Opinion
05-22-00963-CV
01-29-2024
JEFF MANKOFF AND STACI MANKOFF, Appellants v. PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE, Appellee
On Appeal from the 192nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-21-15131
Before Justices Partida-Kipness, Reichek, and Miskel
MEMORANDUM OPINION
ROBBIE PARTIDA-KIPNESS JUSTICE
In this insurance coverage case, appellants Jeff Mankoff and Staci Mankoff appeal the trial court's order granting summary judgment for appellee Privilege Underwriters Reciprocal Exchanges (PURE). This appeal presents the Court with a question of ambiguity in an insurance policy; specifically, whether the term "windstorm" is ambiguous. Because we conclude the term "windstorm" is ambiguous and the Mankoffs' construction of it was not unreasonable, we reverse the judgment and render judgment for the Mankoffs and remand for consideration of the Mankoffs' claim for attorney's fees.
BACKGROUND
On October 20, 2019, a tornado accompanied by a two-minute rainstorm struck and severely damaged the Mankoffs' home and the surrounding area. The parties dispute whether the tornado was an EF-1 or EF-2 tornado and whether the tornado winds were consistent with 110-125 mph winds or 111-135 mph winds. The fact a tornado damaged the Mankoffs' home, however, is not disputed.
The Mankoffs held a homeowners' insurance policy through PURE. They notified PURE of their loss and filed a claim for damages totaling $748,858.19. PURE paid only a portion of the claim because PURE maintained the tornado that struck and damaged the home was a windstorm and, therefore, the claim was subject to the policy's "Windstorm or Hail Deductible." That provision stated:
5. Deductible
Unless otherwise noted in this policy, the base deductible or one of the special deductibles shown on your Declarations or by endorsement is the amount of a covered loss you will pay.
Windstorm or Hail Deductible
In the event of direct physical loss to property covered under this policy caused directly or indirectly by windstorm or hail, the Windstorm or Hail deductible listed on your Declarations is the amount of the covered loss for dwelling, other structures and contents that you will pay. The Windstorm or Hail deductible does not apply to coverage provided under 7. Loss of Use. The Windstorm or Hail deductible applies regardless of any other cause or event contributing concurrently or in any sequence.(emphasis in original). The deductible amount was $87,156 (2% of the dwelling cover limit) per covered loss. The policy also included a base deductible of $25,000, which was waived for covered losses other than those caused by a windstorm, hail, or earthquake:
Waiver of Deductible
For a covered loss caused by a peril other than windstorm or hail or earthquake that is greater than $50,000, we will waive the base deductible. This waiver of deductible only applies if the base deductible shown on your Declarations is $25,000 or less.
This waiver of deductible does not apply to special deductibles for windstorm or hail or earthquake. This waiver of deductible also does not apply to a special construction deductible.(emphasis in original). After applying the windstorm deductible of $87,516, PURE paid $656,702.19 on the claim. The Mankoffs contend the deductible should not have been withheld because the tornado that caused the damage was not a windstorm and, as a result, their deductible was waived.
The Mankoffs sued PURE to recover the deductible withheld by PURE. The parties filed competing motions for summary judgment. On August 31, 2022, the trial court granted PURE's motion for summary judgment, denied the Mankoffs' counter-motion, and rendered a take-nothing judgment against the Mankoffs. This appeal followed. On appeal, the Mankoffs maintain judgment should have been rendered in their favor because the term "windstorm" has more than one reasonable meaning and, as a result, the Windstorm or Hail Deductible is ambiguous and must be construed consistently with the Mankoffs' interpretation that their home was damaged by a tornado not by a windstorm.
STANDARD OF REVIEW
We review summary judgment rulings de novo. Trial v. Dragon, 593 S.W.3d 313, 316-17 (Tex. 2019) (citing Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009)). On cross-motions for summary judgment, each party bears the burden of establishing that it is entitled to judgment as a matter of law. See Guynes v. Galveston Cnty., 861 S.W.2d 861, 862 (Tex. 1993). When the trial court grants one motion and denies the other, we consider both motions, their evidence, and their issues, and we render the judgment that the trial court should have rendered. Trial, 593 S.W.3d at 316-17; Holmes v. Graham Mortgage Corp., 449 S.W.3d 257, 261 (Tex. App.-Dallas 2014, pet. denied).
APPLICABLE LAW
We interpret insurance policies according to the rules of contract construction. See Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003); SMI Realty Mgmt. Corp. v. Underwriters at Lloyd's, 179 S.W.3d 619, 624 (Tex. App.- Houston [1st Dist.] 2005, pet. denied). Our primary goal in doing so is to give effect to the written expression of the parties' intent. SMI Realty Mgmt. Corp., 179 S.W.3d at 624. To this end, we construe the terms of the contract as a whole and consider all its terms, not in isolation, but within the context of the contract. Id.; Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133-34 (Tex. 1994).
If a contract can be given only one reasonable meaning, it is not ambiguous and will be enforced as written. See Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). On the other hand, if a contract is susceptible to two or more reasonable interpretations, it is ambiguous. Id. Whether a particular provision or the interaction among multiple provisions creates an ambiguity is a question of law. See Nat'l Union Fire Ins. Co. v. CBI Indus., 907 S.W.2d 517, 520 (Tex. 1995); SMI Realty Mgmt. Corp., 179 S.W.3d at 624. The fact the parties may disagree about the policy's meaning does not create an ambiguity. SMI Realty Mgmt. Corp., 179 S.W.3d at 624; see Kelley-Coppedge, Inc., 980 S.W.2d at 465. When an alleged contract ambiguity involves an exclusionary provision of an insurance policy, then we must adopt the construction urged by the insured if that construction is not unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties' intent. See Dall. Nat'l Ins. Co. v. Sabic Ams., Inc., 355 S.W.3d 111, 117-18 (Tex. App.-Houston [1st Dist.] 2011, pet. denied) (citing Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 741 (Tex. 1998)). The insurer has the burden of proving that a policy limitation or exclusion constitutes an avoidance or an affirmative defense. Utica Nat'l Ins. Co. v. Am. Indem. Co., 141 S.W.3d 198, 204 (Tex. 2004).
ANALYSIS
The Mankoffs argue the summary judgment should be reversed and judgment rendered for them because "windstorm" is an ambiguous term, their interpretation that a tornado is a different type of storm than a windstorm is reasonable, and the trial court was required to construe "windstorm" per the Mankoffs' interpretation and to conclude the deductible does not apply to their claim. PURE, in contrast, maintains the undefined term "windstorm" unambiguously applies to damage caused by a tornado. Because the deductible is an exclusionary provision, we must adopt the Mankoffs' construction if we conclude "windstorm" is an ambiguous term and the Mankoffs' construction is not unreasonable. See Balandran, 972 S.W.2d at 741 (quoting Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex.1991)). We address each of those issues below.
I. Ambiguity
We must first determine whether the term "windstorm" in the "Windstorm or Hail Deductible" is ambiguous. When construing an insurance policy, "our primary concern is to ascertain the intentions of the parties as expressed in the document." RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113, 118 (Tex. 2015). We look to the policy's language because it best represents what the parties actually intended. Id. Because the PURE policy does not define the term "windstorm," we must give the term its common, ordinary meaning while reading the term "in context and in light of the rules of grammar and common usage." Id. To determine a term's common, ordinary meaning, we typically look first to dictionary definitions and then consider the term's usage in other authorities. Anadarko Petroleum Corp. v. Houston Cas. Co., 573 S.W.3d 187, 192 (Tex. 2019); Tex. State Bd. of Exam'rs of Marriage & Fam. Therapists v. Tex. Med. Ass'n, 511 S.W.3d 28, 35 (Tex. 2017).
In the trial court, both sides offered examples of the definition of "windstorm." The Mankoffs argued the common, ordinary meaning of "windstorm" was a storm with damaging winds that may or may not be accompanied by precipitation but does not include a tornado. In support, they cited the online version of the Encyclopedia Britannica, which defined "windstorm" as follows:
Windstorm, a wind that is strong enough to cause at least light damage to trees and buildings and may or may not be accompanied by precipitation. Wind speeds during a Windstorm typically exceed 55 km (34 miles) per hour. Wind damage can be attributed to gusts (short bursts of high-speed winds) or longer periods of stronger sustained winds. Although tornadoes and tropical cyclones also produce wind damage, they are usually classified separately. . . .https://www.britannica.com/science/windstorm (last visited November 9, 2023).
The Mankoffs also argued "meteorologically, tornados and windstorms are different animals." They referenced expert testimony from Daniel Schreiber, a Certified Consulting Meteorologist, in which he explained tornados and windstorms are materially different in the way they are measured, classified, warned about, and defined within the meteorological profession. In his report, Schreiber stated the term "windstorm" was not included in the American Meteorological Society's Glossary of Terms (AMS Glossary) until March 2, 2021, and the National Weather Service does not issue any alerts or warnings for a windstorm as it does for tornados. According to Schreiber, tornadoes "have always been warned for as 'tornadoes,' and are referenced as 'tornadoes,' not 'windstorms,' in the meteorological community." He also confirmed the AMS Glossary does not define a tornado as a windstorm, and "neither does the term 'windstorm' mention a 'tornado.'" The AMS Glossary defines windstorm as:
A storm in which winds (that could be damaging) are its most impactful or distinctive aspect. Windstorms may be accompanied by precipitation (e.g., during a downburst or a derecho) or not (e.g., during a duststorm or a sandstorm).https://glossary.ametsoc.org/wiki/Windstorm (last visited November 10, 2023). The definition of tornado in the AMS Glossary does not mention windstorms and indicates other weather events involving swirling winds, such as gustnados and dust devils, are classified differently than a tornado. The AMS Glossary defines a tornado as follows:
A rapidly rotating column of air extending vertically from the surface to the base of a cumuliform cloud, often with near-surface circulating debris/dust when over land or spray when over water. Although its presence is not required, a funnel cloud is often visible and may partly or fully extend from the cloud base to the ground.
Characteristics of typical tornadoes include a diameter of 2 km or less, with maximum wind velocity differences across the circulation exceeding 40 m s-1 within 200 m of the surface. Tornadoes typically last on the order of 100-1000 s. Some may be comprised of multiple subvortices with spatial scales as small as tens of meters, rotating around a central axis. Tornadoes rated by the enhanced Fujita (EF) scale have wind gusts at 10 m above the surface equaling or exceeding 29 m s-1 (65 mph; the lower bound of EF-0).
Tornadoes that occur over water are classified as waterspouts. Landspouts are a subset of tornadoes that occur independent of a parent mesocyclone. Gustnadoes are not considered tornadoes since they are shallow and short-lived vortices that are usually weak. Dust devils are not considered tornadoes since they are not associated with cumuliform clouds.https://glossary.ametsoc.org/wiki/Tornado (last visited November 10, 2023). It is Schreiber's "professional opinion that meteorologists classify tornadoes as their own, distinctive event, separate from any wind event, and warn for such accordingly."
On appeal, the Mankoffs also cite the media coverage of weather events in Dallas as evidence tornados are classified separately from windstorms. Specifically, in June 2019, a windstorm with straight-line winds hit Dallas. The Dallas Morning News described that event as a "windstorm," not a tornado. When describing the October 2019 storm that damaged the Mankoffs' home, however, the newspaper referred to that event as one involving tornados, not a windstorm or heavy winds. The Mankoffs also assert Texans understand the difference between a windstorm and a tornado, and recognize each as a distinct peril, because the media, meteorologists, and other Texans describe them as distinct events, and Texans are warned of each type of storm differently and educated in the unique ways to protect themselves from these different meteorological events.
The Mankoffs also rely on the Texas Insurance Code to support their contention "windstorm" and "tornado" are distinct meteorological events. For example, insurers are permitted to sell separate policies for tornados and windstorms and are taxed accordingly. Tex. Ins. Code § 252.003 ("An insurer shall pay maintenance taxes under this chapter on the correctly reported gross premiums from writing insurance in this state against loss or damage by: . . . (21) tornado; . . . [or] (26) windstorm; . . ."); Tex. Ins. Code § 941.002 (permitting a Lloyd's plan to sell tornado insurance). Similarly, other statutory provisions refer to windstorms and tornados as distinct risks. E.g., Tex. Ins. Code § 1806.102(b)(12)(A) (stating subchapter C of chapter 1806 of the Code does not apply to the writing of "insurance coverage for any of the following conditions or risks: (A) weather or climatic conditions, including lightning, tornado, windstorm, hail, cyclone, rain, or frost and freeze; . . ."); Tex. Prop. Code § 92.0562 (a landlord may delay repairs "if the landlord's failure to repair is caused by a general shortage of labor or materials for repair following a natural disaster such as a hurricane, tornado, flood, extended freeze, or widespread windstorm."); Tex. Ins. Code § 542A.001(2)(C) (defining "claim" as a first-party claim arising "from damage to or loss of covered property caused, wholly or partly, by forces of nature, including an earthquake or earth tremor, a wildfire, a flood, a tornado, lightning, a hurricane, hail, wind, a snowstorm, or a rainstorm."); Tex. Ins. Code § 2002.006 (referring to tornados, windstorms, hail, cyclones, rain, frost, freeze, and lightning as separate "weather or climatic conditions"). The Mankoffs reason "if a tornado was understood to be a windstorm, there would be no need to list out tornado separately in the statutes."
See generally Tex. Ins. Code Chapter 941, Lloyd's Plan; see also Tex. Ins. Code § 941.001(3) (" 'Lloyd's plan' means an entity engaged in the business of writing insurance on the Lloyd's plan."); see also De Jongh v. State Farm Lloyds, 555 Fed.Appx. 435, 436 n.1 (5th Cir. 2014) (explaining State Farm Lloyds "sells insurance under a so-called 'Lloyd's plan,' which consists of a group of underwriters who combine to issue insurance through an attorney in fact" who acts as an agent for the Lloyd's group, but "does not bear risks and has no contractual relationship with the insured." (quoting Royal Ins. Co. of Am. v. Quinn-L Cap. Corp., 3 F.3d 877, 882 (5th Cir. 1993)).
PURE, on the other hand, insists the deductible "unambiguously applies" to the Mankoffs' claim for loss caused by a tornado and argues a tornado "comes within the definition of a windstorm," and is "a type of windstorm." PURE relies on a 1946 opinion from the Eastland Court of Appeals to support its contention "windstorm" is not an ambiguous term. See Fireman's Ins. Co. of Newark, N. J. v. Weatherman, 193 S.W.2d 247 (Tex. App.-Eastland 1946, writ ref'd n.r.e.). In Weatherman, an insurance company appealed an adverse judgment in a coverage case in which Weatherman sought coverage for damage to his car from a windstorm. Id. at 247. The insurer argued at trial that Weatherman failed to offer competent testimony to show his car was damaged by a windstorm. Id. at 248. The trial court submitted the following definition of "windstorm" to the jury:
The term "windstorm" as used herein means something more than an ordinary gust of wind, no matter how prolonged, and though the whirling features which usually accompany tornadoes and cyclones need not be present, it must assume the aspect of a storm.Id. at 248. The insurer objected to the definition but did not tender a purportedly correct definition to the trial court. Id. The jury found there was a windstorm on the occasion in question, which proximately caused the damage to the plaintiff's car, and the court rendered judgment for the plaintiff for $850.00 and costs. Id. at 247. On appeal, the court determined whether the trial court correctly defined the term "windstorm" and "whether the evidence and definition brought the case within the terms and meaning of the policy." Id. The court of appeals "concluded that the definition of 'windstorm' given by the trial court in this case was sufficient to bring it within the policy sued upon," and overruled the insurer's appellate issue complaining of the definition. Id. at 249.
PURE contends the definition of "windstorm" approved in Weatherman "has been consistently adopted in Texas cases" and, thus, the term is not ambiguous. Neither Weatherman nor the cases cited by PURE, however, determined whether the term "windstorm" is an unambiguous term as a matter of law or whether "tornado" is encompassed in the term "windstorm." See id.; see also Ins. Co. of N. Am. v. Pittser, 399 S.W.2d 901, 904 (Tex. App.-Texarkana 1965, writ ref'd n.r.e.) (concluding portion of instruction stating, "windstorms may be largely local, or they may cover a large area" caused no harm to insurer in light of Weatherman court's conclusion "it is a matter of 'common knowledge that windstorms may be largely local, or cover a large area.'"); Mid-Continent Cas. Co. v. Whatley, 742 S.W.2d 475, 478 (Tex. Civ. App-Dallas 1987, no writ) (neither "windstorm" nor "act of God" were defined in the jury charge); Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. Cont'l Carbon Co., Civ. No. H-10-2379, 2012 WL 43604, *8 (S.D. Tex. Jan. 9, 2012) (noting Weatherman and Whatley defined windstorm as "a wind of 'unusual violence'…that must assume the 'aspects of a storm' … it is more than an ordinary gust of wind, however prolonged[.]'" and holding there was no evidence the harm was caused by a windstorm where the complaints did not indicate the damages resulted from "wind," a "storm," or a "windstorm," and the evidence of a windstorm was also insufficient); Landmark Am. Ins. Co. v. SCD Mem'l Place II LLC, 25 F.4th 283, 288 (5th Cir. 2022) (applying Texas law in a case involving a "named perils" policy and holding "windstorm" did not expand the policy to include all the perils wrought by Hurricane Harvey, such as floods).
PURE also suggested below "there is a long history in Texas for the term 'windstorm' to encompass such weather events as tornados." On appeal, PURE argues "Texas cases have uniformly applied windstorm coverage to damage caused by tornados, further evidencing that the common, ordinary meaning of windstorm includes tornados." In the cases cited by PURE to support these conclusions, however, the parties did not dispute an insured's claim for tornado damage in policies covering windstorm damage, and the courts did not analyze the definition of windstorm or determine if the term was ambiguous. See generally Republic Ins. Co. v. Silverton Elevators, Inc., 493 S.W.2d 748, 750 (Tex. 1973) (insurer acknowledged windstorm policy covered tornado damage on the house but denied liability for damage to household goods on other grounds); Little v. Tex. R.V.O.S. Ins. Co., 926 S.W.2d 830, 831 (Tex. App.-Eastland 1996, writ denied) (insurer did not dispute tornado damage was covered by insurer in policy providing "Named Insured" and "legal representatives" are insured against a windstorm" but challenged whether homeowner's wife should have been included on payment check when she was not a named insured in the policy); Brasher v. State Farm Lloyds, No. 5:16-CV-1080-DAE, 2017 WL 9342367, at *1-2 (W.D. Tex. Feb. 2, 2017) (order denying remand to state court and abating case for insurer to conduct appraisal of property damage).
PURE also argues the common, ordinary meaning of windstorm is "a storm with high or strong winds that encompasses and includes tornados. . . ." and "windstorm is a common synonym for a tornado." In support, PURE cites various dictionary definitions of tornado describing a tornado as a violent storm with whirling winds or a violently rotating column of air, and, in two definitions, describing a tornado as "a localized, violently destructive windstorm occurring over land, . . ." and "a highly localized, violent windstorm occurring over land." PURE also cites one thesaurus, which includes "windstorm" as one of ten synonyms of tornado. Collins Thesaurus of the English Language - Complete and Unabridged, Tornado (2d ed. 2022) (listing the following as synonyms of tornado: whirlwind, storm, hurricane, gale, cyclone, typhoon, tempest, squall, twister, and windstorm). PURE also notes the National Weather Service categorizes tornados based on wind speed. From these authorities, PURE concludes a tornado is "a type of windstorm" and the deductible "unambiguously applies to damage caused by a tornado."
After reviewing the insurance contract language in its entirety and after applying our well-developed rules of construction, it is our opinion that the term "windstorm," as used in the policy, is reasonably susceptible to more than one meaning, and that it therefore is ambiguous. See Bliss Mine Rd. Condo. Ass'n v. Nationwide Prop. & Cas. Ins. Co., 11 A.3d 1078, 1084-85 (R.I. 2010). The Mankoffs and PURE cite authorities defining "windstorm" in different ways. The definitions provided by those authorities were facially reasonable but conflicting. Under this record, we conclude "windstorm" is an ambiguous term in the policy.
II. Reasonableness of the Mankoffs' interpretation
When, as here, an alleged contract ambiguity involves an exclusionary provision of an insurance policy, we "must adopt the construction . . . urged by the insured as long as that construction is not unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties' intent." Balandran, 972 S.W.2d at 741 (quoting Nat'l Union Fire Ins., 811 S.W.2d at 555); SMI Realty Mgmt., 179 S.W.3d at 624. In particular, exceptions or limitations on liability are strictly construed against the insurer and in favor of the insured. Ramsay, 533 S.W.2d at 349; Cont'l Cas. Co. v. Warren, 254 S.W.2d 762, 763 (Tex. 1953). We must, therefore, decide if the construction advanced by the Mankoffs is a reasonable interpretation of "windstorm." See Barnett, 723 S.W.2d at 666; see also SMI Realty Mgmt., 811 S.W.2d at 555 (citing Utica Nat'l Ins., 141 S.W.3d at 204).
Here, PURE maintains "windstorm is a common synonym for a tornado" and "the common definitions of 'windstorm' and 'tornado' also demonstrate that a tornado is a type of windstorm and the term windstorm must be understood as including tornados." PURE's argument is, essentially, that tornados and windstorms are storms involving high winds and are, therefore, one and the same regardless of context. We disagree.
Although "windstorm" and "tornado" may be considered synonyms in some situations, we must consider the meaning of those terms in the context of the policy as a whole. The deductible in the PURE policy is the "Windstorm or Hail Deductible." It references two distinct perils - windstorms and hail - which exclude a portion of the insured's coverage. Hail is a type of storm; a specific meteorological event. The same is true of a windstorm or a tornado. Each of those perils are distinct meteorological events and specific types of storms. Windstorm and hail are not catchall terms covering all types of meteorological events involving wind or rain. If they were, there would be no need to list hail separately in the deductible or to define hurricane elsewhere in the policy. See Landmark Am. Ins., 25 F.4th at 287 ("If 'Windstorm' includes all that SCD says it does (again, '[f]lood, wind, wind gusts, storm surges, tornados, cyclones, hail or rain'), there would be no need to list 'Hail' separately."). We conclude the listing of Windstorm and Hail separately supports the Mankoffs' interpretation that the deductible covers those specific perils but not tornados or other related weather events. See id. ("the listing of 'Windstorm' and 'Hail' separately supports Landmark's interpretation that the policy covers specific perils but not others.").
Moreover, the authorities cited by the Mankoffs are legitimate, respected sources, including the National Meteorological Society, and the Encyclopedia
Britannica. The references to insurance code provisions separating windstorms from tornados further support the Mankoffs' construction of windstorm as a separate and distinct peril from a tornado. PURE did not show the Mankoffs' construction of "windstorm" was unreasonable. As a result, the trial court was required to adopt the construction of the deductible urged by the Mankoffs. See Glover, 545 S.W.2d at 761. The trial court erred by failing to do so, and we sustain the Mankoffs' appellate issues.
CONCLUSION
On this record, we conclude the "Windstorm and Hail Deductible" is ambiguous because the term "windstorm" is undefined and subject to more than one reasonable meaning. Further, we conclude the Mankoffs' interpretation of the term was reasonable and required the trial court to construe the deductible in their favor. Accordingly, we reverse the trial court's judgment granting PURE's motion for summary judgment, reverse the trial court's denial of the Mankoffs' counter-motion for summary judgment, render judgment for the Mankoffs as to liability and damages for their breach of contract claim, and render judgment of $87,156 in damages to the Mankoffs' on the breach of contract claim.
We remand to the trial court for further proceedings consistent with this opinion as to the Mankoffs' remaining claim for fees under Chapter 38 of the Texas Civil Practice and Remedies Code, and claims for declaratory judgment and discretionary fees under the Uniform Declaratory Judgments Act.
JUDGMENT
Justices Reichek and Miskel participating.
In accordance with this Court's opinion of this date, we REVERSE the trial court's judgment granting Privilege Underwriters Reciprocal Exchange's motion for summary judgment, REVERSE the trial court's denial of appellants Jeff Mankoff and Staci Mankoff's counter-motion for summary judgment, RENDER judgment for appellants Jeff Mankoff and Staci Mankoff as to liability and damages for their breach of contract claim, and RENDER judgment of $87,156 in damages to appellants Jeff Mankoff and Staci Mankoff on the breach of contract claim.
We REMAND to the trial court for further proceedings consistent with this Court's opinion as to appellants Jeff Mankoff and Staci Mankoff's remaining claim for fees under Chapter 38 of the Texas Civil Practice and Remedies Code, and claims for declaratory judgment and discretionary fees under the Uniform Declaratory Judgments Act.
It is ORDERED that appellants JEFF MANKOFF AND STACI MANKOFF recover their costs of this appeal from appellee PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE.
DISSENTING OPINION
Justice Miskel
I write separately to dissent from the majority opinion because I would affirm the summary judgment of the trial court.
I. Procedural History
In their original petition, the Mankoffs sought a judgment under the Uniform Declaratory Judgments Act that the October 20, 2019 tornado that damaged their house was not a windstorm, the special windstorm deductible of $87,156 does not apply, the deductible waiver for general hazards does apply, and that PURE is liable to the Mankoffs for the $87,156 windstorm special deductible that PURE withheld.
Based on the same reasoning, the Mankoffs also asserted a breach-of-contract claim against PURE seeking to recover $87,156 in damages for the windstorm special deductible withheld by PURE, plus attorney's fees. PURE filed an answer generally denying the allegations and asserting the affirmative defense that the policy's windstorm exception resulted in an absence of coverage for the Mankoffs' underlying claim relating to the deductible, precluding their breach-of-contract claim.
PURE filed a traditional motion for final summary judgment on the Mankoffs' breach-of-contract claim and declaratory-judgment action, arguing that, as a matter of law, it proved its affirmative defense that the policy's windstorm exception applied, that the Mankoffs could not establish a breach of the insurance policy, and that PURE is entitled to a declaration that the windstorm deductible was correctly withheld.
The Mankoffs filed a response and traditional counter-motion for partial summary judgment on the liability and damages elements of their breach-of-contract claim. The Mankoffs did not move for traditional summary judgment on their declaratory judgment action.
After a hearing, the trial court (1) denied the Mankoffs' traditional counter-motion for partial summary judgment on two elements of their breach-of-contract claim, (2) granted PURE's traditional motion for summary judgment on the Mankoffs' declaratory judgment action and breach-of-contract claim, and (3) ordered a take-nothing judgment.
II. Applicable Law
A. Contract Interpretation
Insurance policies are construed as contracts and enforced as contracts. Am. Nat'l Ins. Co. v. Arce, 672 S.W.3d 347, 353 (Tex. 2023). Insurance policies are interpreted under the rules of construction that apply to contracts in general. See Monroe Guar. Ins. Co. v. BITCO Gen. Ins. Corp., 640 S.W.3d 195, 198 (Tex. 2022). The primary goal of contract construction is to effectuate the parties' intent as expressed in the contract. See id. at 198-99. Courts consider the entire agreement and, to the extent possible, resolve any conflicts by harmonizing the agreement's provisions, rather than by applying arbitrary or mechanical default rules. See Richards v. State Farm Lloyds, 597 S.W.3d 492, 497 (Tex. 2020). When a valid contract prescribes particular remedies or imposes particular obligations, equity generally must yield unless the contract violates positive law or offends public policy. Id.
Applying the ordinary rules of contract construction to insurance policies, a court ascertains the parties' intent by looking only to the four corners of the policy to see what is actually stated and does not consider what allegedly was meant. See Fiess v. State Farm Lloyds, 202 S.W.3d 744, 746-47 (Tex. 2006).
Similarly, under the rules of contract interpretation, courts give policy language its plain, ordinary meaning unless something else in the policy shows the parties intended a different, technical meaning. Tanner v. Nationwide Mut. Fire Ins. Co., 289 S.W.3d 828, 831 (Tex. 2009). A court examines the entire insurance policy, reads all of its parts together, and seeks to give effect to all of its provisions so that none will be meaningless. See Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 126 (Tex. 2010). To determine the common, ordinary meaning of undefined terms used in contracts, statutes, and other legal documents, courts typically look first to their dictionary definitions and then consider the term's usage in other statutes, court decisions, and similar authorities. See Pharr-San Juan-Alamo Indep. Sch. Dist. v. Tex. Pol. Subdivisions Prop./Cas. Joint Self Ins. Fund, 642 S.W.3d 466, 474 (Tex. 2017).
If the language of an insurance policy is worded so that it can be given a definite or certain legal meaning, then it is not ambiguous and courts construe it as a matter of law. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003). Courts may not look to extrinsic evidence to prove the existence of an ambiguity. See Friendswood Dev. Co. v. McDade + Co., 926 S.W.2d 280, 283 (Tex. 1996).
Whether a particular provision or the interaction among multiple provisions creates an ambiguity is a question of law. State Farm Lloyds v. Page, 315 S.W.3d 525, 527 (Tex. 2010). That the parties may disagree about the policy's meaning does not create an ambiguity; only if the policy is subject to two or more reasonable interpretations is it ambiguous. Id. If a court determines that only one party's interpretation of the insurance policy is reasonable, then the policy is unambiguous and the reasonable interpretation should be adopted. RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113, 118 (Tex. 2015).
Alternatively, if the court determines that both interpretations are reasonable, then the policy is ambiguous. Id. In that event, the court must resolve the uncertainty by adopting the construction that most favors the insured, and if the court is construing a limitation on coverage, it must do so "even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties' intent." Id. (quoting Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex. 1991)).
B. Policy Exclusions and Exceptions
The policy at issue here insures against general hazards and contains other provisions limiting the general liability. See Tex. R. Civ. P. 94. The policy has a special deductible for windstorms, and the waiver of deductible for general hazards does not apply to windstorms. Under Rule 94, the insurer must specifically allege, as an affirmative defense, that a loss was due to a particular exception to the general liability. The Texas Insurance Code makes clear that language of exclusion in the insurance contract or an exception to coverage claimed by an insurer must be pleaded as an affirmative defense and the insurer has the burden of proof. Tex. Ins. Code Ann. § 554.002. The Texas Supreme Court has confirmed that an insurer bears the burden of proof to establish that a policy exclusion or exception to general liability applies. See Utica Nat'l Ins. Co. v. Am. Indem. Co., 141 S.W.3d 198, 204 (Tex. 2004) (citing Ins. art. 21.58(b); Tex.R.Civ.P. 94).
Texas Insurance Code art. 21.58(b) was recodified into § 554.002 of the Insurance Code in 2003.
III. Whether a Tornado is a Kind of Windstorm
PURE filed a traditional motion for final summary judgment on the Mankoffs' breach-of-contract claim and declaratory judgment action. With respect to the Mankoffs' breach-of-contract claim, it argued that, as a matter of law, the Mankoffs could not establish that PURE breached the insurance policy. With respect to the Mankoffs' declaratory judgment action, PURE argued that the Mankoffs were not entitled to a declaration that the windstorm deductible was incorrectly applied to their loss. In the Mankoffs' traditional counter-motion for partial summary judgment on two elements of their breach-of-contract claim, they argued they conclusively established as a matter of law that PURE breached the insurance policy and was liable to them for the amount of the withheld windstorm deductible.
I agree with the majority that the parties' dispute is one of contract interpretation. Under the policy, if a tornado is a windstorm, then the windstorm deductible applied to the Mankoffs' loss. But if a tornado is not a windstorm, then under the policy, the deductible was waived. PURE argues that a tornado is a subcategory of the broader windstorm category, while the Mankoffs maintain that windstorms and tornados are two distinct types of meteorological events and that it is a reasonable interpretation of the insurance contract that a tornado cannot be considered a windstorm. To prevail on its traditional motion for summary judgment, PURE was required to show that the windstorm exception unambiguously applies to tornados.
A. The Policy Does Not Define Windstorm or Tornado
I would begin my analysis by trying to ascertain the parties' intent from the four corners of the policy to see what is actually stated. See Fiess, 202 S.W.3d at 746. Section II (Property Coverage), subsection B5, contains, among other things, the windstorm or hail deductible and the waiver of deductible provisions in the policy. Neither subsection B5 nor the definition section of the policy defines "windstorm" or "tornado."
B. Dictionary Definitions
Next, under the rules of contract interpretation, I would give the policy language its plain, ordinary meaning unless something else in the policy shows the parties intended a different, technical meaning. See Tanner, 289 S.W.3d at 831.
The majority provides an extensive summary of the parties' arguments on the meaning of these terms and then concludes that "[a]fter reviewing the insurance contract language in its entirety and after applying our well-developed rules of construction, it is our opinion that the term 'windstorm,' as used in the policy, is reasonably susceptible to more than one meaning, and that it therefore is ambiguous."
I note that the Mankoffs relied on expert testimony and the American Meteorological Society's Glossary (AMS Glossary), but the insurance policy does not indicate that the parties intended technical or scientific definitions to apply. Instead, § 2301.053(c) of the Texas Insurance Code requires that an insurance form for residential property insurance may not be used unless it is written in plain language. See Ins. § 2301.053(c). Further, courts may not look to extrinsic evidence to prove the existence of an ambiguity. See Friendswood, 926 S.W.2d at 283.
To determine the common, ordinary meaning of these undefined terms, I would first look to their dictionary definitions. See Pharr-San Juan-Alamo Indep. Sch. Dist., 642 S.W.3d at 474. Dictionaries provide the following definitions of "windstorm":
• "a storm marked by high wind with little or no precipitation." Windstorm, Merriam-Webster.com Dictionary, https://www.merriam-webster.com/dictionary/windstorm (last visited Dec. 13, 2023).
• "a storm with a strong wind but little or no rain, hail, etc." Windstorm, Webster's New World College Dictionary (4th ed.), https://www.collinsdictionary.com/us/dictionary/english/w indstorm (last visited Dec. 13, 2023).
• "a storm consisting of violent winds." Windstorm, Collins English Dictionary, https://www.collinsdictionary.com/dictio nary/english/windstorm (last visited Dec. 13, 2023).
• "a storm that has very strong winds and usually very little rain or snow." Windstorm, The Britannica Dictionary, https://www.britannica.com/dictionary/windstorm (last visited Dec. 13, 2023).
A common thread is that a windstorm is a storm whose main feature is strong, violent wind.
In its traditional motion for summary judgment, PURE argued that the plain meaning of windstorm included tornados and pointed to the following dictionary definitions of "tornado" as support, paraphrased as follows:
• "A violently rotating column of air extending from a cumulonimbus cloud to the ground, ranging in width from a few meters to more than a kilometer, with destructive winds up to 510 kilometers (316 miles) per hour or higher." American Heritage Dictionary of the English Language (5th ed. 2016).
• "A violent storm with winds whirling around a small area of extremely low pressure, usually characterized by a dark funnel-shaped cloud causing damage along its path." Collins English Dictionary-Complete and Unabridged (12th ed. 2014).
• "A localized, violently destructive windstorm occurring over land, especially] in the Middle West, and characterized by a long, funnel-shaped cloud that extends to the ground." Random House Kernerman Webster's College Dictionary (2010).
• "A violently rotating column of air ranging in width from a few yards to more than a mile and whirling at speeds estimated at 300 miles (483 kilometers) an hour or higher. A tornado usually takes the form of a funnel-shaped cloud extending downward out of a cumulonimbus cloud. Where funnel reaches the ground, it can cause enormous destruction." The American Heritage Student Science Dictionary (2d ed. 2014).
• "A highly localized, violent windstorm occurring over land, usually in the U.S. Midwest, characterized by a vertical, funnel-shaped cloud." -Ologies & -Isms (2008).
• "An intense cyclone where the spiraling wind-speed reaches over 200 miles (320 Km) per hour. Dictionary of Unfamiliar Words by Diagram Group (2008).
Other dictionaries define "tornado" as follows:
• (1) A violent destructive windstorm accompanied by a funnel-shaped cloud that progresses in a narrow path over the land; (2) a violent windstorm; and (3) a tropical thunderstorm. Tornado, Merriam-Webster.com Dictionary, https://wwwmerriam-webster.com/dictionary/tornado (last visited Dec. 13, 2023).
• (1) In the U.S., a violently whirling column of air, with wind speeds of about 100 to 300 miles per hour, extending downward from a cumulonimbus cloud, especially in Australia and central U.S.: usually appearing as a rapidly rotating, slender, funnel-shaped cloud and typically causing great destruction along its narrow path; (2) in West Africa and the adjacent Atlantic, a severe thundersquall; and (3) any whirlwind or hurricane. Tornado, Webster's New World College Dictionary (4th ed.), https://www.collinsdictionary.com/us/dictionary/english/tornad o (last visited Dec. 13, 2023).
• (1) A violent storm with winds whirling around a small area of extremely low pressure, usually characterized by a dark funnel-shaped cloud causing damage along its path; (2) a small but violent squall or whirlwind, such as those occurring along the African coast; and (3) any violent active or destructive person or
thing. Tornado, Collins English Dictionary, https://www.collinsdictionary.com/us/dictionary/english/tornad o (last visited Dec. 13, 2023).
• "[A] violent and destructive storm in which powerful winds move around a central point." Tornado, The Britannica Dictionary, https://www.britannica.com/dictionary/tornado (last visited Dec. 13, 2023).
• "[A] violent rotating windstorm." Tornado, Color Oxford Dictionary (3d ed.).
Although not all dictionary definitions expressly define "tornado" using the term "windstorm," all of the tornado definitions refer to wind or moving air. The definitions consistently describe the key feature of a tornado as violent wind.
C. Statutes
Turning next to statutes, I note that the Texas Insurance Code also does not define windstorm or tornado. The following sections do list tornadoes and windstorms separately:
• Ins. § 252.003(21), (26) ("tornado" and "windstorm" listed as separate loss or damage events);
• Ins. § 542A.001(2) (in the definition of "claim," lists "tornado" and "wind" as separate "forces of nature");
• Ins. § 1806.102(c)(12) (lists "tornado" and "windstorm" as separate "weather or climatic conditions");
• Ins. § 2002.005(e) (refers to policies insuring against several "hazards," including "tornado" and "windstorm," listed separately);
• Ins. § 2002.006(a)(1)(A) (lists "weather or climatic conditions," including both "tornado" and "windstorm");
• Ins. § 2252.001(c)(12)(A) (same);
• Ins. art. 5.13 (refers separately to "tornado" and "windstorm" insurance); and
• Ins. § 862.051(3) (authorizes companies to insure motor vehicles against loss or damage by "windstorm" or "tornado").
While listing the two weather events separately may imply that they are not identical phenomena, it does not necessarily weigh against an interpretation that a tornado is a subtype of a windstorm-just as not all rectangles are squares, but all squares are rectangles.
Additionally, the federal Windstorm Impact Reduction Program defines windstorm to include tornados. See 42 U.S.C. § 15702(5) ("The term 'windstorm' means any storm with a damaging or destructive wind component, such as a hurricane, tropical storm, northeaster, tornado, or thunderstorm.").
D. Case Law
I agree with the majority's conclusion that neither Fireman's Insurance Co. of Newark, N.J. v. Weatherman, 193 S.W.2d 247 (Tex. App.-Eastland 1946, writ ref d n.r.e.), nor the other cases cited by the parties directly answer the question at issue in this case. However, PURE cites several cases in which insurers paid tornado losses under windstorm policies:
• Republic Ins. Co. v. Silverton Elevators, Inc., 493 S.W.2d 748, 750 (Tex. 1973) ("On April 17, 1970, a tornado destroyed the house and the household goods. On the date of the tornado there was in effect a Texas Standard Fire Policy . . . insuring against loss from windstorm . . . . Republic acknowledged coverage on the house and paid Silverton
$7,000 for its damage," but denied liability for household goods on other grounds.);
• Little v. Tex. R.V.O.S. Ins. Co., 926 S.W.2d 830, 831 (Tex. App.- Eastland 1996, writ denied) ("On March 3, 1992, the house was severely damaged by a tornado. At that time, the house was insured by Texas R.V.O.S. . . . Within approximately ten days after the tornado, [the insurance agent] delivered two checks to [the insured] totaling $106,129.50 to cover the loss. . . . The insurance policy issued by Texas R.V.O.S. expressly provides that the 'Named Insured' and 'legal representatives' are insured against a windstorm.");
• Brasher v. State Farm Lloyds, No. 5:16-CV-1080-DAE, 2017 WL 9342367, at *1-2 (W.D. Tex. Feb. 2, 2017) (Dispute over "amount of property loss as a result of the hail and wind storm" where only property damage alleged was caused by a 2015 tornado under "an insurance policy . . . which specifically covered damage caused by windstorms.").
PURE further argues that the absence of case law defining whether a tornado is a windstorm shows a common understanding that "windstorm" includes tornados.
E. Other Sources
Finally, I would analyze the plain meaning of these contested terms by looking at other relevant sources. In its traditional motion for summary judgment, PURE argued that the National Weather Service categorizes tornados based on their wind speed, which it claimed supported its contention that the plain meaning of the term windstorm as used in the policy includes tornados. In their response and traditional counter-motion for partial summary judgment, the Mankoffs argued the following encyclopedia entry supported their position that windstorms and tornados are two different types of storms:
• "[A] wind that is strong enough to cause at least light damage to tress and buildings and may or may not be accompanied by precipitation. Wind speeds during a windstorm typically exceed 55 km (34 miles) per hour. Wind damage can be attributed to gusts (short burst of high-speed winds) or longer periods of sustained winds. Although tornadoes and tropical cyclones also produce wind damage, they are usually classified separately." Roger A. Pielke, Britannica, "windstorm," https://www.britannica.com/science/cyclone-meteorology.
On appeal, the Mankoffs also note that the National Weather Service issues different warnings based on different types of storms including windstorms and tornadoes. In addition to the parties' arguments, the Texas Department of Insurance website states that "[w]indstorm insurance pays to repair or rebuild your house if it's damaged by hail or wind, from a tornado, thunderstorm, or hurricane" and advises persons to get windstorm coverage, noting that how you get it depends on where you live because "[i]f you live anywhere in Texas-except along the coast-you probably have wind and hail coverage in your homeowners policy. Your homeowners policy will pay for wind and hail damage much like it pays for fire, lighting, or theft, although you may have a different deductible for windstorm damage." Texas Dep't of Ins., What is windstorm insurance?, https://www.tdi.texas.gov/tips/what-is-windstorm-insurance.html (last visited Dec. 13, 2023).
F. A Tornado Is a Kind of Windstorm
Asking abstractly whether a tornado is a windstorm seems like it may lead us into an unsolvable conundrum like the passionately debated controversy of whether a hotdog is a sandwich. However, after applying the rules of contract interpretation, I agree with the trial court that the windstorm deductible unambiguously applies to a loss caused by a tornado.
I wish the insurance company had defined its terms. It is also persuasive to me that the Texas Legislature has arguably implied that windstorms and tornados are distinct weather events. But, at the end of the day, the damage in this case was caused by wind. The consistent thread throughout all of the ordinary dictionary definitions is that a windstorm is a storm with violent winds, and a tornado is marked by violent winds. Under a plain reading of the terms, it is not reasonable to deny that a tornado is a kind of windstorm. The Mankoffs' argument that a tornado is a specially defined storm with specific classifications and warnings does not mean a tornado is not just a special kind of windstorm. In other words, all tornados are a type of windstorm but not all windstorms are tornados.
All of the dictionaries and other sources can be read congruously if a tornado is a subtype of windstorm. The majority's analysis risks creating further ambiguities: is a squall a windstorm? A gale? A nor'easter? A downburst? A variety of colorfully named subtypes of storms could still be windstorms. I conclude that the plain, ordinary understanding of the term "windstorm" includes the various kinds of windstorms and specifically includes a tornado.
IV. Conclusion
I would conclude that the language of the insurance policy is worded so that it can be given a definite or certain legal meaning (that a tornado is a kind of windstorm), that it is not ambiguous, and that the trial court correctly construed it as a matter of law. I would affirm the judgment of the trial court.