Opinion ID: 63283
Heading Depth: 3
Heading Rank: 1

Heading: Care, Custody or Control

Text: The Policy excludes: `Property damage' to: ... (4) Personal property in care, custody or control of the insured. In general, only the area being repaired by an insured is considered under Texas law to be in that insured's care, custody or control. See Goswick v. Employers' Cas. Co., 440 S.W.2d 287, 290-91 (Tex.1969) (holding that insured repairing defective pump on a well was in control of the pump, but not the well); see also SnyderGeneral Corp. v. Century Indem. Co., 113 F.3d 536, 539 (5th Cir.1997) (As [the insurer] failed to establish that [the insured] totally and physically used or controlled the entire pool of groundwater at the Wilmington facility, it was not entitled to summary judgment.); Nat'l Standard Ins. Co. v. Wilson Indus., Inc., 556 S.W.2d 838, 839 (Tex.Civ.App.  Houston [14th Dist.] 1997, writ ref'd n.r.e.) (although the ship in question was being used by the insured for the purpose of accomplishing the work it was not in the care, custody or control of the insured). Here, therefore, even if one could argue that the IFE/CMS system or electrical system generally was in Gore's control during the work being performed, it does not follow that the entire Aircraft was. However, if the Statement of Claim alleged that the Aircraft was in the care, custody or control of Gore at the time of the alleged wrongdoing, the exclusion would apply. Hartford contends that is the exact situation presented here. At first blush, Hartford's position seems correct. The bailment portion of the Statement of Claim (which was not incorporated by reference in the negligence sections) describes Orient's entrustment of the Aircraft to Gore's care and sues for breach of bailment. However, as pointed out by Gore, the Statement of Claim does not indicate that the Aircraft was in Gore's care at the time of the alleged wrongdoing. Indeed, the Statement of Claim contends that Gore breached the following portion of its contract: All Services shall be performed by [Gore] at its facility located in San Antonio, Texas. This allegation, together with the lack of discussion about in whose hands the Aircraft was at the time of the alleged wrongdoing, create an ambiguity as to whether the exclusion applies. Although evidence in the arbitration may ultimately establish the application of the exclusion, the liberal construction we must place on the Statement of Claim allegations and the Policy requires us to reject this exclusion as a basis to deny a duty to defend.