Opinion ID: 11670
Heading Depth: 2
Heading Rank: 2

Heading: Legal Standards for Construing Bonds

Text: 12 We look to state law for rules governing contract interpretation. See Clardy Mfg. Co. v. Marine Midland Bus. Loans, Inc., 88 F.3d 347, 352 (5th Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 740, 136 L.Ed.2d 679 (1997). The applicable state law in this case is that of Texas. 13 An insurance policy is a contract and is therefore subject to rules of contract interpretation. See Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex.1994). Under Texas law, blanket bonds are to be construed in the same manner as insurance policies. See Abilene Sav. Ass'n v. Westchester Fire Ins. Co., 461 F.2d 557, 559 (5th Cir.1972)(construing Texas law); see also Great Am. Ins. Co. v. Langdeau, 379 S.W.2d 62, 65 (Tex.1964)(finding that fidelity bonds should be construed under the liberal rules applicable to insurance contracts). 14 If an insurance contract contains ambiguous language, that ambiguity must be resolved in favor of the insured, if the insured presents a reasonable interpretation. See Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734, 737 (Tex.1990). However, when a clause is clear and unambiguous, this rule does not apply. See Puckett v. U.S. Fire Ins. Co., 678 S.W.2d 936, 938 (Tex.1984). When an insurance provision is capable of only one reasonable interpretation, we need not resort to rules for interpreting ambiguous contracts. See Upshaw v. Trinity Co., 842 S.W.2d 631, 633 (Tex.1992). 15 In interpreting an insurance policy, the court's primary concern is to give effect to the written expression of the parties' intent. Union Pac. Resources Co. v. Aetna Cas. & Sur. Co., 894 S.W.2d 401, 405 (Tex.App.--Fort Worth 1994, writ denied). When there is no ambiguity in the language, courts must give the words used their plain, ordinary, and generally accepted meaning unless the policy shows that the words were meant in a technical or different sense. See Canutillo I.S.D. v. National Union Fire Ins. Co., 99 F.3d 695, 700 (5th Cir.1996).