretations of the policy. It did not err in prorating the deductible.