Opinion ID: 895236
Heading Depth: 1
Heading Rank: 5

Heading: Balandran

Text: Page contends our decision in Balandran controls interpretation of her HO-B policy, and the court of appeals agreed. There, the Balandrans sued to recover damage to their dwelling caused by foundation movement resulting from an underground plumbing leak. 972 S.W.2d at 739. We examined exclusion 1.h concerning foundation damage in light of the exclusion repeal provision. Id. For two reasons, we concluded that the policy's language and structure were subject to different, but reasonable, interpretations and thus created an ambiguity. Id. at 741. First, we noted that the repeal of exclusion 1.h expressly applied to loss caused by a plumbing leak, and was not by its terms limited to personal property loss. Id. That the repeal provision is contained in Coverage B, we said, did not necessarily limit its application to Coverage B, as the provision could have been placed where it was simply because that is the only place in the policy that the `accidental discharge' risk is specifically described. Id. Second, we determined that the insurer's construction of the policy would render part of the policy language meaningless. Id. If the repeal provision applied only to personal property under Coverage B, exclusion 1.h would mean nothing as that exclusion, on its face, only applies to damage to the dwelling under Coverage A. Id. Finally, we noted the reasonableness of the Balandrans' interpretation in light of the circumstances surrounding the policy's drafting, which indicated that placement of the exclusion repeal provision in Coverage B was intended merely to simplify the policy and not to restrict then-available coverage for foundation damage resulting from a plumbing leak. Id. at 742. Concluding that both the insurer's and the insured's interpretation of the policy language were reasonable, we held that the policy was ambiguous. Id. Because the ambiguity involved an exclusionary provision of an insurance policy, we adopted the construction urged by the Balandrans and held that the policy provided coverage for the damage to their foundation. Id. at 742. The court of appeals, broadly applying Balandran to this case, held that the entire exclusion repeal provision is ambiguous even though our Balandran analysis was confined to the foundation damage exclusion contained in 1.h. 259 S.W.3d at 263. Page contends the court of appeals' sweeping application was proper because our analysis was based, at least in part, upon the repeal provision's reference to loss rather than personal property loss, and on the drafters' intent that there be no substantive change in coverage under the redrafted policy. As to the latter point, our decision in Fiess made clear that an ambiguity may not be created by extrinsic evidence concerning the prior HO-B policy. 202 S.W.3d at 747. Moreover, there is nothing to indicate that the prior version of the policy unambiguously covered mold damage resulting from plumbing leaks as it did for foundation damage. Balandran, 972 S.W.2d at 742. As to the former point, that the exclusion repeal provision expressly applies to loss caused by a plumbing leak and is not by its terms limited to personal property loss, we are not persuaded that this policy wording, in isolation, can bear the weight of rendering the entire repeal provision ambiguous. Instead, we must examine the policy language in light of the particular policy exclusion in issue, reading all parts of the policy together and giving meaning to every sentence, clause, and word to avoid rendering any portion inoperative. Fiess, 202 S.W.3d at 748 (citing Balandran, 972 S.W.2d at 741; Liberty Mut. Ins. Co. v. Am. Emp. Ins. Co., 556 S.W.2d 242, 245 (Tex.1977); Pan Am. Life Ins. Co. v. Andrews, 161 Tex. 391, 340 S.W.2d 787, 790 (1960)).