Court Opinion

ID: 9681430
Source: CourtListenerOpinion
Date Created: 2023-08-24 07:50:07.567633+00
Date Added: 2024-06-11T18:17:33.957843
License: Public Domain

HOWELL, Justice,
dissenting.
I dissent. Blindly applying the undeniable rule that insurance policies must be construed in favor of the insured, the majority has found coverage where none was ever intended. In doing so, it has ignored other valid principles of construction and common sense as well.
Construction in favor of the insured is a principle too well established to be questioned. However, it is not the be-all and end-all of insurance law. The Supreme Court has written:
We recognize the general rule that contracts of insurance are to be strictly construed in favor of the insured, but this does not affect the further general rule that contracts of insurance are to be construed as other contracts, and that all parts of the contract are to be taken together, and such meaning shall be given to them as will carry out and effectuate to the fullest extent the intention of the parties.
United American Insurance Co. v. Shelby, 161 Tex. 162, 338 S.W.2d 160, 162 (Tex.1960).
The parties’ intent is to be derived from the words used, the subject matter to which they relate, and matters naturally or usually incident thereto. Nutchey v. Three R's Trucking Co., 674 S.W.2d 928, 930 (Tex.App.—Amarillo 1984, writ ref'd n.r.e.).
Viewing the policy as a whole, it is evident that it was meant to insure Walker’s interest in equipment that was out of his possession and in the possession of his purchasers.1 The operative part of the policy is entitled, “Special Floater Form.” The term “floater” has a particular meaning in the insurance industry. It means “a policy that floated around with the goods and insured them wherever they were ...” Grossbaum Ceramic Art Syndicate v. German Ins. Co., 213 Pa. 506, 62 A. 1107, 1108 (1906). “The purpose of such policy is to provide indemnity for property which cannot, because of its frequent change of location and quantity be covered by specific insurance.” Davis Yarn Co. v. Brooklyn Yarn Dye Co., 293 N.Y. 236, 56 N.E.2d 564, 570 (1944). See Morgan v. Badger Mutual Ins. Co., 192 F.Supp. 249, 251-52 (N.D.Fla.1961). Floater insurance was particularly suitable to Walker’s original conditional sales plan with the equipment leaving his control and being used at a large number of locations. It was not appropriate to entreprenurial ventures where the property was under Walker’s sole management and control at a specific location.
*107In addition to equipment under conditional sales and deferred payment plans, the policy also protected property when “leased, loaned, rented or sent out on approval by the insured....” Again, the common denominator was that Walker had no direct control of the property. The insurance contract’s manifest design was to insure against risks away from the possession and control of the insured.
The policy contemplated a limited time frame for the covered risk. Walker’s interest was insured until the equipment was “fully paid for by the vendee.” When final payment was made, coverage was to cease. Walker’s interpretation makes the risk run for the life of the policy. This writer would hold the proper construction to be that when the sale failed and the property returned to the possession and control of the seller, it was no longer covered.
If Walker were to open a coin operated laundry stocked with new equipment, he could not contend that the policy in question provided coverage. However, were he to continue the use of repossessed equipment in the same location and manner as his former vendee, he would, under his theory, be fully covered. Thus, coverage would turn on a fortuitous factor — the involvement of the equipment in a prior conditional sales transaction — completely unrelated to the underlying risk. This could not have been the parties' intention.
Further support for the denial of covers age is found in the clause “excluding premises owned, rented, leased or used for storage or exhibition purposes by the insured.” The majority would stand this clause on its head and construe it as reading:
Excluding premises (1) owned for storage or exhibition purposes, (2) rented for storage or exhibition purposes, (3) leased for storage or exhibition purposes, or (4) used for storage or exhibition purposes.
The construction is strained and nonsensical. If the clause be viewed as a special endorsement applicable to this insured only, for what purpose would these parties have created a “storage or exhibition” exclusion? The evidence suggests none. On the other hand, if the more probable view, that the clause is a standard policy provision, be applied, for what reason would the insurer desire to exclude “storage or exhibition” and cover the property in all other instances? The majority construction is without logic.
Read with the rest of the policy, it is far more likely that the exclusion was included precisely to create classic “away from the insured” floater type insurance:
Excluding premises (1) owned by the insured, (2) rented by the insured, (3) leased by the insured, or (4) used for storage or exhibition purposes by the insured.
Read from the four corners of the policy, all indicia of intent suggest that the parties did not intend the risk before us to be covered. It is improper to apply the rule of construction in favor of the insured for the purpose of creating coverage where none was intended.
This writer is driven to the conclusion that the phrase “sold by the insured by deferred payments or under conditional sales agreements” refers to property subject to those arrangements at the time of loss. It does not refer to property formerly subject to deferred payment or conditional sale but now being directly owned and used by the insured. I would reverse the trial court’s judgment and render judgment for appellants.

. Despite the trial court’s finding of fact (Maj. op. 104-105), it is undisputed that Walker was at the time of each disputed loss, the proprietor of each premises where a loss occurred. The fact that Walker had, in each instance, retained someone to manage the premises for him is of no legal significance.