|
Homeowners |
Duty
to Defend |
|
Leased
Land |
Business
Exclusion |
Ruth
Hallman appealed a lower court decision that granted her insurer’s motion to
deny her a legal defense. Allstate Insurance Co., Hallman’s homeowner insurer,
filed for a declaratory motion in support of its decision to deny Hallman’s
claim. Hallman filed a claim after being sued by her neighbors. Hallman’s
neighbors claimed their property was damaged by mining company operations
performed on Hallman’s property. The mining operations started after Hallman
leased her land to several mining companies who were searching for limestone.
Hallman
asked an appellate court to reverse the decision that agreed with her carrier.
Allstate’s position was that, because leasing the land was an intentional act
and because the mining operation was a "business,’ the claim was excluded
by their homeowner policy. On the other hand, Hallman asserted that she was, at
least, owed a legal defense.
The
higher court reviewed the matter, focusing upon the policy’s references to
business, intentional acts and occurrence. The latter term was important
because Allstate argued that the Hallman neighbors’ claim for damages did not
result from an "occurrence" (accident) but from the insured’s
intentionally leasing her land to be mined. The carrier asserted that the
damage was forseeable. Further it was also a
business, both elements absolving it from either defending or responding to the
loss.
In
the court’s opinion, Hallman’s leasing arrangement was a single event. The
action was not consistent with a business activity which is commonly understood
to be a longer term or ongoing situation. The court also viewed Hallman’s
intent differently. While it recognized that the act of leasing to was
intentional, it did not believe that the resulting damages could have been
obvious to Hallman. Hallman could have assumed that any consequences of the
mining activity would be confined to her property. The appellate court reversed
the lower court decision, obligating Allstate to defend the suit per its policy
provision. The matter was remanded (returned) to the lower court in order to
proceed with the matter.
Ruth
Hallman, Appellant v. Allstate Insurance Company, Appellee, Texas Court of
Appeals. No. 05-02-00962-CV. July 30, 2003. Reversed and Remanded. CCH 2003
Fire and Casualty Cases 6925