Opinion ID: 3008468
Heading Depth: 1
Heading Rank: 4

Heading: “. if the loss would otherwise be covered under this policy”

Text: All members of the Court affirm Lambros and refuse to construe the ensuing-loss clause outside its context. But the dissent would hold that the ensuing-loss clause cancels the mold exclusion of which it is a part, because its last phrase (“if the loss would otherwise be covered under this policy”) requires us to disregard paragraphs 1(f), 1(g), and 1(h) of the policy. Clearly, removing the 22 exclusions in those paragraphs would create mold coverage, but it would also create a different policy. To qualify as an ensuing loss, mold must “otherwise be covered under this policy.” Here, the first sentence of 1(f) excludes mold, and the second sentence extends coverage to ensuing losses caused by water damage. If neither sentence said anything more, the two would conflict whenever water damage (covered) caused mold (excluded). But 1(f) resolves this potential conflict by limiting the second clause — the ensuing-loss clause — whenever it conflicts with anything else in the policy. By placing this proviso where it is, the only reasonable construction is that the second sentence (covering ensuing losses) must yield to the first (excluding mold), not the other way around. This does not, as the dissent suggests, delete “otherwise” from paragraph 1(f). “Otherwise” when used as an adverb means “in a different way or manner; in different circumstances”; [30] it does not mean we should disregard the immediately preceding sentence. Assume, for example, that the flight schedule of a certain airline stated: We do not fly from Dallas to Denver. We do fly from Dallas to all cities otherwise listed in this flight schedule. No reasonable reader would think “otherwise” means we should disregard the preceding sentence and assume the airline really does fly from Dallas to Denver. The dissent would rewrite the ensuing-loss clause here to provide coverage “if the loss would otherwise be covered under this policy not counting the exclusions in paragraph 1(f), 1(g), and (h) .” But those exclusions are part of the policy; a policy without exclusions for rust, rot, mold, wear and tear, and termites is simply a different policy. This would be policy “construction” in the architectural rather than the legal sense. Moreover, the upshot of the dissent’s construction would be that the more risks excluded in a policy containing an ensuing-loss clause, the broader coverage would become. Paragraphs 1(f), 1(g), and 1(h) of the HO-B policy contain roughly 22 exclusions, and each has an ensuing-loss clause listing 3 intervening risks (building collapse, water damage, and glass breakage). According to the dissent, if any one of the 22 exclusions combines with any one of the 3 intervening risks to cause any of the 22 excluded losses, the loss is no longer excluded. This would mean there are only about 1,452 possible ways to turn exclusions into coverage. [31] Thus, the more exclusions that are added, the broader coverage gets. This cannot possibly be a reasonable construction. Finally, a “yes” answer to the certified question today would give ensuing-loss clauses in Texas a different meaning from what they have in most other American jurisdictions. These clauses are common in all-risk policies, and while rarely identical they share more similarities than differences. [32] Accordingly, we should strive for uniformity in construing them. [33] But the Fiess’s argument that an ensuing-loss clause can make an excluded loss reappear as a covered loss has been rejected by courts in Alabama, [34] Arizona, [35] California, [36] Florida, [37] Illinois, [38] Massachusetts, [39] Minnesota, [40] New York, [41] North Carolina, [42] New Hampshire, [43] Ohio, [44] Pennsylvania, [45] Vermont, [46] Washington, [47] and Wisconsin. [48] There would have to be something very peculiar about the Texas ensuing-loss clause for its results to be so very different from similar clauses used everywhere else.